Rolling Std Cost for Raw Materials

Summary:  This document gives the user a General Overview of how to role the Last Purchase price of a raw material into standards.   The system will pre-populate the Future cost of the Raw Material with the last price within the date range selected.  Caution should be used and a review of the net change should be done before rolling the standard costs to all items.

Assumptions:

1. All G/L Accounts for Standard Costing have been setup (note this is not optional for customers using Standard Costing)
   
   1. Review to make sure the System Setup G/L Setup has a Cost Revalue account
      
      
      
2. All Changes completed for MFG Items.
   
   1. Labor Rate Updates
      
   2. Overhead Rate Updates – these should be reviewed for consistency between Center Types
      
   3. BOM Fixes/Updates
      
      1. Cycle Time
         
      2. Efficiency Factors
         
      3. Labor 
         
      4. Material Usage
         
      5. Scrap %
         
         1. Main Item
            
         2. Raw Material
            
            
            
3. It is recommended in some instances to possibly set aside money in a reserve to cover the expense incurred when doing a Std Cost Roll.  
   

Steps:  

1. Choose a Purchase Raw Materials Item from Inventory
   
2. Go to the Standard Costing Tab and choose Calculate Std Cost
   
3. Click no on the recalculate the Std Cost Pop Up
   
4. Click on the Future Cost Icon  be sure to click on the Arrow just to right of the icon
   
5. Choose the Update Future Cost on All Items – note this process will take time
   
6. Select the Date Range that you wish to update for
   
7. Click Ok
   
8. On the Main Screen you should see a number posted in the Future Cost Screen if nothing is visable that means there was no activity on this item during that date range, this could be normal depending if you have purchased this item within the time frame.  
   
9. Click on the Search Picklist Icon and select a Finished good item.
   
10. Click on the Calculate Cost for all Items Button  be sure to choose future costs note this will take time 
    
11. Next run the Standard Cost – Current vs Temporary with Cost Value Report – this report will show you the overall net $ change effect.  It can be run by Purchased or MFG item or Both combined.  You can also include items only with net change or all items regardless of a Std Cost net change
    
12. After review make any adjustments as needed. 
    
    1. Raw Material Adjustments 
       
       1. Find the Raw Material to be changed
          
       2. Update Future Cost
          
          
          
    2. MFG –items
       
       1. BOM Change – update any items that need to be changed, this should have been done prior to cost roll
          
       2. Labor Change – change the labor rates if need – this should have been done prior to cost roll
          
       3. Overhead Rates – change on machines if need – this should have been done prior to cost roll
          
          
          
    3. Return to step 9
       
       
       
13. If all changes are acceptable press Roll all temporary calculated items to standard button 
    
14. Review Journal entry and post this will adjust the G/L to the Perpetual at the new Std Cost. 
    
15. Post the Journal Entry