Item Sales Line 'Target Cost'

Use Target Cost on sales lines to validate margins and control pricing changes.

Bevica's Target Cost feature allows you to set an agreed or notional cost against an item and have that value populate the Unit Cost (LCY) field on sales lines. This lets you set a stable cost against your sales that can be used for reporting.

Prerequisites

Items have been created.

Understanding how to manage Stockkeeping Units (SKUs). See Set Up Stockkeeping Units.

Note

Target Cost features only apply to duty controlled items using FIFO costing method. For non-duty controlled items similar standard Business Central functionality exists, see Design details: Costing Methods.

Setup

To setup Target costing navigate to Bevica Setup and then Pricing / Costing FastTab. Set Use Target Cost on Sales Lines to yes.

Use Target Cost on Sales Lines	Note
On	The Sales line Unit Cost LCY field is populated using the logic described below.
Off	The Sales line Unit Cost LCY field is populated from the item's Unit Cost Duty Free or Unit Cost Duty Paid fields.

Target Cost fields

The field exists on the Item and SKU card and list pages. It is a standalone field, unaffected by inventory costing methods, system updates, or routines. It can be updated manually or via RapidStart.

Note

Target Cost features do not replace Bevica's financial costing functionality. Inventory posting routines and costing logic continue to use the Costing Method and Inventory Posting Group set against each item.

Item record

The Target Cost field can be found on the Costing FastTab of the item card. The value entered here is assumed to be Duty Free.

Stockkeeping Unit

The Target Cost field can be found on the Invoicing FastTab of the SKU card.

Sales Line

When an item is added to a sales line, and Target Costing is switched on, system logic attempts to find the most appropriate cost for that item/SKU setup. Given the item number, location, and variant code on the sales line, the logic first searches for SKUs held against the item in this order:

1. Item/Location/Variant
2. Item/Variant
3. Item/Location

When it finds a SKU, if a Target Cost has been entered, its value(1) is copied to the Unit Cost (LCY) field of the sales line. If Target Cost is zero, it takes the SKU's Unit Cost and copies that to the sales line Unit Cost (LCY). If both Target Cost and Unit Cost are zero, the logic moves to the item card, and if Target Cost is populated, it will apply that value(1) to the sales line Unit Cost (LCY). If not, Bevica takes the Unit Cost Duty Free or Unit Cost Duty Paid value held on the item card.

1 Where the Target Cost has come from the Item/Location SKU or the Item card, the Target Cost value is assumed to be Duty Free and will be converted to Duty Paid on a Duty Paid sales document. On other SKU cards, the Duty Paid Target Cost should be populated if required.

Note

The Target Cost value is a value at the point in time the sales line was created. It does not otherwise get updated, if, for example, the Target Cost on the item card is changed.

Scenarios:

1. You want to apply a Target Cost that applies to all sales documents across all Locations.

   Setup: Populate the Target Cost field on the Item card as a Duty Free value. There is no need to create SKU records.
2. You want to apply a Target Cost just to one location's stock, i.e., En Primeur.

   Setup: Create Item/Location SKU's for your items and specific En Primeur Location, populate the Target Cost field as a Duty Free value.
3. Your Target Cost differs between duty status that is not Duty Free + duty amount.

   Setup: Create Item/Variant SKU's for your items and populate the Target Cost field.

Maintenance

If used, Target Cost values should be periodically reviewed to make sure they remain relevant, i.e., producer cost change significantly.

When using Copy Item, SKU records are not automatically created. Users will need to run the Create Stockkeeping Unit routine on the new item(s) and populate their Target Cost.

Reporting

Sales document lines

The Target Cost value can be reported on from Unit Cost (LCY) and Unit Cost fields of the following sales document lines:

• Sales Quote
• Sales Order
• Sales Invoice
• Sales Credit Memo
• Sales Return Order
• Sales Blanket Order

Posted Sales document lines

On posting sales documents, the value is copied to the same two fields on the following document lines:

• Posted Sales Shipment
• Posted Sales Invoice
• Posted Sales Credit Memo
• Posted Return Receipt

Item Ledger Entry

Item Ledger Entry (ILE) records hold the sales document cost value. The field Target Cost denotes a static cost value derived from the entry's originating sales document Unit Cost (LCY). The value may have originated from Target Cost functionality or standard sales line costing routines. The field is for operational reporting only and should not be used for financial inventory valuation purposes.