Use this function to create, or modify the standard cost of a specific product at a specified site.


Best practice: Create new standard costs with a future date so that you can modify if needed. The new standard cost is added to the STKMVTITC - Movement with value pending table and the value is applied on that date when the FUNSMI - Standard cost adjustment batch task is run.


Costs are calculated from a set of user-defined parameters. These include defining a specific route or bill of material (BOM) alternative from which to base the new cost, and applicable quantities.

A single product-site record has only one current standard cost. You can prepare simulated costs then update the product-cost record when the costs are finalized.

A standard cost cannot be modified once it has been applied to a product, or if the validity date is in the past.


Points to note

Prerequisites

SEEREFERTTO Refer to documentation Implementation

Screen management

The Standard costs function contains a home section in which you define the control parameters for a specific product, and 3 additional sections:

  • Level cost: Use this section to enter costs for the bill of materials (BOM) level.
  • Multilevel totals: This section displays the total value of the standard cost for the complete bill of materials (BOM). The figures in this section are fixed values.
  • Calculation parameters: This section displays the calculation parameters applied when this product was last calculated.

You can choose to display the calculated costs results in a table, or as a pie chart.

Header

You use this section to load the standard costs for a specified fiscal year, for a specific product, and site.

Block number 1

Product (field ITMREF)

Enter or select the product code to inquire upon.
Storage site (field STOFCY)

Enter or select the storage site where the selected product is active.

The Selection icon (magnifying glass) only suggests products that are referenced in the products-sites table.
Major version (field ECCVALMAJ)

Use this field to indicate which major version of this product applies. Major versions might be used where there have been increased or significant changes to the original or previous version, that is the 'form, fit or function' has changed.

Type in, or select a version code from the list of version codes displayed. This field is not available for entry if the product code defined in the Product field is not version managed.
Minor version (field ECCVALMIN)

Use this field to indicate which minor version of this product applies. Minor versions might be used where there have been minor features or changes in functionality, or significant fixes applied to a specific major version.

Type in, or select a version code from the list of version codes displayed. This field is not available for entry if the product code defined in the Product field is not version managed.
Fiscal year (field FIYNUM)

Enter or select the number of the fiscal year for the company and the ledger type.
Validity start date (field ITCSTRDAT)

This field displays the start date defined for the selected fiscal year. You cannot change this date.

Validity end date (field ITCENDDAT)

This field displays the end date defined for the selected fiscal year. You cannot change this date.

Product category (field TCLCOD)

This field displays the product category to which this product is assigned. You cannot amend this field.
Cost group (field BRDCOD)

This field displays the cost group set on the product. It can be amended.

Cost calculations are used to break down material costs. Use this field to define where (subtotal) the material cost for this product category must be posted.

The MAT - Number of material groups
Update (field STDCSTUPD)

This field displays the method that will be applied when the cost calculations are performed.

  • Calculated. The existing costs (entered or calculated) will be overwritten when the cost calculation is run.
  • Entered. The cost calculation will not modify existing cost data.
field LCKSCRN

This field displays a warning if this particular product-storage site record already has a standard cost assigned to it for this fiscal year. You will not be able to update the standard cost.

Grid

Movement type (field OTRSTYP)

You can include overheads in the cost calculations. To include overheads for a specific stock movement type select the required movement type.
Overhead (field OVECOD)

Select an overhead code.

Overhead codes are used as follows:

  • To value selected stock movement types.
    The column that defines the formula or fixed rate to be used for the calculation is defined by the OVECOLSTK - Stock overhead column parameter (STO chapter, VAL group).
  • To determine the cost price or the production cost price calculation.
    Selected functions use the overhead code for the following:
    • To value work center overheads associated with the valuation dimension.
    • To value overheads for materials or semi-finished products.

The overheads column that contains the formula or fixed rate to be used in the cost price calculation functions is defined by parameters. For standard cost calculations the OVECOLSTD - Standard calc overhead column parameter (GPA chapter, COS group) applies.

You can modify the column to be applied before running the calculation.
Include lower level ovrh. (field OVECPNFLG)

Use this field to select the calculation type.

  • No. The overhead calculation for the manufactured product does not take into account the overhead amount for the lower-level products.
  • Yes. The overhead calculation for the manufactured product takes into account the overhead amount for the lower-level products.

SEEINFO 

Tab Level cost

Use this section to enter costs for this level of the bill of materials (BOM), for this product-site combination.

You can choose to display the calculated costs results in a table, or as a pie chart. Click Show list/Show graph, as required.

Level cost

Component (field MATTOTLEV)

Use this field to enter the current stock value for this product.
field CUR

Code of the currency in which the customer costs are expressed.

