Cost bases and cost calculation methods

Cost calculation methods that act as a cost reference for item sales prices let you calculate prices from values not maintained elsewhere in Microsoft Dynamics NAV. Enter and maintain these item cost values as cost bases. Assign cost bases to cost calculation methods, which instruct the program how the item cost values for the assigned cost basis should be used as cost references. Once a cost reference is calculated, the program applies the pricing parameters defined on the sales price line to establish a sales price for the item.

Cost bases

A cost basis represents a listing of item cost values. Obtain these values in one of two ways:

  • Manually enter item cost values if they come from a source outside of Dynamics NAV. For example, some industries publish standard market values for items on a regular basis and distribute this data to companies to use when calculating sales prices.
  • Develop a codeunit that calculates item cost values from existing data within Dynamics NAV. For example, instruct the system to calculate an item's cost value by averaging historical item costs over a particular period of time.

You can set up any number of cost bases, each with its own list of item cost values. This lets you maintain different sets of costing data that can be used in cost reference calculations.

Insights in cost bases

A fact box has been added to the Item card and item variants to provide more insight on cost bases. The fact box shows information on the used cost basis, cost value, and last cost value date.

Cost calculation methods

The cost values of a cost basis may represent raw data that needs further refinement before use as a cost reference for sales price calculations. This is particularly true if the item cost values have been entered manually, since a codeunit used to determine cost values can have calculation steps as part of the process.

Set up cost calculation methods to provide further instructions to the system on how a cost basis's item cost values should be used. Assign each cost calculation method a cost basis. Additional settings indicate how the values for the assigned cost basis should be used as cost references. For example, set up a date restriction that prevents the program from using any cost basis values from the current week.

You can assign the same cost basis to more than one cost calculation method. This lets you use the same item cost values in several different cost reference calculations.

Set up cost calculation methods if you want to calculate sales prices from cost bases. When entering sales price lines, assign a particular cost calculation method as a cost reference. You cannot assign a cost basis directly as a cost reference. Even in scenarios where you do not require further manipulation of a cost basis's item cost values, you must still set up a cost calculation method that instructs the program to use these item cost values as cost reference amounts.

Cost calculation items

With cost calculation methods you can define a cost calculation item. When a cost calculation method has an assigned calculation item, the program uses the cost value data for that item to calculate any sales prices for which the cost calculation method is assigned as a cost reference.

For example, a cost calculation method is set up with Item A as the cost calculation item. This cost calculation method is assigned as a cost reference for sales prices involving Item B. Whenever a sales line is created for Item B, Microsoft Dynamics NAV uses the item cost value for Item A to calculate a sales price.

You can further influence the relationship between a sales item and a cost calculation item by defining a cost conversion factor. This factor is applied whenever a cost calculation item is used to establish a cost reference. Using the previous example, if a cost conversion factor of five units of Item A for every one unit of Item B was established, the program would multiply the cost value of Item A by five when determining a cost reference for Item B's sales price.