Get greater accuracy in manufacturing costing

Enabled for	Public preview	General availability
Users by admins, makers, or analysts	-	Apr 1, 2025

Business value

The system accurately calculates standard costs for produced items with specific variants or locations by using stock-keeping units (SKUs). This improvement makes costs more precise when you assign production bills of material (BOMs) and routes to SKUs. You can also include noninventory items in production cost calculations, so you get a more complete view of cost shares.

Feature details

Include noninventory costs in finished goods

With this release, you can include noninventory items in the cost of produced items for both actual and standard cost scenarios.

Setup

To start using this feature, go to the Manufacturing Setup page and turn on the Include Non-Inventory Items to Produced Items toggle.

When you turn on this feature, the cost of non-inventory items is part of the cost of produced items. The cost appears as an extra value entry that relates to the item ledger entry of the type Output. You must also configure the corresponding balancing accounts.

The following table shows the relationship between the new types of inventory value entries and the accounts and balancing accounts in the general ledger.

Item Ledger Entry Type	Value Entry Type	Variance Type	Expected Cost	Account	Balancing Account	Comment
(Production) Output	Direct Cost - Non Inventory		No	Inventory	Direct Cost Non-Inventory Applied Account	Similar to item indirect cost
(Production) Output	Variance	Capacity Overhead	No	Inventory	Material Non-Inventory Variance Account	Similar to other variance accounts

Use

You can explore the effect of non-inventory items on the cost of produced items on the BOM Cost Shares page, where you can use the Rolled-up Material Non-Inventory Cost and Single-level Material Non-Inventory Cost fields.

After you post, you can find the amounts in the value entries and general ledger entries.

Note

These changes don't affect assembly orders. You can consume the non-inventory items without impacting the cost of the assembled item.

Use standard cost from versions for production output

Define a production BOM or routing in the version. This setup is useful when a version represents a different variant that requires a different set of components or a different location with other production equipment. These changes can affect cost.

Setup

To turn on this feature, go to the Manufacturing Setup page and select the Load SKU Cost on Manufacturing toggle.

Usage

Use the Calc. Production Std. Cost action in the Stockkeeping Unit Card page to calculate the standard cost.

The action fills in these fields:

• Single-level Material Cost
• Single-level Capacity Cost
• Single-level Material Non-Inventory Cost
• Single-level Subcontracted Cost
• Single-level Manufacturing Overhead Cost
• Single-level Capacity Overhead Cost
• Rolled-up Material Cost
• Rolled-up Capacity Cost
• Rolled-up Material Non-Inventory Cost
• Rolled-up Subcontracted Cost
• Rolled-up Manufacturing Overhead Cost
• Rolled-up Capacity Overhead Cost

Note

• For subassemblies, the system uses information from item cards.
• The standard cost worksheet doesn't support stockkeeping units.

When you post the output for an item that has a stockkeeping unit, the standard cost uses information from the stockkeeping unit.

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Additional resources

learn.microsoft (docs)