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# When the Unit Cost and Standard Cost Are Not Equal on NAV Inventory Valuation Report

We received a call recently from a client who said when they run the Dynamics NAV Inventory Valuation Report that the unit cost on the report is not equal to the Standard Cost of the Item.

To illustrate, see the example below.

The Standard Cost for Item 1000 is 427.499, but when we run the Inventory Valuation Report, the Unit Cost is 423.508.

Figure 1 – Standard Cost for an item is shown as 427.499…

Figure 2 - …however, the Unit Cost for the same item is 423.508

The probable reason for the mismatch is that someone rolled up the Standard Cost but did not do an Inventory Revaluation to update the existing inventory value.

If we look at the Item Ledger Entries for this item, we can see that, although we are using Standard Cost, we have ‘layers’ in inventory with a different Unit Cost.

Figure 3 – Item Ledger Entries for the item shows inventory values with different Unit Cost, even though it is set to Standard Cost

If we use the Dynamics NAV Standard Cost Worksheet to roll up the Standard Cost for this item, we see that the new standard is set to 427.499. In addition to that, the system rolled up the standard cost for all of the low level sub-assemblies.

Figure 4 – The Standard Cost Worksheet shows the standard is set at 427.499

Now, when we ‘implement’ the Standard Cost Changes, the system automatically creates a Revaluation Journal.

Figure 5 – Selecting the “Implement Standard Cost Changes” from the Standard Cost Worksheet…

Figure 6 - …causes the system to automatically create a Revaluation Journal

After we have posted the Revaluation Journal, we see that the Inventory Valuation Report Unit Cost reflects the Item Standard Cost of 427.499.

Figure 7 – Now the Inventory Valuation Report Unit Cost reflects the Item Standard Cost of 427.499

The likely cause of the mismatch is that the users are rolling up the Item Standard from the Item Function to Roll Up Standard Cost and are neglecting to then run the Revaluation Journal.

Figure 8 – When Calculating Standard Cost from the Item Card, users must also remember to then run the Revaluation Journal

Figure 9 – Rather than rolling up Standard Costs from the Item Card->Calc. Standard Cost, users are advised to use the Standard Cost Worksheet instead

Our advice is to never roll up Standard Costs from the Item Card, but to always use the Standard Cost Worksheet. When the Standard Cost Worksheet is implemented, it will automatically create a Revaluation Journal.

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

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