Implications to the Billing Conversation

Processing by the billing conversations is affected by the type of costing method used.  If moving average costing is used, the unit cost field on the associated Warehouse Balance file record is updated using the following formula:

New Unit Cost =

If standard costing is used, this additional processing is bypassed.

In addition to determining the costing method to be used for each company/warehouse, the user must determine whether a part is to be labeled as a stock or nonstandard part.  Parts that are normally stocked in the warehouse are labeled as stock parts.  Parts that require either unit cost input at billing time (make-to-order parts, for example), or represent inventory parts which require a minimal control, are labeled as nonstandard parts.

The operator cannot override cost for stock part warehouse shipments unless they are preparing credit (debit) memos.  The manual entry of cost is flagged on the Price Exception Report.

In a manufacturing environment, the manufacturing company/warehouse must use the standard costing method.  The unit cost (the sum of the standard costs) is retrieved from the Part Master file.