Roadmap for Cost Accounting [AX 2012] Page 1 of 6

Roadmap for Cost Accounting [AX 2012]

Updated: August 20, 2014

Applies To: Microsoft Dynamics AX 2012 R3

This topic provides a set of resources for structured learning of cost accounting in supply chain management in
Microsoft Dynamics AX 2012. The topics and resources listed here provide background and conceptual information
to help you learn about cost accounting.

Cost accounting is used to measure and report financial information that is related to an organization’s acquisition,
consumption, and use of resources. In particular, cost accounting in Microsoft Dynamics AX 2012 lets you plan,
manage, and track costs for inventory, manufactured goods, and overhead. With Microsoft Dynamics AX 2012, you
can use a normal costing method and a standard costing method to plan and manage costs.

Learn Use WebSearchAX to search community content for “costing”.

Also, search blogs and white papers for “costing”.
Define
Microsoft Dynamics AX 2012 R3 Cost Accounting Help (article)
Maintain
Microsoft Dynamics AX 2012 R3 Supply Chain (blog)
Perform
Microsoft Dynamics AX 2009 White Paper: Cost Management
(white paper)

Microsoft Dynamics AX 2009 White Paper: BOM Calculations

Using Costing Sheet (white paper)

Microsoft Dynamics AX 2009 White Paper: Standard Cost

Conversion Guide (white paper)

Learn
Here’s what you need to do before you deploy and configure cost accounting. These topics will help you learn
about the new features for Microsoft Dynamics AX 2012.

Task Videos and topics

Learn about what’s new in cost accounting Microsoft Dynamics AX 2012 R3 Inventory aging report (video)

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Roadmap for Cost Accounting [AX 2012] Page 2 of 6

Microsoft Dynamics AX 2012 R3 – Price compare report (video)

What's new: Inventory and warehouse management features

Back to top

Define
Here’s what you need to do to define a cost accounting policy to comply with the accounting policy that is used in
your organization. You will also learn what you need do to define a structure to make sure that costs and revenues
can be captured and allocated between cost centers and profit centers.

Define a cost accounting policy for inventory

Task Topics

Understand the inventory valuation process About inventory close

About physical and financial updates

About running average cost price

Track running average cost per inventory dimension

Understand the inventory valuation method About FIFO with physical value and marking

About LIFO with physical value and marking

About LIFO Date with physical value and marking

About weighted average with physical value and marking

About weighted average date

About moving average

Back to top

Define a cost accounting policy for manufacturing products

Task Topics

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Understand cost information that pertains to manufacturing Set up production control parameters
products
About cost categories used in production
routings

About co-products and by-products

About the methodology for total cost

allocation

Back to top

Define a cost accounting policy for indirect costs

Task Topics

Define rules for calculating indirect costs About costing sheet setup

Example of a costing sheet setup

Back to top

Define a cost allocation policy for overhead

Task Topics

Define rules for allocating overhead Define an internal cost allocation

Define a surcharge allocation

Create hierarchy structures

Back to top

Maintain
Here’s what you need to do to set up, create, and maintain predetermined costs as well as allocation for overhead.
You will also learn how to maintain cost and revenue forecasts that can be used in the predetermined cost
calculation.

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Maintain predetermined costs

Task Topics

Set up predetermined About cost groups

costs
About BOM calculation groups

Costing version setup (form)

About costing versions

Create predetermined Calculation for a costing version (form)

costs
Prepare to maintain standard costs for purchased items

Prepare to maintain standard costs for manufactured items

Calculating standard costs for manufactured items

About costing versions containing item purchase prices related to BOM

calculations

About costing versions containing item sales prices related to BOM

calculations

Back to top

Maintain allocation for overhead

Task Topics

Learn about the allocation process Create a cost accounting accrual scheme

Create cost accounting accrual transactions

Create rules for allocating overhead Create reference tables

Distribute costs or quantities

Learn how to budget for overhead About cost accounting budgeting

About cost budgeting

About service budgeting

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About flexible budgets

About setting up a budget model for flexible budgets

Transfer actual costs in a flexible budget

Back to top

Perform
Here’s what you need to do to calculate the inventory valuation and cost of goods manufactured.

Perform inventory accounting

Task Topics

Perform inventory valuation Closing and adjustment (form)

Adjustment of on-hand inventory (form)

Adjust transactions

Inventory transaction posting (form)

Trace inventory settlement transactions

Cost explorer (form)

Back to top

Perform product costing

Task Topics

Calculate the cost of goods manufactured About estimated costs for a production order

Run an estimation

Production control

About production posting

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About analyzing costs for a production order

About lean manufacturing

Back to top

Perform variance analysis

Task Topics

Analyze the difference between actual costs and About analyzing variances for a completed
standard costs production order

Back to top

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Setting up and maintaining cost accounting [AX 2012] Page 1 of 1

Setting up and maintaining cost

accounting [AX 2012]

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The following topics provide information about how to set up cost accounting.

Topic Description

About cost accounting Provides conceptual information about how cost accounting is integrated into
integration other modules.

About configuring cost Provides conceptual information about how to configure cost accounting.
accounting

About settings for cost Provides conceptual information about additional settings that you can
accounting configure in cost accounting.

See also
Cost accounting

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

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About cost accounting integration [AX 2012] Page 1 of 2

> Application users > Cost accounting >

About cost accounting integration

About cost accounting
About settings for cost accounting
integration [AX 2012]
About configuring cost accounting
Other Versions
Setting up and maintaining
standard costs

Setting up and maintaining cost

categories

Updated: July 16, 2013

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Cost accounting integrates with the following modules:

• General ledger

• Production control

• Project management and accounting

Cost accounting and General ledger

The General ledger module is the main link to Cost accounting. All financial values in Microsoft Dynamics AX
pass from General ledger to Cost accounting.

When you first set up Cost accounting and set the parameters in the Cost accounting parameters form, you
must make several decisions regarding integration. Base your decisions on the following issues:

• The dimensions to use in Cost accounting

• Whether the cost categories in Cost accounting should be identical to the ledger accounts in General
ledger

• The posting layers that are important for Cost accounting

There are additional potential integration points for budgeting between Cost accounting and ledger accounts in
General ledger. For example, you can import financial budget values from Cost accounting or transfer Cost
accounting budgets to the ledger accounts in General ledger.

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Cost accounting and Production

Integrate Cost accounting and Production control by importing production hours from production orders to the
Service category tab in the Cost categories form. You define the integration in the Service transactions field
group. You must select dimensions in the Debit dimension and the Credit dimension fields to determine how to
credit and how to debit the service quantity.

Cost accounting and Project

You can also integrate Project by setting up the Service category tab in the Cost categories form. You must
select the dimension to credit and the dimension to debit.

See also
Setting up and maintaining cost accounting

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About settings for cost accounting [AX 2012] Page 1 of 2

> Application users > Cost accounting >

About cost accounting integration

About settings for cost
About settings for cost accounting
accounting [AX 2012]
About configuring cost accounting
Other Versions
Setting up and maintaining
standard costs

Setting up and maintaining cost

categories

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The following steps will help you complete the base configuration for cost accounting.

Step Form or situation Description

1 Line structures Group cost and service categories. The Expense distribution sheet and
some inquiries are based on the line structures.

2 Hierarchies Group dimensions. By using this functionality, you can easily create a
profit center structure. You can execute some inquiries and reports based
on the hierarchies.

For more information, see Create hierarchy structures.

3 Expense Create reports on your own.

distribution sheet
For more information, see Create an expense distribution sheet.

4 Reference tables Create the reference tables that you want to use in distributions and
allocations.

In this form, you can only create the reference tables. To enter the values,
click Calculation versions > Reference table values.

For more information, see Create reference tables.

5 Calculation Validate and summarize distributions and allocations.

versions

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6 Accrual schemes Create accrual schemes.

For more information, see Create a cost accounting accrual scheme.

7 Budget model Create budget models.

For more information, see About cost accounting budgeting.

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About configuring cost accounting [AX 2012] Page 1 of 2

> Application users > Cost accounting >

About cost accounting integration

About configuring cost
About settings for cost accounting
accounting [AX 2012]
About configuring cost accounting
Other Versions
Setting up and maintaining
standard costs

Setting up and maintaining cost

categories

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Microsoft Dynamics AX offers many configuration and setup options for cost accounting, but only some of them are
necessary for the mandatory or basic setup.

Note

In general, you do not have to follow the order in which these steps are described. However, because of certain
interdependencies, you may have to perform one step before another.

To simplify the configuration process, the process has been divided among the following procedural topics:

• About settings for cost accounting

See also
About cost accounting integration

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Setting up and maintaining standard costs [AX 2012] Page 1 of 1

Setting up and maintaining standard costs

[AX 2012]
Updated: February 9, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about how to set up and maintain standard costs.

Prerequisites for standard costs

Standard cost conversion overview

Maintaining standard costs in a nonmanufacturing environment

Preparing to maintain standard costs in a manufacturing environment

Preparing to maintain standard costs in a manufacturing environment with routings

Calculating standard costs for manufactured items

Maintaining standard costs in a manufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

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Prerequisites for standard costs [AX 2012] Page 1 of 3

> Cost accounting > Setting up and maintaining cost accounting >

Prerequisites for standard costs

Prerequisites for
About costing versions
standard costs [AX
2012]
About costing versions for
standard costs

About managing standard cost

updates

About costing versions containing

item purchase prices related to
BOM calculations

About costing versions containing

item sales prices related to BOM
calculations

Standard cost conversion overview

Maintaining standard costs in a

nonmanufacturing environment

Preparing to maintain standard

costs in a manufacturing
environment

Preparing to maintain standard

costs in a manufacturing
environment with routings

Calculating standard costs for

manufactured items

Maintaining standard costs in a

manufacturing environment

Updated: November 5, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

This topic covers the basic steps for using standard costs. Subsequent steps depend on the company’s operations,
such as a nonmanufacturing environment, a manufacturing environment without routings, and a manufacturing
environment with routings.

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Prerequisites for standard costs [AX 2012] Page 2 of 3

To set up standard costs, follow these steps:

1. Create an item model group for standard costs.

Use the Item model groups form to create a new group for standard costs and to assign an inventory model
of Standard cost. The identifier for the item model group should be meaningful, such as Std Cost. Select the
check boxes to indicate that the group should allow financial negative inventory, post physical inventory, and
post financial inventory. This standard cost group will be assigned to items.

2. Define ledger accounts that are related to standard cost variances.

Use the Chart of accounts form to define ledger accounts that are related to standard cost variances. These
ledger accounts must be defined before they can be assigned in the Posting form. The ledger accounts can
reflect item groups and cost groups.

3. Assign ledger accounts to item postings that are related to standard cost variances.

Use the Posting form to assign the ledger accounts that are related to standard cost variances. You can
choose whether to specify a variance’s ledger account by item (or item group) and by cost group (or cost
group type), or to specify that the ledger account applies to all items and all cost groups. These choices
correspond to cost relations for tables, groups, and all.

Use the Transaction combinations form to enable the use of cost relations (for tables, groups, and all) before
you define the item posting rules.

4. Define inventory parameters that are related to standard costs.

Use the Inventory parameters form to define cost control parameters (on the Bills of materials tab) to
define two parameters that are related to standard costs.

◦ Use the Cost breakdown field to select No or Sub ledger. The selection of Sub ledger is termed an
active cost breakdown. An active cost breakdown is critical for calculating, retaining and viewing cost
group segmentation across a multilevel product structure for standard cost items. When the cost
breakdown is active, you can report and analyze inventory, work in process (WIP), and cost of goods
sold (COGS) per cost group in a single level, multilevel or total format. An active cost breakdown means
that activating a manufactured item’s cost will result in storing the cost group segmentation within the
item’s cost record.

The selection of none for the Cost breakdown field means that cost group segmentation will not be
maintained for standard cost items. That is, a manufactured item's standard cost will be calculated and
maintained as a single amount without cost group segmentation, and the cost contributions of
manufactured components will be aggregated into the single amount.

◦ Use the Variances to standard field to select summarized or per cost group. The selection of per cost
group enables you to identify purchase price variances and production variances by cost group, and
also identify the four types of production variances: the lot size, quantity, price and substitution
variances. The selection of summarized means that you cannot identify variances by cost group, and
you cannot identify the four types of production variances. You can only view a summarized
production variance.

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Prerequisites for standard costs [AX 2012] Page 3 of 3

The policy about variance to standard works independently of the cost breakdown policy. That is, you
can select a cost breakdown policy of none, and select variances per cost group, so that production
variances by cost group will still be captured.

5. Create costing versions for standard costs.

Use the Costing version setup form to create one or more costing versions for standard costs. Each costing
version must be designated with a costing type of standard costs and allow content to include cost data.

6. Prepare an existing Microsoft Dynamics AX customer to use standard costs.

Customers who want to change their existing items to a standard cost inventory model must use the
Standard cost conversions form.

See also
Maintaining standard costs in a nonmanufacturing environment
Preparing to maintain standard costs in a manufacturing environment with routings
Preparing to maintain standard costs in a manufacturing environment
Calculating standard costs for manufactured items
Maintaining standard costs in a manufacturing environment
About costing versions

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About costing versions [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About costing versions

About costing versions
About costing versions for
standard costs [AX 2012]
About managing standard cost
updates

About costing versions containing

item purchase prices related to
BOM calculations

About costing versions containing

item sales prices related to BOM
calculations

Updated: November 20, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A costing version can serve one or more purposes based on the data that is contained within the costing version. The
primary purpose of a costing version is to contain cost records about items, cost categories, and indirect cost
calculation formulas. A costing version can contain a set of standard cost records or a set of planned cost records
that are based on the costing type that is assigned to the costing version.

• Standard costs − A costing version can support a standard cost inventory model for items, where the costing
version contains a set of standard cost records about items and manufacturing processes. Cost data about
manufacturing processes is expressed in terms of the cost categories for routing operations and the
calculation formulas for manufacturing overheads.

• Planned costs − A costing version can contain a set of planned cost records about items and manufacturing
processes. A costing version with planned costs is often used to support cost calculation simulations, such as
simulating the effect of cost changes to purchased materials or manufacturing processes on the calculated
costs of manufactured items. The item cost records for planned costs can also be used to support an actual
cost inventory model by providing the initial values for item costs, including the calculation of planned costs
for manufactured items.

Maintaining cost records within a costing version involves entering costs for purchased items and for items that are
transferred between sites. Additional data maintenance for manufacturers involves entering costs for cost categories,
which are associated with routing operations; entering calculation formulas for the indirect costs reflecting
manufacturing overheads; and calculating costs for manufactured items.

The item cost data within a costing version will consist of one or more cost records for each item. An item cost record
is initially entered with a pending status and an intended effective date. Activating the item cost record updates the
status to active and the effective date to the activation date. Different item cost records may reflect different sites,

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About costing versions [AX 2012] Page 2 of 2

effective dates, or status. When calculating costs for manufactured items for a future date, the BOM calculation will
use cost records with the relevant effective date whether status is pending or active. An item's current active cost
record will be used for estimating production order costs and valuing inventory transactions under a standard
costing inventory model. The maintenance of cost records for cost categories and indirect cost calculation formulas is
similar to the maintenance of item cost records.

Two blocking policies for a costing version determine whether pending costs can be maintained and whether the
pending cost can be activated. Use the blocking policies to permit data maintenance, and then to prevent data
maintenance for cost records within a costing version.

A costing version can also contain data about item sales prices or purchase prices for BOM calculation purposes.

• Item sales prices for BOM calculation purposes − A BOM calculation can calculate a sales price for
manufactured items, and a BOM calculation can generate an associated sales price record within the costing
version.

• Item purchase prices for BOM calculation purposes − A BOM calculation with planned costs can be based on
item purchase price records within the costing version, rather than item cost records. The item purchase price
records must be manually entered.

• The item sales price records and purchase price records are only used for BOM calculation purposes.

See also
About costing versions for standard costs
About costing versions containing item sales prices related to BOM calculations
About costing versions containing item purchase prices related to BOM calculations

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
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About costing versions for standard costs [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About costing versions

About costing versions
About costing versions for
standard costs for standard costs [AX
About managing standard cost
updates
2012]
About costing versions containing
item purchase prices related to
BOM calculations

About costing versions containing

item sales prices related to BOM
calculations

Updated: March 22, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Costing versions for standard costs must be assigned to a type of standard cost, and they must allow content to
include cost data. A costing version can contain a set of standard cost records about items, cost categories for
routing operations, and calculation formulas for indirect costs.

Some restrictions apply to a costing version for standard costs. The following restrictions guarantee adherence to
standard costing principles:

• Charges must be included in an item's cost. The charges for a manufactured item represent the amortized
constant costs in the bill of materials (BOM) and route information. Therefore, they must be included in the
unit cost. The charges for a purchased item are also included in the item's unit cost.

• Calculation of standard costs for manufactured items must be based on the cost records in a costing version
for standard costs. Alternative sources of cost data, which are defined by the BOM calculation group, can only
be used with a costing version for planned costs, such as purchase price trade agreements for purchased
items.

• BOM calculations must be performed in a single-level explosion mode.

The item cost data for standard costs can be copied to another costing version that contains standard costs or
planned costs. However, the item cost data for planned costs cannot be copied to a cost version that contains
standard costs, because the restrictions that are listed earlier in this topic do not apply to planned costs.

See also

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About costing versions for standard costs [AX 2012] Page 2 of 2

About costing versions

Maintaining standard costs in a nonmanufacturing environment
Maintaining standard costs in a manufacturing environment

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About managing standard cost updates [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About costing versions

About managing
About costing versions for
standard costs standard cost updates
About managing standard cost
updates
[AX 2012]
About costing versions containing
item purchase prices related to
BOM calculations

About costing versions containing

item sales prices related to BOM
calculations

Updated: January 21, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Updates to standard cost data can be managed by using two different approaches: the one-version approach and
the two-version approach.

The one-version approach uses a single costing version that contains all cost records. These records include the
original costs and all cost updates.

The two-version approach uses one version that contains records of the original costs and a second version that
contains records of all cost updates. A primary advantage of the two-version approach is the clear delineation and
tracking of cost updates in a separate costing version, without affecting the original costing version. The two-version
approach can be used to identify multiple incremental updates, where each incremental update has a separate
costing version that contains the incremental cost records.

Example

The following example illustrates how the one-version and two-version approaches can be used for updating
standard costs in a manufacturing environment. For example, updates that reflect new items or error corrections.

Assume that a single costing version represents the standard costs for the current year. The identifier for this version
is 2012-STD. Version 2012-STD contains the current active costs for all items. Additionally, it contains all routing-
related cost categories and overhead calculation formulas that were known at the start of the year 2012. 2012-STD is
the original costing version.

• One-version approach to cost data updates − In the one-version approach, the original costing version
2012-STD contains all cost records. Cost updates are recorded in 2012-STD and are set to a status of
”Pending.” The pending costs can be manually entered for new purchased items, or they can be calculated for
a manufactured item to reflect corrections.

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When the one-version approach is used, the BOM calculations do not require a fallback data source because
all active costs are contained in the costing version. After the pending costs become active, the original
costing version 2012-STD will again contain all the current active costs.

• Two-version approach to cost data updates − The two-version approach requires an additional costing
version that contains only the cost updates. The identifier for this version is 2012-STD-CHANGES. Cost
updates are recorded in 2012-STD-CHANGES and are set to a status of “Pending.”

With the two-version approach, the BOM calculations of pending costs for manufactured items require a
fallback data source. This is because the additional costing version 2012-STD-CHANGES contains only a subset
of cost data. The fallback can be expressed as the active costs or as the costing version 2012-STD, because
both identify the source of cost data when it is not included in 2012-STD-CHANGES. After the pending costs
become active, the costing version 2012-STD-CHANGES will contain the current active costs that reflect the
updates, whereas the original costing version 2012-STD will be untouched.

When the two-version approach is used, blocking policies for the original costing version should be set up to
prevent updates. Identical blocking policies should be set up for the additional costing version, except for the
specified from-date and the selective use of blocking policies to allow for updates. The specified from-date
should be updated with each batch of changes to reflect the scheduled activation date.

This example used one additional costing version for managing updates throughout the year 2012. More than one
additional costing version can be used, such as a separate version for each batch of updates. When more than one
additional costing is used, the fallback must be expressed as the active costs, because the active costs are spread
over multiple costing versions.

