In your production environment The cost calculation for finished products to be manufactured is normally based on a preliminary cost estimate. The cost of raw materials is often determined by economic factors.
As a result, a ‘mixed’ costing system is often in place in your company today.
How are we going to track cost calculations in the ERP system?
In Microsoft Dynamics NAV, this can be implemented perfectly by configuring the item cards that define the raw materials—the ‘Valuation Method’ ‘FIFO’ to keep in mind. First In, First Out means that the inventory that comes in first must also go out first. The cost price on the item card then becomes the rising average cost. This cost price therefore follows the market price and will smooth out the peaks.
The item cards that define the semi-finished and finished goods can use the Dynamics NAV ‘Valuation Method’ ‘Fixed’ This activates the NAV standard cost calculation with variance analysis. This allows efficiency to be measured for each production batch based on the deviations (variances) from the target cost.
If you'd like to learn more about what your ERP software package can do for your business, take a look at our Microsoft Dynamics 365 Business Central page or Please contact our team.
