Item Costs and Valuation Methods: To Sell Items with the Standard Method

The following activity demonstrates how to process to completion a sale of stock item that is assigned the Standard valuation method.

Story

SweetLife Fruits & Jams is a midsize company, which purchases fruit, jams, and spices from large fruit vendors and then sells these goods to wholesale customers such as restaurants and cafes. Raspberry jam is among these goods. The RASPJAM08 stock item (which represents a small 8-ounce jar of raspberry jam) has been assigned the Standard valuation method in MYOB Acumatica. The standard cost for a box of the jam is $39.75.

On January 15, 2024, the company bought three boxes of raspberry jam at the cost of $39.75 from a regular vendor. On January 20, 2024, the company bought ten boxes of this jam at the cost of $38 from a new vendor. Further suppose that the HM's Bakery & Cafe customer ordered five boxes of raspberry jam.

Acting as the sales manager Regina Wiley, you need to review how the costs of the purchased jam has been recorded in the system, process the sale, and review the cost of the raspberry jam issued from the warehouse.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

• On the Enable/Disable Features (CS100000) form, the following features have been enabled:
  • Inventory and Order Management, which provides the standard functionality of inventory and order management
  • Inventory, which gives you the ability to maintain stock items by using forms related to the inventory functionality and to create and process sales and purchase documents that include stock items
• On the Customers (AR303000) form, the HMBAKERY (HM's Bakery & Cafe) customer has been created.
• On the Stock Items (IN202500) form, the RASPJAM08 stock item has been created, the Standard valuation method has been assigned to the stock item and the cost of $39.75 has been defined for the item.
• On the Receipts (IN301000) form, two receipts that have the RASPJAM08 item have been created and released as follows:
  • A receipt dated 1/15/2024 that has three boxes with the cost of $39.75
  • A receipt dated 1/20/2024 that has ten boxes with the cost of $38

Process Overview

In this activity, you will do the following:

1. On the Receipts (IN301000) and Inventory Transaction Details (IN404000) forms, review the cost of the purchased stock item.
2. On the Sales Orders (SO301000) form, create a sales order.
3. On the same form, quick-process the sales order.
4. On the Issues (IN302000) form, review the related issue to see how the stock item has been issued and its cost has been calculated.

System Preparation

Before you begin performing the steps of this activity, do the following:

1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as sales manager by using the wiley username and the 123 password.
2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/30/2024. If a different date is displayed, click the Business Date menu button, and select 1/30/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.

Step 1: Reviewing the Cost of the Purchased Item

To review the costs of the RASPJAM08 stock item, do the following:

1. On the Receipts (IN301000) form, open the receipt for ten boxes of raspberry jam dated 1/20/2024 for the GLORYFRUIT vendor. Notice that the Total Cost is 380, which means that the unit cost is $38.
   Note:

   On the release of the receipt, which was generated when the purchase receipt was released, the system posted a transaction to the Inventory account. This transaction has the RASPAJAM08 item with it's standard unit cost of $39.75. The difference between the actual cost of $38 and standard cost of $39.75 (which is $17.5) was posted to the Standard Cost Variance account. The transaction can be reviewed on the Journal Transactions (GL301000) form.
2. Open the Inventory Transaction Details (IN404000) form.
3. In the Selection area, specify the following criteria:
   • Period: 01-2024
   • Inventory ID: RASPJAM08
4. Review the amounts in the table (see the following screenshot). Notice that the receipt for three boxes of raspberry jam dated 1/15/2024 from the ALLFRUITS vendor has the In/Out Unit Cost [*] of 39.75, which means that the standard unit cost of $39.75 was used. Also notice that the receipt for ten boxes of raspberry jam dated 1/20/2024 from the GLORYFRUIT vendor has the In/Out Unit Cost [*] of 39.75. Despite the unit cost of $38 for the purchased items the system has recorded the standard cost of $39.75.

   
   
   

Step 2: Creating a Sales Order

To create the sales order for HM's Bakery & Cafe, do the following:

1. On the Sales Orders (SO301000) form, add a new record.
2. In the Summary area, specify the following settings:
   • Order Type: SO
   • Customer: HMBAKERY
   • Date: 1/30/2024
   • Description: Sale of 5 boxes of raspberry jam
3. On the table toolbar of the Details tab, click Add Row.
4. Specify the following settings in this row:
   • Branch: HEADOFFICE
   • Inventory ID: RASPJAM08
   • Warehouse: WHOLESALE
   • Quantity: 5
5. On the form toolbar, click Save.

Step 3: Quick-Processing the Sales Order

To process the sales order, do the following:

1. While you are still viewing the Sale of 5 boxes of raspberry jam order on the Sales Orders (SO301000) form, on the form toolbar, click Quick Process.
2. In the Process Order dialog box, which opens, do the following:
   1. In the Warehouse ID box, make sure that WHOLESALE is selected.
   2. In the Shipment Date section, make sure that Today is selected.
   3. In the Shipping section, make sure that the following check boxes are selected:
      • Create Shipment
      • Confirm Shipment
      • Update IN
   4. In the Invoicing section, do the following:
      1. Make sure that the Prepare Invoice check box is selected.
      2. Select the Release Invoice check box.
   5. Click OK. The Processing Results dialog box opens. Wait for the system to create the documents.
   6. Close the dialog box. Notice that the sales order now has the Completed status.

Step 4: Reviewing the Item's Cost

To review how the system has recorded the cost for the issued RASPJAM08 item, do the following:

1. While you are still viewing the Sale of 5 boxes of raspberry jam order on the Sales Orders (SO301000) form, open the Shipments tab.
2. In the Inventory Ref. Nbr. column, click the link. The issue opens on the Issues (IN302000) form in a pop-up window. In the Unit Cost box, notice that the 39.75 standard cost is inserted.