See also
About BOM calculations that use the fallback principle

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About costing versions containing item purchase prices related to BOM calculations [AX ... Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About costing versions

About costing versions
About costing versions for
standard costs containing item
About managing standard cost
updates
purchase prices related
About costing versions containing
to BOM calculations
item purchase prices related to
BOM calculations [AX 2012]
About costing versions containing
item sales prices related to BOM
calculations

Updated: December 13, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A costing version can include content about the purchase price records for an item. You enable purchase price
content primarily to define purchase price records for component items, so that these records can be used to
calculate the costs of manufactured items. To enable purchase price content, you must define a BOM calculation
group that contains a cost price model for the item's purchase price, and then assign the BOM calculation group to
purchased items. You must then use a cost price model for the BOM calculation group when you perform BOM
calculations with planned costs to calculate the sales price of manufactured items.

An item's purchase price records are also used for reference information. By changing the status of an item's
purchase price record from pending to active, you can update the item's base purchase price. The base purchase
price is not site-specific, and it can be manually overridden. It acts as a default purchase price on purchase orders.

See also
About BOM calculation of a suggested sales price

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About costing versions containing item sales prices related to BOM calculations [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About costing versions

About costing versions
About costing versions for
standard costs containing item sales
About managing standard cost
updates
prices related to BOM
About costing versions containing
calculations [AX 2012]
item purchase prices related to
BOM calculations

About costing versions containing

item sales prices related to BOM
calculations

Updated: June 15, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A costing version can include content about the sales price records for items. The main reason for including content
about sales prices is to retain a manufactured item's calculated sales price. The calculated sales price can then be
analyzed to determine how components, routing operations, and overhead contribute to the cost and sales price.

A secondary reason for including content about sales prices is to define the sales price records for component items.
These records can then be used to calculate the sales price of manufactured items. To use content about sales prices
for this purpose, you define the sales price model that is embedded in a bill of material (BOM) calculation group, and
then assign the BOM calculation group to purchased items. Then, when you perform BOM calculations with planned
costs, you select the cost price model of the BOM calculation group.

Otherwise, the sales price records for items are only used for reference information, regardless of whether the
records are manually entered or calculated. By activating an item's sales price record, you can update the item's base
sales price. However, the base sales price is not site-specific, and it can be manually overridden. The item's base sales
price is used as a default sales price on sales orders and sales quotations.

See also
About BOM calculation of a suggested sales price

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Maintaining standard costs in a nonmanufacturing environment [AX 2012] Page 1 of 1

Maintaining standard costs in a

nonmanufacturing environment [AX 2012]
Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Nonmanufacturing and distribution environments maintain standard costs for purchased items. The guidelines for
maintaining an item's standard costs consist of several scenarios. For example, standard costs can be set for the first
time, they can be updated through the frozen period, and they can be periodically updated. The guidelines assume
that you complete preparatory steps before you maintain standard costs for purchased items.

See also
Prepare to maintain standard costs for purchased items
Set up initial standard costs in a nonmanufacturing environment
Update standard costs in a nonmanufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

© 2017 Microsoft

https://technet.microsoft.com/en-us/library/gg212963(d=printer).aspx 2/16/2017
Prepare to maintain standard costs for purchased items [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

Prepare to maintain standard costs

for purchased items Prepare to maintain
Set up initial standard costs in a standard costs for
purchased items [AX
nonmanufacturing environment

Update standard costs in a

nonmanufacturing environment
2012]
Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

To maintain purchased items' costs, follow these steps:

1. Assign an item model group to each purchased item.

The item model group determines whether the item’s costs reflect a standard cost or an actual cost inventory
model.

2. Assign an item group to each purchased item.

The item group contains ledger accounts that apply to the purchased item. The ledger accounts for an item
with a standard cost inventory model include the purchase price variance, the inventory cost revaluation, and
the cost change variance.

3. Assign a cost group to each purchased item.

The cost group can act as the basis for assigning ledger accounts, such as assigning ledger accounts for
purchase price variances.

4. Assign the inventory unit of measure to each item.

The item’s costs are always expressed in the item’s inventory unit of measure.

The purchased items’ costs can be maintained after you complete the preparation steps. Additional preparation steps
are necessary when a purchased item will be a component in a manufacturing environment.

See also
Set up initial standard costs in a nonmanufacturing environment
Update standard costs in a nonmanufacturing environment
Prepare to maintain standard costs for purchased items

https://technet.microsoft.com/en-us/library/gg230981.aspx 2/16/2017
Prepare to maintain standard costs for purchased items [AX 2012] Page 2 of 2

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Set up initial standard costs in a nonmanufacturing environment [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

Prepare to maintain standard costs

for purchased items Set up initial standard
Set up initial standard costs in a costs in a
nonmanufacturing
nonmanufacturing environment

Update standard costs in a

nonmanufacturing environment
environment [AX 2012]
Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Nonmanufacturing and distribution environments maintain standard costs for purchased items. This includes setting
up the standard costs for the first time. The following guidelines assume the use of a single costing version when you
set up the standard costs for the first time. This costing version contains standard costs for the current period.
Pending cost records for all items are entered in this costing version, and the status is changed to active.

1. Define the costing version in the Costing versions form. Guidelines for this costing version include the
following:

◦ Assign a costing type of standard costs.

◦ Assign a meaningful identifier for the costing version, such as 2012-STANDARD.

◦ Ensure that the content includes cost records.

◦ Allow the entry of cost records. Do not block the entry of pending costs.

◦ Allow the entry of cost records for all sites. Assigning a site limits the entry of cost records to the
specified site.

◦ Optionally prevent the ability to change the status of item cost records from pending to active. The
status change will be enabled after the pending costs have been completely and accurately defined.

◦ Optionally define a from-date. As a general guideline, use a future date that represents the planned
cutover date, or the first day in the frozen period if you prepare cost data beforehand.

◦ Indicate a fallback principle of none, because the fallback principle applies to BOM calculations in
manufacturing environments.

2. Enter item cost records in the costing version in the Item price form. A separate cost record must be entered
for each site that purchases or stocks the item. The cost reflects the standard costs for the period. If a cost is
entered incorrectly, change the pending cost for the item. A pending cost can also be deleted.

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Set up initial standard costs in a nonmanufacturing environment [AX 2012] Page 2 of 2

3. Verify item cost records in the costing version for completeness and accuracy. Use the Item prices report to
review a list of item cost records.

4. Use the Costing version setup form to change the blocking flag to allow the status change of pending cost
records.

5. Change the status to active for all pending item cost records in the costing version on the cutover date. Use
the Activate prices form to change the status for multiple cost records. You can open the Activate prices
form from the Costing version setup form. The status of individual cost records can be changed in the Item
price form by clicking Activate.

6. Use the Costing version setup form to change the blocking flags in the second costing version to prevent
additional data maintenance.

Repeat the steps in this procedure for separate costing versions when they contain site-specific costs for a multisite
operation.

See also
Update standard costs in a nonmanufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Update standard costs in a nonmanufacturing environment [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

Prepare to maintain standard costs

for purchased items Update standard costs
Set up initial standard costs in a in a nonmanufacturing
environment [AX 2012]
nonmanufacturing environment

Update standard costs in a

nonmanufacturing environment

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Nonmanufacturing and distribution environments maintain standard costs for purchased items. Maintaining standard
costs includes updating the standard costs throughout the frozen period. Updates may reflect new items, corrections,
or cost changes. The following guidelines assume the use of a two-version approach to updating standard cost. One
costing version contains the originally defined standard costs for the frozen period, and the second costing version
contains the incremental updates. Each update is entered as a cost record that is enclosed in the second costing
version, and eventually it is enabled. An alternative, one-version approach uses the originally defined set of standard
costs.

The two-version approach requires the definition of a second costing version. The guidelines for defining this costing
version include the following:

• Assign a costing type of standard costs.

• Assign the costing version a meaningful identifier that indicates the contents, such as 2012-UPDATES.

• Ensure that the content includes cost records.

• Allow the entry of cost records for all sites. If you specify a site, you limit the entry of cost records to that site.

• Indicate a fallback principle of none. The fallback principle only applies to cost calculations for manufactured
items.

To correct, adjust, or update standard costs for new items, follow these steps:

1. Use the Costing version setup form to enable the entry of cost data into the second costing version.
Optionally, prevent the activation of pending costs, so that the activation will be allowed after pending costs
have been completely and accurately defined. Optionally, enter a date in the From date field. As a general
guideline, use a date that represents when you intend to enable the incremental updates. Alternatively, leave
the From date field blank for the costing version, and then enter a date in the From date field for each cost
record.

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Update standard costs in a nonmanufacturing environment [AX 2012] Page 2 of 2

2. Use the Item price form to enter updates as item cost records that are enclosed in the second costing
version.

3. Use the Item prices report to verify the completeness and accuracy of the item cost records that are enclosed
in the second costing version.

4. Use the Costing versions form to change the blocking flag to allow the activation of pending cost records
that are enclosed in the second costing version.

5. Use the Activate prices form to activate all pending item cost records that are enclosed in the second costing
version. You open the Activate prices form from the Costing versions form. You can also enable the pending
cost records for individual items by clicking the Activate button in the Item price form.

6. To prevent additional data maintenance, use the Costing version setup form to change the blocking flags
that are enclosed in the second costing version. The blocking policies will prevent the entry of new pending
costs and the activation of pending costs.

See also
Set up initial standard costs in a nonmanufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Preparing to maintain standard costs in a manufacturing environment [AX 2012] Page 1 of 1

Preparing to maintain standard costs in a

manufacturing environment [AX 2012]
Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Information about purchased and manufactured items must be prepared before you maintain the items' standard
costs in a manufacturing environment. For example, the cost groups that are assigned to purchased components
provide the basis for segmenting the calculated costs of manufactured items, and the BOM calculation group that is
assigned to items defines the applicable warning messages that are generated by BOM calculations.

A manufacturing environment that uses routing information requires additional preparation steps in order to
maintain standard costs. For example, additional information must be defined for cost categories that are assigned to
operations resources and routing operations.

See also
About cost groups
About BOM calculation groups
Prepare to maintain standard costs for manufactured items
About manufacturing overheads based on material

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

© 2017 Microsoft

https://technet.microsoft.com/en-us/library/gg230647(d=printer).aspx 2/16/2017
About cost groups [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost groups

About cost groups [AX
About BOM calculation groups
2012]
About manufacturing overheads
based on material Other Versions

Prepare to maintain standard costs

for manufactured items

Updated: February 20, 2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Cost groups provide the basis for segmenting and analyzing cost contributions in a manufactured item’s calculated
cost, such as the cost contributions for material, labor, and overhead. Cost group segmentation has several synonyms
within manufacturing environments, such as cost breakdown, cost decomposition, or cost classification.

Cost group segmentation can serve several purposes, such as the following:

• Segment costs for different types of material, such as ingredients and packaging material for a canned goods
product, based on the cost groups that are assigned to items.

• Segment costs for different types of operations resources, such as different types of labor or machines, based
on the cost groups that are assigned to cost categories related to operations resources and routing
operations.

• Segment costs for setup and run time in routing operations, based on the cost groups that are assigned to
cost categories related to the routing operations.

• Segment costs for different types of overheads, such as labor-related and machine-related overheads, based
on cost groups that are assigned to indirect costs in the costing sheet setup.

• Act as the basis for calculating various manufacturing overheads in the costing sheet setup. This can include
different overheads related to routing information about operations resources or about setup and run time.
Manufacturing overheads can also be related to cost contributions of component material, reflecting a lean
manufacturing philosophy that eliminates the need for routing information.

Cost group segmentation applies to a manufactured item’s calculated cost whether it was based on standard costs or
planned costs. The Summary form displays this segmentation by cost group or by level or by both.

The ability to retain cost group segmentation across multiple levels in a product structure only applies to
manufactured items that use a standard cost inventory model. The term splitting refers to this ability to retain cost
group segmentation across multiple levels. Without splitting, the cost for a manufactured component is treated as a
material cost contribution. The inventory parameter for cost breakdown by subledger indicates that cost group

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About cost groups [AX 2012] Page 2 of 3

segmentation will be retained across multiple levels in standard cost calculations. Whereas a policy of no levels
means that cost group segmentation only applies to a single level calculation. The Cost rollup by cost group form,
for example, displays the cost group segmentation across multiple levels for standard cost items.

Cost group segmentation can also apply to variances for a standard cost item. A second inventory parameter defines
whether variances will be identified by cost group, or just summarized.

A cost group can be assigned a cost group type and a behavior for supplemental segmentation purposes.

• Cost group type − Each cost group must be assigned a cost group type, which designates it as pertaining to
direct material, direct manufacturing, direct outsourcing, indirect or undefined. A cost group designated as
direct material can be assigned to items. A direct manufacturing cost group can be assigned to cost
categories. A direct outsourcing cost group can be assigned to a product type of service, which enables you to
classify costs associated with the service purchase to subcontracting activities. An indirect cost group can be
assigned to indirect costs for surcharges or rates. A cost group designated as undefined can be assigned to
items, cost categories or indirect costs.

The assignment of a cost group type serves several purposes. First, it constrains the ability to assign a cost
group and to view a drop-down list of applicable cost groups. Second, it provides supplemental segmentation
for reporting purposes. Third, it can be used to assign ledger accounts for variances.

• Behavior − Each cost group can optionally be assigned a behavior, which designates the cost group as
pertaining to fixed costs or variable costs. A cost group that has a null value for behavior is treated as a
variable cost. The assignment of a behavior only serves a reporting purpose. For example, costs can be
displayed with segmentation of fixed and variable costs on the costing sheet, and in the Cost rollup by cost
group form.

If you assign a profit-setting percentage to each cost group, the BOM calculation provides a suggested sales
price based on a cost-plus-markup approach.

See also
About BOM calculations
About BOM calculation of a suggested sales price

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions ADD

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About BOM calculation groups [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost groups

About BOM calculation
About BOM calculation groups
groups [AX 2012]
About manufacturing overheads
based on material

Prepare to maintain standard costs

for manufactured items

Updated: May 27, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

One purpose of assigning a BOM calculation group to items is to define applicable warning conditions so that a BOM
calculation generates warning messages about potential sources of calculation errors. A BOM calculation generates
an Infolog that contains the warning messages. You can view this warning Infolog about a selected item when you
use the Complete form to review BOM calculation results. The form displays an icon that indicates that a warning
Infolog exists for an item.

Two warning conditions only apply to manufactured items, and four warning conditions apply to any item.

• Identify when a manufactured item does not have an active BOM.

• Identify when a manufactured item does not have an active route.

• Identify a warning when the item in a BOM line has a 0 (zero) quantity.

• Identify a warning when the item in a BOM line has a 0 (zero) cost or when it does not have a cost record.

• Identify a warning when the item in a BOM line has an out-of-date cost. The warning reflects a comparison of
the calculation date to the specified days for a maximum age of cost.

• Identify a warning when the item in a BOM line has less than the profitability percentage that you want.

The definition of various BOM calculation groups depends on the need for variations in applicable warning
messages. For example, one BOM calculation group may be sufficient, with warning conditions about an active BOM,
a zero component quantity, and a zero component cost.

The applicable warning conditions that are associated with the BOM calculation group can be optionally overridden
when you initiate a BOM calculation. You can add or remove an applicable warning condition. For example, you
could remove the applicable warning condition about an active route when the specific situation does not involve
routing data.

The assignment of a BOM calculation group to items can serve other special purposes. The special purposes include
the following:

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About BOM calculation groups [AX 2012] Page 2 of 3

• Indicate the source of a purchased component’s cost contribution data in calculating the planned cost of a
manufactured item (by using the cost price model field). Some manufacturers calculate planned costs by using
the purchase price trade agreements for purchased components or another basis, such as the purchase price
records in a costing version. The approach that you want is termed the cost price model. The decision about
the source of cost data should be reflected in the definition and assignment of BOM calculation groups.

• Indicate how the item’s data will be used to calculate a suggested sales price. This is done in the sales price
model field. Some manufacturers want to calculate a suggested sales price for manufactured items. The
calculated sales price can reflect a rolled-price approach that is based on the component’s sales price record.
It could also be a cost-plus-markup approach that is based on the component’s cost and applicable profit
percentage. This is associated with the item’s cost group.. The approach that you want is termed the sales
price model, with a choice between item sales price and cost group. The decision about a rolled-price versus
cost-plus-markup approach should be reflected in the definition and assignment of BOM calculation groups.

• Indicate that a manufactured item should be treated as a purchased item for BOM calculation purposes by
using the stop explosion field. A manufactured item can be treated as a purchased item for cost-rollup
purposes. The typical situations include a purchased item that is occasionally manufactured or a manufactured
item that is now being purchased. The item will first be designated as a manufactured item to define BOM and
route information, and to support production orders for the item. However, the stop explosion flag prevents
cost calculations from using the item’s BOM and route, and the BOM calculation uses the item’s specified
costs.

Note

The Time and attendance module contains the Calculation groups form, but that form has no relationship to
BOM calculation groups. In Time and attendance, workers can be assigned to calculation groups which reflect
the grouping of workers associated with the same supervisor or manager. Calculation of workers’ registrations can
be done automatically or manually by a supervisor or manager.

See also
About BOM calculations
About manufactured items that are treated as purchased items
About BOM calculation of a suggested sales price

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions ADD

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About manufacturing overheads based on material [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost groups

About manufacturing
About BOM calculation groups
overheads based on
material [AX 2012]
About manufacturing overheads
based on material

Prepare to maintain standard costs

for manufactured items

Updated: December 13, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A manufacturing environment that has only bills of material (BOM) information and no routing information can
calculate manufacturing overheads that are based on material. The manufacturing overheads are expressed as
indirect cost-calculation formulas for a surcharge percentage, and they are defined in the Costing sheet setup form.
A cost group that is assigned to material components acts as the basis for a calculation formula. The calculation
formulas can be defined for individual products or for item groups that are assigned to products, to provide more
flexibility in calculating manufacturing overheads that are based on material.

See also
About costing sheet setup
Example of a costing sheet setup

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(LCS).

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Prepare to maintain standard costs for manufactured items [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost groups

Prepare to maintain
About BOM calculation groups
standard costs for
manufactured items
About manufacturing overheads
based on material

Prepare to maintain standard costs

for manufactured items
[AX 2012]
Updated: March 22, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The preparation steps for maintaining costs for manufactured item are slightly different than for purchased items.
Policies assigned to manufactured items can affect the cost calculations for their parent manufactured items. To
prepare for maintaining costs for manufactured items, follow these steps:

1. Assign an item model group to the manufactured item.

The item model group identifies the use of standard costs.

2. Assign an item group to the manufactured item.

The item group contains ledger accounts that apply to the manufactured item. The ledger accounts for a
manufactured item with a standard cost inventory model include several production variances, the cost
change variance, and inventory cost revaluation.

3. Assign the inventory unit of measure to the item.

The item’s costs are always expressed in the item’s inventory unit of measure.

4. Do not assign a cost group to the manufactured item unless it will be treated as a purchased item.

5. Assign a BOM calculation group to the manufactured item.

The item’s BOM calculation group defines applicable warning conditions so that performing a BOM
calculation will generate warning messages about possible sources of calculation errors. For example, a
warning message can identify when an active BOM or route does not exist.

The BOM calculation group contains a stop explosion policy that indicates when to treat a manufactured item
as a purchased item.

6. Assign a standard order quantity to the manufactured item when it has constant costs.

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Prepare to maintain standard costs for manufactured items [AX 2012] Page 2 of 2

The standard order quantity is an accounting lot size for amortizing constant costs. For example, setup times
in routing operations or a constant component quantity in the bill of material.

7. Define the BOM for the manufactured item. One or more BOM versions can be defined for the manufactured
item. Verify that the versions that you want have been marked as approved and active and that they have the
effective dates that you want. The BOM version can be company-wide or site-specific.

8. Define the routing for the manufactured item. One or more route versions can be defined for the
manufactured item. Verify that the versions that you want have been marked as approved and active and that
they have the effective dates that you want. The route version must be site-specific.

The use of routing information for costing purposes will require additional preparation steps. For example, the cost
categories that are assigned to routing operations must be correct and completed.

See also
About BOM calculation groups
About manufactured items that are treated as purchased items
About amortizing constant costs for a manufactured item
About displaying charges for a manufactured item

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Preparing to maintain standard costs in a manufacturing environment with routings [AX 2... Page 1 of 1

Preparing to maintain standard costs in a

manufacturing environment with routings
[AX 2012]
Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section contain information about how to prepare to maintain standard costs in a manufacturing
environment where routings are used.

