PPV and Cost Type

Currently, at the warehouse level, we use cost method 07. For purchased items, the cost is defined as follows at the Cost Component level:

First, cost method 05 is loaded:

- Cost Type A1 (Material): this is the actual unit price for the purchased item.
- Cost Type XF (Freight on Purchased Parts): this is the shipping cost related to the purchased item, which we include in the cost.

Subsequently, cost method 07 is loaded (based on cost method 05) :

The cost type A1 is loaded as the sum of cost type A1 and XF from cost method 05.
Therefore, the business includes and considers freight as part of the cost of the purchased item. The value of the purchased item includes this component.