This feature gives the user the ability to receive merchandise at landed cost which will be the sum of the item’s cost, freight charges, broker fees, and any other costs associated with the merchandise. This will ensure that the profitability of the item is accurately reflected to include its total landed cost when sold.
The first step in using the landed cost feature is to set up your cost categories.
How these additional costs are allocated to the item can be based on the item’s weight, cost, quantity as it relates to the PO as a whole or they can be manually allocated.
Once the categories are set up, enter the category and its cost when entering purchase orders.
When the merchandise is received the item cost will be the cost of merchandise plus any additional costs such as inland freight that have been prorated to the item.
If there is a variance between the landed cost used at time of PO receipt and the cost that you are actually invoiced from your vendor, that difference can be posted to the cost of goods variance account assigned to the cost category.