About cost categories used in production routings

About costing sheet setup

About cost categories used in Production control and in Project management and accounting

Example of a costing sheet setup

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

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About cost categories used in production routings [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost categories used in

production routings About cost categories
About costing sheet setup used in production
About cost categories used in
Production control and in Project
routings [AX 2012]
management and accounting

Example of a costing sheet setup

Updated: November 24, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Cost categories apply to manufacturing environments that use routings. Cost categories are assigned to operations
resources and routing operations to define hourly costs and segment cost contributions in a manufactured item’s
calculated costs. That is, the cost groups that are assigned to cost categories classify manufacturing cost
contributions by operation resources and type of activity, such as setup and run time. The specificity of cost group
assignment provides the foundation for calculating manufacturing overheads based on routing information.

Note

Cost categories have several synonyms within manufacturing environments, such as labor rate codes or machine
rate codes.

Each cost category has its associated cost records and an assigned cost group. Different cost categories are needed
to support different production purposes.

• Assign different hourly costs by operations resource, such as different costs for various types of labor skills,
machines, or manufacturing cells.

• Assign different hourly costs for the setup time or run time that is associated with a routing operation.

• Assign operations resource costs on the basis of output quantity rather than hourly costs, such as the piece
rates for paying labor.

• Provide cost group segmentation of cost contributions to a manufactured item’s calculated cost, such as
segmentation of labor and machine costs.

• Provide the cost group basis for overhead calculation formulas, such as labor-related and machine-related
overheads or overheads that are related to setup and run time.

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About cost categories used in production routings [AX 2012] Page 2 of 3

A cost category can be assigned to the setup time, process time, and the quantity for a routing operation. When
costs or cost group segmentation differ between setup and process time, for example, different cost categories
should be defined and assigned to them. The selective usage of cost categories for setup time, process time, and
quantity is determined by the route group that is assigned to an operation. Assignment of cost categories to time
and quantity can be mandated based on the company-wide policies that are embedded within the Production
parameters form.

Each cost category has its associated costs that are based on the definition of cost records within a costing version.
Use the Cost category price form to define the cost records for a specified costing version and site. The cost record
for a cost category is initially entered with a pending status and an intended effective date. Activating the cost record
updates the status (to current active) and the effective date (to the activation date). Different cost records may reflect
different sites, effective dates, or status. Bills of material (BOM) calculations for a future or historical date will use cost
records that have the relevant effective date. The current active cost record will be used for estimating production
order costs and valuing reported time against a production order.

The cost record for a cost category can be site-specific or company-wide. The cost record will be site-specific if you
assign a site to it. Otherwise, a blank value means that the cost record will apply to all sites within the company. Costs
may differ between sites, for example, so that the cost records must be defined as site-specific.

A routing operation generally inherits the cost categories that are assigned to the operations resource or master
operation. When a production order is created, the routing operations in the production route reflect the selected
route version. You can override the cost categories that are assigned to the operations in the production route.

Certain types of production work may apply to project time estimates and reporting, which requires a cost category
that can be used for production and project purposes. Additional project-related information must be defined when
a cost category is flagged for use in projects.

See also
About cost groups
About cost categories used in Production control and in Project management and accounting

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About costing sheet setup [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost categories used in

production routings About costing sheet
About costing sheet setup setup [AX 2012]
About cost categories used in
Production control and in Project
management and accounting

Example of a costing sheet setup

Updated: February 4, 2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Setting up the costing sheet involves two objectives. As the first objective, you define the format for displaying cost
of goods sold information about a manufactured item or production order. The formatted display is termed a costing
sheet. As the second objective, you define the basis for calculating indirect costs. The costing sheet setup builds on
the cost group feature for displaying information and for the indirect cost calculation formulas. The two objectives of
costing sheet setup are as follows:

• Define the format for the costing sheet. The user-defined format for a costing sheet identifies the
segmentation of costs that contain a manufactured item’s cost of goods sold. The item’s cost of goods sold
information, for example, could be segmented into material, labor, and overhead based on cost groups. These
cost groups are assigned to items, cost categories for routing operations, and indirect cost calculation
formulas. The format for the costing sheet typically requires intermediate totals when multiple cost groups
have been defined, such as aggregating multiple cost groups pertaining to material. The definition of a
costing sheet format is optional, but a costing sheet format must be defined if indirect costs will be calculated.

• Define the basis for calculating indirect costs. Indirect costs reflect manufacturing overheads that are
associated with producing a manufactured item. An indirect cost calculation formula can be expressed as a
surcharge or a rate. A surcharge represents a percentage of value, whereas a rate represents an amount per
hour for a routing operation. A cost group defines the basis for the calculation formula. For example such as a
100 percent surcharge for a labor cost group or a USD 50.00 hourly rate for a machine cost group. In order to
define a calculation formula and its cost group basis, the costing sheet setup requires the identification of the
cost group that represents the overhead and the selection of a surcharge or rate approach.

Each calculation formula must be entered as a cost record. The cost record consists of a specified costing version, a
surcharge percentage, or a rate amount, the cost group basis, a status, and an effective date. A cost record is initially
entered with a pending status and effective date. Activating the cost record updates the status (to current active) and
the effective date (to the activation date). The cost record can also specify a site for a site-specific calculation formula,
or indicate a company-wide calculation formula by leaving the site field blank. The cost record can optionally consist
of a specified item or item group when the calculation formula has been flagged as per item.

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About costing sheet setup [AX 2012] Page 2 of 2

The current active cost records for indirect cost calculation formulas will be used for estimating production order
costs. They will also be used for calculating actual costs that are related to actual consumption of time and material.
The pending cost records will be used in BOM calculations for a future date.

Two blocking policies for a costing version determine whether pending costs can be maintained and whether the
pending cost can be started. Use the blocking policies to permit data maintenance, and then to prevent data
maintenance for the cost data in a costing version.

After you define the costing sheet format and calculations for indirect costs, you must initiate a separate step to
validate and save the information. The costing sheet represents a company-wide format for consistently displaying
the costs of goods sold information.

The costing sheet is displayed as part of the Calculate item cost form. The costing sheet can be displayed for a
manufactured item’s calculated cost record in the Item price form, or for an order-specific calculation record in the
BOM calculation results form. It can also be displayed as part of the Price calculation form for a production order.

Set up a costing sheet

• Click Inventory management > Setup > Costing > Costing sheets.

See also
About cost groups
Example of a costing sheet setup

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About cost categories used in Production control and in Project management and accounti... Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About cost categories used in

production routings About cost categories
About costing sheet setup used in Production
About cost categories used in
Production control and in Project
control and in Project
management and accounting
management and
Example of a costing sheet setup
accounting [AX 2012]
Updated: December 9, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Certain types of production work can apply to project time estimates and reporting, which requires a cost category
for production and project purposes. Additional project-related information must be defined when a cost category is
used in production and projects. For example, the hourly costs that are associated with projects can be different from
the hourly costs that are associated with production. A cost category that is used in Production and Project can be
defined in the Cost categories form.

Note

Cost accounting contains a Project categories form, but it has no relationship to the functionality that is
described in this topic.

When you select to use a cost category in projects, the Cost categories form displays additional project-related
information. Additional tabs include project-related information, such as the assignment of a category group, a line
property, and ledger accounts. The cost category must be assigned to a category group that supports a transaction
type of hours. A line property indicates the default about how reported time is chargeable to a project. The ledger
accounts that are related to costs and sales typically are defined for the category group that is assigned to the cost
category. However, specific accounts can be defined for an individual cost category.

Additional buttons provide access to project-related information about a selected cost category. For example, you
can view project-related transactions, define employees or projects, define hourly costs and sales prices, and view
reports.

See also
About cost categories used in production routings

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Microsoft Dynamics AX 2009
®

BOM calculations using

costing sheets
White Paper

This document describes how to set up a costing sheet that

includes material and manufacturing, and how the setup affects
the BOM calculation results.

June 2012

http://www.microsoft.com/dynamics/ax
Table of Contents
Purpose....................................................................................................... 4

Introduction ................................................................................................ 4
The costing sheet and indirect costs ........................................................................................ 5

Cost groups ................................................................................................. 5

Cost group types ............................................................................................................... 5
Cost group behavior ........................................................................................................... 6
Create cost groups ............................................................................................................. 6
Assign a cost group to an item ............................................................................................ 6
Assign a cost group to a cost category.................................................................................. 7
Assign cost categories to operations on a production route ..................................................... 7

Costing version ........................................................................................... 8

Costing version types ......................................................................................................... 8
Cost price model ................................................................................................................ 8
Explosion mode ................................................................................................................. 8
Create and set up a costing version ..................................................................................... 8

Cost groups and costing versions ................................................................ 9

Set up standard cost prices for items through a costing version .................................................. 9
Set up standard cost prices for cost categories through a costing version ....................................10

Costing sheet ............................................................................................ 10

Create a Price node in the costing sheet .............................................................................. 11
Create a Total node or a Cost group node in the costing sheet ................................................ 11
Create a Rate node or a Surcharge node in the costing sheet ................................................. 13

Single-level and multilevel BOM calculation .............................................. 13

Costing sheet setup..............................................................................................................13
Calculate a BOM by using Single level explosion ......................................................................13
View the calculated cost of the single-level BOM ................................................................... 14
View the origin of the values in the single-level BOM calculation ............................................. 15
View the costs according to the format created in the costing sheet setup ............................... 15
Calculate a BOM by using Multilevel explosion .........................................................................16
View the calculated cost of the multilevel BOM ..................................................................... 16
View the origin of the values in the multilevel BOM calculation ............................................... 17
View the costs according to the format created in the costing sheet setup ............................... 17

Indirect costs ............................................................................................ 18

Create an indirect cost node in the costing sheet setup ......................................................... 19
Create and set up a surcharge node .................................................................................... 20
Create and set up a rate node ............................................................................................ 21

Surcharge calculation and subtype behavior ............................................. 22

Set up surcharges ............................................................................................................. 22
Calculate surcharges by using the Level subtype................................................................... 23
View the surcharge records upon BOM calculation by using the Level subtype .......................... 24

BOM CALCULATIONS USING COSTING SHEETS

 View the indirect costs upon BOM calculation by using the Level subtype ................................. 24
Calculate surcharges by using the Total subtype ................................................................... 25
View the indirect costs upon BOM calculation by using the Total subtype ................................. 26
Calculate surcharges by using the Sublevel subtype .............................................................. 26
View the indirect costs upon BOM calculation using the Sublevel subtype ................................. 27

Rate calculation and subtype behavior...................................................... 28

Set up rates ..................................................................................................................... 28
Calculate rates by using the Process subtype ....................................................................... 29
View the rate records upon BOM calculation by using the Process subtype ............................... 30
Calculate rates by using the Setup subtype .......................................................................... 31
View the rate records upon BOM calculation by using the Setup subtype .................................. 31

Surcharge calculation by using the Per item parameter ............................ 32

Calculate surcharges by using the Per item parameter ........................................................... 32
View overhead per item upon BOM calculation by using the Per item parameter ....................... 33

Indirect cost calculation viewed from a production order ......................... 33

Set up the costing sheet .................................................................................................... 34
Perform a BOM calculation and associate the cost with a costing version.................................. 34
Create adjustment lines ..................................................................................................... 35
Create and process a production order ................................................................................ 36
View the results of a BOM calculation from a production order ................................................ 36
Update a production order by using automatic BOM calculation .............................................. 38
View the results of a BOM calculation from a production order by using automatic BOM
consumption .................................................................................................................... 38

Production variances ................................................................................ 40

Production variances and the difference between actual costs and calculated costs ................... 41
Analyze the production variances ........................................................................................ 41

BOM CALCULATIONS USING COSTING SHEETS

Purpose
The purpose of this document is to describe how Microsoft Dynamics AX 2009 supports absorption
costing by allowing indirect costs to be absorbed into the product cost.

Introduction
Absorption costing is one of many cost accounting methods. The purpose of applying absorption
costing is to ensure that indirect costs that originate in the manufacture of finished goods are
recognized and absorbed into the product cost.
Classifying resources of the material and labor types into cost groups of the Direct materials or
Direct manufacturing type lets cost controllers configure a cost composition with the level that is
required for financial reporting and internal analysis. The aggregation also serves as the basis for
calculating absorption of indirect cost.
Inventory is evaluated by:
 Standard cost – The cost composition can be tracked in Microsoft Dynamics AX 2009, and the
inventory value of a product can be reported by its cost composition.
 Use the Standard cost inventory value report for reporting.
 Use the Sub ledger option in the Cost breakdown field on the Bill of materials tab under
Inventory management > Setup > Parameters.
 Actual cost (FIFO, LIFO, or Weighted average) – The cost composition cannot be tracked in
Microsoft Dynamics AX 2009, and the inventory value can only be reported as Direct material.
Absorption of indirect cost is important for ensuring accurate product costing and valuation of
inventory. In some industries, indirect cost represents a significant portion of the product cost.
Accounting standards or Generally Accepted Accounting Principles (GAAP) may recommend or require
that indirect cost be absorbed.
Examples of indirect cost include:
 Depreciations of manufacturing equipment.
 Maintenance expenses related to manufacturing equipment.
 Shop floor expenses for cleaning, rent, or insurance.

BOM CALCULATIONS USING COSTING SHEETS

The costing sheet and indirect costs
The following illustration shows a costing sheet structure, and it also shows how indirect cost is posted
to accounts in the general ledger.

Note: All examples in this document use a Microsoft Dynamics AX 2009 SP1 RU7 environment with
Contoso demo data (company CEU).

Cost groups
Cost groups represent the lowest level of a cost composition. A cost group must be associated with a
cost group type, which defines the nature of cost classification in Microsoft Dynamics AX 2009.

Cost group types

There are four types of cost groups:
 Direct materials – Can be assigned to items.
 Direct manufacturing – Can be assigned to cost categories.
 Indirect cost – Can be assigned to indirect costs for surcharges or rates
 Undefined – Not specific to anything. This cost group type is automatically assigned to cost
groups during upgrade to Microsoft Dynamics AX 2009 from earlier versions of Microsoft Dynamics
AX
At least one cost group of each cost group type must be set as the default type. If a resource is not
assigned a cost group, the system automatically assigns the default cost group. You are not notified
about automatic cost group assignment.

BOM CALCULATIONS USING COSTING SHEETS

Cost group behavior
A cost group can be defined as Fixed or Variable, depending on the resources that it represents in
the cost composition. This is referred to as the behavior of the cost group. The distinction is purely for
reporting purposes, and it applies only when you use the Standard cost inventory value report and
the Standard cost method for reporting.

Create cost groups

 Click Inventory management > Setup > Bill of materials > Cost groups.

Cost groups are assigned to items and cost categories, and the cost categories are assigned to
operations on production routes. In this way, the operations are associated with cost groups.

Assign a cost group to an item

 Click Inventory management > Item details.

Note: As the preceding illustration shows, only cost groups of the Direct materials and Undefined
types are applied.

BOM CALCULATIONS USING COSTING SHEETS

Assign a cost group to a cost category
 Click Production > Setup > Routes > Cost categories.

Note: As the preceding illustration shows, only cost groups of the Direct manufacturing and
Undefined types are applied.

Assign cost categories to operations on a production route

1. Click Production > Route details > Route.
2. Click the Setup tab, and then, under Cost categories, select the cost categories.

BOM CALCULATIONS USING COSTING SHEETS

Costing version
The primary purpose of a costing version is to contain cost records for items and cost categories. The
costing version determines current active costs and the way that the bill of materials (BOM)
calculation simulation is performed.

Costing version types

There are two types of costing versions:
 Standard cost – Used for items that are associated with an inventory model group of the
Standard cost type. Use this costing version type to set up costs and calculate current active
cost.
Note: This inventory model group supports calculation of costs only at a single level.
 Planned cost – Used for items that are associated with inventory model groups of types other
than Standard cost, such as FIFO and LIFO. Use this costing version type to run different
scenarios according to the setup for cost simulations.

Cost price model

In a costing version, you can select one of the following values as the cost price model:
 Version cost price – The cost is taken from the current costing version for items, categories, and
indirect costs. This is the only available option for costing versions of the Standard cost type.
Tip: Pending costs are always applied in calculations. If no pending costs exist for the current
costing version, the cost value is determined from the fallback principle that is selected for the
costing version. For more information, see “Create and set up a costing version.”
 Calculation group – The cost is based on the calculation group for the items.
 Set up calculation groups under Inventory Management > Setup > Bill of materials.
 Assign the calculation group to component items on the References tab under Inventory
management > Item details.

Explosion mode
The explosion mode in a costing version determines how the levels in a BOM affect the cost
calculation. You can select one of the following explosion modes:
 Multilevel – The calculated cost reflects a complete recalculation. Each sub-BOM is calculated
instead of just taking its current cost.
 Make to order – Resembles Multilevel (a complete recalculation), except the specified quantity
is used to amortize constant costs.
 According to BOM line type – The calculation depends on the BOM line type. For example, if the
type is Item, the current cost is taken, and if the type is Production, the cost is calculated.
 Single level – The standard costing version is restricted to a single level. This ensures accurate
and consistent calculation of standard costs. For this explosion mode, the calculated costs of first-
level manufactured components are applied.

Create and set up a costing version

1. Click Inventory management > Setup > Costing versions.
2. To set up a cost price model and an explosion mode, click the Calculation tab.

BOM CALCULATIONS USING COSTING SHEETS

3. To specify the date when the costing version becomes valid, click the Recording tab. Then, in
the From date field, enter a date.

Note: In the Fallback principle field on the Calculation tab, you can define the cost value that
is applied if no cost value is retrieved for the current costing version.

Cost groups and costing versions

You associate the cost groups of items and operations with a costing version by setting up a standard
cost price for the item or for the cost category of the operation.
For example, you have a BOM item that is composed of two raw material items and a partially finished
product. The BOM and the sub-BOM have a route with one operation. All items are associated with an
inventory model of the Standard cost type.
To set up standard cost prices for the components of the BOM item, you add standard cost prices to
the items and to the cost categories of the routes that are associated with the BOMs.

Set up standard cost prices for items through a costing version

1. Click Inventory management > Item details.

BOM CALCULATIONS USING COSTING SHEETS

 2. Select an item, click Price, and then create a pending price of the Cost type.
3. In the Version field, select a costing version, and in the Price field, enter a price.
4. Save the record, and then click Activate.

Set up standard cost prices for cost categories through a costing

version
1. Click Production > Setup > Routes > Cost categories.
2. Create a new category, and then, in the Cost group field, select a cost group.
3. Click Price, and then, in the Version field, select a costing version.
4. In the Price field, enter a price, and then click Activate.

Costing sheet
The costing sheet defines the format for displaying the cost information of a manufactured item and
the elements to be included in the calculation of manufacturing overhead.
Each level in the costing sheet consists of a node that is composed of totals and subtotals. The totals
and subtotals are based on the cost group list. There are three types of nodes:
 Root nodes
 Parent nodes of the Price type
 Child nodes of the Cost group and Total types

Nodes of the Total type are used for grouping and for subtotal amounts. Total nodes can contain
subtotals or Cost group nodes.

10

BOM CALCULATIONS USING COSTING SHEETS

A node of the Cost group type that is associated with an indirect cost group must be calculated. To
nodes of this type, you can add subnodes of the Surcharge and Rate types, and define surcharge
percentages and rate amounts.

Create a Price node in the costing sheet

1. Click Inventory management > Setup > Bill of materials > Costing sheet setup.
2. Right-click the Root node, and then click Create. From the Root node, you can create only
nodes of the Price type.
3. In the Code field, enter a code, and in the Description field, enter a description.
4. In the Type field, select Cost price.
5. To display a header line for the node, select the Header check box. To display a total line, select
the Total check box.

Create a Total node or a Cost group node in the costing sheet

1. Right-click the Price node, and then click Create.
2. In the Select node type field, select the node type. In a Price node, you can include a Total
node or a Cost group node.

11

BOM CALCULATIONS USING COSTING SHEETS

3. On the Edit tab, in the Code field, enter a code, and in the Description field, enter a
description. If you want to view a header line and a total line for the node, select the Header and
Total check boxes.
 For a node of the Total type, you can add another node of the Total type (a subtotal) or a
node of the Cost group type.

 For a node of the Cost group type, you can add nodes of the Total and Cost group types.
You can also associate the node with a cost group for direct materials or indirect costs. In the
Cost group field, select the cost group that is related to the node. This node will cumulate
amounts for the cost group.

