Last Cost

Kinetic ERP
1

In regards to Last Cost, could you please clarify what “current quantities of the part record” means? Does this mean that if an order has a lot size of 10 and the last order produced had a cost of $1,500, the last cost will be $150? Or does the lot size not matter and the last cost will simply be the cost of the last production?

Lastly, how is the internal price calculated?

2

From the Job Costing Technical Reference manual:

“This costing method pulls in the most recent Unit Cost of the part. This value is then used as the Unit Cost of the part for all future inventory transactions until a new part quantity is received to inventory.”

ALL inventory will be costed at this value.

The “Internal Price” and “Sales Unit Price” fields on the Part master are not calculated by Epicor, these are values you enter.

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3

Price =/= Cost :smiley:

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4

Lot size does not matter in the cost. What will matter for the last cost is the unit cost of the last transaction received to inventory.

For example you might have a job to manufacture 10 pcs at 150 each. You also have a PO for same part at 170 each. Even if the PO is created before the job, if you have not received anything to inventory from the job and you do a partial PO receipt, the last cost will be 170/each. Until you receive one unit from the job and then the last is 150/each. And if you have another partial PO receipt, the last cost jumps again to 170 and so on.

5
  1. Internal price and inventory value are not the same amount, is this correct?
  2. Is Last Cost calculated using the current inventory quantity or is it calculated using the inventory quantity when the part was last cost rolled?
6

Internal price is something that the company sets for internal transfers, it has nothing to do with inventory value.

There is no need to do a cost roll on parts that are Last. Whenever something is received to inventory (regardless of where it comes from) the cost will change to the last receipt and all inventory in stock will be adjusted to reflect the new cost. If you have 10 pieces in inventory and receive 1 part for $1, the cost will be set to $1 which makes the inventory value $11. If you then receive 1 more piece at $10, the cost will be set to $10 and the inventory will now be valued at $120.

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7

Thanks John,

I understand now.

Question - Last Cost is the amount recorded on the most recent part transaction made against a part number, when I checked PN SKP-400, it seems like it is the same cost as the current cost-why would that be?

8

Not the most recent part transaction, because if you purchase directly to a job, the cost will not update. And the same for make to order, you do not receive the part to inventory before shipping, the cost does not get updated.

Is it a purchased part or manufactured?

9

Purchased part

10

With a purchased part, you can check the last few POs to see the price. But a purchased part should be more consistent than a manufactured part, so it does not sound like it is a problem.

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11

Thanjs John,

Since last cost changes whenever something is received to inventory regardless of where it comes from, does this mean last cost is constantly changing? In other words, does this mean that anytime we receive inventory for a part, last cost will be updated?

You also mentioned that this applies regardless of where the inventory comes from does this mean that if for example we manufacture SK-400 and purchase SK-400, last cost will update to the last cost of whichever transaction was processed last a manufacture or purchase?

12

On purchased parts that are QtyBearing, yes.

13

Yes

14

manufacture or purchase?

15

Yes to all of your questions.

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