Material costs originate from the value of the raw material components that you purchase. Verifying supplier pricing and regular maintenance of your purchased items Estimated Costs followed by Cost Rollups of your manufactured items are essential tasks.
Inventory value is an average cost based on PO Receipt value
DBA will average in the PO receipt cost with any existing quantities on hand. For accurate costing, It is imperative that you verify PO prices prior to sending to suppliers.
Update your supplier prices before sending out Purchase Orders
Methods of updating supplier prices:
1.Update supplier price in MRP PO Generation screen. This ensures that your default supplier price records are continuously updated and current.
2.By individual item in the Inventory > Stock Item > Sources tab
3.Group of Items by Supplier using the File > Data Import > Item Sources > Item Suppliers
Mass update estimated costs in BOM > Estimated Purchase Costs on a regular basis
On at least a weekly basis or after any supplier price changes, you should run the BOM > Estimated Purchase Costs Mass Replace routine and update your estimated costs by Default Supplier Price.
Always perform a BOM Cost Rollup immediately after updating Estimated Purchase Costs
Run BOM>Cost Rollup to reflect updated estimated material costs across all manufactured items
You must constantly work on your Estimated Costs and Inventory Costs for your purchased items
Your estimated costs will flow through all of your manufactured items. Your inventory cost will be based on your PO receipt costs and this will affect your actual transaction costs in Jobs. If you do not pay attention to either your estimated or inventory costs you can cause widespread costing confusion.
Subassemblies used in a Job are considered material
Subassemblies that are components in Jobs are considered material and are issued to WIP at inventory cost.
