Re: HEEEEEEELP! With Cost Accounting (CST)

[Shalom Carmel <shalom@xxxxxxxxxxxx>]

>> 
>>I have a serious problem with Cost Accounting. My client needs to use 
>> FIFO costing, which CST doesn't do. CST only uses Average Cost and Last 
>> Cost method, but there's no way I can convince them to use one of these. 


Hello Lu.
You have quite a problem.
Average cost accounting changes the cost of material only when a costed
receipt enters the system. FIFO costing changes the cost of material with
EVERY issue as well, as each and every transaction changes the mix of
receipts. 
Thus, it is not feasible to implement as an on-line costing method. 
I have implemented FIFO costing several times, and it was always a
periodical (monthly) batch costing. I have never used it instead of the
regular costing methods, but as a supplemental costing system. With 99 cost
sets and reports to match there was no reason to replace the standard methods.

Try to get your client's agreement on Lot-based costing, which is similar
to FIFO and several degrees easier to implement:

Each and every lot has it's actual cost calculated and stored in the Lot
master (ILN) file. The actual inventory breakdown by lot should be
identical to FIFO, if the warehouse issues material in FIFO order.
You have full lot traceability via the Inventory Transactions file (ITH),
so costing a shop order should not be too dificult. The process will step
through all items sorted by low level code, and write in a special Cost Set
the calculated FIFO cost.
Catches: 
Lot management for all items is necessary.
Good only for material costing, although it can be expanded to labor with
some thought.
You can't buy this product.

Good luck!


_________________________________________________________________
Shalom Carmel                           tel 972-9-7662818
General Manager                         fax 972-9-7656392
Venera Systems Ltd                      email shalom@venera.co.il
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