Updation of Finished Goods with purchase parts

Hi all, The components cost gets loaded to production item if that purchase item is invoiced. HOwever in many cases vendor supplies the material and sends the purchase invoice later on. By that time these components gets consumed in production order but the cost of the finished goods does not get any value as the purchase items are still not invoiced. Is there any way out to handle this scenario. Regards Abhay

Hi Abhay Are you referring to Production or Inventory BOM’s? And of course what is the costing method?

Hi Steven, I am referring to Production BOM and the costing method is FIFO. Abhay

Hi Abhay I have the following Parent, Costing = FIFO, current cost 0.00 with zero in stock. Parent contains one component item, where 10 off are required, costing method if FIFO with a LDUC and Unit Cost of 0.19. I have zero in stock. I load a purchase order for 10 off of the component. The system tells me the cost will be 0.19 and an amount of 1.90. I receive 10 in. I load a production order for 1 off of the parent. The unit cost reflects that of the item card of 0.00. I post the produciton journal and finish the production order. I chose not to update the unit cost. I load a purchase invoice, get receipts and alter the cost to 0.21 then post the invoice. I run the adjust cost item entry. The parent card now tells me the average cost, unit cost and last direct unit cost of the item are 2.10. Does that answer your question?

Hi, The problem here is that if the vendor sends the purchase invoice after some time, till then there will be no output cost. The WIP will remain and there will be no COGS after selling, thus giving wrong interpretation of profitability. Of course, this happens when we do not have a unit cost on item card. Making expected cost true does not help either. Regards, Rohit

Hi, Let me put across the steps and was mistake instead of FIFO it is average. 1) Create 3 items: FG (production item) and two components C1 and C2 (purchase items). Costing Method: Average. 2) Create BOM and link to FG and qty of components is 2 each. 3) Create two PO say PO1 and PO2 (1/4/05). PO1 is having 2 qty each of C1 and C2. PO2 say is having 5 qty each of C1 and C2. 4) Receive PO1 and Invoice. (1/4/05). 5) Receive PO2 (don’t invoice) (3/4/05). 6) Create production order PR1 (1/4/05) for FG for qty 1. 7) Create consumption journal for production order PR1 (1/4/05) that will consume 2 qty each of C1 and C2, which has been received in PO1. 8) Create output journal for production order PR1 (1/4/05) for FG and qty as 1. 9) Finish the production order PR1. 10) Create production order PR2 (3/4/05) for FG for qty 2.5. 11) Create consumption journal for production order PR2 (3/4/05) that will consume 5 qty each of C1 and C2, which has been received in PO1. 12) Create output journal for production order PR1 (3/4/05) for FG and qty as 2.5. 13) Finish the production order PR2. 14) Run the batch job (1/4/05), system is not updating cost for PR1. Query: Even though the components used for PR1 and invoiced. Regards Abhay

Are the ledger entries associated with the first production order all flagged as completely invoiced? Do you have automatic costing turned on in the inventory set-up? What version are you running. Essentially you are saying you make one item where all the items are invoiced and because you are making the second the cost is not pushed through for the first? In mine it does, but I am using 4.0 and the production journal, you are clearly not from your processing description.

Hi Steven, I am on version 3.70 B. Yes automatic cost posting in ON. Is it working in version 4.0. Also had you checked in version 4.0 incase even first purchase order is not invoiced than also system updates the cost of the production item based on the value entered in purchase order line. If it is doing so than it means that Navision has corrected this error in version 4.0. Will wait for your reply as one of our client got stuck up. Regards Abhay

Hi Are you now saying you have an initial purchase order for the components that is not invoiced but a later order that is, so earlier transactions are uninvoiced? What is connecting you consumption to you input if this is the case - do you use item tracking? If not it will consume the items from the earliest booking in, i.e. your uninvoiced order. Using 3.70 and running the scenario you desctibe I get the parent unit cost and last direct cost to update with the costs after running the adjust cost item entries, although with average this is naturally the unit cost not the cost associated with the items booked in. So I do not believe it is “fixed” in version 4.0 when I can get it to process through in 3.70. Therefore it has to be something in with your set-up or the way you are explaining your issue (are you missing anything of importance out). Have you tried this in Cronus?

Hi, Purchase order PO1 is invoiced however PO2 is only received and not invoiced. Production order PR1 and PR2 are finsihed after reporting the consumption and output. After running the batch job, if you check the ILE for Finsihed goods FG, unit cost field is blank. I am working on Cronus also all the three items used above new with no previous transactions. Regards Abhay

Hi Well Assuming you are talking about the “Cost Amount (Actual)” field in the item ledger entry then following your example in both my databases I see this field updated with the appropriate cost. There must be something else you are doing as it is working fine for me. Sorry [V]