Real cost for finished product

Hello everybody! I’m about to implement Dynamics AX 2009 for production and I’m willing to get some guidance in this scenario. FIFO, once the production order is started, it takes from 2-3 months to have all the product to be reported as finished. In the mean time, partial deliveries of the finished product are done, it could be daily deliveries. Can I have the actual cost of the finished product for each partial delivery? What feature in Dynamics provide me this? What setup or special parameters do I need to consider?

Many thaks for the help!!

FIFO - are you using it for raw materials or fg or both…

If you are using a FIFO or any costing method - the system will first uses Average wt. and any closing or recalculation is made the cost of the production will be calculated based on your costing method(FIFO)…

In your scenario you are not going to end the production for 2-3 months…and the delivery is done mean while

If this is the case - you need to do the report as finished task before you are doing delivery every time…

that means you are updating physical stock and cost of the item - cost will be estimated cost …

and when you sell these items the same cost be posted to the consumption and inventory accounts…

for this you need

allow - negative financial inventory - in the inventory Model group must be selected…

But as per my knowledge you will not get the real cost of the production until the production is ended and the inventory is closed

Please let me know if i am wrong in any of the cases…

Kranthi is correct - only when you END production are the costs truly known and the WIP is fully reversed and the cost attibuted. The only better way to do this would be to split production to meet the delivery schedule, in this manner you would have production orders per drop and then you would know the costs because they are reported independently. However I will guess this is not possible because the call off is probably not scheduled in the period.

Thanks for both replies! Currently FIFO is used for both RM&FP but still needs to be determined prior to AX instalation. As it is a continuous process I think a whole production order for all the process would be better than partial orders -correct me if I’m wrong- . I was reading Picanol case study: http://www.microsoft.com/casestudies/Microsoft-Dynamics-AX/Picanol-Group/Leading-Textile-Industry-Supplier-Gains-Global-Support-and-Streamlined-Processes/48479

Here it is say that: **…**The opportunities for improved costing are more extensive with Microsoft Dynamics AX 2009. “Besides standard cost, we wanted to calculate the cost of our machines on the basis of the most recently invoiced prices,” … “by upgrading to Microsoft Dynamics AX 2009 we simulate this with the new costing sheet feature.”

As Kranthi says, we will be doing partial ‘report as finished’ transactions, and this product would be selling until more product cames to stock. What I want is an accurate actual cost to estimate a better selling price, maybe it will not be exact, but I want to use the better cost I can get from the system… would the costing sheet feature help me?

The costing sheet allows the user to see the costs, it does not mean they are the end costs. You can get an estimation - depending upon your item cost group setup and the costing sheet construction with indirect/direct overheads and labour you would from the production order be able to see the latest current split of the cost in teh format you design. I suggest you load a production order and estimate it. You will be able to estimation and actual as well. From the inquiries you can see the production posting and from the analysis report costs estimates and costing you will see the posted costs - but the costing sheet probably gives you your good starting point. I can only suggest you have a look at it - go to any production order past estimation and look at the pricing inquiry - then look at the tabs at the top.

Thanks a lot!

Wonderful.