Chapter 59: Updating Standard Cost (MSCC)

Purpose: Use this option to update the cost of all items in the SKU file with the item's landed cost. The system uses the price defined for the primary vendor plus any additional vendor/item charges to determine the landed cost. For example, if the vendor item price is 10.00 and an additional charge exists for 2.00, the landed cost equals 12.00.

The system updates the standard cost for items only if they have a primary vendor defined in the Item file a vendor item associated with that primary vendor.

You can also update the cost of all eligible items with the landed cost through the Update Standard Cost periodic function. See System Operations Chapter 13: Working with Periodic Functions (WPER) for more information on periodic functions and processes.

Note: The Costing Method (A25) system control value must be set to STANDARD in order to update the standard cost of all items.

Interactive update: You can also update the standard cost of selected items through the Work with Vendor Item Screen, available through the Work with Item/SKUs (fast path = MITM) and the Work with Vendor Items (fast path = WVNI) menu options.

In this chapter:

• Update Standard Cost Screen (Submitting the Batch Program)

• Standard Cost Updates Report

• Landed Cost Calculation

Update Standard Cost Screen (Submitting the Batch Program)

Purpose: Use this screen to submit the Calculate Standard Cost Batch program. This program updates the standard cost of all items defined with a primary vendor and vendor item with the landed cost.

How to display this screen: Enter MSCC in the Fast path field at the top of any menu or select Update Standard Cost from a menu.

INR1092 ENTER Update Standard Cost 7/16/97 9:22:08 The Mail Order Company Press F9 to submit Update Standard Cost. F3=Exit F9=Submit F12=Cancel F24=Select Company

Step-by-step instructions:

1. Press F9 to submit the Update Standard Cost batch program.

2. The system displays the following message:

 

Job (UP_STDCOST) has been submitted to batch.

 

3. The following message displays if the Costing Method (A25) system control value is not set to STANDARD:

 

Costing Method must be Standard.

The system:

• updates the Cost field, visible on the Change SKU (Base Information) screen, with the landed cost for all items defined with a primary vendor and vendor item

• produces the Standard Cost Updates Report

• updates the General Ledger Interface file with the change in inventory valuation. See * = Change Average or Standard Cost for a discussion.

• Cost Change Audit file if the Track Cost Changes (J69) system control value is set to Y. See Reviewing Item/SKU Cost History for a discussion.

Landed Cost Calculation

The calculation for landed cost is:

vendor item price + total vendor item additional charges = landed cost

 

Example:

vendor item price = 10.00

freight charge = 1.00

duty charge = 7%

 

10.00 + [1.00 + (10.00 x (7/100))]

10.00 + [1.00 + (10.00 x .07)]

10.00 + (1.00 + .70)

10.00 + 1.70 = 11.70

Important: The vendor item additional charges are used to calculate landed cost only if the additional charge type is not D (duty). See Chapter 20: Working With PO Additional Charges (WPAC).