12

BOM CALCULATIONS USING COSTING SHEETS

Create a Rate node or a Surcharge node in the costing sheet
1. Right-click a node of the Cost group type that is associated with an indirect cost group, and then
click Create.
2. In the Select node type field, select Rate or Surcharge. The type of node that you create
depends on the method to be used to calculate indirect costs.
For more information, see “Surcharge calculation and subtype behavior” and “Rate calculation and
subtype behavior.”

Single-level and multilevel BOM calculation

The following examples show the results of BOM calculations when the Single level and Multilevel
explosion modes are used. The explosion mode is defined in the Costing version setup form, and
the format of the cost information is defined in the Costing sheet setup form.

Costing sheet setup

The cost classification is divided into two nodes of the Total type:
 Material cost – Includes all cost groups related to raw material.
 Manufacturing – Includes all cost groups related to cost categories in the production operations.

Calculate a BOM by using Single level explosion

1. Click Inventory management > Item details.
2. Select an item of the BOM type, and then click Price.

13

BOM CALCULATIONS USING COSTING SHEETS

 3. In the Item price form, click Calculation.
4. Select a costing version that uses the Single level explosion mode, and then click Yes to insert
the active version of the BOM and the route.

View the calculated cost of the single-level BOM

On the Pending prices tab in the Item price form, you can see that the calculated cost amount is
50:
 Price field: The variable costs are 45.
 Price misc. charges field: The constant cost is 5.

14

BOM CALCULATIONS USING COSTING SHEETS

View the origin of the values in the single-level BOM calculation
On the Tree structure tab in the Item price form, you can trace the values of the BOM calculation:
 10 is derived from ItemA, 10 from ItemB, and 10 from BOM2. The cost is derived from the cost of
this subproduct, but it is not calculated, because the calculation is set up to be performed at a
single level.
 5 is derived from the setup time, which is a constant cost, and 15 is derived from the run-time
operation.

View the costs according to the format created in the costing sheet setup
On the Costing sheet tab in the Item price form, you can view the format of the costs according to
the costing sheet format:
 A header and a total for the total cost of 30 that is derived from raw material. The cost is divided
by cost group type, where ItemA and ItemB belong to the HESMat cost group, and BOM2 belongs
to the Matl cost group.
 A header and a total for the manufacturing cost, where only one cost group shows cost.

15

BOM CALCULATIONS USING COSTING SHEETS

Calculate a BOM by using Multilevel explosion
1. Follow steps 1 through 3 of the procedure for a single-level BOM calculation.
2. Select a costing version that uses the Multilevel explosion mode, and then click Yes to insert
the active version of the BOM and the route.

View the calculated cost of the multilevel BOM

On the Pending prices tab in the Item price form, you can see that the calculated cost amount is
85:
 Price field: The variable costs are 80.
 Price misc. charges field: The constant cost is 5.

16

BOM CALCULATIONS USING COSTING SHEETS

View the origin of the values in the multilevel BOM calculation
On the Tree structure tab in the Item price form, you can view the following costs. The cost of
BOM2 is 45, compared to 10 in the single-level calculation. The reason for the difference is that the
cost has been calculated, and raw material and route operations are included in the calculation.

View the costs according to the format created in the costing sheet setup
On the Costing sheet tab in the Item price form, you can view the format of the costs according to
the costing sheet format:
 In the Level field, select Single. The cost for the Matl cost group is 45, compared to 10 in the
single-level calculation. The Matl cost group is associated with BOM2.

17

BOM CALCULATIONS USING COSTING SHEETS

 In the Level field, select Multi. The costs are classified according to the composition of BOM2,
where 10 is derived from the Matl cost group, and 35 is derived from the manufacturing cost
group named Lab_HE.

Indirect costs
There are two types of indirect costs:
 Surcharge – A surcharge is an indirect cost based on a percentage that is applied over raw
material or operational processes.
 Rate – A rate is an indirect cost calculated as a constant amount that is added to the operational
process.

18

BOM CALCULATIONS USING COSTING SHEETS

Create an indirect cost node in the costing sheet setup
To calculate indirect costs, you must add a formula in the costing sheet setup.
1. Click Inventory management > Setup > Bill of materials > Costing sheet setup.
2. Right-click the price node, which is named COGM - Cost of good manufactured in the following
illustration, and then click Create.

3. In the Select node type field, select Total, and then click OK.
4. Select the Header and Total check boxes.

5. Right-click an indirect cost node, and then click Create.

19

BOM CALCULATIONS USING COSTING SHEETS

6. In the Select node type field, select Cost group, and then click OK.

A cost node for indirect costs is created. In the preceding illustration, the indirect cost node is
associated with the Var_OVH cost group for indirect costs.
This node will cumulate the amounts that are calculated for indirect costs.

Create and set up a surcharge node

1. Right-click a cost group node for indirect costs, and then click Create.
2. Select Surcharge, and then click OK.
3. Complete the remaining options:

General tab
 In the Subtype field, select one of the following options:
 Undefined – Applies only if your costing sheet is in a draft mode. This value has to be set
to avoid errors when you validate or save the costing sheet.
 Level – The calculation is performed at each level individually.
 Sublevel – The calculation is performed at the second level and all lower levels.
 Total – The calculation is performed at each level, and the sums are cumulated.
 If you select the Per item check box, you can indicate which manufactured items the
overhead is calculated for. This applies only to BOM items, and totals are calculated for the
BOMs that you select.

Calculation tab
 Under Basis, select the material or manufacturing nodes (cost totals or subtotals) for which
you want to apply the surcharge.
 Under Surcharge, enter the formula that is linked to a costing version.

20

BOM CALCULATIONS USING COSTING SHEETS

 Posting tab
Set up accounts for the production accounting process. When you start a production order, indirect
costs are posted to two WIP accounts: WIP issue and WIP account. When you end a production
order, these accounts are cleared, and the final indirect absorption is posted to the Indirect
absorption and Indirect absorption offset accounts.

Dimension tab
The dimensions that you select are set in the indirect cost postings. If you leave the dimensions
blank, the production order dimensions are applied.

Create and set up a rate node

1. Right-click a cost group node for indirect costs, and then click Create.
2. Select Rate, and then click OK.
3. Complete the remaining options:

General tab
 In the Subtype field, select one of the following options:
 Undefined – Applies only if your costing sheet is in a draft mode. This value has to be set
to avoid errors when you validate or save the costing sheet.
 Process, Setup and Quantity – The overhead applies to the total cost of the operation
type that you select.
 Per item: See the guidelines in the procedure for the surcharge node.

Calculation tab
 Under Basis, select the manufacturing nodes (cost totals or subtotals) for which you want to
apply the rate.
 Under Rate, enter the formula linked to a costing version. To enter different amounts per site
or use different costing versions, for example, you can create an optional number of lines.

Posting tab
See the guidelines in the procedure for the surcharge node.

Dimension tab
See the guidelines in the procedure for the surcharge node.

21

BOM CALCULATIONS USING COSTING SHEETS

Surcharge calculation and subtype behavior
The following examples show how the values in the Subtype field in the Costing sheet setup form
affect the results of surcharge calculation. The calculation is based on the following setup in the
Costing sheet setup form.

Set up surcharges
1. In the Costing sheet setup form, on the Calculation tab, in the Code field, select the node on
which you want to calculate the surcharge.
In the following examples, the surcharge percentage is applied to the Matl node amount.
2. In the Surcharge section, select a costing version, and in the Percent field, enter a percentage.
In the following examples, the percentage is 10.

22

BOM CALCULATIONS USING COSTING SHEETS

Calculate surcharges by using the Level subtype
1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Level.
2. In the Item details form, on the General tab, in the Cost group field, select the cost group.

3. In the Item details form, select an item of the BOM type, click Price, and then click
Calculation.
4. In the BOM calculation for an item form, in the Costing version field, select a costing version
of the Planned cost type.
Note: Use the Planned cost costing version to see the effects of using the Level subtype. The
Standard cost costing version is restricted to single-level calculation.
5. Click OK. The following cost price is calculated:
 Price field: 82
 Price misc. charges field: 5
6. Click Complete.

23

BOM CALCULATIONS USING COSTING SHEETS

View the surcharge records upon BOM calculation by using the Level subtype
The two new surcharge records can be identified by the surcharge icons.

View the indirect costs upon BOM calculation by using the Level subtype
Note that there is an indirect cost per level. In this example, ItemA and ItemC belong to a cost group
for direct material. (The cost group is named Matl in the illustrations.) Each item represents a cost of
10, so 10 percent is 1 per level.

24

BOM CALCULATIONS USING COSTING SHEETS

Calculate surcharges by using the Total subtype
1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Total.

2. Follow the steps 2 through 5 of the procedure for calculation that uses the Level subtype.
The following cost price is calculated:
 Price field: 83
 Price misc. charges field: 5
3. Click Complete.

25

BOM CALCULATIONS USING COSTING SHEETS

View the indirect costs upon BOM calculation by using the Total subtype
An indirect cost has been calculated per level. ItemA and ItemC belong to the cost group named Matl
in the illustration. However, because the subtype is Total, the cost is cumulated in upper levels:
 Level 2: Total cost of Matl = 10, surcharge = 10 percent, surcharge amount = 1
 Level 1: Total cost of Matl for Levels 2 and 1 = 20, surcharge = 10 percent, surcharge amount = 2

Calculate surcharges by using the Sublevel subtype

1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Sublevel.

26

BOM CALCULATIONS USING COSTING SHEETS

 2. Follow steps 2 through 5 of the procedure for calculation that uses the Level subtype.
The following cost price is calculated:
 Price field: 81
 Price misc. charges field: 5
3. Click Complete.

View the indirect costs upon BOM calculation using the Sublevel subtype
Although the surcharge record is added in the top level (Level 1), in this scenario, the application
applies the surcharge from Level 2 only to any levels below that.
The calculation considers only Level 2. The total for the direct material cost group, Matl, is 10.
Therefore, the surcharge amount is 1.

27

BOM CALCULATIONS USING COSTING SHEETS

Rate calculation and subtype behavior
The following examples show how the values in the Subtype field in the Costing sheet setup form
affect the results of rate calculation. The calculations are based on the following setup in the Costing
sheet setup form.

Set up rates
1. In the Costing sheet setup form, on the Calculation tab, in the Code field, select the node on
which you want to calculate the rate.
In the following examples, the rate is applied to the Manufacturing node amount.

2. Under Rate, select a costing version, and in the Amount field, enter an amount.
In the following examples, the amount is 3.

28

BOM CALCULATIONS USING COSTING SHEETS

Calculate rates by using the Process subtype
1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Process.

2. In the Item details form, select an item of the BOM type, and then click Route.
3. In the Route form, on the Times tab, in the Setup time field, enter 2. In the Run time field,
enter 5.

4. In the Item details form, click Price, and then click Calculation.

29

BOM CALCULATIONS USING COSTING SHEETS

 5. In the BOM calculation for an item form, in the Costing version field, select a costing version
of the Planned cost type.
6. Click OK. The following cost price is calculated:
 Price field: 159
 Price misc. charges field: 10
7. Click Complete.

View the rate records upon BOM calculation by using the Process subtype
The explosion mode of the costing version is Multilevel, so the rate is calculated per level.
Because the subtype is set to Process in the Costing sheet setup form, an amount of 3 is added per
unit of the process time (run time):
 At Level 2, the run time is 1, so the rate is 3.
 At Level 1, the run time is 5, so the rate is 15 (5 × 3).

30

BOM CALCULATIONS USING COSTING SHEETS

Calculate rates by using the Setup subtype
1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Setup.

2. Follow steps 2 through 4 of the procedure for calculation that uses the Process subtype.
3. In the BOM calculation for an item form, in the Explosion mode field, select Single level.
4. Click OK. The following cost price is calculated:
 Price field: 105
 Price misc. charges field: 16
5. Click Complete.

View the rate records upon BOM calculation by using the Setup subtype
The explosion mode is Single level, so the rate is calculated only in the top level.
The total rate amount is 6, because the calculation is based on the setup time, which is 2 (2 × 3 = 6).
The rate amount is a constant cost contribution that is related to the setup time.

31

BOM CALCULATIONS USING COSTING SHEETS

Surcharge calculation by using the Per item parameter
The following example shows how overhead is calculated for specific manufactured items.

Calculate surcharges by using the Per item parameter

1. In the Costing sheet setup form, on the General tab, in the Subtype field, select Level.
2. Select the Per item check box.

3. Click the Calculation tab, and then, in the Code field, select the node on which you want to
calculate the surcharge.
4. In the Valid for field, select Table, and in the Relation field, select the item.
Note: When you enter a specific item, the application considers the total amount of the node for
only this manufactured item. You can select any type of item, but this applies only to items of the
BOM type.
5. In the Percentage field, enter a percentage. In this example, the percentage is 10.
6. In the Item details form, select an item of the BOM type, and then click Price.
7. Click Calculation, select a costing version, and then click OK. The following cost price is
calculated:
 Price field: 142
 Price misc. charges field: 19
8. Click Complete.

32

BOM CALCULATIONS USING COSTING SHEETS

View overhead per item upon BOM calculation by using the Per item parameter
In the following illustration, the surcharge percentage is calculated for the components of BOM2. Using
the Per item parameter does not apply a percentage to the cost of BOM2.

Indirect cost calculation viewed from a production order

The following example shows the results of a BOM calculation from a production order. The calculation
results are based on the structure that is defined in the costing sheet setup.

33

BOM CALCULATIONS USING COSTING SHEETS

Set up the costing sheet
1. Click Inventory management > Setup > Bills of materials > Costing sheet setup.
2. Select a surcharge node, and then, on the General tab, in the Subtype field, select Level.

Perform a BOM calculation and associate the cost with a costing version
1. In the Item details form, select an item of the BOM type, and then click Price.
2. In the Item price form, delete any records on the Pending prices tab, and then click
Calculation.
3. In the BOM calculation for an item form, in the Costing version field, select a costing version
of the Standard cost type, and then click OK.

34

BOM CALCULATIONS USING COSTING SHEETS

4. In the Item price form, click Complete.

Note If no surcharge or rate records are calculated, make sure that the date of the costing
version that is used is correct. Set the date in the From date field on the Recording tab in the
Costing version setup form to the current date.
5. Close the Complete BOM calculation form, and then, in the Item price form, click Activate.

Create adjustment lines

1. Click Inventory management > Journals > Item transaction > Profit/Loss.
2. Click New to create a new journal.
3. Click Lines, and then create three new lines to register stock for two items and one BOM item. In
the following example, the records ItemA, ItemB, and BOM2 are created, each with a quantity of
10.

4. Click Post to post the journal.

Note: Before posting, click General ledger > Setup > Periods > Periods, and make sure that
the ledger period is open.

35

BOM CALCULATIONS USING COSTING SHEETS

Create and process a production order
1. Click Production > Production Order Details.
2. Create a new production order for a BOM item. In the following example, the record BOM1 is
created with a quantity of 1.

3. Click Update, and then click Estimation.

4. In the Estimation form, click OK.

View the results of a BOM calculation from a production order

1. In the Production orders form, click Inquiries, and then click Price calculation.
The information in the Calculation form corresponds to the information in the BOM calculation
form.
The calculation is performed at a single level, because the item is a standard cost item.

36

BOM CALCULATIONS USING COSTING SHEETS

2. Click the Overview Costing tab to view the actual and estimated costs for the production order.

3. Click the Costing sheet tab to view the data within the costing sheet structure.

4. Use the following filters to view the data:

 In the Mode field, select Estimation to view estimated costs, or select Costing to view actual
costs.
 In the Level field, specify whether to view the cost groups in a single-level or multilevel
structure.
 In the Per field, specify whether to view the costs per unit, per production lot size, or per
specific quantity.

37

BOM CALCULATIONS USING COSTING SHEETS

Update a production order by using automatic BOM calculation
1. In the Production orders form, click BOM.
2. Select a warehouse for all BOM lines, and then close the form.
3. In the Production orders form, click Update, and then click Start.
4. In the Start form, click the General tab. In the Automatic BOM consumption field select
Always, and then click OK.
Note: Before you click OK in the Start form, click Basic > Setup > Calendar > Working time
templates, and make sure that working times are set up correctly in the calendar.

View the results of a BOM calculation from a production order by using automatic
BOM consumption
1. In the Production orders form, click Inquiries, and then click Price calculation.
2. Click the Costing sheet tab, and then, in the Mode field, select Costing.
The form is now populated with data. The data corresponds to the estimation data, because no
changes have been made to the BOM or route of the production order.

38

BOM CALCULATIONS USING COSTING SHEETS

3. In the Production orders form, click Inquiries, and then click Indirect cost transactions.
In the Indirect cost transactions form, you can view details about each indirect cost transaction
that has been posted. At this stage, only WIP postings have been performed.

4. In the Production orders form, click Inquiries, and then click Production posting.
In the Production posting form, you can view the transactions for the indirect costs that have
been added to the production:
 To view the inventory transactions for the indirect costs, click Inventory > Voucher
transactions.
 To view the ledger transactions for the indirect costs, click Ledger > Voucher.

5. In the Production orders form, click Update, and then click End.
6. Click OK to post the journal. The indirect cost transactions are now financially posted.

39

BOM CALCULATIONS USING COSTING SHEETS

 7. Click Inquiries, and then click Indirect cost transactions.

Note: The transactions appear as posted.

Production variances
When a production order for a standard cost item has been ended, you can calculate the production
variances. Variances reflect a comparison of the reported production activities and the standard costs
that are calculated for the production item.
The variances do not reflect a comparison to the production order’s estimated costs. The production
activities that are reported include the consumption of material and routing operations, together with
the associated indirect costs and the quantity that is reported as finished.
The following four types of production variances are calculated:
 Lot size variance
 Production quantity variance
 Production price variance
 Production substitution variance

40

BOM CALCULATIONS USING COSTING SHEETS

Production variances and the difference between actual costs and calculated costs

The preceding illustration shows the four variances that cause the difference between a production
order’s actual costs and the calculated costs within the item’s cost record when the production order is
ended.

Analyze the production variances

Use the Variance form or the Production variance report to analyze production variances, and to
identify the sources of the variances.
1. Open the Variance form or the Production variance report:
 To open the Variance form, click Production > Production Orders. Double-click a
production order to open the Production order details form, and then click > Inquiries >
Price calculation > Variance.

41

BOM CALCULATIONS USING COSTING SHEETS

  To open the Production variance report, click Production > Reports > Analysis >
Production variance.

2. In the Level field, select how you want to view the detailed variances:
 Single – View variances by item and operation resource.
 Multi – View variances by cost group.
 Total – View summarized variances without a detailed breakdown.
3. If you want the variances to be tracked by cost group, in the Inventory parameters form, click
the Bills of materials tab. Then, in the Variances to Standard field, select Sub ledger.

42

BOM CALCULATIONS USING COSTING SHEETS

Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your
people to make business decisions with greater confidence. Microsoft Dynamics works like and with familiar
Microsoft software, automating and streamlining financial, customer relationship and supply chain processes in a
way that helps you drive business success.

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© 2012 Microsoft Corporation. All rights reserved.

43

BOM CALCULATIONS USING COSTING SHEETS

Calculating standard costs for manufactured items [AX 2012] Page 1 of 1

Calculating standard costs for

manufactured items [AX 2012]
Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section contain information about how to set up calculations for the standard costs for
manufactured items.

About amortizing constant costs for a manufactured item

About displaying charges for a manufactured item

About manufactured items that are treated as purchased items

About BOM calculations

About BOM calculations that use the fallback principle

About BOM calculation of a suggested sales price

About information used in BOM calculations with standard costs

About order-specific BOM calculations

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

© 2017 Microsoft

https://technet.microsoft.com/en-us/library/gg231085(d=printer).aspx 2/16/2017
About amortizing constant costs for a manufactured item [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About amortizing
About displaying charges for a constant costs for a
manufactured item [AX
manufactured item

About manufactured items that

are treated as purchased items
2012]
About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: March 22, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A manufactured item’s constant costs reflect the operation setup times and the components that have a constant
quantity or a constant scrap amount. The concept of a costing lot size is used to amortize these constant costs in the
calculated cost of a manufactured item. This concept has several synonyms, one of which is accounting lot size. The
concept of amortizing constant costs also has several synonyms, one of which is proportional constant costs.

The quantity of a costing lot size for a manufactured item is used in a bill of material (BOM) calculation. The quantity
depends on how you initiate and perform the BOM calculation, as illustrated by the following:

• Default calculation quantity in an item’s BOM calculation − The item’s standard order quantity (for inventory)
acts as the costing lot size, but the default value might be a greater quantity to reflect the item’s order
quantity multiple. The item’s standard order quantity and multiple can be defined within its default order
settings or site-specific order settings.