Material (field MATLEV0)

Use this field to enter the current stock value for the components directly associated with the top level of the bill of materials (BOM).
Machine (field MACTOTLEV)

Use this field to enter the machine cost for this product-site combination.
Labor (field LABTOTLEV)

Use this field to enter the labor cost for this product-site combination.
Subcontract (field SCOTOTLEV)

Use this field to enter the subcontracted cost for this product-site combination.
Overhead (field OVETOTLEV)

Use this field to enter the overhead costs for this product-site combination.
Total cost (field VLTTOT)

This field displays the total costs for this product-site combination.
Calculation quantity (field CLCQTY)

Use this field to define the quantity for the basis of the calculations.
field STU

This field displays the unit of the calculation quantity.
Detail (field DETCST)

Click this Search icon to view the material, machine, labor and overheads cost breakdown.

Grid

Description (field LBL)

This field displays the description of the calculated cost.
Level cost (field CST)

This field displays the result of the calculated cost.

Tab Multilevel totals

This section displays the total value of the standard cost for this product-site combination, for the complete bill of materials (BOM). The figures in this section are fixed values.

You can choose to display the calculated costs results in a table, or as a pie chart. Click Show list/Show graph, as required.

Multilevel totals

Material (field MATTOT)

This field displays the total stock value of the components in this product design BOM revision. You can amend this figure as required.
field CUR

Code of the currency in which the customer costs are expressed.

Machine (field MACTOT)

This field displays the total machine cost of the components in this product design BOM revision. You can modify this figure as required.
Labor (field LABTOT)

This field displays the total labor cost of the components in this product design BOM revision. You can modify this figure as required.
Subcontract (field SCOTOT)

This field displays the subcontract service cost. The price used to value the service is specified by the VLTSCEOEXT - Service value price/planned PC parameter (ACH chapter, COS group).
Overhead (field OVETOT)

This field displays the total overhead costs of the components in this product design BOM revision. You can modify this figure as required.
Total cost (field VLTTOT)

This field displays the total value of stock in hand for this product-site combination in the complete bill of materials (BOM).
Calculation quantity (field CLCQTY)

This field displays the quantity included in the calculations. The default quantity is the Economic order quantity (field EOQ (REOMINQTY)) defined on the product-site record or the Technical lot (field MFGLOTQTY) defined on the product-site record, or 1.
field STU

This field displays the unit of the calculation quantity.
Detail (field DETCST)

Click this Search icon to view the material, machine, labor and overheads cost breakdown.

Grid

Date calculated (field LBL)

This field displays the description of the calculated cost.
Multilevel totals (field CST)

This field displays the result of the calculated cost.

Tab Calculation parameters

This section displays the calculation parameters applied when this product was last calculated by the Standard cost calculation run (CALCSTSTD):

  • Routing code. If this field is blank only material costs were calculated.
  • BOM code. The BOM alternative associated with the selected routing alternative (Routing code field (ROUALT)).
  • BOM type. States if this BOM is manufactured, or procured from a subcontractor.
  • Material cost. The cost type applied for the calculation of material costs.
  • Dimension rate. The cost type applied for the calculation of labor and machines.
  • Fixed costs distribution. The fixed overhead costs (material loss, setup rate, operation loss rate, fixed rate) can be distributed as a total sum, or spread pro rata from the combination of the calculation quantity/economic lot quantity.
  • Overhead column. Used for the calculation of overheads. The value of an overhead is calculated by applying the fixed rate, or the formula in the chosen calculation column.
  • Multilevel. If set to Yes, the cost calculation process descended through the bill of materials (BOM) to the lowest level, or up to a parent product whose "Standard cost update" in their product-site record is entered. The calculation process stored the standard cost for each parent product found. If set to No, the calculation was performed at the first level, from the standard costs of the components of the calculated products.


You can recalculate the standard cost by selecting the Recalculate icon.

You can print the results of the run from this function. A log file detailing the results of the run is also produced. The end of run reports are in summary if the Multilevel field is set to No.

Routing code (field ROUALT)

Multiple routings can be defined for a single product. Each routing code can be assigned specific management features. These include restriction of the routing to a specific site and to specific areas of functionality (for use in a manufacturing environment, for costing or for capacity planning). This field defines the route used for the calculation of the components, machines, resources, workforce and subcontractors.

From this routing code, the program searched for the first valid alternative bill of materials (BOM) for the defined site. If this field is blank, only a material calculation was made (valuation and calculation of material overheads).
BOM code (field BOMALT)

Multiple bills of materials (BOMs) can be defined for a single product. Each BOM code can be assigned specific management features. For manufactured or subcontracted products this includes restriction of the BOM to a specific site and to specific areas of functionality (for costing or for capacity planning).
BOM type (field BOMALTTYP)

This field displays Manufacturing if you manufacture this bill of materials (BOM); if it is procured from a subcontractor, it displays Subcontracting.
Material cost (field SLTMATCST)

This field defines the type of cost used to value materials. The possible values are:

  • Standard cost
  • Revised standard cost
  • Budget cost
  • Simulated cost
  • Last cost. This value corresponds to the cost of the last recorded movement.
  • Average cost
  • Last purchase price. This value corresponds to the last receipt price or last invoice.
  • List price. The material is valued from a price list of the type priority supplier/product.

