Using Cost Details for Purchased Parts—Exercises

IMPORTANT
It is extremely important that you set up and work within your own company to maintain your data integrity. If you work within any other company, your exercises will not function as intended and the data of other students might be affected. Predictable exercise results require that your data is isolated in your own company.

Basic Data Setup

Enter Basic Data for Cost Details

Purpose: The purpose of this exercise is to set up the basic data to get the cost details to work.

Windows:
Inventory Basic Data
Cost Details Basic Data
Modify Posting Cost Group

  1. Enter commodity group XXSMP with description Sheet Metal Parts and group XXMISC with description Miscellaneous Parts (replace XX with your initials).
  2. Enter cost source XXS1 with description Sheet Metal Parts and cost source XXM1 with description Miscellaneous Parts (replace XX with your initials).
  3. Make sure that Commodity Group 2 is used as cost source indicator for purchased material.
  4. Connect commodity group XXSMP with cost source XXS1 and XXMISC with XXM1.
  5. Enter posting cost group XXM with description Material (replace XX with your initials).
  6. Connect posting cost group XXM to cost bucket 110 - Estimated Material Cost.

General exercise for Commodity Groups
General exercise for Setting up Cost Sources
General exercise for Setting up Posting Cost Groups

Create Purchased Inventory Part

Purpose: The purpose of this exercise is to create a purchased inventory part to be used in the main exercise.

Windows:
Inventory Part
Supplier for Purchase Part

  1. Open the Inventory Part window.
  2. Create Steering Axle as an inventory part, and give it the part number XX99-009 (replace XX with your initials). Enter Purchased as the part type and connect the commodity group XXSMP to comm. group 2.
  3. Create Steering Wheel as an inventory part, and give it the part number XX99-010 (replace XX with your initials). Enter Purchased as the part type and connect the commodity group XXMISC to comm. group 2.
  4. In the Inventory Part/Misc Part Info tab, select Weighted Average as the inventory valuation method, and Cost per Part as the cost level for both parts.
  5. Connect the parts to supplier 5000 in the Supplier for Purchase Part window.

General exercise for Creating Purchased Inventory Part
General exercise for Connecting Supplier to Purchase Part

Main Exercise

Purpose: The purpose of this lesson is to learn how the cost details are built up for purchased parts.

Windows:
Purchase Order
Register Purchase Order Arrivals
Inventory Part
Inventory Part Unit Cost
Inventory Transaction History

Cost Details for Purchased Parts

  1. Open the Purchase Order window, and create a purchase order for 100 units of part XX99-009 and 100 units XX99-010 for supplier 5000. Release the order.
  2. Open the Register Purchase Order Arrivals window, and register the arrival of the purchase order.
  3. Open the Inventory Part. Query for part XX99-009 and XX99-010, and study the values in the Cost/Inventory Value tab. Select the line in the table and right-click and then click Cost Details. Study the values in the Inventory Part Unit Cost window for both parts.
  4. Open the Inventory Transaction History window, and query for part number XX99-009 and XX99-010. Study the values in the Cost Details tab and the postings in the Accounting tab.
Note: Both the posting cost group and cost source are control types in the posting control and could be used to control the financial postings.