Landed Costs
Add landed costs to manufacturing orders
The MRP Landed Costs module extends the Landed Costs feature to apply to Manufacturing Orders. This module allows adding landed costs to manufacturing orders, allocating costs to finished products, and automatically adjusting inventory values.
When to Use
Key points
• Special material transportation costs
• Quality inspection costs
• Manufacturing insurance costs
• Other additional costs not in BoM
Important Terminology
| Fields | Trường dữ liệu | Description |
|---|---|---|
| Landed Costs | Chi phí phát sinh | Additional costs incurred beyond standard manufacturing costs |
| Target | Đối tượng | Manufacturing Orders to add costs to |
| Additional Costs | Chi phí bổ sung | Costs to be allocated |
| Valuation Adjustments | Điều chỉnh định giá | Inventory value adjustments |
| Split Method | Phương pháp phân bổ | How to divide costs among products |
Create Landed Cost for Manufacturing Order
Steps
1. Go to Inventory → Operations → Landed Costs.
2. Click Create.
3. Enter Date (cost occurrence date).
4. Select Target: Manufacturing Orders.
5. Select Manufacturing Orders to add costs to.
6. Select Journal (accounting journal) and Account (cost account).
Add Additional Costs
In the Additional Costs tab, add costs to be allocated.
Steps
1. Click Add a line.
2. Select Product (cost type, e.g., Transportation, Insurance).
3. Enter Cost (amount).
4. Select Split Method (allocation method).
5. Can add multiple cost lines.
Allocation Methods
Split Methods
| Method | Description | Use When |
|---|---|---|
| By Quantity | Divide by product quantity | Homogeneous products |
| By Current Cost | Divide by current value | Products with different values |
| By Weight | Divide by weight | Transportation costs |
| Equal | Divide equally | Few products, similar values |
Calculate Allocation
Steps
1. After adding costs, click Compute.
2. System automatically retrieves finished products from MO.
3. Calculates allocation based on selected method.
4. Displays results in Valuation Adjustments tab.
View Allocation Results
In the Valuation Adjustments tab, view detailed allocation for each product.
Key points
• Product: Product name
• Quantity: Quantity
• Former Cost: Old value
• Additional Landed Cost: Allocated cost
• New Cost: New value
Validate Landed Cost
Steps
1. Check allocation in Valuation Adjustments tab.
2. Click Validate.
3. System automatically creates journal entry.
4. Adjusts inventory value.
5. Updates product cost.
Journal Entry
When validated, system creates entry: Debit Stock Valuation Account, Credit Landed Cost Account.
View Journal Entry
Steps
1. After validation, click Journal Entries button.
2. View detailed journal entry.
Check Inventory Value
Steps
1. Go to Inventory → Reporting → Valuation.
2. Find product with landed cost added.
3. View adjusted value.
Check Product Cost
Steps
1. Open product.
2. In Inventory tab, view Cost (includes landed cost) and Valuation (inventory value).
Traceability
Steps
1. Open product.
2. Click Valuation smart button.
3. View Stock Valuation Layers.
4. Find layer with type = "Landed Cost".
When to Use Landed Cost
Key points
• Should use: Costs incurred after MO completion, unpredictable costs not in BoM, costs to allocate across multiple MOs
• Should not use: Fixed costs that can be added to BoM, costs already in work center cost, insignificant small costs
Appropriate Allocation Methods
Key points
• By Quantity: Homogeneous products, costs not dependent on value
• By Current Cost: Products with different values, costs proportional to value
• By Weight: Transportation costs, products with different weights
• Equal: Few products (2-3 types), similar values
Workflow
Steps
1. Complete MO before creating landed cost.
2. Collect cost invoices.
3. Create landed cost and select MO.
4. Add costs with appropriate allocation method.
5. Compute to view allocation.
6. Check allocation results.
7. Validate to post.
Special Situations
Key points
• Costs for multiple MOs: Create one landed cost, select multiple MOs, costs will be allocated to all MOs
• Adjust after validation: Cannot edit validated landed cost, must create new landed cost with negative amount or create manual journal entry
• Landed cost for by-products: Only applies to finished products, by-products without cost share will not receive landed cost