Purchased Item Costs

For purchased items, the standard and simulated purchase costs are entered in the panel Purchase costs (in the Item window, in the Item costs rollup window (Costing menu)). The total inventory costs (and other calculated costs) are also displayed in the panel.

The Last purchase price is the price of the last validated order.

The Standard Cost is equal to the standard purchase price, increased by the additional purchase cost rates (entered in the Overheads cost window in the Item costs rollup window (Costing menu)). It is calculated by the Item costs rollup function if the Update standard cost option is selected.

Complete information concerning the physical inventory (in units) and its monetary value is also displayed on this panel.

The Beginning Inventory is the physical inventory at the time of the last inventory closure.

The Beginning Inventory Actual value is determined at the closure of inventories and is equal to the average unit value multiplied by the quantity in inventory. The standard Beginning inventory value is equal to the beginning value multiplied by the standard purchase price. The variance value of the beginning inventory is equal to the difference between the two values.

The value of the Receipts are estimated either from the standard purchase price, or from the actual price agreed on at the time of the order/delivery process and recorded on the order. The Receipts variance is equal to the difference between the real value of supplies (into inventory) and the standard value of the receipts, estimated with the standard purchase price.

The value of the Issues are estimated in the same way.

The On hand actual values is estimated with the initial inventory value and the successive actual receipts values.

The On hand standard values is equal to the On hand Inventory multiplied by the standard purchase cost.

The On hand variance value is the difference between the On hand actual value and the On hand standard value.

The Beginning inventory average cost is equal to the Beginning inventory actual value divided by the Beginning inventory level.

The list displaying the different costs characterizing the purchased items can be printed by selecting the Costs of purchased items (from the heading Items and bill of materials in the Reports window).