Standard Costs

If you use the inventory management module, the program calculates the average prices of purchased goods. The screen for presenting and changing the standard purchase prices of goods and products in the internet accounting program mKsiegowa.pl is available in the module Inventory → Standard Costs. The standard purchase costs of goods and products are used as inventory calculation prices for inventory accounting.

Standard costs are calculated by the program on the basis of GRN documents entered into the system. The standard costs (inventory calculation price) can be changed, and then the program generates an accounting document of the type Cost Update.

Standard costs are used in the program for:

calculating sales prices if there is no price in the sales pricing,
determining the value of the inventory location in inventory reports,
sales cost accounting.

How to change the standard cost?

You can change the standard cost calculated by the program by entering a new value in the field Standard Cost and clicking Update.

The program will automatically create an accounting document, which you can see in Journal Inquiry.

Procedure of accounting an inventory calculation price change

Cost Update document type is created only if the quantity of the discounted item in the inventory location is positive.

Accounts to which the document is posted depend on the following settings:

System and General GL Ledger Setup, if the fields listed below are set to the option Item's adjustment act, then the program performs posting according to the settings in the Items
in the following fields, you can set any accounts from the chart of accounts to which the document is posted (in that case, the settings in the Items don't matter):

Cost Update Costs Account
Cost Update Deviations Account

If the new cost is higher than the previous one, then the document is posted according to the following table:

Where Can I Set Up Accounts	Party
Field Cost Update Deviations Account in the settings or Inventory Account in the Items, if there is the option Item's adjustments act selected	Debit
Field Cost Update Costs Account in the settings or Inventory Adjustments Account in the Items, if there is the option Item's adjustments act selected	Credit

The posting is reversed to reducing the average purchase price.

Automatic document creation

Apart from the situation described above, the document Cost Update in the program is created automatically in the following cases:

after the production of the goods with a changed cost (production of final products),
when in the screen System and General GL Ledger Setup, there is the option Allow Negative Inventory is set, in case of a goods return above zero,
if there is a positive inventory and the new GRN is at a different price,
when deleting invoices or GRN if rounding is important.

Algorithm for Calculating Standard Costs

When purchasing an item, the program calculates the standard cost from the purchase invoice.

Example 1: We buy 10 items of goods for PLN 100 net - the standard cost is set to PLN 100

2.With each subsequent purchase, the program calculates a standard cost as follows:

 Standard Cost = (New Price * New Qty + Old Price * Qty In Stock) / (New Qty + Qty In Stock)

Example 2:

There are 10 items in stock
the current standard cost is PLN 100
the new cost is PLN 140
the quantity on the new purchase invoice is 10 items

The new satndard cost is PLN 120

Example 3:

all goods in stock have been sold (quantity is 0)
the new standard cost is as in example 1

Possible Distortions in Determining Standard Costs

The program is relatively flexible and allows to modify and delete purchase documents. Note, however, thatin some cases, the modification or deletion of purchasing documents may interfere with the correct determination of the standard costs.

Such a situation may take place if you delete or modify the purchase document (purchase order delivery, purchase invoice, adjustment) with a date after which the sales documents (WZ) were issued.