The system updates calculated price bases, such as average cost, last cost or landed costs when the finished good is added to inventory after the work order is complete. When you add that completed inventory item to a sales order, the cost on the sales order depends on the price line settings for the price line associated with the finished good.
If you have the price line set up to have the global basis COGS-COST associated to a calculated price basis such as AVG-COST, landed or last cost, the system uses the cost that was updated when the finished good was received from the work order. However, if you have the price line set up to have the COGS-COST basis associated to a price sheet basis, such as REP-COST, then the system uses the cost straight from the price sheet (or matrix if applicable), without recognizing the work order costs.
We recommend to set up a price line for your finished goods that uses AVG-COST, landed or last cost as its COGS-COST basis. This setup allows the costs of the work order processing to be associated to the sales orders.
Note: You can also tag the two costs together, if needed. You create work orders for the products directly from the scheduling screen on the sales order. As long as the work orders remain tagged to the sales orders, the costs will carry over.
See Also:
Editing Costs on Work Orders