24 May 2012

Weekly Review: Specific Item Costing

I ran into a situation recently where a client needed specific item costing for each product that they sell.

This is most common for serialized items where there is a single item number but specific costs need to be applied for each serialized item.

In a simple example, consider a dealership where each car model is an item number. We might have 15 MINI Cooper's on the lot in various trim models from stripped down to fully loaded but each one is a different cost with a different serial (VIN) number. You can't average the costs of the fully loaded and the stripped down models and you sure can't use FIFO or LIFO. [I'm not suggesting this is the way to run a dealership. It's an example.] You have to account for the specific cost of each car and relieve that cost when the car sells.

Dynamics GP can handle this but there are a few things that you need to know to make this work right:
  1. The item must be using FIFO Perpetual or LIFO Perpetual valuation.
  2. The items have to have serial numbers.
  3. When you sell an item, the correct cost WILL NOT show on the screen or on any edit lists.
  4. The correct cost WILL SHOW on the posting reports.
GP doesn’t finalize the cost for the item until posting so all of the edit reports show FIFO or LIFO cost but the correct cost is applied at posting. It works, you just can’t tell that it works until you post the transaction.

[Update: Lot Tracking works the same way]