Achieve greater accuracy in manufacturing costing

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

Business value

The standard costs for produced items with specific variants or locations are accurately derived from stockkeeping units (SKUs). This improvement makes cost more precise when production bills of material (BOMs) and routes are assigned to SKUs. You can also include non-inventory items in production cost calculations, which gives you a more comprehensive view of cost shares.

Feature details

Include non-inventory costs in finished goods

This release allows non-inventory items to be included in the cost of produced items in 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.

Afterward, the cost of non-inventory items is included in the cost of produced items as an additional value entry related to 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 expected effect of non-inventory items on the cost of produced items on the BOM Cost Shares page, where the Rolled-up Material Non-Inventory Cost and Single-level Material Non-Inventory Cost fields are available.

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

Note

These change don't affect assembly orders: the non-inventory items can be consumed but without impacting the cost of the assembled item.

Use standard cost from SKUs for production output

You can define production BOM or routing in the SKU, which can be useful if the SKU represents a different variant, which requires a different set of components or different location where different production equipment is available. These changes might impact cost.

Setup

To activate this feature, navigate to the Manufacturing Setup page and enable the Load SKU Cost on Manufacturing toggle.

Usage

You can now use the Calc. Production Std. Cost action in the Stockkeeping Unit Card page to calculate standard cost.

That action will populate new 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.
• Standard cost worksheet doesn't support stockkeeping units.

When you post the output for an item that has a stockkeeping unit, the standard cost will be defined based on information from the stockkeeping unit.

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