What-if costing in AX 2012 R3

Although most of the following is do-able in earlier Dynamics AX versions – the last step (the Cost comparison report) is only available in Dynamics AX 2012 R3.

The scenario we’re working on here is calculating a new Finished goods cost based on a planned change to a raw material or ingredient (or a change in labour recovery or machine recovery costs or overheads).

We’re going to use BOM calculation to calculate our Finished goods costs – so we need a couple of Finished Goods items which use the same raw material.

Formal documentation, as ever on Technet

I’m in the standard demo Hyper-V image for Dynamics AX 2012 R3 CU9. In the demo data in the USPI company we find some ‘Parts wash solvent’ finished goods items (various pack sizes):


The bulk solvent itself has this formula:


I’m going to focus on the cost of one ingredient – the Zinc oxide and try to predict the effect on the cost of our finished goods items based on a proposed increase in the price of this one ingredient.

So first I’ll setup a Costing version and run BOM calculation – all of my items are standard cost items, but I’ll setup a ‘Planned cost’ costing version so that I can run a multi-level BOM calculation. Inventory management > Setup > Costing > Costing versions:


On the ‘Recording tab’ I’m entering the site (because I only have one site), and deselecting ‘Sales price’:


And my Calculation tab setup is:


Now I’m going to run my BOM calculation for the items I’m interested in by setting my Select filter query and clicking the ‘Calculation’ button on my Costing version:


I’ve entered a Site, and selected my finished goods items (and the bulk solvent), although I don’t really need to include the bulk solvent item. Click OK and the system performs the calculations. ‘Price > Item price’ on the Cost version shows me the calculated [Pending] cost prices:


The ‘Complete’ button (or ‘Print’) shows me the detailed cost breakdown for the Solvent:


On the detailed tab for the Zinc Oxide (M5003) we see a unit price of 0.92:


And obviously it took that form the item’s active costs. Released products > Manage costs > Setup > Item price:


So that’s setup our base-line current costs. Let’s create a new costing version (2016) and in that costing version set a new price for the Zinc oxide:


(Let’s hope you never see a 100-fold cost increase in real life). Now in that costing version I run BOM Calculation as before:


And as a final step I run the Cost comparison report:


I select to compare to the pending costs in my 2015 version – but I have the option of comparing to Active costs:


The Cost comparison report needs a bit of tidying up – but export it to Excel and delete a few empty columns and you will see:


Job done.

But wait …. There’s more. There are a couple of minor differences between the BOM calculations you can perform for standard cost items and other items. To activate the cost for a standard cost item you have to use a Pending cost price from a cost version with a Costing type = Standard cost. When you run BOM calculation from a Standard cost costing version you’ll notice that you can’t perform a multilevel BOM calculation – you have to establish the standard costs of these items using a single level BOM calculation; but you have an additional option called ‘Where used update’:


If you select ‘Where used update’ then the BOM calculation is performed for all of the parents of the item(s) you’ve selected. More or less perfect for driving cost changes up bills of material based on the change of a low level ingredient or raw material.


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2 thoughts on “What-if costing in AX 2012 R3

  1. nice article,

    just I want to know if there is a way to adjust the posted indirect costs.

    example :

    – the production order is ended and posted with the standard indirect cost price.
    – now at the end of the month I want to put the actual indirect cost price to get the right average cost.

    Like

    • No, I don’t think that there is any way to adjust indirect costs like this. The only thing I can think of is that you could create service items that represent the indirect costs, and post the actuals as picking list journal issues, but I don’t think that that is going to give you a practical, workable solution. Tim

      Like

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