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      Managing Inventory Costs

      Cost management, also referred to as “costing”, is concerned with recording and reporting business operating costs. It includes the reporting of manufacturing costs and inventory costs, that is, the value of items.

      Central principles to understand are that costing methods define how items are valued when they leave inventory, that cost adjustment updates the cost of goods sold with related purchase costs posted after the sale, and that inventory values must be posted to dedicated G/L accounts at regular intervals.

      The following table describes a sequence of tasks, with links to the topics that describe them.

      To See
      Read various conceptual information to understand the principles and definitions that govern the inventory costing accounting functionality in Business Central. About Inventory Costing
      Learn about all mechanisms in the costing system. Design Details: Inventory Costing
      Read how inventory periods help a company to control inventory value over time by defining shorter periods that can be closed for posting as the fiscal year progresses. Work with Inventory Periods
      Read why standard costs are often used by manufacturing companies as a valuation base for components and end items. About Calculating Standard Cost
      Set up inventory periods, costing methods, and rounding methods. Setting Up Inventory Valuation and Costing
      Appreciate or depreciate the value of one or more items in inventory by posting their current, calculated value. Revalue Inventory
      Adjust item costs, either automatically or manually, to forward cost changes from inbound entries to their related outbound entries. Adjust Item Costs
      Use special costing functions for every-day item transactions in the item operations. Handling Inventory and Manufacturing Costs
      Periodically update the standard costs of components, in assembly or production BOMs, and roll the new costs up to the parent item. Update Standard Costs
      View and manually change certain item application entries that are created automatically during inventory transactions. Remove and Reapply Item Ledger Entries
      Perform period-end control and reporting tasks, such calculate the value of inventory and post costs to the general ledger. Reporting Costs and Reconciling with the General Ledger

      See Also

      Finance
      Inventory
      Sales
      Purchasing
      Working with Business Central

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