• Specified calculation quantity in an item’s BOM calculation − The specified calculation quantity acts as the
costing lot size for the item. The calculation quantity initially uses the item’s standard order quantity, but the
default value can be manually overridden. The specified calculation quantity represents the costing lot size for
the specified item, and for manufactured components that have a BOM line type of production. This is

https://technet.microsoft.com/en-us/library/gg213653.aspx 2/16/2017
About amortizing constant costs for a manufactured item [AX 2012] Page 2 of 2

because it is assumed that the component will be produced to the exact quantity. The costing lot size for
other manufactured components that have a BOM line type of item will reflect their standard order quantity.

• Specified make-to-order calculation quantity in an item’s BOM calculation − The specified calculation quantity
acts as the costing lot size for the item and its manufactured components when BOM calculations use a make-
to-order explosion mode. It is assumed that the manufactured components will be produced to the exact
quantity, just like a manufactured component that has a BOM line type of production.

• Specified calculation quantity in an order-specific BOM calculation − An order-specific BOM calculation can
be performed for a line item on a sales order, sales quotation, or service order. The specified calculation
quantity uses the quantity on the originating line item, but the default quantity can be overridden. You can
select whether the order-specific BOM calculation uses a make-to-order or multilevel explosion mode.

The calculated amount of a manufactured item’s amortized constant costs is termed charges.

See also
About displaying charges for a manufactured item

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About displaying charges for a manufactured item [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About displaying
About displaying charges for a charges for a
manufactured item [AX
manufactured item

About manufactured items that

are treated as purchased items
2012]
About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: March 22, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Charges are the calculated amount of an item's amortized constant costs. The constant costs of a manufactured item
reflect the operation setup times and the components that have a constant quantity or a constant scrap amount. For
more information, see About amortizing constant costs for a manufactured item.

The calculated amount of an item's charges can be displayed with the item's unit costs. However, the charges are
sometimes displayed as separate fields, and they are not included in the item's unit costs. When the charges appear
as separate fields, one field displays the total amount of charges, and another field displays the costing lot size that is
used to amortize the amount. The Item price form, for example, displays the charges as two separate fields.
However, the Complete form displays the item's total cost per unit, and the amortized costs are included in the unit
costs.

The charges for a manufactured item are always included in the item's unit cost for standard cost purposes. They can
optionally be included for planned cost purposes. A policy in the costing version enforces the inclusion of charges in
the cost of a manufactured item.

When you activate an item's cost record, you update the charges for the item's base cost information, which is
displayed in the Item price form. The charges are displayed as two separate fields, and they are not included in the
item's unit cost. Each activation updates the item's base cost information, even if the activation reflects different sites.
Therefore, you should view the base cost information as reference information.

https://technet.microsoft.com/en-us/library/gg243055.aspx 2/16/2017
About displaying charges for a manufactured item [AX 2012] Page 2 of 2

See also
About amortizing constant costs for a manufactured item

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About manufactured items that are treated as purchased items [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About manufactured
About displaying charges for a items that are treated
as purchased items
manufactured item

About manufactured items that

are treated as purchased items
[AX 2012]
About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: November 19, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A manufactured item can be treated as a purchased item for master scheduling and cost-rollup purposes. Typical
situations include a purchased item that is occasionally manufactured or a manufactured item that has been changed
to being a primarily purchased item. The item is first designated as a manufactured item in order to define bill-of-
material and route information, and to support production orders for the item.

The item cost record can be calculated for the manufactured item, but it might not match the standard cost that you
want for purchasing purposes. The standard cost that must be manually entered and activated for the item cost
record. In addition, a manufactured item at one site can be transferred to another site. Therefore, the item's cost
must be manually entered and activated for the site that the item is transferred to.

When you use the manufactured item as a component in higher-level products, the component's costs should be
treated as a purchased item. This applies whether the component’s costs were calculated or manually entered. That
is, a BOM calculation should treat the item's costs as a purchased component instead of calculating costs that are
based on its bill and route information. You can prevent this calculation from occurring by selecting the stop
explosion flag that is embedded in the BOM calculation group that is assigned to the item.

You can prevent master scheduling calculations from exploding requirements through the item by selecting the stop
explosion flag (for item coverage) for the item. The master scheduling calculation will treat the item as a purchased
item and will not perform more calculations for its bill and route information.

https://technet.microsoft.com/en-us/library/gg232436.aspx 2/16/2017
About manufactured items that are treated as purchased items [AX 2012] Page 2 of 2

See also
About BOM calculation groups
About BOM calculations

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About BOM calculations [AX 2012] Page 1 of 4

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About BOM
About displaying charges for a calculations [AX 2012]
manufactured item
Other Versions
About manufactured items that
are treated as purchased items

About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The Calculation form is used to calculate a manufactured item’s cost and to generate an associated item cost record
within a costing version. The Calculation form can also be used to calculate a manufactured item’s sales price and to
generate an associated item sales price record within a costing version. The cost roll-up and sales price calculations
are termed BOM calculations, or bill of material (BOM) calculations, because you initiate them from the Calculation
form.

Usage of the Calculation form varies slightly based on how you initiate the BOM calculations. Usage also depends
on whether the BOM calculations involve a costing version for standard costs or planned costs, and depends on
several policies defined within the costing version that is being used in the BOM calculations.

Note

A variation of the Calculation form is used in the context of a sales order, sales quotation, or service order line
item. These are termed order-specific BOM calculations. An order-specific BOM calculation generates a calculation
record that is displayed on the BOM calculation results form (rather than an item cost record within a costing
version). The calculation record includes a calculated cost and a calculated sales price.

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About BOM calculations [AX 2012] Page 2 of 4

The Calculation form can be initiated for a single manufactured item or for a costing version.

Initiate BOM calculations from the Item price form in order to calculate costs for a single manufactured item. The
Calculation form inherits the item identifier, and the Calculation form requires specification of the costing version,
BOM version, route version, calculation quantity, calculation date, and site.

• The BOM version and route version will initially display the active versions for the item, site, date, and
calculation quantity, but the default can be overridden with approved versions.

• The calculation quantity will initially display the item’s standard order quantity, but the default can be
overridden.

• The calculation date or site can be mandated by the costing version, or allow user-specified values when the
date or site are not mandated in the costing version. A future calculation date determines the use of pending
cost records. BOM calculations will use a pending cost record with the nearest from-date on or before the
calculation date.

Initiate BOM calculations from the Costing version setup form (or the Costing version maintenance form) in order
to calculate costs for all manufactured items or for selected items, or for updating items on a where-used basis. The
Calculation form inherits the costing version.

• The calculations assume the use of the active BOM version and route version for a manufactured item (and
the related site, date, and quantity), unless a manufactured component has a specified sub-BOM or subroute.

• The calculations assume the use of the standard order quantity for manufactured items, which provides the
basis for calculating component quantities, for determining the relevant BOM versions and route versions
(when you use quantity-sensitive BOMs and routes), and for amortizing constant costs. The assumption does
not apply when a manufactured component has a BOM line type of production or vendor, or when you use a
make-to-order explosion mode for the BOM calculations, because quantities will reflect the specified
calculation quantity.

• The calculation date or site can be mandated by the costing version, or the calculation date or site can allow
user-specified values when not mandated by the costing version.

Other variations in BOM calculations reflect the costing type and restrictions of the costing version, as summarized in
the following diagram and described in the text that follows.

BOM calculations with standard costs must be restricted by costing version policies because the restrictions ensure
standard costing principles. Standard costing principles require the enforcement of restrictions about the use of
standard costs for purchased items, a single level explosion mode, and the inclusion of miscellaneous charges in unit
costs. In contrast, BOM calculations with planned costs do not have to follow standard costing principles. These BOM
calculations can use different explosion modes, alternative sources of cost data for purchased items, and optional
enforcement of restrictions within the costing version.

BOM calculations with standard costs. Policies within the costing version (for standard costs) can mandate
enforcement of five BOM calculation policies. The recording restriction check box within the costing version
mandates one of these policies, where miscellaneous charges must be included in the unit price. Miscellaneous
charges for purchased items can be manually entered, whereas the miscellaneous charges for manufactured items
reflect the calculated amortization of constant costs.

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About BOM calculations [AX 2012] Page 3 of 4

The calculation restriction check box within the costing version mandates the other four BOM calculation policies.

• The source of purchased items’ cost contributions must be based standard costs. That is, BOM calculations
must use the item cost records within the specified costing version, or within the fallback that contains
standard costs.

• The explosion mode must be single level, which ensures accurate and consistent calculation of standard costs.

• The profit setting must be mandated in order to obtain consistent results in calculating the items’ sales price.
The costing version must allow content of sales prices in order to use the profit setting and to generate the
item sales price records.

• The fallback principle must be mandated, where the principle can be none, active cost records, or a specified
costing version.

BOM calculations with planned costs. Policies within the costing version (for planned costs) can optionally mandate
enforcement of five BOM calculation policies, or simply provide default values. The recording restriction check box
within the costing version determines whether the BOM calculation policy about miscellaneous charges will be
mandated, or act as a default value. Miscellaneous charges can be optionally included in the unit price.

The calculation restriction check box within the costing version determines whether the other four BOM calculation
policies will be mandated or act as default values.

• The source of a purchased item’s cost contributions can be the item cost records within a costing version or
the source can be defined by the BOM calculation group that is assigned to the item. For example, the BOM
calculation group could define purchase price trade agreements as the source of cost contribution data.

• The explosion mode can be single level, multilevel, make-to-order, or based on the BOM line item. The
explosion mode for BOM line type replicates the cost calculation logic for production order estimates.

• The profit setting can be mandated or a default value. The costing version must allow content of sales prices
in order to use the profit setting and to generate the item sales price records.

• The fallback principle can be mandated or a default value, where the principle can be none, active cost
records, or a specified costing version.

BOM calculations generate an Infolog that contains warning messages and other types of messages. Several BOM
calculation policies determine the types of messages in the Infolog. The applicable warning conditions are defined
within the BOM calculation group that is assigned to items, but you can override these warning conditions when you
initiate a BOM calculation. When using the fallback principle, it is often helpful to display the fallback information as
messages in the Infolog. When trying to update calculated costs for items with missing cost records, it is also helpful
to identify items that did not get updated as messages in the Infolog.

See also
About costing versions
About costing versions for standard costs
About information used in BOM calculations with standard costs

https://technet.microsoft.com/en-us/library/aa571515.aspx 2/16/2017
About BOM calculations [AX 2012] Page 4 of 4

About amortizing constant costs for a manufactured item

About displaying charges for a manufactured item
About manufactured items that are treated as purchased items
About BOM calculations that use the fallback principle
About BOM calculation of a suggested sales price

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About BOM calculations that use the fallback principle [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About BOM
About displaying charges for a calculations that use
the fallback principle
manufactured item

About manufactured items that

are treated as purchased items
[AX 2012]
About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: December 10, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Bill of materials (BOM) calculations that use cost records in a single, specified costing version do not use a fallback
principle. However, BOM calculations that use another costing version or active cost records as a fallback principle
can be useful in certain situations. The fallback principle indicates an alternative source of cost data if there is no cost
data in the specified costing version. The following situations illustrate two uses of the fallback principle:

• Two-version approach to standard cost updates – A costing version can contain the incremental changes to
standard costs, such as pending cost records that represent new items or cost changes. In this situation, the
fallback principle can identify the use of the active standard costs that are contained in other costing versions.

• Simulating the effect of cost changes with planned costs – A costing version for planned costs can contain
incremental changes for simulation purposes. This costing version would include pending cost records that
represent the simulated cost changes to items, cost categories, and calculation formulas for indirect cost. In
this situation, the fallback principle can identify the use of the active standard costs that are contained in other
costing versions.

See also

https://technet.microsoft.com/en-us/library/gg213366.aspx 2/16/2017
About BOM calculations that use the fallback principle [AX 2012] Page 2 of 2

About managing standard cost updates

About simulating cost changes by using a costing version for planned costs
About BOM calculations

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(LCS).

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About BOM calculation of a suggested sales price [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About BOM calculation
About displaying charges for a of a suggested sales
price [AX 2012]
manufactured item

About manufactured items that

are treated as purchased items

About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: May 12, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Bill of material (BOM) calculations can be used to calculate a manufactured item’s suggested sales price, based on a
cost-plus markup approach. By using a cost-plus markup approach, the item’s calculated sales price reflects the set
of profit-setting percentages that is specified for the BOM calculation and the costs that are associated with its
component items, routing operations, and applicable manufacturing overheads. The markup reflects profit-setting
percentages that are assigned to cost groups and the cost groups that are assigned to items, cost categories for
routing operations, and the indirect cost calculation formulas for manufacturing overheads.

The sets of profit-setting percentages are labeled Standard, Profit 1, Profit 2, and Profit 3. Within the Profit 1 set, for
example, a profit-setting percentage of 50 percent could be defined for a cost group that is assigned to purchased
material, and a profit-setting percentage of 80 percent could be defined for a cost group that is assigned to cost
categories for routing operations.

The context of the BOM calculation determines how the results of a calculated sales price will be handled:

• BOM calculation for an item and specified costing version − The BOM calculation generates a pending sales
price record the costing version. This sales price record provides the starting point for viewing the calculation
details, such as viewing the Calculate item cost form. The sales price record primarily acts as reference
information, and it is not used as the basis for a sales price on sales orders.

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About BOM calculation of a suggested sales price [AX 2012] Page 2 of 2

• Order-specific BOM calculation − A variation of the BOM calculation form is used in the context of a sales
order, sales quotation, or service order line item. An order-specific BOM calculation generates a calculation
record that is displayed on the BOM calculation results form instead of a record in a costing version. This
calculation record provides the starting point for viewing the calculation details, such as viewing the Calculate
item cost form. Information about a selected calculation record can be transferred to the originating line
item, such as transferring the calculated sales price to a sales order line item.

See also
About BOM calculations
About costing versions containing item sales prices related to BOM calculations
About order-specific BOM calculations

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About information used in BOM calculations with standard costs [AX 2012] Page 1 of 4

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About information
About displaying charges for a used in BOM
calculations with
manufactured item

About manufactured items that

are treated as purchased items
standard costs [AX
About BOM calculations
2012]
About BOM calculations that use
the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: March 23, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Bills of material (BOM) calculations use data from several sources to calculate the standard costs of a manufactured
item. The sources include information about items, bills routings, indirect cost calculation formulas, and the costing
version.

The purchased item information that is used in a standard cost BOM calculation includes the following:

• Cost − A purchased item’s costs are maintained as site-specific cost records in a costing version for standard
costs. Each cost record has an effective date, and the BOM calculation date determines which cost record will
be used. For example, a BOM calculation with a future calculation date might use a cost record with a pending
status and a future effective date.

• Cost group − The cost group that is assigned to a purchased item provides the basis for cost segmentation in
the calculated costs of a manufactured item.

• Warning conditions that are embedded in the item’s BOM calculation group enable the BOM calculation to
identify potential problems. This can be when the purchased item has a zero cost, a zero quantity in a BOM, or
an out-of-date cost record. The applicable warning conditions can be overridden when initiating a BOM
calculation.

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About information used in BOM calculations with standard costs [AX 2012] Page 2 of 4

The manufactured item information that is used in a standard cost BOM calculation includes the following:

• Standard order quantity for inventory − The item’s standard order quantity for inventory, acts as the default
accounting lot size for amortizing constant costs in a BOM calculation. The accounting lot size will also reflect
the order quantity multiple if it is specified.

• Warning conditions that are embedded in the item’s BOM calculation group enable the BOM calculation to
identify potential problems. One example could be that the manufactured item does not have a BOM or route.
The applicable warning conditions can be overridden when initiating a BOM calculation.

The bill of material information that is used in a standard cost BOM calculation includes the following:

• BOM version − The BOM version that is assigned to the manufactured item has effective from and to dates,
and a status for approved and active. The bill version can be company-wide or site-specific, and it can
optionally reflect quantity breakpoints.

• BOM line item quantity − A component typically has a variable quantity required, but it can be a constant. The
component quantity is typically expressed for producing one parent item, but it may be expressed per 100 or
per 1000 to handle decimal precision issues. The component quantity can also be calculated based on
measurements.

• BOM line item scrap − A component can have a variable or constant quantity for planned scrap.

• BOM line item valid dates − A component can have valid from and to dates.

• BOM line item type of production − The costing lot size for amortizing constant costs will reflect the BOM
calculation quantity and a make-to-order explosion mode, because the BOM calculation assumes that the
manufactured component will be produced to the exact quantity instead of its standard order quantity.

• Sub-BOM for a manufactured component − A manufactured component can optionally have a specified BOM
version, which would be used instead of the item’s current active BOM version in a BOM calculation.

• Sub-route for a manufactured component − A manufactured component can optionally have a specified route
version, which would be used instead of the item’s current active route version in a BOM calculation.

• Operation number and the impact of operation scrap percentages − The operation number links a component
to a specific operation, and operations can have a scrap percentage. The linkage enables BOM calculations to
account for scrap percentages and cumulative scrap percentages across multiple operations on the
component’s required quantity.

• Ignore BOM line item in cost calculations − A component can be ignored for BOM calculation purposes.

The operations resource information that is used in a standard cost BOM calculation includes:

• Hourly costs − The hourly costs that are associated with an operations resource are expressed as cost
categories that are assigned to set up time and run time. These cost categories should be identified for
resource groups and operations resources. The hourly costs that are associated with a cost category can be
site-specific or company-wide.

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About information used in BOM calculations with standard costs [AX 2012] Page 3 of 4

• Per unit costs − Some manufacturing environments assign operations resource costs per unit of output, which
would be expressed as a different cost category for quantity. For example, the quantity-related costs can
reflect piece rates for labor, or a paint manufacturer may assign operations resource costs per gallon of
output.

• Overriding operations resource information on routing operations − The resource information about cost
categories will be inherited by operations, where it can be overridden. BOM calculations will use the cost
category information that is specified on the routing operations.

• Cost group for a cost category − The cost group that is assigned to a cost category provides cost
segmentation in the calculated costs of a manufactured item. For example, different cost groups might be
used to segment the calculated costs that are associated with machines and labor or with setup and run time.

The route information that is used in a standard cost BOM calculation includes:

• Route version − The route version that is assigned to the manufactured item has effective from and to dates,
and a status for approved and active. The route version must be site-specific, and it can optionally reflect
quantity breakpoints.

• Routing operation time − The time can be specified for runtime and setup time. The hourly time is typically
expressed for producing one parent item, but it may be expressed per 100 or per 1000 to handle decimal
precision issues.

• Routing operation time for secondary resources − A secondary resource has the same operation number as
the primary resource, and the same routing operation time. For example, an operation might require a
machine as the primary resource and labor and tools as secondary resources.

• Routing operation scrap percentage − BOM calculations will account for scrap percentages and cumulative
scrap percentages across multiple operations. This applies to the required time for routing operations and the
required quantity for components that are linked to operation numbers.

• Cost categories for a routing operation − Operations resource information about cost categories will be
inherited by operations, where it can be overridden. BOM calculations will use the cost category information
that is specified on the routing operations.

The manufacturing overhead information that is used in a standard cost BOM calculation includes:

• Surcharge − A surcharge calculation formula reflects a percentage of value, such as 100 percent, that is tied to
a specific cost group, such as labor.

• Rate − A rate calculation formula reflects an amount per unit, such as USD 10.00 per hour, that is tied to a
specific cost group, such as labor.

• Time-based versus material-based overhead − The manufacturing overhead can be tied to routing operations
or material components.

The costing version information that is used in a standard cost BOM calculation includes:

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About information used in BOM calculations with standard costs [AX 2012] Page 4 of 4

• Costing type − The costing version must contain standard costs. Several restrictions apply to BOM calculations
that use standard costs. For example, these restrictions specify that miscellaneous charges must be included in
unit costs and that the BOM calculation explosion mode must be single level.

• Mandated fallback principle − The costing version can mandate the use of a fallback principle, such as using a
specified costing version or the active cost records. The mandated fallback principle typically applies to a
costing version that represents the incremental updates in a two-version approach for cost updates.

• Blocking flag for pending costs − A blocking flag can prevent BOM calculations of the pending cost for
manufactured items.

• Specified from-date − The specified from-date will act as the default calculation date for all BOM calculations
that involve the costing version.

• Specified site − A specified site will limit BOM calculations to the single site.

• Content of the costing version must include costs − The content must include costs. It can optionally include
sales prices in order to calculate suggested sales prices for manufactured items.

