Entering an Item Group - Cost Card
If you are maintaining stock valuations in the Nominal Ledger ('cost accounting'), this card is concerned with the selection of the Cost Model for this Item Group. The Cost Model is the valuation method that will be used to calculate the amount to be debited to the Cost Account and credited to the Stock Account whenever an Item is sold. Both these Accounts are specified on the
'A/C' card.
The Cost Model will be chosen as follows:
- in the case of cost accounting transactions created from Deliveries, it will be the Cost Model, Delivery specified in the Cost Model setting in the Sales Ledger;
- in the case of cost accounting transactions created from Invoices, it will be the Cost Model specified here. If that Cost Model is "Default", or the Item Group does not have Cost and Stock Accounts on the 'A/C' card, or an Item does not belong to an Item Group, then it will be the Cost Model, Invoice specified in the Cost Model setting.
Cost accounting is fully described
here.
- Cost Model
- If you use cost accounting, select one of the alternatives for calculating the cost amount.
- Default
- This option will calculate the cost amount using the default Cost Model, determined using the Cost Model setting in the Sales Ledger.
- Cost Price
- Use the Cost Price of the Item (visible on the 'Costs' card of the Item screen). If this option is chosen, it is recommended that one of the Update Cost Price at Purchase options (also on the 'Costs' card of the Item) is chosen, to ensure the Cost Price is always up-to-date.
- % of Base Price
- Calculate the cost by applying a specified percentage to the Base Price (i.e. the retail price) of the Item. The percentage is specified in the Cost in % of Base Price field, just above this Cost Model selection area. This option can be used in cases where a consistent gross margin is required.
- Cost from Invoice
- Use the Cost Price of the appropriate row of the Invoice.
- FIFO Price
- A true FIFO cost is used based on the cost prices recorded in Goods Receipts.
- Weighted Average
- Use the Weighted Average Cost Price of the Item (the average unit price of all previous purchases, visible on the 'Costs' card of the Item screen).
- None
- Select this option to ensure cost accounting postings will not be made on the sale of Items of the Item Group.
- Cost in % of Base Price
- Specify here the percentage to be applied if the % of Base Price Cost Model is to be used.
! | If Cost Price, % of Base Price or Weighted Average is selected, make sure that the appropriate field contains values for each Item. Otherwise, cost accounting Transactions with a zero amount may result. |
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- Type
- Use these options to indicate the type of Item that is likely to belong to the Item Group. Once you have done this and using the fields listed below, you can include various subtotals in the design of your Invoice Form:
- Total Goods
- Total Transport Cost
- Total for Packages Item
- Subtotal without packages (=Total Goods + Total Transport Cost)
- total-discount without packages
- These subtotals are calculated by referring to the Types of the Item Groups to which the Items on the Invoice belong. Items that do not belong to Item Groups are included in the Total Goods figure.