SEEINFO The selection of the cost type only applies to the cost calculation of a material (component without a valid BOM for the alternative). The cost of a product with a BOM is calculated based on the cost of its components. The cost of materials from a subcontractor always comes from a price list. If the price list is not found, the standard cost can be used if the PURPRICE - Standard cost default price list parameter (ACH chapter, PRI group) is set to Yes.
Dimension rate (field VLTCCERAT)

This field displays the dimension rate used to value time.
Fixed costs distribution (field FXDCSTDSP)

This field defines how the fixed overhead costs (material loss, setup rate, operation loss rate, fixed rate) were distributed.

  • Prorata. The fixed costs were multiplied by the Calculated product quantity/Economic lot quantity combination.
  • Total. The total fixed cost were posted.
Overhead column (field SLTOVECOL)

This field defines how overheads were valued.

The value of an overhead was calculated by applying the fixed rate or the formula in the chosen calculation column.
Multilevel (field DESCEND)

This field is only active for a single product calculation.

  • If set to Yes, the cost calculation process descended through the bill of materials (BOM) to the lowest level, or up to a parent product whose "Standard cost update" in their product-site record is entered. The cost calculation therefore starts from the lower-level components. The standard cost of each component at each level was calculated and stored, and the report detailed.
     
  • If set to No, the calculation was performed at the first level, from the standard costs of the components of the calculated products. This also applies if the calculation is launched for multiple products.

SEEINFO By definition, a material does not have to be a component. The Material cost selection field is used to determine how its cost is calculated when defined as Calculated and not .
Recalculate (field CLCSTD)

Click this Recalculate icon to recalculate the standard cost for this product-site combination.

Reports

By default, the following reports are associated with this function :

  ITMCOST : Detail cost calculations

  NA-ITMCOST : Single Level BOM Report

This can be changed using a different setup.

Specific actions

Click the History action to view the current and past standard cost records for this product-site combination.

Click the Transfer action to copy the costs. You can copy the costs to a different site, or create a new type of cost from these figures such as a new budgeted cost.

Click the Calculation action to run the standard cost calculations for the current costs displayed.

If the calculation run generates a new standard cost for this product for the current validity period you can update the new standard costs so they become effective immediately, or defer the update. A stock value change record is created for the difference between the current, and the new standard cost. This is defined as a Type 23 record.

Once a Type 23 record has been created the standard cost is set and cannot be modified.

Points to note

Barre de menus

Use this menu to enter the analytical dimensions for the movement that is created if the product is valued using the standard cost valuation method.

Parameters from the STJVAL - Change of Costdefault dimension are used to load the sections for this movement.

Points to note

Best practice

Your system is supplied with the batch task FUNSMI - Standard cost adjustment. Sage advises that you set FUNSMI to be run as a recurring task on a daily basis, including weekends. Use the Recurring task management function (GESABA) to do this, setting key fields as follows:

  • Active: Select this check box.
  • Periodicity: Select Weekly.
  • Weekly: Select each day of the week, including weekends.
  • Start time: Set to 00:01.

Running FUNSMI on a daily basis ensures a stock value change record is created at the point the new calculated cost becomes valid, as based on the quantity in stock calculation for a product.

Stock value adjustments

Organizations typically set product standard costs for an extended period of time. This can be from a minimum period of, for example, 6 months, but usually standard costs apply to a complete fiscal year.

If the costs (manual or automatically calculated) are for a date in the future, for example, the costs are for the next fiscal year, the calculated standard costs are added to the STKMVTITC - Movement with value pending table with an assigned validity date.

If you need to change the standard cost of your products you can use one of the following methods to do this:

  • Use this function (Standard costs) to manually adjust the standard costs.
  • Run the Standard cost calculation function (CALCSTSTD) to calculate and update the standard costs automatically.
    • If you run the calculation for the current validity period you can update the new standard costs so they become effective immediately, or defer the update.
    • If you run the calculation for a date in the future, the new standard costs are stored in the STKMVTITC - Movement with value pending table with an assigned validity date.
  • Run the Calculated cost update function (CALCSTUPD) to update the standard costs with a deferred calculated cost. If a new standard cost exists, as based on the quantity in stock calculation for a product, the date you run this function is significant:
    • If you run this function in the current validity period, the new standard cost is "activated". The new standard cost becomes effective immediately.
    • If you run this function prior to the validity period selected for the calculation run, that is the new standard cost applies to a date in the future, the new standard cost remains stored in the STKMVTITC - Movement with value pending table.
  • Run the FUNSMI - Standard cost adjustment batch task. This will read the STKMVTITC - Movement with value pending table. If the FUNSMI batch task finds a valid cost, as based on the quantity in stock calculation for a product and the validity date, the new standard cost is "activated" and becomes effective immediately.

Each time a standard cost is updated a stock value change record is created simultaneously in the STOJOU - Stock journal table for the difference between the current and the new standard cost. This is defined as a Type 23 record (the value 23 is defined in local menu 704 - Stock transaction type).

Error messages

The only error messages are the generic ones.

Tables used

SEEREFERTTO Refer to documentation Implementation