Several sources of information can be specified when initiating a BOM calculation. This includes the site, the
calculation date, and the costing version.

See also
About BOM calculations

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About order-specific BOM calculations [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About amortizing constant costs

for a manufactured item About order-specific
About displaying charges for a BOM calculations [AX
2012]
manufactured item

About manufactured items that

are treated as purchased items

About BOM calculations

About BOM calculations that use

the fallback principle

About BOM calculation of a

suggested sales price

About information used in BOM

calculations with standard costs

About order-specific BOM

calculations

Updated: June 21, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

An order-specific bill of materials (BOM) calculation represents a variation of a BOM calculation for a manufactured
item. An order-specific BOM calculation is performed in the context of a sales order, sales quotation, or service order
line item. An order-specific BOM calculation generates a calculation record that is displayed in the BOM calculation
results form. The calculation record includes a calculated weight, a calculated cost that is based on active cost
records, and a calculated sales price. Each order-specific BOM calculation for an item generates a calculation record
in the BOM calculation results form, uniquely identified by a calculation number. The results of a calculation record
can optionally be transferred to the originating line item.

An order-specific BOM calculation differs from a BOM calculation for a manufactured item. First, an order-specific
BOM calculation does not generate an item cost record throughout a costing version. This results in the BOM
calculation policies not applying to create an item cost record or to overwrite a cost record. Second, an order-specific
BOM calculation always uses the active cost records for components, cost categories, and indirect cost calculation
formulas.

See also
About BOM calculations

https://technet.microsoft.com/en-us/library/gg232253.aspx 2/16/2017
About order-specific BOM calculations [AX 2012] Page 2 of 2

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Maintaining standard costs in a manufacturing environment [AX 2012] Page 1 of 1

Maintaining standard costs in a

manufacturing environment [AX 2012]
Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section contain information about how to maintain standard costs in a manufacturing environment.

About updating standard costs for a new manufactured item

About simulating cost changes by using a costing version for planned costs

Set up initial standard costs in a manufacturing environment

Update standard costs in a manufacturing environment

About updating standard costs in a manufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

© 2017 Microsoft

https://technet.microsoft.com/en-us/library/gg230676(d=printer).aspx 2/16/2017
About updating standard costs for a new manufactured item [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About updating standard costs for

a new manufactured item About updating
About simulating cost changes by standard costs for a
new manufactured
using a costing version for
planned costs

Set up initial standard costs in a

manufacturing environment item [AX 2012]
Update standard costs in a
manufacturing environment

About updating standard costs in

a manufacturing environment

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Manufacturing environments involve maintaining standard costs for new manufactured items. A typical scenario
involves a new manufactured item that has a new bill of materials (BOM) that contains new purchased items and new
manufactured items as components. The following guidelines focus on this typical scenario.

The following guidelines assume use of a two-version approach to standard cost updates. In this approach, one
costing version contains the first defined standard costs for the frozen period, and the second costing version
contains the incremental updates that pertain to the new manufactured items. The incremental updates are entered
as cost records in the second costing version and, ultimately, enabled.

The two-version approach requires the definition of a second costing version. The guidelines for defining this costing
version include the following:

• Assign a costing type of standard costs.

• Assign a significant identifier to the costing version that communicates the contents, such as 2008-UPDATES.

• Ensure that the content includes cost records.

• Allow the entry of cost records for all sites. Entering a site limits the entry of cost records to the specified site.

• Use a fallback principle of active costs.

To add new manufacturing items throughout the frozen period, follow these steps:

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About updating standard costs for a new manufactured item [AX 2012] Page 2 of 3

1. Use the Costing version setup form to allow the entry of cost records into the second costing version that
contains the incremental updates. Prevent the activation of pending costs, where activation is allowed after
pending costs have been completely and accurately defined. Indicate a blank from-date as a policy in the
costing version, and then enter the from-date when you enter each cost record. The from-date should
represent a date before the new items are purchased or manufactured.

2. Use the Price form to enter cost records for new purchased items. For each cost record, enter the costing
version that contains incremental updates, and use a from-date that comes before the expected
manufacturing date for new manufactured items.

3. Calculate the cost of new manufactured items by using the Calculation form. You can open the Calculation
form from the Costing version maintenance form and then selecting the costing version that contains the
incremental updates. Use the selection criteria to selectively identify the new manufactured item and any one
of its manufactured components. In a multilevel product structure, you might also have to selectively identify
any parent item that contains the new manufactured items as a component.

Enter a from-date for the BOM calculation that corresponds to the start of manufacturing for the new
manufactured items. The from-date should be in the effective dates for the item’s BOM version and route
version.

Note

A missing cost record can indicate a new manufactured item. BOM calculations can be limited to items that
have missing costs.

Verify the calculated costs for new manufactured items for completeness and accuracy. Use the Complete
form to review the calculated costs for each item-cost record and any Infolog of warning messages.
Alternatively, use the Calculation form to review the calculated costs.

4. Change the blocking flag to allow the activation of pending-cost records in the second costing version by
using the Costing version setup form.

5. Enable all pending-cost records in the second costing version by using the Activate prices form, which you
can open from the Costing version maintenance form. You can also enable the pending-cost records for
individual items by opening the Price form and then clicking the Activate button.

6. Use the Costing version setup form to change the blocking flags in the second costing version to prevent
additional data maintenance. The blocking policies prevent the entry of new pending costs and the activation
of pending costs.

See also
Set up initial standard costs in a manufacturing environment
Update standard costs in a manufacturing environment

https://technet.microsoft.com/en-us/library/gg231515.aspx 2/16/2017
About updating standard costs for a new manufactured item [AX 2012] Page 3 of 3

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About simulating cost changes by using a costing version for planned costs [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About updating standard costs for

a new manufactured item About simulating cost
About simulating cost changes by changes by using a
costing version for
using a costing version for
planned costs

Set up initial standard costs in a

manufacturing environment planned costs [AX
Update standard costs in a 2012]
manufacturing environment

About updating standard costs in

a manufacturing environment

Updated: May 12, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The effects of cost changes on a manufactured item’s calculated costs can be simulated with a separate costing
version for planned costs. Use the separate costing version for entering pending cost records that reflect incremental
cost changes, and for calculating the cost impact on manufactured items. A fallback principle of active costs will be
used in the BOM calculations so that only the incremental cost changes must be entered.

Use the following guidelines for defining the simulation costing version.

• Assign a costing type of planned costs.

• Assign a meaningful identifier for the costing version, such as simulation.

• Ensure that the content includes cost records.

• Allow the entry of cost records. Do not block the entry of pending costs.

• Allow the entry of cost records for all sites. Entering a site will limit the entry of cost records to the single site.

• Prevent the activation of pending costs. Only pending costs must be entered for cost records in the simulation
costing version.

• Do not enter a from-date. A calculation date will be entered for each BOM calculation that uses the simulation
costing version.

• Indicate a fallback principle of current active. The fallback principle allows the entry of incremental cost
changes for simulation purposes, while using the current active costs as the source for all other cost records. It
is assumed that all current active costs exist for all other cost records.

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About simulating cost changes by using a costing version for planned costs [AX 2012] Page 2 of 3

• Indicate a cost price model of version cost price, but do not restrict calculations. For example, the simulations
could also use a cost price model of BOM calculation group to indicate the source of cost contribution data
for purchased items.

• Indicate an explosion mode of multilevel, but do not restrict calculations. The simulations could use other
explosion modes.

Costing versions
The following scenarios illustrate the use of the simulation costing version to simulate the impact of cost changes.
Prior to entering a simulated cost change, delete the pending cost records in the simulation costing version so
that you have a clean starting point. Use the Item price form to view and delete the pending cost records that are
related to item prices and cost category prices.

• Simulate the cost change for a purchased item. For example, the cost change may reflect an expected
increase or decrease in the costs of critical purchased materials. To define the different cost for a purchased
item, use the Item price form to enter a pending cost record in the simulation costing version.

• Simulate the cost change for a cost category. For example, the cost change may reflect an expected
increase or decrease in labor rates, or in hourly rates for operations resources. To define the different cost
for a cost category, use the Cost category price form to enter a pending cost record in the simulation
costing version.

• Simulate the cost change in an indirect cost calculation formula. For example, the cost change may reflect
an expected increase or decrease in manufacturing overheads. To define the change in an indirect cost
calculation formula, use the Costing sheet setup form to enter a pending cost record in the simulation
costing version, and to validate and save the change.

After entering the simulated cost changes, calculate the costs for manufactured items that are affected by the cost
changes. Use the Calculation form for the simulation costing version, and identify the selected manufactured
items that will be affected by the cost changes. The BOM calculations apply to all manufactured items unless you
identify the selected items. Alternatively, you can use the BOM calculation option for where-used updates.

View the item cost records in the simulation costing version to analyze how the simulated cost changes affected
the costs of the selected manufactured items. Use the Item price form and the Calculate item cost form to view
and analyze the costs.

See also
About BOM calculations

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Set up initial standard costs in a manufacturing environment [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About updating standard costs for

a new manufactured item Set up initial standard
About simulating cost changes by costs in a
manufacturing
using a costing version for
planned costs

Set up initial standard costs in a

manufacturing environment environment [AX 2012]
Update standard costs in a
manufacturing environment

About updating standard costs in

a manufacturing environment

Updated: May 27, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Manufacturing environments involve maintaining standard costs for purchased items and manufactured items, which
includes the first time setting standard costs. Additional steps are required in manufacturing environments that use
routing information for costing purposes. These guidelines assume the use of a single costing version when you set
standard costs for the first time. This costing version will contain standard costs for the current period. Pending cost
records for all items will be entered in this costing version.

1. Define the costing version by using the Costing versions form. Guidelines for this costing version include the
following:

◦ Assign a costing type of standard costs.

◦ Assign a meaningful identifier for the costing version, such as 2008-STANDARD.

◦ Ensure that the content includes cost records.

◦ Allow the entry of cost records. Do not block the entry of pending costs.

◦ Allow the entry of cost records for all sites. Assigning a site will limit the entry of cost records to the
specified site.

◦ Prevent the change to active status. The change to active status will be enabled after pending costs
have been accurately defined.

◦ Optionally enter a from-date. As a general guideline, use a future date that represents the planned
cutover date or the first day in the frozen period when you prepare cost data beforehand.

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Set up initial standard costs in a manufacturing environment [AX 2012] Page 2 of 3

◦ Indicate a fallback principle of none.

2. Use the Price form to enter item cost records for purchased items in the costing version. A separate cost
record must be entered for each site that purchases or stocks the item. The cost should reflect the standard
costs for the period. If a cost was entered incorrectly, change the pending cost for the item. A pending cost
can also be deleted.

Verify item cost records in the costing version for completeness and accuracy. Use the Item price report to
review a list of item cost records.

3. When you use routing information for costing purposes, use the Price form to enter cost records. This must
be in the costing version to define the hourly rate or piece rate that applies to each cost category. The cost
record can reflect a company-wide hourly rate or a site-specific hourly rate. The cost should reflect the
standard costs for the period. If a cost was entered incorrectly, change the pending cost for the cost category.
A pending cost can also be deleted.

Verify cost records in the costing version for completeness and accuracy.

4. When you must calculate manufacturing overheads, use the Costing sheet setup form to enter the indirect
cost calculation formulas for surcharge and rate nodes. The cost record can reflect a company-wide
calculation formula or a site-specific calculation formula, and it can reflect item-specific calculation formulas. If
a cost record was entered incorrectly, change the pending cost record or delete it.

Validate and save the costing sheet setup. Correct any errors that are identified by the validation process.

Verify cost records in the costing version for completeness and accuracy. Use the Indirect cost rate and ratio
report to review a list of cost records.

5. Calculate the cost of all manufactured items by using the Calculation form. You can access the Calculation
form from the Costing version setup form, and by selecting the current period’s costing version.

Verify the calculated costs for manufactured items for completeness and accuracy. Use the Complete form to
review the calculated costs for each item cost record, and any Infolog warning messages. Alternatively, use the
Calculation report to review a list of the calculated costs.

6. Use the Costing versions form to change the blocking flag so that the status of pending cost records can be
changed to active.

7. Change the status to active for all pending item cost records in the costing version on the cutover date. Use
the Activate prices form to change status all cost records. You can access the Activate prices form from the
Costing version setup form for the current period’s costing version.

Alternatively, change the status of individual cost records in the costing version. Use the Price form to change
the status of pending cost records for individual items. Use the Price form to change the status of pending
costs for individual cost categories. Use the Costing sheet setup form to change the status of individual
calculation formulas for indirect costs.

8. Use the Costing versions form to change the blocking flags in the second costing version to prevent
additional data maintenance.

Repeat the steps in this procedure for separate costing versions when they contain site-specific costs for a multisite
operation.

https://technet.microsoft.com/en-us/library/gg243197.aspx 2/16/2017
Set up initial standard costs in a manufacturing environment [AX 2012] Page 3 of 3

See also
About updating standard costs in a manufacturing environment
Update standard costs in a manufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Update standard costs in a manufacturing environment [AX 2012] Page 1 of 3

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About updating standard costs for

a new manufactured item Update standard costs
About simulating cost changes by in a manufacturing
environment [AX 2012]
using a costing version for
planned costs

Set up initial standard costs in a

manufacturing environment

Update standard costs in a

manufacturing environment

About updating standard costs in

a manufacturing environment

Updated: May 27, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Manufacturing environments maintain standard costs for purchased and manufactured items. This maintenance
includes periodically updating standard costs. Periodic updates reflect a new frozen period and the need to update
standard costs for all items. Additional steps are required in manufacturing environments that use routing
information for costing purposes. The following guidelines assume the use of a separate costing version to contain
the next period's standard costs. Pending cost records for all items are entered in this costing version.

1. Use the Costing version setup form to define the costing version for the next period. Guidelines for this
costing version include the following:

◦ Assign a costing type of standard costs.

◦ Assign a meaningful identifier to the next period's costing version. For example, if 2012 is the next
frozen period, you might use 2012-STANDARD.

◦ Ensure that the content includes cost records.

◦ Allow the entry of cost records. Do not block the entry of pending costs.

◦ Allow the entry of cost records for all sites. If you specify a site, you limit the entry of cost records to
that site.

◦ Prevent the activation of pending costs. The status of cost records will be changed to active after
pending costs have been completely and accurately defined.

◦ Enter a from-date. As a general guideline, use a future date that represents the first day of the next
frozen period.

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Update standard costs in a manufacturing environment [AX 2012] Page 2 of 3

◦ Indicate a fallback principle of none.

2. Analyze the need to change standard costs for items. Use the Standard cost variance analysis report to
analyze the historical purchase price and production variances, and to suggest a new standard cost.

3. Use the Price form to enter item cost records for purchased items in the next period's costing version. A
separate cost record must be entered for each site that purchases or stocks the item. The cost should reflect
the standard costs for the period. If a cost was entered incorrectly, change the pending cost for the item. A
pending cost can also be deleted.

Alternatively, you can automatically enter costs by copying item cost records. The cost records can then be
maintained by using the Price form. Use the Copy item prices form to copy active item cost records for
standard costs into the next period's costing version. You should copy active costs if you used a two-version
approach to cost data updates for the current period, because active cost records will be located in more than
one costing version.

You can selectively copy item cost records to populate the next period's costing version, and you can copy
them multiple times. Existing costs can be selectively changed by a factor or an amount. Existing charges can
also be changed by a factor or an amount.

4. Use the Item prices report to review the completeness and accuracy of the item cost records in the costing
version.

5. When you use routing information for costing purposes, use the Cost category price form to enter cost
records in the next period's costing version. Also define the hourly rate or piece rate that applies to each cost
category. The cost record can reflect a company-wide or site-specific hourly rate. The cost should reflect the
standard costs for the next period. If a cost was entered incorrectly, change the pending cost for the cost
category. A pending cost can also be deleted.

6. Review the completeness and accuracy of the cost records in the next period's costing version.

7. When you calculate manufacturing overhead, use the Costing sheet setup form to enter the calculation
formulas for indirect costs for surcharge or rate nodes. The cost record can reflect a company-wide or site-
specific calculation formula. The cost record can also reflect item-specific calculation formulas. If a cost record
was entered incorrectly, change the pending cost record or delete it.

8. Validate and save the setup of the costing sheet. Correct any errors that the validation process identifies.

9. Review the completeness and accuracy of the cost records in the next period's costing version. Use the
Indirect cost rate and ratio report to review a list of item cost records.

10. Use the Calculation form to calculate the cost of all manufactured items. You can open the Calculation form
from the Costing version setup form. You can also open it by selecting the next period's costing version.

11. Review completeness and accuracy of the calculated costs for manufactured items. Use the Complete form to
review the calculated costs for each item cost record, and to review any Infolog messages. Alternatively, use
the Calculation report to review a list of the calculated costs.

12. Use the Costing version setup form to change the blocking flag for the next period's costing version to allow
activation of pending cost records.

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Update standard costs in a manufacturing environment [AX 2012] Page 3 of 3

13. Activate all pending item cost records in the next period's costing version no earlier than the first day of the
next period. Use the Activate prices form for the next period's costing version. You can open the Activate
prices form from the Costing version setup form. You can also activate the pending cost records for
individual items by clicking the Activate button in the Price form.

Alternatively, you can activate individual cost records in the costing version. Use the Price form to activate
pending cost records for individual items and individual cost categories. Use the Costing sheet setup form to
activate individual calculation formulas for indirect costs.

14. Use the Costing version setup form to change the blocking flags in the next period's costing version to
prevent additional data maintenance.

Repeat the steps in this process every time that you must enter and activate costs for a new period.

See also
Set up initial standard costs in a manufacturing environment
About updating standard costs in a manufacturing environment

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About updating standard costs in a manufacturing environment [AX 2012] Page 1 of 2

> Setting up and maintaining cost accounting > Setting up and maintaining standard costs >

About updating standard costs for

a new manufactured item About updating
About simulating cost changes by standard costs in a
manufacturing
using a costing version for
planned costs

Set up initial standard costs in a

manufacturing environment environment [AX 2012]
Update standard costs in a
manufacturing environment

About updating standard costs in

a manufacturing environment

Updated: March 31, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Manufacturing environments involve maintaining standard costs for purchased items and manufactured items, which
includes the scenario for updating standard costs throughout the frozen period. Updates may reflect new items, cost
categories, or indirect cost calculation formulas, corrections, and cost changes. The type of update will affect the
steps that are required to update standard costs, as illustrated in the following cases.

• Enter expected standard cost changes for purchased items, and then change the status of the item cost
records to active on the appropriate date. However, do not recalculate the costs of manufactured items that
use the purchased items.

• Enter standard costs for a new purchased item, but do not recalculate the costs of manufactured items with a
bill of material (BOM) version that contains the new purchased item as a component.

• Correct or change the cost of a purchased item, or change the cost group that is assigned to a purchased
item, and calculate the cost for all manufactured items with a BOM version that contains the purchased item
as a component.

• Change the cost for a cost category, and calculate the cost for all manufactured items with a route version
that contains routing operations that use the cost category.

• Change the cost categories that are assigned to routing operations or the cost group that is assigned to cost
categories. Then calculate the cost for all manufactured items with a route version that contains routing
operations that use the cost category.

• Change an indirect cost calculation formula, and calculate the cost for all manufactured items that are affected
by the change.

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About updating standard costs in a manufacturing environment [AX 2012] Page 2 of 2

• Change or add a manufacturing site for a manufactured item, and calculate the item's manufactured cost for
the site.

• Calculate, or recalculate, the cost for a manufactured item, and recalculate the cost for all manufactured items
with a BOM version that contains the manufactured item as a component.

• Calculate costs for a new manufactured item based on its defined, approved, and active BOM and route
information.

Each case requires careful consideration about how to update standard costs.

See also
About updating standard costs for a new manufactured item

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(LCS).

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Setting up and maintaining cost categories [AX 2012] Page 1 of 1

Setting up and maintaining cost

categories [AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about how to set up and maintain cost categories. Cost categories are
the ledger accounts of cost accounting.

About cost categories

About service categories

Create cost categories (CA)

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

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About cost categories [AX 2012] Page 1 of 2

> Cost accounting > Setting up and maintaining cost accounting >

About cost categories

About cost categories
About service categories
[AX 2012]
Create cost categories
Other Versions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The function of a cost category in Cost accounting is equivalent to the function of a chart of accounts in General
ledger. Cost amounts are posted to cost categories through general ledger postings or cost accounting postings.

