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Understanding Low-Level Code When Running Adjust Cost-Item Entries

or When Running Adjust Cost-Item Entries, why does the Microsoft Dynamics NAV need to know the Item Low-Level Code?

ArcherPoint How-To Blog: Step-by-step instructions on how to perform specific tasks in Microsoft Dynamics NAV

The scenario:

Your company is a manufacturing company and has a Bill of Material that has several levels. Your company has not started to use the Dynamics NAV MRP (Planning Worksheet) functionality yet. You are running the Adjust Cost-Item Entries program on a regular basis. 

So the question is, “Why you would need to run the ‘Calculate Low-Level Code’ program before you run the Adjust Cost program?”

Selecting Calculate Low-Level Code before running the Adjust Cost program

Figure 1 – Selecting Calculate Low-Level Code before running the Adjust Cost program

Looking at the Bill of Material example below, we can see that this structure has 4 levels. When the Adjust Cost-Item Entries program runs, it needs to know the ”lowest level” of an item. This lowest level is represented in the Item’s Low-Level Code. (We discuss Low Level Codes in more detail in the blog, Using Low Level Codes in Microsoft Dynamics NAV.)

In order to know the full cost of Item A, the Adjust Cost program must start at the bottom of the structure and “push costs upward” through the BOM structure levels.  It would start with F and G, then D and E, then B and C, and finally A.

Diagram of Low-Level Code in BOM structure levels

Figure 2 – Diagram of Low-Level Code in BOM structure levels

If you are running the Adjust Cost-Item Entries program without first calculating the Low-Level Code, then the Adjust Cost program is producing incomplete costing results.

For more information on this or any other Dynamics NAV costing topic, please contact ArcherPoint.

Read more "How To" blogs from ArcherPoint for practical advice on using Microsoft Dynamics NAV.

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