Dynamics 365 Business Central: Item Costing Part 16, Specific Costing

Dynamics 365 Business Central: Item Costing Part 16, Specific Costing:

Hey everyone, we're going to keep going on costing. Before I dive into it, I want to mention again the manufacturing training we're doing in three weeks. It's online, so just go and click on the link underneath if you're interested. It's going to be loads of fun. You're going to deep dive into manufacturing, know everything about manufacturing in Business Central in three days. It's online, so you can be anywhere in the world if you want to sign up.

Anyways, we are going to get into costing. We're going to talk about specific costing. We're going to create a specific coffee mug, an item. How is specific costing? Why is it different? It's pretty interesting if you enable item tracking on the item, which means that you either are using serial numbers or lock numbers. You're either serializing your item, or you're lock tracking your item, then you can use specific costing. You cannot put specific costing unless you have item tracking set on the item.

Once it's set, you have a transaction, let's say, you've got a purchase. Let's say it's serial numbers. The serial number for, let's say, that's quantity one. I'll do it like this. One, and serial number AB01, and cost, whatever, five dollars. When you sell the item, you specify the serial number in the sale. You sell a particular serial number to the customer. Scan the serial number or however you do it. When you sell that serial number, it takes the cost from that serial number. That's why it's specific. It is exactly what you bought it at. You cannot get more accurate with costing than this.

The overhead, of course, is you got to say one to one. I bought this particular serial number, now I'm going to sell that particular serial number, which is a lot of overhead if you had to scan everything by serials. It works, in some cases, where everything is serialized. However, with lots, lots is a nuance of this. I'm going to show you the serial in the screen share, and maybe we'll take another radio on the lot. Let's take a look.

Okay, so let's go ahead and create the specific coffee mug. I'm just going to go ahead and say, new, and name it specific coffee mug. If I actually put the costing method here to specific, I get an error. The error is that it wants a tracking code before you actually put it to specific, which makes sense. Let's just go ahead and revert this. Go down to tracking, and I'm going to just make this a serialized item. It's serialized for all. Now, I can go ahead and say specific. Now the system is happy.

What is going on here? If I go into a purchase order, and buy this item, I'm going to be asked to specify a serial number for the item since it's serialized. I'm just going to put the invoice number right here, so specific coffee mug. I'm just going to buy one because I have to put in a serial number for each one. Save me the trouble. Say, it's $10. Actually, let's do two. I'll go here to line item tracking lines to put in the serial number. I put serial number AB and AB like that. The quantity is one and one.

With serial numbers, we can only have quantity one for each serial number. Each piece is serialized, basically. I go ahead and say close and hit posting, post.

If we go into the item, now, specific coffee mug, and take a look at the costing for this. I'm just going to go into the ledger entries. I can see that we get a transaction for each serial number. If you have an item that has lots of serial numbers, there's going to be lots of item ledger entries here. Anyway, that's an aspect of serial numbers.

The other aspect of the costing method being specific is that when I actually sell a particular serial number in here, the cost will come from that serial number, itself. If I go ahead and do a sales order, it's pretty simple. It's just the cost off that particular serial number as it came in. Create a new serial number. I mean, create a new sales order. Do a specific coffee mug from Maine. Let's say I'm selling one.

The cost is ten. Obviously that comes straight from the unit cost on the cart. However, the actual cost comes from item tracking lines when I pick the serial number. This serial number has a cost as came in on the purchase order. It's that exact cost that's coming into this sales order. That's why it's called specific. It's specifically placed on the serial number for that item.