Each cost category must have one of the following three cost types assigned to it:

• Primary costs: Primary costs are always posted directly. They can be set up to be identical to the following
general ledger accounts: profit and loss, revenue, or costs. When the cost categories are the same as general
ledger accounts, they are created automatically as primary costs.

• Secondary costs: Secondary costs cannot be posted directly. They are used to post allocations. When you set
up allocations, cost categories that are secondary costs are mandatory.

• Service categories: Service categories are used to post quantities. They are usually linked with the production
cost categories or the project categories. For more information, see About service categories.

When a cost category is created manually in Cost accounting, the local account option is enabled automatically, and
the cost category can be used in cost accounting only. The cost category numbers cannot be used later as account
numbers for general ledger accounts.

Referencing a general ledger account

There are two ways to reference a general ledger account:

• If the cost categories and the general ledger accounts (profit and loss, cost, and revenue) are identical,
enable the transaction control after you create a new ledger account.

• If the cost categories and the general ledger accounts are not identical, create the cost categories manually,
and then link them to the general ledger account by using the Cost category reference form.

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About cost categories [AX 2012] Page 2 of 2

Transaction control
If no dimension is selected, no cost transactions are created by the general ledger, and no posting entries are
possible for this cost category. When one or more dimensions are enabled, cost transactions are created.

Note

When more than one dimension is selected for a cost category, Cost accounting creates one cost transaction
for each dimension.

When a dimension in one or more cost categories is enabled, general ledger transactions can be reposted to the
Process ledger transactions form to create cost transactions. (Click Cost accounting > Periodic > Transactions
> Process production transactions.)

After the transactions have been created, the dimension cannot be cleared for this cost category.

See also
Setting up and maintaining cost categories
Create cost categories (CA)
Chart of accounts (form)

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(LCS).

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About service categories [AX 2012] Page 1 of 2

> Cost accounting > Setting up and maintaining cost accounting >

About cost categories

About service
About service categories
categories [AX 2012]
Create cost categories
Other Versions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Service categories are a type of cost category. Service categories can be posted only by using numerical quantities,
such as hours or units.

There are two types of service categories:

• General quantity itemization – Quantities that are used for distribution or allocation.

• Internal cost allocation – Quantities that are used for calculation of labor costs in production or projects.

Both types of service categories can be linked to production or to a project.

See also
Setting up and maintaining cost categories

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(LCS).

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About service categories [AX 2012] Page 2 of 2

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Create cost categories (CA) [AX 2012] Page 1 of 1

> Cost accounting > Setting up and maintaining cost accounting > Setting up and maintaining cost categories

About cost categories

Create cost categories (CA) [AX 2012]
About service categories
Other Versions

Create cost categories

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

1. Click Cost accounting > Common > Cost categories.

2. Press CTRL+N to create a new line.

3. In the Cost category field, enter the appropriate information.

4. In the Cost type field, select either Primary costs, Secondary costs, or Service category.

5. On the General tab, in the Transaction control field group, select the check boxes for the dimensions that you want to create cost transactions for.

See also
Setting up and maintaining cost categories
About cost categories

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Working with cost accounting [AX 2012] Page 1 of 1

Working with cost accounting [AX 2012]

Updated: May 4, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

This section provides overviews of the main business process components in Cost accounting. The topics in this
section provide information about the main business processes you can perform in Cost accounting.

Dimensions in cost accounting

Expense distribution sheet

Calculations, allocations, and distributions

Budgeting in cost accounting

Journals and posting in cost accounting

See also
Setting up and maintaining cost accounting

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

Community Additions

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Dimensions in cost accounting [AX 2012] Page 1 of 2

> Application users > Cost accounting >

Dimensions in cost accounting

Dimensions in cost
About querying dimension
balances accounting [AX 2012]
Structures Other Versions

Expense distribution sheet

Calculations, allocations, and

distributions

Budgeting in cost accounting

Journals and posting in cost

accounting

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The following topics provide information about dimensions in cost accounting.

Topic Description

About querying dimension Provides conceptual information about how to query dimension balances in
balances cost accounting.

See also
Cost accounting

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About querying dimension balances [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About querying dimension

balances About querying
Structures dimension balances
[AX 2012]
Other Versions

Updated: March 31, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Click Cost accounting > Common > Cost categories.

To view dimension balances for cost categories in the Cost categories form, select a cost category, select either
Primary costs or Secondary costs in the Cost type column, and then click Dimension balance > Cost category.

To view query dimension balances for service categories in the Cost categories form, select a cost category, select
Service category in the Cost type column, and then click Dimension balance > Service category.

In the Dimension balance form, you can view the dimension balances for the selected period and for two different
value types. For each column group, you can select the following value types:

• Actual costs

• Budget costs

• Basic plan costs

• Flexible plan costs

• Target costs

Note

If you select Basic plan costs, Flexible plan costs, or Target costs, you must select a budget model.

The Total values section consists of two areas:

• The total of primary costs, secondary costs, and total costs

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About querying dimension balances [AX 2012] Page 2 of 2

• The dimensions that these costs are posted to

Primary costs are posted to ledger accounts. Secondary costs are generated only in Cost accounting.

For the selected dimension, you can display cost, service, and calculation transactions by clicking Transactions. To
display cost balances, click Cost balance.

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Structures [AX 2012] Page 1 of 1

> Cost accounting > Working with cost accounting >

About querying dimension

balances Structures [AX 2012]
Other Versions
Structures

Create hierarchy structures

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about the line structures and hierarchy structures that are used in Cost
accounting.

Create hierarchy structures

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Create hierarchy structures [AX 2012] Page 1 of 2

> Working with cost accounting > Dimensions in cost accounting >

Create hierarchy
Create hierarchy structures

structures [AX 2012]

Other Versions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Hierarchy structures help you group and summarize dimensions.

1. Click Cost accounting > Setup > Grouping > Hierarchies.

2. Click New or press CTRL+N to create a new line.

3. In the Hierarchy field, enter the number of the hierarchy.

4. Select the check box for each dimension that you want to include in the hierarchy structure.

5. Click the Divisions button.

6. Press CTRL+N to create a new line.

7. In the Division field, enter the division number that you want to track, and then close the form to save your
changes.

8. In the Hierarchies form, click the Hierarchy structure button.

9. To add to the hierarchy structure, double-click the items on the Dimension and Division tabs.

Note

In a hierarchy structure, dimensions can be grouped by division. The groups are used to set up the Expense
distribution sheet.

See also
Expense distribution sheet

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Create hierarchy structures [AX 2012] Page 2 of 2

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Expense distribution sheet [AX 2012] Page 1 of 1

Expense distribution sheet [AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The following topics explain how to set up and use an expense distribution sheet in Cost accounting.

Create an expense distribution sheet

Run a report

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(LCS).

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Create an expense distribution sheet [AX 2012] Page 1 of 3

> Cost accounting > Working with cost accounting >

Create an expense distribution

sheet Create an expense
Run a report distribution sheet [AX
2012]
Other Versions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

You must create an expense distribution sheet (EDS) before you can run an EDS report. In the EDS, you must set up
the report lines and report columns that will appear in the report.

Types of EDS
There are two types of EDS: dimension statement and cost statement.

• Dimensions statement – Use this EDS to report and compare results of different dimensions. Each column
corresponds to one dimension.

• Cost statement – Use this EDS to create a report for one or more dimensions or divisions. However, results
for each dimension or division appear on a separate page, and columns compare actual and budget costs
for each dimension or division.

Setup of EDS
To create a new EDS:

1. Set up a line structure. The line structure is the basis for report lines.

2. Set up a calculation type. The calculation type determines the cost balances that are considered for the
report. Select from among the following calculation types:

◦ Period calculation

◦ Special calculation

◦ Plan calculation

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Create an expense distribution sheet [AX 2012] Page 2 of 3

3. Set up a report type. The report type determines the type of EDS report, whether it is a dimension
statement or a cost statement.

4. Set up a hierarchy. You must select a hierarchy if you want to use the cost statement for hierarchies.

Report lines
You can manually or automatically define lines that you want to view in the report by using the transfer lines
function.

Report lines are identical to cost lines for the selected line structure.

If the lines are entered automatically, you can still modify them by deleting or changing their position in the
report. Change their position in the report by using the up and down buttons.

Report columns
You can define columns that you want to view in the report.

See also
Cost accounting report (form)
Expense distribution sheet
Run a report

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Run a report [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

Create an expense distribution

sheet Run a report [AX 2012]
Other Versions
Run a report

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

There are three different expense distribution sheet (EDS) reports:

• Dimension statement

• Cost statement, dimensions

• Cost statement, hierarchy

Generate an EDS
1. Click Cost accounting > Setup > Expense distribution sheet. Open one of the EDS reports.

2. On the General tab, use the Identification list to select the statement that you created in the EDS setup.

3. In the Calculation type list, select either Period calculation or Special calculation. The calculation type is
usually entered in the EDS setup, but you can modify it here before you generate the report. If you select
Special calculation, you must select a calculation number in the Calculation number list.

4. If you did not set up a specific date interval for each dimension in the EDS setup, you can configure date
interval settings in the Date interval area before you generate the report.

5. On the Column definition tab, you can modify the value type and budget model in the appropriate
columns.

6. Click OK to generate the report.

Dimension statement
In addition to modifying settings that are common to the types of EDS, when you run a dimension statement, you
can modify the dimension setup or the divisions for each column.

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Run a report [AX 2012] Page 2 of 2

Cost statement, dimensions

When you run a cost statement for dimensions, select any dimension type and the range of dimensions that you
need.

Cost statement, hierarchy

When you run a cost statement for hierarchies, select a hierarchy, if you have not already done this, and then
select the range of divisions.

See also
Expense distribution sheet
Create an expense distribution sheet

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Calculations, allocations, and distributions [AX 2012] Page 1 of 1

Calculations, allocations, and distributions

[AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about how to use calculations, allocations, and distributions in Cost
accounting.

Create reference tables

Distribute costs or quantities

Define an internal cost allocation

Define a surcharge allocation

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Create reference tables [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

Create reference tables

Create reference tables
Distribute costs or quantities
[AX 2012]
Define an internal cost allocation
Other Versions
Define a surcharge allocation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Reference tables are used as the basis for calculations for the distribution or allocation of costs or quantities.
Reference tables are typically used when references are fixed for several periods. Examples of reference tables are
square meters, headcount, equipment calculation, and so on.

1. Click Cost accounting > Setup > Calculation > Reference tables.

2. Press CTRL+N to create a new line.

3. In the Reference table field, enter a name for the reference table.

4. On the General tab, select the dimensions that you want to use in this reference table.

5. Click Cost accounting > Setup > Calculation > Calculation versions.

6. Click Reference table to open the Reference table values form.

7. On the Overview tab, in the list of created reference tables, click the reference table that you created in the
Reference tables form.

8. On the General tab, select the dimensions that you want to enter the references for, and then enter the total
reference quantity in the Reference quantity field.

9. Enter the reference quantity for each dimension that you want to allocate.

10. Confirm that the value in the Difference field is 0 (zero).

Example
The most common example of a reference table is the cost center building. Here, the costs are allocated by square
meters, as shown in the following table.

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Create reference tables [AX 2012] Page 2 of 2

Description Square meters

Total quantity of square meters 2000 m2

Square meters used by the cost center's stock 500 m2

Square meters used by the cost center's production 1 500 m2

Square meters used by the cost center's production 2 750 m2

Square meters used by the cost center's administration 250 m2

If the total costs on the cost center building are USD 1,000, the period calculation will allocate USD 250 to the cost
center's stock, USD 250 to the production 1, and so on.

See also
Reference tables (form)

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Distribute costs or quantities [AX 2012] Page 1 of 3

> Cost accounting > Working with cost accounting >

Create reference tables

Distribute costs or
Distribute costs or quantities
quantities [AX 2012]
Define an internal cost allocation
Other Versions
Define a surcharge allocation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

You use distributions to distribute posted cost amounts or service quantities to other dimensions. The posted cost
amounts or service quantities might or might not have a dimension. The distribution is performed on the same cost
category as the original posting.

Before you can distribute costs or quantities, you must create a calculation version.

1. Click Cost accounting > Setup > Calculation > Calculation versions.

2. Select a calculation version, and then click Cost distribution.

Note

To distribute the posted service quantities, click Service distribution.

3. In the Cost line form, on the Overview tab, press CTRL+N to create a new line.

4. In the Distribution level field, select a distribution level. If you select Cost line, specify the distribution
structure.

5. In the Distribution reference field, select either a cost category or a cost line, depending on the distribution
level.

6. In the Calculation method field, select a calculation method.

The calculation method that you select determines how distributions are calculated. You can select from the
following methods of calculation:

◦ Fixed percentage – Posted amounts are distributed to other dimensions according to the selections
that you made on the Dimension tab.

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Distribute costs or quantities [AX 2012] Page 2 of 3

◦ Cost category – Posted amounts are distributed to the dimensions that are posted on the cost
category in this field, and they are distributed in the posted proportion. When you use this calculation
method, it is appropriate to select all dimensions on the Dimension tab.

◦ Service category – Posted amounts are distributed to the dimensions that are posted on the service
category in this field, and they are distributed in the posted proportion. When you use this calculation
method, it is appropriate to select all dimensions on the Dimension tab.

◦ Cost line – Posted amounts are distributed to the dimensions that are posted on the cost line in this
field, and they are distributed in the posted proportion. When you use this calculation method, it is
appropriate to select all dimensions on the Dimension tab.

◦ Reference table – Posted amounts are distributed to other dimensions in the proportion that is set up
on the selected reference table. The dimensions of the reference table are automatically updated on
the Dimension tab.

◦ Reference specification – Posted amounts are distributed to other dimensions according to the
selected reference quantity, and they are distributed in the proportion that is specified on the
Dimension tab.

◦ Fixed amount – On the Dimension tab, a specified amount is distributed to the dimension.

7. On the General tab, select the appropriate check boxes under Cost share and Offset transaction dimension.

8. Specify the calculation method by using the fields under Offset transaction calculation.

9. Click the Dimension tab, and then enter the dimensions.

Note

The cost distributions and service distributions are calculated in the manner shown on the Overview tab in the
Cost distribution or Service distribution form. The finishing order of the calculations is necessary for the result.
You can change the order by using the Up and Down buttons.

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Define an internal cost allocation [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

Create reference tables

Define an internal cost
Distribute costs or quantities
allocation [AX 2012]
Define an internal cost allocation
Other Versions
Define a surcharge allocation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

To allocate costs, you must first set up a calculation version. You can then select among the following three allocation
types:

• Allocation

• Internal cost allocation

• Surcharge calculation

To allocate costs by using the Internal cost allocation allocation type:

1. Click Cost accounting > Setup > Calculation > Calculation versions. Click Allocations.

2. Press CTRL+N to create a new line.

3. In the Allocation level field, select the allocation level. If you select Hierarchy, specify the allocation hierarchy
in the Allocation hierarchy field.

4. In the Allocation reference field, type a reference.

5. In the Allocation dimension field, select an allocation dimension. The allocation dimension can be either a
dimension or a division. This field is available only if you selected Dimension in the Allocation level field.

6. In the Allocation type field, select Internal cost allocation.

7. On the General tab, select Allocation account and Offset account.

8. On the Internal cost allocation tab, select the check boxes under Cost share.

9. In the Service category field, select the service category that you want to allocate. You can select only service
categories for which the Use of service category field in the Cost categories form is set to Internal cost
allocation.

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Define an internal cost allocation [AX 2012] Page 2 of 2

10. In the Cost rate type field, select the type of cost rate for each value type.

Note

The allocations are calculated in the order shown on the Overview tab of the Allocations form. The order in
which the calculations are run affects the result. To change the order, click the Up and Down buttons.

See also
Define a surcharge allocation

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Define a surcharge allocation [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

Create reference tables

Define a surcharge
Distribute costs or quantities
allocation [AX 2012]
Define an internal cost allocation
Other Versions
Define a surcharge allocation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

To allocate costs, you must first set up a Calculation version. You can then select one of the following different
allocation types:

• Allocation

• Internal cost allocation

• Surcharge calculation

To allocate costs with the allocation type Surcharge calculation, follow these steps.

1. Click Cost accounting > Setup > Calculation > Calculation versions. Select a calculation version and then
click Allocations.

2. Press CTRL+N to create a new line.

3. In the Allocation level field, select the current level of allocation.

4. In the Allocation hierarchy field, select the hierarchy. This field is available only if you have selected
Hierarchy in the Allocation level field.

5. In the Allocation dimension field, select the dimension for the allocation. This field is available only if you
have selected Dimension in the Allocation level field

6. In the Allocation reference field, select the reference for the allocation.

7. In the Allocation type field, select Surcharge calculation.

8. Click the General tab, and in Allocation account and Offset account fields, select the ledger accounts.

9. Click the Surcharge calculation tab, and select the check boxes under Cost share field group.

10. Complete the fields under Value calculation field group to specify the allocated value.

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Define a surcharge allocation [AX 2012] Page 2 of 2

11. Select the relevant check boxes under Offset transaction dimension field group.

12. Click the Dimension tab, and select the dimensions in the Dimensions field group.

Note

The allocations are calculated in the order shown on the Overview tab in the Allocations form. The order in
which allocations are calculated is essential to the result. To change the order, click the Up and Down buttons.

See also
Define an internal cost allocation

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Budgeting in cost accounting [AX 2012] Page 1 of 1

Budgeting in cost accounting [AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about how to use budgeting in Cost accounting.

About cost accounting budgeting

About cost accounting budget models

Cost and service budgeting

Flexible budgets

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(LCS).

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About cost accounting budgeting [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About budgeting
About cost accounting
About cost accounting budget
models budgeting [AX 2012]
Cost and service budgeting Other Versions

Flexible budgets

Updated: November 26, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Budgeting is a forecasting feature that enables you to plan costs for the future. It extends the budgeting functionality
of the general ledger, and makes it possible to transfer budget amounts from the general ledger.

The Cost accounting module has two separate forecast functions: budgeting, which is standard functionality, and
flexible planning, which is an advanced budgeting functionality and requires special licensing.

If you want to plan costs, you must first create a budget model using one of the following budget model types:

• Cost accounting budget

• Ledger budget

• Flexible budgeting

The Budget overview form provides an overview of all budget costs. To receive an overview of budget costs using
all budget models, you can aggregate these budget models by linking them to each other as submodels on the
Submodel tab of the Budget model form.

When you create budgets, you must distinguish between:

• Cost budget – Used to create budgets based on cost categories.

• Service budget – Used to create budgets based on service categories.

Note

This topic includes information about financial budgets. For information about budgets for projects, see About
project budgets and forecasts.

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About cost accounting budgeting [AX 2012] Page 2 of 2

See also
About cost accounting budget models
Budget model (form)
Cost and service budgeting
Flexible budgets

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About cost accounting budget models [AX 2012] Page 1 of 3

> Cost accounting > Working with cost accounting >

About budgeting
About cost accounting
About cost accounting budget
models budget models [AX
Cost and service budgeting 2012]
Flexible budgets Other Versions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Click Cost accounting > Setup > Budget model. You create various budget models to enter budget costs.

A budget model can contain many submodels that you attach to the budget model on the Submodel tab. For
example, you can create a budget with submodels that represent various departments of the company.

Note

Submodels can contain other submodels. Also, if you use budget control, budget models with submodels cannot
be used in the calculation of the available budget balance. For more information, see About basic budgeting and
budget control setup.

In Cost accounting, there are three different types of budget models:

• Cost budget – Used for basic budgeting, such as budgeting of costs and services.

• Ledger budget – Instead of creating a special budget in Cost accounting, you can use the ledger budget.

• Flexible budgeting– Used for complex flexible budgets with planning for costs and services. You can also
calculate different cost rates.

Note

Select the Stopped check box to indicate that the budget model and the budgets that are based on the budget
model are blocked for modifications.

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About cost accounting budget models [AX 2012] Page 2 of 3

Cost accounting budget

Use the Cost accounting budget model type for standard budgeting of costs and services.

Click Cost accounting > Journals > Cost budget. You enter budget amounts for dimensions and cost categories.

In this form, only budget models of the Cost accounting budget type are available.

Click Cost accounting > Journals > Service budget. You enter budget amounts for Service categories.

Ledger budget
Use the Ledger budget model type to use a budget from the General ledger. This is useful, because you do not
have to create a new budget in Cost accounting.

When you use the Ledger budget model type, you must select a specific budget from the General ledger in the
Ledger budget field on the General tab.

