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Landed Cost Calc Paramaters

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Landed cost is an alias for the direct cost of an item.

Since this cost can vary during a period of time, or be an estimated mean average cost for a year as in a Standard cost environment, the tab provides a choice of options from where the cost must be sourced.

The Sales manager is responsible to specify the preferences for a specific product.

The manager thus specifies, via this function, the landed cost base from which profit margins are calculated. The selected option will also serve as a baseline for the purpose of calculating required amounts on Requisitions if a part of this product is required by a requisition.

 

Three preferences are provided.  The reason being that if preference 1 does not apply to a specific part and the cost cannot be sourced via that option, preference 2 and eventually preference 3 will be applied.

(E.g. your 1st or 2nd choices may be Last purchase price or Supplier list price but not all parts, for example phantoms or manufactured parts, have purchase prices and therefore the next option will be applied to obtain the cost).

 

Since the function forces 1 of the 3 options to be either "Part financial year data" or Last average cost, depending on the stock valuation method, the cost will normally be sourced from at least 1 of the preferences.

 

At the time of order entry, the function not only displays the landed cost, but also via which option it was sourced.

 

On this tab the following fields can be viewed:

 

hmtoggle_plus1Apply

On 'Apply' the system will validate that either Financial Year Data or Last average cost is selected in one of the preference frames.

This is to ensure that at least 1 preference applies an option that is likely to return a cost value, not being specific to the part's source of replenishment or dependant on the part having stock at that point in time.

 

If the Stock Valuation Method setting is set to Average Costing) then either Fin year data or last average can be applied.

 

If the Stock Valuation Method setting is set to Standard Costing the system will validate that Financial Year Data is selected as 1 of the choices.

hmtoggle_plus1Last Purchase Price History Days Limit

This field will only be enabled after the 'Last Purchase Price' option button has been selected as the cost option.  You may enter up to 999 days to search for the Last Purchase Price. This field serves the purpose to limit the past horizon for which Last purchase prices can serve as a valid, representative cost baseline for the purpose of profit margin calculation or for calculating required amounts on Requisitions if a part of this product is required by a requisition. Thus, if the last purchase event was more than the specified number of days in the past, it will be ignored and the landed cost will be sourced from 1 of the other preferences specified.

hmtoggle_plus1Location Limits

This frame will be enabled when the Location Average Cost option is checked as a preference.

 

Only if the Stock Valuation Method is set to Average Costing can this option be chosen.

3 Options to calculate the location average cost of a part is provided:

 

All Stores

Stock in all store locations will be taken into account when the average l cost is calculated. The cost will thus be based on the average cost for all stock locations of the part in all stores in the Company.

 

Limit Locations To Controlling Store

Stock in all locations of the part's controlling store (as specified on its Part master record) will be taken into account when the average cost is calculated. Stock in other stores will thus be ignored and will not be included in the average cost calculation.

 

 

Limit Locations To Controlling Division

Stock in all locations of stores in the part's controlling division (as specified on its Part master record) will be taken into account when the average cost is calculated. Stock in stores in other Divisions will thus be ignored and will not be included in the average cost calculation.

hmtoggle_plus1Preference 3

Preference 3 indicates the 3rd preferred source of cost to serve as a cost baseline when profit margin calculations are done or for calculating required amounts on Requisitions if a part number linked to this product is required by a requisition.  If preference 1 and 2 does not apply to a specific part and the cost cannot be sourced via those options, preference 3 will be applied.

(E.g. your 1st or 2nd choices may be Last Purchase Price or Supplier list price but not all parts, for example phantoms or manufactured parts, have purchase prices and therefore the next option will be applied to obtain the cost) Since the function forces 1 of the 3 options to be either "Part financial year data" or Last average cost, depending on the stock valuation method, the cost will normally be sourced from there if not found via any of the preceding preferences.

 

If the Stock Valuation Method setting on System Configuration is 'Standard Costing' the Part Financial Year Data, Last Purchase Price and Preferred Supplier Catalogue Price option buttons will be enabled.

 

If the Stock Valuation Method setting on System Configuration is set to 'Average Costing' all the option buttons in the frame will be enabled.

 

This frame will only be enabled after the user selects an option in the Preference 2 frame.

hmtoggle_plus1Preference 2

Preference 2 indicates the second preferred source of cost to serve as a cost baseline when profit margin calculations are done or for calculating required amounts on Requisitions if a part number linked to this product is required by a requisition.  If preference 1 does not apply to a specific part and the cost cannot be sourced via that option, preference 2 will be applied, or preference 3 as a last resort.

 

If the Stock Valuation Method setting on System Configuration is 'Standard Costing' the Part Financial Year Data, Last Purchase Price and Preferred Supplier Catalogue Price option buttons will be enabled.

 

If the Stock Valuation Method setting on System Configuration is set to 'Average Costing' all the option buttons in the frame will be enabled.

 

This frame will only be enabled after the user selects an option in the Preference 1 frame.

hmtoggle_plus1Preference 1

Preference 1 indicates the preferred source of cost to serve as a cost baseline when profit margin calculations are done or for calculating required amounts on Requisitions if a part number linked to this product is required by a requisition.  If preference 1 does not apply to a specific part and the cost cannot be sourced via this option, preference 2 will be applied, or preference 3 as a last resort.

(E.g. your 1st choice may be Last purchase price but not all parts have purchase prices and therefore the next option will be applied to obtain the cost.)

 

If the Stock Valuation Method setting on System Configuration is 'Standard Costing' the Part Financial Year Data, Last Purchase Price and Preferred Supplier Catalogue Price option buttons will be enabled.

 

If the Stock Valuation Method setting on System Configuration is set to 'Average Costing' all the option buttons in the frame will be enabled.

hmtoggle_plus1Stock Valuation Method

This is an information field that populates with the Stock Valuation Method setting from the System Configuration table and will display the method as either standard costing or Average costing.