Last Cost on Manufactured Part - How does it work?

Epicor ERP 10
1

Hello All,

What is the last cost on a manufactured part? Does this get updated after every job? Does it get updated when something is received to inventory from a job? We use standard costing so I would think that the last cost would always be the standard cost if we receive it to inventory since we inventory at the standard cost.

In short, how does last cost work for a manufactured part?

-Utah

2

Per E10 Online Help

  • Part Costing Method
  • Last Cost - Calculated as the most recent receipt cost for this part

and for Job Cost calculations

  • I usually start with the “Job Costing Technical Reference Guide”
  • you should be able to search the Online Help and find the PDF link
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3

I’ll check it out Bruce, spent a lot of time in there this week already and couldn’t gather the strength to hop back in today.

4

Yes, pretty dry “stuff”.
I tend to use the search with Tech Ref Guides, like I would a dictionary or encyclopedia.
So I end up reading smaller, select portions instead of trying to read from cover to cover.
Also having a test system comes in handy. While it can be tedious to perform data entry … clears up a lot of confusion when you can produce some actual before and after values.

1 Like
5

Cost for a job receipt isn’t straightforward. There are lots conditions that make the cost “incorrect”.

The simple or ideal cost would be the sum of all the materials and labor to the job divided by the qty produced.

But what qty received to stock is less than the job qty? This could be from scrap, or just receiving part of the job now, and the remainder later.

  • Say the job is for 10 EA, and the total cost for materials to make 1 is $15.
  • Material to make 10 issued to the job. WIP now has $150 in it.
  • 6 have been completed and are to be received to stock. The other 4 will be received later.

Should the cost be 6 * $15?
Or $150/6 with the next 4 being costed at $0 each?

Edit

FWIW- Avg Cost would receive the first 6 at $0 each, and the final 4 $37.50 each. The value of inventory would be
(6 * $0 + 4 * $37.50) / (6 + 4) = $15 each.

1 Like
6

And this is how Standard Cost was born. :slight_smile:

2 Likes
7

Yes, which is what I was trying to say… we use standard cost so wouldn’t the last cost always be the standard cost because everything else is posted to variance accounts? Or does the last cost actually take the cost of the job as Calvin was getting at?

8

Standard cost is ALWAYS set in the Costing Workbench (or much less preferably for Make parts in Adjust Cost Entry). Last Cost would contain differences in quantity (used more or less), materials (substitutions), and the actual labor and outside processing reported. They are tracking different things, so Calvin is spot on.

9

Right on Mark and @ckrusen ! Thank you !