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PPV caused by Trade Operations even for Standard Cost

Received Response


We are using Standard costing method with a ledger cost book (primary cost book) and LCM (ledgerless, actually FIFO cost ) just for analysis for the Items for our customer. The standard costing method has the following elements with an example (Item X)

Material Cost - $10

Freight (OHD) - $7

Custom (OHD) - $3

therefore total cost of the item is $20.

Now we create the PO for (Item X) with a PO price as $10, then there is no PPV and following is the distribution

a) Inv Val (Dr) - $10 (for Material), $7 (for Freight) and $3( for Custom)

b) Receiving Inspection (Cr) - $10 (for Material)

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