# what is cost price used for in Inventory Close AX 2012

#### Get our Free Newletter

Don't you have the time to be online here at DUG every day? So how do you follow what is going on in the Dynamics industry and community?
If you subscribe to the DUG Newsletter then you can relax! We will make sure that you don't miss the big news!

Check out our
page a complete list of our different newsletters.

#### This post has 1 verified solution | 11 Replies | 2 Followers

486 Posts
4,869 Points
Joined: 2012-11-4
Last Online:
2014-11-16 0:26
Location: Hoboken New Jersey
Patrick Am posted on 2013-2-25 18:59

Hi,  there is a step in the inventory close - Check Cost price?  What is this used for and how does the "deviation percentage" change will affect the issue to receipt settlements?

say if I set the percentage from 30% to 50% on the basis of item cost price, what is the impact?

From what I have researched,  "it is used to determine receipts that will adversely affect the cost price calculation during the inventory close"    Could someone explain perhaps with an example?

Cost price is calculated on the basis of running average prior to close; after close, issue transaction is settled to receipts

say cost price of an item is \$10 at the start,  we purchase 3 times 10 QTY @ different prices \$8, \$9 and \$25 due to high demand at one time. (assuming all receipts invoice updated, )

\$80+\$90+\$250 divided by 30 is the running average = \$14; an issue transaction applied for 30 Qty @ \$14

when check cost price is run with 50% deviation, i assume the receipt @25 will show up. then what steps do we need to take?

how will the cost price is impacted after the inventory close?

thank you

#### Verified Solution

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK

Verified by Patrick Am

You can use the Check cost prices report to enter a maximum deviation percentage, and then view the items that will exceed the maximum deviation percentage. The deviation is based on the item cost price, item or median cost price, or median.

For example, an item contains a cost price (using the currency of the United States dollar (USD)) of 5.00 USD. When a purchase order invoice is posted for this item, the cost price entered is 15.00 USD. When printing the report, the maximum deviation percentage that is set will be 30 percent and the item cost price will be used as the base. This purchase order would appear on the report because the cost of the item posted, 15.00

“Any fool can know. The point is to understand.”
Albert Einstein

#### All Replies

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK

Verified by Patrick Am

You can use the Check cost prices report to enter a maximum deviation percentage, and then view the items that will exceed the maximum deviation percentage. The deviation is based on the item cost price, item or median cost price, or median.

For example, an item contains a cost price (using the currency of the United States dollar (USD)) of 5.00 USD. When a purchase order invoice is posted for this item, the cost price entered is 15.00 USD. When printing the report, the maximum deviation percentage that is set will be 30 percent and the item cost price will be used as the base. This purchase order would appear on the report because the cost of the item posted, 15.00

“Any fool can know. The point is to understand.”
Albert Einstein

1,025 Posts
11,109 Points
Joined: 2007-9-25
Last Online:
2014-6-18 5:15
lally replied on 2013-2-26 7:31

You can use the Check cost prices report to enter a maximum deviation percentage

Why we need to know the maximum deviation percentage and how it is related to business scenerio ?

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK

You do not need to know it, but it is a tool used where the received cost diverges from the current cost, which in itself will create costs and cause impacts, so if the usual cost is \$10 and the user accidentally enters \$100 this would be outside of a 30% deviation (as an example) and would highlight that there is a potential rogue transaction adveresely impacting on cost - it is an early warning system for finance at close.

“Any fool can know. The point is to understand.”
Albert Einstein

10 Posts
56 Points
Joined: 2013-2-26
Last Online:
2013-8-6 20:37
Location: St. Louis, MO
Matt Plodzien replied on 2013-2-27 21:45

Hi Patrick,

This report allows you to enter a maximum deviation percentage. Items that appear on this report will be only those exceeding  the maximum deviation percentage. The deviation is based on the item cost price, item or median cost price, or median.

Hope this helps,

Shantanoo, Barry-Wehmiller International Resources

1,025 Posts
11,109 Points
Joined: 2007-9-25
Last Online:
2014-6-18 5:15
lally replied on 2013-2-28 7:14

You do not need to know it, but it is a tool used where the received cost diverges from the current cost, which in itself will create costs and cause impacts, so if the usual cost is \$10 and the user accidentally enters \$100 this would be outside of a 30% deviation (as an example) and would highlight that there is a potential rogue transaction adveresely impacting on cost -

it is an early warning system for finance at close.

Hi Steven ,

As you said if the usual cost is \$10 and the user accidentally enters \$100 this would be outside of a 30% deviation , Can i know when the system gives the warning Is it during the PO creation or packing slip ?

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK

the warning is on the inventory close highlighted as a comment. No impact on user entry of PO or receipt etc. Invoice controls would pick this up so really it is for received not invoiced stock.

“Any fool can know. The point is to understand.”
Albert Einstein

1,025 Posts
11,109 Points
Joined: 2007-9-25
Last Online:
2014-6-18 5:15
lally replied on 2013-3-1 7:20

Hi Steven Sir ,

I am not able to understand the use of the functionality , can you explain in detail about the functionality usage ?

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK

I can only suggest you read the manual and run through the process. It is an early warning built into one specific process of a potential issue. It does nothing but warn you.

“Any fool can know. The point is to understand.”
Albert Einstein

1,025 Posts
11,109 Points
Joined: 2007-9-25
Last Online:
2014-6-18 5:15
lally replied on 2013-3-4 6:41

I can only suggest you read the manual and run through the process. .

Could you share the manual name ?

11,179 Posts
180,994 Points
Joined: 2000-11-3
Last Online:
2014-11-27 23:54
Location: UK