ANS-1228 · INVENTORY & ITEM MANAGEMENT
NetSuite Inventory Cost Templates: Calculating Variances on Purchased Assemblies
NetSuite Inventory Cost Templates enable organizations to calculate and track variances on purchased assembly items, including material, labor overhead, and landed costs, when using standard costing.
Short answer
NetSuite Inventory Cost Templates provide a mechanism to establish standard cost templates for purchased assembly items. This functionality is crucial for calculating variances on these items, allowing for the tracking of material, labor overhead, and landed costs, similar to how planned standard costs work for built assemblies, ensuring accurate cost accounting.
Scenario
Organizations using NetSuite's Standard Costing for assembly items often encounter a challenge when purchasing these assemblies rather than building them. While built assemblies utilize Planned Standard Costs to identify production variances, purchased assemblies do not incur such variances directly. The need arises for a method to calculate and track cost variances, including material, labor overhead, and landed costs, specifically for purchased assembly items.
Solution
Extensive current documentation on Inventory Cost Templates, Standard Costing, and Landed Costs is readily available within NetSuite's SuiteAnswer knowledge base. Relevant documentation can be found using search terms such as 'NetSuite Inventory Cost Templates' and 'NetSuite Standard Costing'.The Inventory Cost Templates functionality in NetSuite is specifically designed for scenarios involving the purchase of Assembly Items that utilize Standard Cost. When standard cost assemblies are built, a Planned Standard Cost serves as a template to highlight any production variances. However, when these assemblies are purchased, direct production variances are not incurred.Inventory Cost Templates address this by providing a mechanism to establish a form of Standard Cost template. This allows for the calculation of variances on purchased assemblies, enabling the tracking of any material/labor overhead or landed costs that can be attributed to these purchased items.
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