Periodic cost for production output
When items are received and stored in inventory, periodic costs such as cooling or ripening costs accumulate daily. For production orders, the system traces these costs from the finished goods output lot back to the originating purchase or transfer receipt lots using a factor-based allocation. This ensures that the storage costs incurred by the finished goods output lot are accurately distributed across all receipt lots that contributed to the production.
To calculate periodic costs for production output, you must first set up a trade plan and trade plan rates for periodic costs. For more information, see Set up trade plans for periodic costs and Set up trade plan rates for periodic costs.
How the system calculates periodic costs for production output
For production output, the system calculates the following additional amounts for each periodic cost line. For information about the Amount field, see View periodic cost lines.
| Field | Description |
|---|---|
| Related Amount | Specifies the share of the finished goods output lot storage cost allocated back to the purchase or transfer receipt lot. This value is calculated using the Factor field value from the Periodic Cost Line Entries. |
| Factor | Specifies the allocation factor used to distribute the finished goods output lot periodic cost to individual purchase or transfer receipt lots. Calculated as the consumption quantity of the receipt lot divided by the total consumption quantity for the production order. |
| Posted Amount | Specifies the posted amount for the periodic cost line, in the specified currency. This value is always 0.00 for production output lines, since these lines cannot be posted directly. |
How the factor is calculated
Factor calculation applies only to periodic cost lines for production output lots, that is, lines where the Location Receipt Entry Type field value is Output. Purchase and transfer receipt lines that are not linked to a production output do not have a factor calculated.
For periodic cost lines that are eligible, the factor is not static. It activates, splits, and shifts dynamically as each consumption item ledger entry becomes visible on the calculation date:
- No consumption visible: No factor is calculated. The system generates output Periodic Cost Line Entries for the finished goods output lot only. No purchase or transfer receipt Periodic Cost Line Entries are generated.
- First consumption visible: The factor activates. If only one receipt lot has been consumed, the factor for that lot is set to 1.000000.
- Second consumption visible: The factor splits proportionally across all visible consumption lots. The sum of all factors always equals 1.000000.
- Additional consumptions visible: The factor shifts each time a new consumption item ledger entry becomes visible on the calculation date.
- No consumption for a specific receipt lot: If other receipt lots in the same production order have visible consumption but a specific receipt lot does not, the factor for that lot remains 0 until its own consumption becomes visible.
The Relates to Periodic Cost Entry No. field on the Periodic Cost Line Entries page specifies the entry number of the finished goods output periodic cost line entry that each purchase or transfer receipt entry is linked to.
Post periodic costs for production output
After reviewing the calculated periodic cost lines, you can post the periodic costs to the general ledger.
- Select the Search icon, enter Periodic Cost Lines, and then choose the related link. Alternatively, on the Trade Plan Card page, on the action bar, select Related > Periodic Cost Lines.
The Periodic Cost Lines page opens. - On the action bar, select Post Periodic Costs.
The system posts the periodic costs for all open purchase and transfer receipt lines and updates the Posted Amount and Open field values. The system creates G/L entries based on the accounts defined on the associated trade plan.
Production output periodic cost lines cannot be posted directly. When you run the Post Periodic Costs action, the system skips production output entries and shows the following notification for each skipped entry: Periodic cost line [Entry No.] was not posted because it is a production output. The cost is redistributed to the underlying purchase receipt lines during periodic cost calculation. The posting continues for all other eligible lines.