Cost Price - precise definition

Hello I have a question regarding the term "cost price." When I create a counting Journal in Dynamics 365 for F&O, there is a tab called "Lines Detail" -> if I open it I can see the field "cost price." Usually I thought this represents the value of our Item which we have bought (so it corresponds to the price of the product receipt). But that is not true of course, since the cost price refers to the price of the released product (in the modul Product Information Management) under the manage cost tab. My question is what does cost price" means specifically? Is it the cost we have to pay in order to hold Item X in the inventory? It would be great if someone could help me, because I was Looking for a Definition and explanation, but I could not find something.

Parents Reply
  • To answer your original question, "it depends". Indeed some people add these costs into the inventory value, miscellaneous costs in the terms of the software, but others do not. It depends what you mean but in many businesses using the system the receipt proces of the product is the cost price. Therefore the question is slightly flipped, what does the business you are dealing with consider the cost (does it include indirects, or handling etc.) then you have the ability to configure it and the receipt price will not be the cost price. As Rares says the cost price on the inventory adjustment, is the inventory cost, the cost for margin reporting, your base cost price for the product. What that actually means will depend upon the financial requirements and configuration of the system. 

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