Flexible budget
Use the Flexible budgeting model type for advanced budgeting, such as flexible planning of costs and services or
planning of calculations. Before you work with the Flexible budgeting model type, you must enter the following
settings:

Click Cost accounting > Setup > Budget model.

• Cost category setup

• Dimension setup

• Line structure on the General tab

See also
About cost accounting budgeting
About flexible budgets

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Cost and service budgeting [AX 2012] Page 1 of 1

Cost and service budgeting [AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section contain information about how you can use cost budgeting and service budgeting to plan
costs for cost categories and service categories.

About cost budgeting

About service budgeting

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About cost budgeting [AX 2012] Page 1 of 2

> Working with cost accounting > Budgeting in cost accounting >

About cost budgeting

About cost budgeting
About service budgeting
[AX 2012]
Other Versions

Updated: December 10, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Cost budgeting is used to budget costs for specific dimensions.

Click Cost accounting > Journals > Cost budget. Budget costs are planned for a selected budget model, which
contains the dimensions.

To create a budget line, you must complete the following fields:

• Cost category

• Date

• Amount

• Method, which specifies how the budget costs are allocated for the future period

Note

If you select Period or Key in the Method field on the General tab, the Total amount field, which displays the
budget costs for a certain future period, is updated automatically.

Click Budget balances in the Cost budget form to view period balances for all kinds of costs.

Click Transaction levels in the Budget balances form to modify the posting layer between the following:

• Financial accounting

• Cost accounting direct

• Cost distribution

• Allocation

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See also
Cost and service budgeting
About cost accounting budgeting

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About service budgeting [AX 2012] Page 1 of 2

> Working with cost accounting > Budgeting in cost accounting >

About cost budgeting

About service
About service budgeting
budgeting [AX 2012]
Other Versions

Updated: March 15, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Click Cost accounting > Journals > Service budget. Budget services are planned for a selected Budget model
andFinancial dimensions.

To create a budget line, the following fields must be completed:

• Service category, which specifies the service category.

• Date, which specifies the date of the transaction.

• Quantity, which specifies the budget quantity.

• Method, which specifies how the budget quantities are allocated for the future period.

Note

The Total quantity field that displays the total budget services for a certain future period is updated
automatically when you set the Method field to Period or Key as the method of budget cost allocation.

See also
Cost and service budgeting
About cost accounting budgeting

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(LCS).

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Flexible budgets [AX 2012] Page 1 of 1

Flexible budgets [AX 2012]

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Flexible budgets is a forecast function that extends the basic cost and service budgeting features of Microsoft
Dynamics AX and gives you more flexibility in working with budgets. The most important feature is the ability to
make plan calculations.

This section contains topics about how to work with flexible budgets.

Topic Description

About flexible budgets Provides general information about the creation and setup rules of
flexible budgets.

About setting up a budget model for Provides detailed information about how to set up a budget model with
flexible budgets cost categories and dimensions.

Transfer actual costs in a flexible Provides information about how to set up the Flexible budgeting form
budget to transfer actual costs.

About budgeting on transactions and Provides information about how to use flexible budgets to analyze
total amounts financial performance.

Run a calculation Provides information about which cost values are calculated.

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About budgeting on transactions and total amounts [AX 2012] Page 1 of 3

> Working with cost accounting > Budgeting in cost accounting >

About budgeting on transactions

and total amounts About budgeting on
About flexible budgets transactions and total
About setting up a budget model
for flexible budgets
amounts [AX 2012]
Other Versions
Transfer actual costs in a flexible
budget

Run a calculation

Updated: December 13, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

When you want to be able to analyze financial performance, you budget on transactions and total amounts by using
a flexible budget.

In the Budget form, all cost categories, service categories, and cost lines are automatically displayed according to the
cost category that is set up in the Budget model form. The same applies to dimensions. If specific dimensions are set
up in the Budget model form, only these dimensions are displayed. Otherwise, you can select all dimensions.

In the Plan cost values form, you first fill in the Dimension and Number fields, and then you can either plan
amounts for the whole year or plan a specific amount for each period.

You enter annual amounts for cost categories in the Total column in the Primary costs section. The amounts are
automatically divided into 12 partial amounts, one for each month. If a period key is set up in the Cost category
setup form, the amounts are divided according to the key.

To plan individual amounts for each month, you enter amounts in the columns for the months in the Primary costs
section. Click Calculate to summarize monthly values in the Total values section. Be aware that this calculation is not
done automatically.

You plan amounts for a service category or a cost line in the same way. You enter annual amounts in the Total
column and individual amounts in the column for each the month.

The following table provides guidance for using the planning tabs in the Plan cost values form.

Cost
categories • If you are planning on cost categories, first select a value in the Cost component field
tab (either Fixed costs, Variable costs, or Full costs), and then enter plan values for the cost
categories.

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About budgeting on transactions and total amounts [AX 2012] Page 2 of 3

Note

If there is a calculation setup for a proportional dependency on another cost line in the
Budget model form, you cannot manually enter amounts for those cost categories.

• When you have finished entering plan values, click Calculate.

• To display cost balances, click Cost balance.

Service Budgeting on service categories works almost the same as budgeting on cost categories, except
categories you do not have to select a value in the Cost component field. Budgeting differs depending on
tab the type of service category. Planning on service categories of the General quantity itemization
type is identical to planning on cost categories, because transactions are always single-entry
(debit). Service categories of the Internal cost allocation type have double-entry transactions and
are marked blue. You cannot plan on them directly. Instead, you enter the quantity in the lower
pane of the form, which is the debit transaction, and then the credit transaction is created
automatically in the upper pane.

Cost lines If you are planning on cost lines, specify the cost component. You can only plan on the cost lines if
tab the Budget check box is selected for the cost line on the Cost lines tab of the Cost category
setup form. (Click Cost accounting > Setup > Budget model. Click Cost category setup.) When
you select this check box, all cost categories that are included in the cost line are blocked and
become blue. If the Budget check box is cleared, you can only plan on cost or service categories.
In this case, the relevant cost line is blocked and becomes green.

See also
Flexible budgets

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About flexible budgets [AX 2012] Page 1 of 2

> Working with cost accounting > Budgeting in cost accounting >

About budgeting on transactions

and total amounts About flexible budgets
About flexible budgets [AX 2012]
About setting up a budget model Other Versions
for flexible budgets

Transfer actual costs in a flexible

budget

Run a calculation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Before you create a flexible budget, you must create and set up a flexible budget model in the Budget model form.

After you set up a flexible budget model, you create a flexible budget in the Flexible budgeting form.

Note

There can be only one flexible budget per year and per budget model.

Select the following fields in the Flexible budgeting form:

• Flexible budget model – Select the budget model created in the Budget model form

• Fiscal year – Select the first date in the new fiscal year.

Note

You can select only one flexible budget per year per budget model.

• Locked –The current flexible budget is not considered for the calculation.

• Calculated –The calculation for this flexible budget was performed.

• Calculation version – You must create and set up a new calculation version specifically for the flexible
budget. It is important to select the following value types:

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About flexible budgets [AX 2012] Page 2 of 2

◦ Basic plan costs

◦ Flexible plan costs

◦ Target costs

The Flexible budgeting form contains the following buttons:

Button Description

Plan values Enter the plan values.

Workload Enter the percentage of load.

Calculation Run the plan calculation batch job.

Transfer balances Copy the actual costs in the flexible budget.

See also
About setting up a budget model for flexible budgets
Transfer actual costs in a flexible budget
About budgeting on transactions and total amounts
Run a calculation

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About setting up a budget model for flexible budgets [AX 2012] Page 1 of 4

> Working with cost accounting > Budgeting in cost accounting >

About budgeting on transactions

and total amounts About setting up a
About flexible budgets budget model for
About setting up a budget model
for flexible budgets
flexible budgets [AX
Transfer actual costs in a flexible
2012]
budget
Other Versions

Run a calculation

Updated: December 13, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

You set up the budget model for a flexible budget in the Budget model form. Select Flexible budgeting in the
Budget model type field. When you select this type of budget model, you have the following options:

• To set up dimensions manually by clicking the Dimension setup button, select the Check dimensions check
box on the General tab. Otherwise, the dimensions are available in the dimension setup when plan values
have been entered in the flexible budget.

• To set up the cost categories, service categories, and cost lines to plan on, click Cost category setup.

• To set up the dimensions to plan on in the flexible budget, click Dimension setup.

Cost category setup

Use the Cost category setup form to specify the cost categories, service categories, or cost lines that you want to
plan on in the flexible budget. These are displayed automatically in the flexible budget. You must decide whether
the planning of costs is based on cost categories or cost lines.

If planning is based on cost lines, select the Budget check box for the required cost lines on the Cost lines tab of
the Cost category setup form. If you do this, you cannot plan on the cost or service categories that are included
in these cost lines.

The cost and service categories are displayed in blue in the flexible budget, and you cannot enter values for them.

Cost categories tab

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About setting up a budget model for flexible budgets [AX 2012] Page 2 of 4

On the Cost categories tab, enter the cost categories to plan on and select a period key for each cost category.
If you leave the Period key field blank, the planning on this cost category is linear. You set up period allocation
keys in the Period allocation key form in General ledger.

If an entry was made in the Calculation setup form for this cost category, the Calculated check box is selected.
This means that the plan value for this cost category is calculated from the plan values of the other cost
category.

Click Load cost categories to create a query to enter the cost categories automatically. This is especially useful
if you are entering all cost categories. You can still modify the list of cost categories after you load it.

Click Calculation setup to use the Calculation setup form, in which you can implement a proportional
dependency on another cost category. This means that the plan value in the flexible budget is not entered
manually. Instead, it is calculated according to this calculation setup as a percentage of another plan value.
Select a cost category in the Cost category field and enter a percentage in the Percent field. You can also
select the Invert sign check box to indicate that the calculated plan value has the opposite sign from the typical
planned value.

Service categories tab

On the Service categories tab, enter the service categories to plan on and select a period key for each service
category. If you leave the Period key field blank, the planning on this service category is linear.

Click Load service categories to create a query to enter the service categories automatically. This is especially
useful if you are entering all service categories.

You can modify the list of service categories after you load it.

Cost lines tab

On the Cost lines tab, enter the cost lines to plan on, and select values in the following fields for each cost line,
as appropriate:

• Select the Budget check box to base the costs on a cost line instead of planning values on the cost
categories that are included in this cost line.

• Select a period key. If you leave the Period key field blank, the planning on this cost line is linear.

• To use this cost line for planning, use the Share fixed costs and Share variable costs fields to define
cost shares for the cost line.

• If an entry was made in the Calculation setup form for this cost line, the Calculated check box is
selected. This means that the plan value for this cost line is calculated from the plan values of the other
cost line.

• Click Calculation setup to open the Calculation setup form, in which you can implement a proportional
dependency on another cost line. This means that the plan value in the flexible budget is not entered
manually. Instead, it is calculated according to this calculation setup as a percentage of another plan

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About setting up a budget model for flexible budgets [AX 2012] Page 3 of 4

value. In the Calculation setup form, select a cost line in the Cost line field and enter a percentage in
the Percent field. You can also select the Invert sign check box to indicate that the calculated plan value
has the opposite sign from the typical planned value.

• Click Cost allocation to open the Cost allocation form, in which you can define, as a percentage, how
the planned costs that are based on this cost line are allocated among the cost categories that are
included in this cost line. If a cost allocation is not defined, all planned costs that are based on the cost
line are allocated to the first cost category that is included in this cost line.

Dimension setup
Use the Dimension setup form to specify the dimensions to plan on in the flexible budget. You can select
dimensions manually only if the Check dimensions check box on the General FastTab of the Budget model form
is selected. Otherwise, each dimension is automatically displayed in the Dimension setup form when plan costs
have been entered for the dimension in the flexible budget.

When you enter dimensions, you must select values in the following fields for each dimension:

• Dimension – The type of dimension.

• Number – The dimension number. If no number is selected in this field, the costs can be planned without a
defined dimension. These costs can later be distributed on dimensions by using the cost distribution.

• Locked for journal – If this check box is selected, you cannot plan on this dimension in the flexible budget.

• Determination of load – If you are working with a workload in the flexible budget, you can select whether
to enter data manually or to have data be loaded automatically.

• Service category – This check box is selected when the Determination of load field is set to service
category.

To delete plan costs for a specific dimension, delete the dimension in the Dimension setup form. All plan costs for
this dimension are deleted automatically in the flexible budget.

See also
Flexible budgets

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Transfer actual costs in a flexible budget [AX 2012] Page 1 of 2

> Working with cost accounting > Budgeting in cost accounting >

About budgeting on transactions

and total amounts Transfer actual costs in
About flexible budgets a flexible budget [AX
About setting up a budget model
for flexible budgets
2012]
Other Versions
Transfer actual costs in a flexible
budget

Run a calculation

Updated: March 30, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Click Cost accounting > Journals > Flexible budgeting. On the Transfer balances form, click the Transfer
balances button.

Enter the following information on the General tab before you run the transfer of balances:

• Forecast model – Select the budget model that the balances are to be transferred into. Select the Overwrite
check box if all existing budget values in the selected budget model should be removed before the transfer of
balances.

• Period – Select Date interval code or From date and To date of balances to be transferred into the flexible
budget.

• Change – Specify the time shift of the balances. The Quantity field defines the number of time units for time
shift. The Unit field defines the units for time shift (days, months, years). The From date and To date fields
display the automatically updated date interval for the transfer.

• Rules – Specify the factor and round-off for cost balances. Factor increases the existing transaction amounts
by this factor.

• Area – Define which types of values to transfer: Fixed costs, Variable costs, and Services.

• Financial dimensions – Define which dimension balances to transfer by selecting the appropriate dimensions.

• Create settings automatically – Define whether to create flexible budget settings automatically and to
transfer balances for cost categories, service categories, and dimensions defined in the flexible budget model
setup.

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Transfer actual costs in a flexible budget [AX 2012] Page 2 of 2

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Run a calculation [AX 2012] Page 1 of 2

> Working with cost accounting > Budgeting in cost accounting >

About budgeting on transactions

and total amounts Run a calculation [AX
About flexible budgets 2012]
About setting up a budget model Other Versions
for flexible budgets

Transfer actual costs in a flexible

budget

Run a calculation

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

1. Click Cost accounting > Journals > Flexible budgeting.

2. In the Flexible budgeting form, click Calculation to calculate plan costs. The following cost value types are
calculated:

◦ Basic plan costs

◦ Flexible plan costs

◦ Target costs

The concept resembles the period calculation that is used for actual and budget costs.

Before you run a calculation, you must create distributions, allocations, or cost rate calculations by using the
calculation version that is set up specifically for the flexible budget. The calculations are based on the plan
calculations.

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Journals and posting in cost accounting [AX 2012] Page 1 of 1

Journals and posting in cost accounting

[AX 2012]

Updated: May 19, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The topics in this section provide information about how to use journals and posting in Cost accounting.

About journal names

Create a cost journal

Create a service journal

Create a cost accounting accrual scheme

Create cost accounting accrual transactions

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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About journal names [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About journal names

About journal names
Create a cost journal
[AX 2012]
Create a service journal
Other Versions
Create a cost accounting accrual
scheme

Create cost accounting accrual

transactions

Updated: December 12, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Journal names are the templates that you select from when you create journals for cost transactions and service
transactions. You can create journal names in the Journal names form.

Click Cost accounting > Setup > Journal names. For more information, see Journal name (form)

You can create two types of journals:

• Cost – This type of journal is used for cost transactions.

• Services – This type of journal is used for service transactions.

In addition to selecting the journal type, you must enter other information when you create a journal name, including
information about posting, approval, offset transactions, and voucher series.

See also
Create a cost journal
Create a service journal

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Create a cost journal [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About journal names

Create a cost journal
Create a cost journal
[AX 2012]
Create a service journal
Other Versions
Create a cost accounting accrual
scheme

Create cost accounting accrual

transactions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

A cost journal is used to create and post cost transactions. Before you enter and post cost transactions, you must
create a cost journal by using one of the journal names that is created in the Journal names form (Click Cost
accounting > Setup > Journal names.)

1. Click Cost accounting > Journals > Cost transactions.

2. Press CTRL+N to create a new line, and then select the appropriate journal name in the Name field.

3. Click Lines.

4. Press CTRL+N to create a new line.

5. Enter all information about the transaction.

6. Press CTRL+N to create additional lines.

7. Click Validate and then Validate to validate the transactions.

8. Click Post and then Post to post the transactions.

Note

You can only use the journal that you have created to post cost transactions. To post service transactions, use the
Service transactions form.

See also

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Create a cost journal [AX 2012] Page 2 of 2

About journal names

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Create a service journal [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About journal names

Create a service
Create a cost journal
journal [AX 2012]
Create a service journal
Other Versions
Create a cost accounting accrual
scheme

Create cost accounting accrual

transactions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

The service journal is used to create and post service transactions. Before you can enter and post the service
transactions, you must create the cost journal. You create the cost journal by using one of the journal names that you
created in the Journal names form. (Click Cost accounting > Setup > Journal names.)

1. Click Cost accounting > Journals > Service transactions.

2. Press CTRL+N to create a new line, and then select the appropriate journal name in the Name field.

3. Click Lines.

4. Press CTRL+N to create a new line.

5. Enter all information about the transaction.

6. Repeat steps 4 and 5 for each transaction that you want to add to the journal.

7. Click Validate and then Validate to validate the transactions.

8. Click Post and then Post to post the transactions.

Note

You can use this journal to post only service transactions. To create cost transactions, use the Cost transactions
form.

See also

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Create a service journal [AX 2012] Page 2 of 2

About journal names

Service transactions (form)

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Create a cost accounting accrual scheme [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About journal names

Create a cost
Create a cost journal
accounting accrual
scheme [AX 2012]
Create a service journal

Create a cost accounting accrual

scheme Other Versions

Create cost accounting accrual

transactions

Updated: December 10, 2010

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

1. Click Cost accounting > Setup > Accrual schemes.

2. Press CTRL+N to create a new line.

3. In the Accrual identification and Description of accrual scheme fields, enter the appropriate information.

4. On the General tab, define the posting rules and duration of the accrual scheme.

5. Close the form to save your changes.

See also
Cost accounting accrual schemes (form)
Accrual (form)
Create cost accounting accrual transactions
Accrual schemes (form)

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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Create cost accounting accrual transactions [AX 2012] Page 1 of 2

> Cost accounting > Working with cost accounting >

About journal names

Create cost accounting
Create a cost journal
accrual transactions
[AX 2012]
Create a service journal

Create a cost accounting accrual

scheme Other Versions

Create cost accounting accrual

transactions

Updated: October 17, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

1. Click Cost accounting > Journals > Accruals.

2. In the Voucher field, select the voucher that you want to accrue.

3. View the information in the Amount fixed field or the Amount variable field.

4. Click the Accruals tab, and then in the Accrual identification field, enter the identification code of the accrual
scheme.

5. In the Start date field, select the date of the first accrued transaction. The End date field is filled in
automatically, based on the configuration of the accrual scheme.

6. Close the form to save your changes.

Note

You can verify the accrual transactions in the lower pane of the Accruals form.

See also
Accrual (form)
Cost accounting accrual schemes (form)
Create a cost accounting accrual scheme

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Microsoft Dynamics AX reports [AX 2012] Page 1 of 2

Microsoft Dynamics AX reports [AX 2012]

Updated: February 4, 2013

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature
Pack, Microsoft Dynamics AX 2012

Use the following information to learn more about the reports that are provided with Microsoft Dynamics AX.

How to obtain help for a report

For detailed descriptions of the default reports that are provided with Microsoft Dynamics AX, see the Reports
Catalog on the Microsoft TechNet website.

How to work with reports

The following topics explain how to print a report and how to filter and sort the data on a report:

• Print or email a report

• Filter the data on a report

• Sort the data on a report

How to create a custom report

The following topics explain how to create a new, custom report:

• Create a report by using the Microsoft Dynamics AX auto-report wizard

• Create a report by using the Excel data connection wizard to connect to a cube

• Create a report by using SQL Server Report Builder to connect to a cube

• Create a report by using Power View to connect to a cube

How to learn where the data on a report comes from

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Microsoft Dynamics AX reports [AX 2012] Page 2 of 2

If you are a developer, you can learn more about where the data on a report comes from by using the following
procedure:

1. Open the Microsoft Dynamics AX Application Object Tree (AOT).

2. Expand the SSRS Reports > Reports node.

3. Right-click a report. Click Add-Ins > Cross-reference > Using (instant view).

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services
(LCS).

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