Setting Up Item Records for Standard Costing

To use standard costing for an item, set up the item record.

To set up an item record for standard costing:

Go to Lists > Accounting > Items.
Click Edit next to the item record.
On the Purchasing/Inventory subtab, select the Standard costing method.

Note:
The costing method cannot be changed after the record is saved.
Set the cost category.

Cost categories you have created appear in the list.

For more information about cost categories, see Creating Cost Categories.
Enter a cost in the Standard Cost field. You can enter a cost per location. The value in this field can be used as the default when you create a planned standard cost record.

To streamline data entry for setting up standard costs, you can also import values into this field using CSV import.
In the Purchase Price Variance Account field, choose the account to post a variance to when a purchase transaction calculates a cost variance.
In the Gain/Loss Account field, choose the account to post a variance to when an inventory transfer calculates a cost variance.
On assembly item records, complete the following:
1. In the Production Quantity Variance Account field, choose the account to post a variance to. The variance posts when the assembly cost is higher or lower than expected due to the number of items used in the assembly build.
  
  For example, a variance is created if a build costs more because you use 10 widgets when you normally use 8.
2. In the Production Price Variance Account field, choose the account to post a variance to. The variance posts when the assembly cost is higher or lower than expected due to the expense of items used in the assembly build.
  
  For example, a variance is created if a build costs more because you use widgets that cost $30 each when you normally pay $20.
3. In the Unbuild Variance Account field, choose the account to post a variance to when an unbuild transaction calculates a cost variance.
  
  These fields appear only on assembly item records.
Complete additional fields as necessary.
Click Save.

Deletion of Standard Cost Item

A warning message appears when you attempt to delete an item that has a standard cost, either active or historical. This is done to help preserve the integrity of the data used to evaluate items' inventory costs. For example, this happens when the unit cost of an item is found in inventory revaluation transactions and not on item records. Before you can delete such an item, you must first delete the standard cost on the inventory revaluation transaction. The warning message displayed includes a link to the revaluation transaction that includes the standard cost.

To set up an item record for standard costing:

Deletion of Standard Cost Item

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