Creating Cost Groups

You can start to break down your costs into a more granular level by assigning Cost Groups to your products. This allows the costing to lump costs together into costing buckets so that you can see them by product group, or type of product. This will also allow you to track costing changes by the costing groups.

NOTE: This is part of the Configuring Costing and Cost Sheets in Dynamics AX 2012 blueprint series where we show how to configure costing within Dynamics AX, and also how to set up a costing sheet to better view and analyze the costs. If you want to see all of the other posts in this series, click here.

How to do it…

To create a Cost Group, follow these steps:

1. Open up the Cost groups form from within the Costing folder of the Setup group of the Inventory and warehouse management area page.
2. Click on the New menu button to create a new Cost group record.
3. In this example we will create cost groups for each of the types of ingredients that we are using in our BOM/Formula. Start off by assigning a Cost group code, and a Name.
   
4. From the Cost group type drop down, select the Direct materials
   option since these are all going to be assigned to ingredients.
   
5. In the Behavior field, select the Variable cost option.
   
6. Repeat this process for all of the other Cost groups that you want to use, and then click the Close button to finish the setup.
   

How it Works…

To use the Cost groups open up your Released product records that you are using in your BOM, and update the Cost group field in the Manage costs group to reflect the cost group that you want to use.

Now, when you re-run the cost roll up for your BOM/Formula, if you click on the Cost rollup by cost group menu item within the Item price maintenance form, you will see a breakdown of your costs by cost group.