Overview
Here you will learn how to perform periodic standard product costing.
You can conduct standard product cost calculation for products included in mid-term production plans and placed unfulfilled orders.
When you calculate standard cost, you calculate a price per unit.
If master data is maintained correctly, standard costs are calculated in the background automatically.
Standard product cost is based on the following data:
- Materials, works and labor costs structure
- Prices for materials and works
- Employees activity kind rates
- Production overhead standards
After cost calculation, you update the product price to reflect the material price change.
Before you update price lists according to the calculation results, consider the price change materiality and factor analysis.
As a result of the process, product standard costs are calculated.
Perform standard cost calculations flowchart
Paths
Path | Budgeting and planning → Sales and operations plans → Production plans |
|---|---|
| In-app link EN code |
e1cib/list/Document.ProductionPlan
|
| In-app link RU code |
e1cib/list/Документ.ПланПроизводства
|
How to identify products requiring standard cost calculation
1. Go to Budgeting and planning and click Production plans under Sales and operations plans.
2. Open the relevant Production plan.
3. Find the finished product and open its card.
4. Click Navigate → Manufacturing.
5. Go to the Product standard costs tab.
6. Review the existing Product standard cost documents.
7. Return to the Item form.
8. Click Navigate → Company price list.
9. Review the current prices by Price types.
10. Check if there are any figures for the Price type used as a standard cost.
Note
Follow the next process steps if the Item does not have relevant Product standard cost or Price.
11. Repeat these steps for other items in the production plan.
Paths
Path | Master data and settings → Master data → Items |
|---|---|
| In-app link EN code |
e1cib/list/Catalog.Products
|
| In-app link RU code |
e1cib/list/Справочник.Номенклатура
|
How to maintain parameters for standard cost calculation
1. Go to Master data and settings and click Items under Master data.
2. Find the finished product and open its card.
3. Click Navigate → Manufacturing.
4. In the Apply products to manufacturing workplace, go to the Product standard costs tab.
5. Create the Product standard cost document.
6. Go to the Main tab.
7. Select a Company and a Dispatching unit.
8. Select the Cost object (type of object for which you want to calculate a planned production cost):
- Bill of materials for mass production
- Production order for small scale or long-term production
9. In the Material price type field, select the Price type of resources required for the standard product cost calculation.
10. Go to the Bills of materials (or Production orders) tab.
11. Add a line, specify items to be produced and their quantity. The system will automatically fill in the Bill of materials (or Production orders) column.
12. Fill in the Bill of materials (or Production orders) column manually, if necessary.
13. Click Save.
Paths
Path | Manufacturing → Master data → Product standard costs |
|---|---|
| In-app link EN code |
e1cib/command/Document.StandardCosting2_2.Command.StandardCostEstimatesWithoutTitle
|
| In-app link RU code |
e1cib/command/Документ.ПлановаяКалькуляция2_2.Команда.ПлановыеКалькуляцииБезЗаголовка
|
How to perform standard cost calculation
1. Go to the Product standard cost document.
Note
You can find the whole list of Product standard cost documents in Manufacturing → Product standard costs.
2. Click Post.
The system will automatically start the background calculation process.
The calculation is still running if you see the Costing is being calculated status.
The calculation is executed successfully if you see the Costing is calculated status.
How to analyze product cost calculation results
1. Go to the Product standard cost document.
2. Click Reports → Product standard cost.
3. Review the calculation results:
- Cost of products and semi-finished products
- Expenses related to the Material and work component
- Labor costs
- Itemized fixed and Variable expenses according to production cost standards
- Off-balance cost for production orders if raw materials are supplied by a client (contracting manufacturing)
How to analyze product cost calculation errors
1. Go to Manufacturing and click Product standard costs under Master data.
2. Set Calculated with errors in the State filter.
3. Review the list and open the document.
4. Find the Costing is calculated with errors message and click Details.
5. In the Errors of product costing calculation report, review the calculation errors:
- Materials without the specified price
- Activity kinds without established rates
or
4. Click Reports → Calculation protocol.
5. In the Errors of product costing calculation report, review the calculation errors:
- Materials without the specified price
- Activity kinds without established rates
See also how to Set prices and resource quantity structure for product costing.
How to update product price with product cost calculation result
1. Go to Manufacturing and click Product standard costs under Master data.
2. Open the Product standard cost document.
3. Click 
and then click Price setup. The system will automatically:
- Create a new Price setup document.
- Fill it in with the calculated standard price of the product.
4. Review the list of items and prices in the document and set the Approved status.
5. Click Post and close.