Community,
Would like to borrow your mind. We have been suffering from below discrepancy of product cost, and we are looking for best practice.
Below is out situation:
1. Company uses Standard Cost.
2. Engineering release product new revision pretty frequently, i.e. multiple times within a month, but Standard cost review is far longer than engineering release time span.
Dilemma:
when doing standard cost review, products sitting in inventory sometimes have huge inventory cost discrepancy between inventory product cost and current standard cost. for example, on Apr.1, 2025, engineering release a new engineering revision 10 and transferred to the inventory revision 10, with a standard cost $100 updated in system on Apr.1, 2025. The product currently in stock might manufactured under product revision 6, which inventory stand cost might be only $50.
It is also an opportunity, if the revision 6 product shop order received after Apr.1, 2025, system will capture $100 as the inventory value, which is also wrong.
What is the best practice for our situation? Thank you.