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Cost objects

  • Article
  • 01/24/2025

This article provides information about costs objects, and explains how costs and quantities are accumulated. A cost object is an entity that costs and quantities are accumulated for. A cost object entity can be either a product or product variants, such as variants for style and color.

The Cost objects page lists all cost objects that are registered on a product. The cost objects are defined by data from the following sources:

  • Product
  • Product dimension group
  • Storage dimension group
  • Tracking dimension group

A cost object represents a cost element of the Direct material type only. A cost object and an inventory object differ in the way that a cost object is defined by the inventory dimensions that are selected for financial inventory.

For example, suppose you have an item with following configuration:

  • Site: Physical inventory = Yes, Financial inventory = Yes
  • Warehouse: Physical inventory = Yes, Financial inventory = No
  • Batch No.: Physical inventory = Yes, Financial inventory = No

For this example, the following table shows what is a cost object and what is an inventory object.

Object type Item number Site Warehouse Batch No.
Cost object x x
Inventory object x x x x

Accumulation of costs and quantities

  • The value in the Value field is a sum of the following values:
    • Physical cost amount
    • Financial cost amount
    • Adjustments
  • The value in the Quantity field is a sum of the following values:
    • Received
    • Deducted
    • Posted quantity
  • The Average unit cost field is a calculated field. The value is calculated by dividing the Value value by the Quantity value.

Note

The Include physical value parameter has no effect on the preceding calculations.

Additional resources