We resell products and procure same product from two different vendors. Which ever one gives a better price, we would go with that vendor based on product/quantity and special pricing/promo that each vendor may have at that time. All of them are shipped direct to end customers. So for an item (for e.g. Guitar Hero Software). We are going to treat the items as stocked. assume generally the purchase cost is $10!
$10 from Vendor A on June 2014
9 from Vendor B on July 2014
$9.5 from Vendor A on Aug 2014.
Note: the purchase cost of an item doesn’t change a lot (unless we order large volume. they don’t provide us upfront volume discount and in some cases we negotiate a better price).
As I look at Std and FIFO, I was thinking of going with std costing.
Question: do we need to set up costing version, cost group, calculation groups (we don’t anticipate BOM but may be in the future)
What would be the better way to inventory track these item from costing perspective. Could we use a standard costing version and capture std purchase cost variance or go with FIFO
we have about approx 30 products that we sell most of the time (customer may order different products that we source from vendors).
If STD costing, Is std costing versions mandatory? what is the benefits?
If FIFO, then we need to run inventory valuation/recal eetc.,
Any suggestions greatly appreciated. Thank you