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Costing method simulator
Post receipts, sales, returns and item charges for one Business Central item, then see the item ledger, value and application entries it creates, and what Adjust Cost – Item Entries changes afterwards.
Postings, in posting order
Shaded rows are the value entries Adjust Cost – Item Entries adds. The others are posted with the documents.
A quantity application links an outbound entry to the inbound entry it takes stock (and cost) from. A cost application, made by Appl.-from Item Entry on a sales return, only copies cost: the returned units become new stock.
Average cost = (value at the start of the period + inbound costs − fixed-applied outbound costs) ÷ (quantity at the start + inbound quantity − fixed-applied outbound quantity). Every other decrease in the period gets that cost.
The same postings run through each method, after Adjust Cost. Specific needs the receipt picked on every sale.
A teaching model of Business Central inventory costing for one item at one location, with every document fully invoiced (no expected cost) and G/L posting left out. Postings apply in the order listed: FIFO, Standard and Average take the oldest open receipt by posting date, LIFO the newest, and Specific the receipt you pick, standing in for its serial or lot number. A purchase or an unapplied sales return first closes any open negative inventory. Adjust Cost forwards item charges and late receipts along the applications; with Average it values decreases at the period's weighted average, cumulatively rounded; with other methods it posts a rounding entry once a receipt is fully applied. Valuation date equals posting date except for item charges, which take the receipt's date. Revaluation, transfers, production, variants and closed periods aren't modelled.