Cost accounting

Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Cost accounting is the process of tracking, recording, and analyzing costs associated with the products or activities of an organization. It can include tracking and managing costs for inventory, manufacturing products, finished goods and overhead.

With Microsoft Dynamics AX, you can use the following different costing methods:

1. Normal costing

2. Standard costing

3. Absorption costing

There are settings on production orders that influence how production estimates and production costing will be performed, and the inventory movement valuations.

The following production entities are used to calculate costs:

• BOM calculations are used to determine the raw material items used to create a finished product, and to add up or roll up the total material costs.

• Routes provide the operations, labor, and resources required to produce a given product, and are used to calculate labor costs and manufacturing overhead.

• The costing sheet is used to build cost groups.

Cost accounting at a glance

Important tasks		Primary forms
Run an estimation		BOM calculation results (form)
Create cost categories		Cost accounting budget model (form)
Create a cost journal		Cost lines (form)
		Standard cost conversion (form)

Integration of Cost accounting

Cost accounting can be integrated with the following modules and Microsoft resources:

1. General ledger

2. Production control

3. Project management and accounting

4. Inventory management

See also

Setting up and maintaining cost accounting

Working with cost accounting

Microsoft Dynamics AX reports