Defining Cost Methods and Item Costs
Access the Cost Revisions form.
- Sales/Inventory
Enter a value from UDC table 40/CM that indicates the cost method that the system uses for the inventory value and to calculate the cost of goods sold (COGS) for the item. Cost methods 01 through 19 are reserved for JD Edwards EnterpriseOne system use.
If you maintain costs at the item level, the system retrieves the default value for this field from the data dictionary. If you maintain costs at the item and branch/plant levels, the system retrieves the default value from branch/plant constants.
- Purchasing
Enter a value from UDC table 40/CM that indicates the cost method that the system uses for the inventory value and to calculate the cost of goods that are sold for the item. Cost methods 01 through 19 are reserved for JD Edwards EnterpriseOne system use.
If you maintain costs at the item level, the system retrieves the default value for this field from the data dictionary. If you maintain costs at the item and branch/plant level, the system retrieves the default value from branch/plant constants.
- Cost Method
Enter a value from UDC table 40/CM that specifies the basis for calculating item costs. Cost methods 01 through 19 are reserved for use by the JD Edwards EnterpriseOne system.
- Unit Cost
Enter the cost for one unit of this item in the primary unit of measure, based on the corresponding cost method.
You can change the monetary amount for any cost method at any time except for cost method 07 (standard). You can prevent standard costs from being changed by setting the processing option.
Best practice for changing standard costs is running the Frozen Update program (R30835). If you change the amount for the cost method that you use to value inventory and to track costs of goods sold, the system applies the new amount to the on-hand quantity of the item and creates journal entries to account for the difference between the old and the new amounts.
Certain programs update the monetary amount for some cost methods. Examples include:
Last-in method
The system interactively updates this unit cost based on the last cost of the item at the time of a purchase order receipt or after an inventory adjustment.
Weighted average method
The system calculates and updates this amount by adding transaction quantities, adding transaction costs, and dividing the total cost by the total quantity.
Purchase method
The system updates cost amounts similarly to the last-in method, but without landed costs.