Acquisition Flag

Cost elements may be designated as either acquisition or non-acquisition costs.  Acquisition costs are assumed to be paid to vendors; purchase price variance will be calculated against acquisition costs.  Non-acquisition costs are assumed to be additional charges.  The cost code of each non-acquisition cost may be associated with a unique general ledger account; charges will be booked to these accounts when inventory receipts are recorded.  The total standard cost of an item, which is used to measure its inventory value, is the sum of its acquisition and non-acquisition costs.