Cost Type (Actual/Standard)

Select Actual to use one of the four Actual costing methods or Standard to use one of the five Standard costing methods. The cost type you enter here becomes the default Cost Type value when you add new items on the Items form. On the Items form, you can override the Cost Type for a specific item.

If you select Standard costing:

• All inventory reports use the Standard cost of each item.
• All transactions processed that affect inventory value are posted to the Inventory Distribution Journal at Standard Cost (variances are also posted).
• You can still use one of the four Actual cost methods (Average, LIFO, FIFO, or Specific) for job costing, even though you are using Standard costing for your journals/ledger.
• Variance calculation will depend on the setting of the Calculate Variances Against field located in Shop Floor Parameters. For Standard costing, this field should be set to Standard.

If you select Actual costing:

• All inventory transactions are posted to the Inventory Distribution Journal based on the cost method you enter for each item on the Items form.
• The cost used for inventory reports, job costing, and posting to the Inventory Distribution Journal is determined by the costing method specified on the Items form for each item.
• Variance calculation will depend on the setting of the Calculate Variances Against field located in Shop Floor Parameters. For Actual costing, this field should be set to Actual.