# Unit Cost in Business Central and How to Set Up Cost Centers > Source: https://netray.co/erp-help/business-central-unit-cost-and-cost-center-dimensions > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: ERP Help ## Short answer On the Item Card, Unit Cost is a calculated average or standard figure that depends on the Costing Method, and it is recalculated when costs are adjusted. Business Central has no standalone cost center field on transactions: you model cost centers either with global dimensions or with the optional Cost Accounting feature, which maps G/L accounts to cost types, centers and objects. ## Kind how-to ## System dynamics ## Erp Microsoft Dynamics 365 Business Central ## Module Inventory Costing / Dimensions / Cost Accounting ## Query unit cost business central ## Alternate Queries - cost center in business central - business central unit cost vs standard cost - business central cost accounting cost centers and dimensions ## Applies To Dynamics 365 Business Central online and on-premises, recent releases (2023 wave 1 and later); field and page names can differ slightly in older NAV-era versions ## Steps ### How to check unit cost and set up cost centers **Items:** Open the Item Card and look at the Costing FastTab: Costing Method (FIFO, LIFO, Specific, Average, Standard), Unit Cost, Standard Cost, Indirect Cost % and Last Direct Cost. For Average costing, run Adjust Cost - Item Entries (search for it) or enable automatic cost adjustment in Inventory Setup so Unit Cost reflects posted receipts and applied costs. For Standard costing, set Standard Cost by hand, or use the Standard Cost Worksheet to roll up BOM and routing costs and then implement the new values. For manufactured items, review the Production BOM, Routing, and the Work Center and Machine Center cards (Direct Unit Cost, Indirect Cost %, Overhead Rate) that feed the rolled-up cost. For a simple cost center, open General Ledger Setup and assign a Global Dimension (for example DEPARTMENT or COSTCENTER) under Dimensions, then add dimension values. For true cost accounting, search for Cost Accounting Setup, define Cost Types, Cost Centers and Cost Objects, then run Transfer G/L Entries to Cost Accounting. Review the result in Cost Type Balance, Cost Center/Cost Object pages, or Value Entries on the item to trace how the figure was built. ## Sections ### What Unit Cost actually is **Body:** The Unit Cost field on an item is not a typed-in price. For FIFO, LIFO, Specific and Average items it is a system-maintained figure derived from item ledger and value entries. For Standard items it follows the Standard Cost you set. This is why the figure can move after you post an invoice with a different price than the receipt, or after a cost adjustment batch runs. Business Central keeps expected cost and actual cost apart. A receipt posts expected cost first, and the purchase invoice posts the actual cost. Adjust Cost - Item Entries then pushes the actual cost through the applied outbound entries, so cost of goods sold catches up. If Unit Cost looks stale, check whether adjustment ran and whether Post Inventory Cost to G/L is current. ### Manufacturing cost roll-up **Body:** For produced items, the cost is built from material, capacity and overhead. Material comes from the Production BOM components, capacity from the routing times multiplied by Work Center or Machine Center rates, and overhead from Indirect Cost % and Overhead Rate. Standard costing locks the planned figure, and variances (material, capacity, subcontracted, manufacturing overhead) are posted when the production order is finished. The Standard Cost Worksheet lets you calculate new standard costs for a set of items, review them side by side with the current values, and then implement them. This is the safer path than editing Standard Cost on many Item Cards, and it leaves a clear audit trail. ### Cost centers: dimensions or Cost Accounting **Body:** Most Business Central companies model a cost center as a dimension. You define a dimension such as COSTCENTER, add values like MACHINING or ASSEMBLY, mark it as Global Dimension 1 or 2, and set default dimensions on accounts, work centers or items. Every G/L entry then carries the value and you filter financial reports by it. The Cost Accounting feature is a separate ledger. It holds Cost Types (usually linked to G/L income statement accounts), Cost Centers (where cost occurs) and Cost Objects (what the cost is for, such as a product or project). It supports allocations, so you can distribute shared costs such as facility cost across centers. Use it only if accountants need allocations that the G/L cannot express. ## Pitfalls - Editing Unit Cost directly and expecting it to stick: for non-standard costing methods the system recalculates it. - Changing the Costing Method on an item with open ledger entries without a plan; revaluation and adjustment can produce large one-time postings. - Forgetting to run Adjust Cost and Post Inventory Cost to G/L, then comparing inventory subledger to G/L and finding differences. - Setting up Cost Accounting when dimensions would do; it doubles the maintenance of account mappings. - Missing default dimensions on work centers, so capacity cost posts without a cost center value. ## Ai Angle ERPray, connected read-only to Business Central, can answer why a specific item's Unit Cost moved by walking the value entries, showing the receipt, invoice and adjustment that changed it, and displaying the query it ran. For on-premises Business Central, the model and index run on your own servers, so costing data does not leave your network. ## Faq ### Why does Unit Cost on the Item Card change after I post an invoice? **Answer:** Receipts post expected cost and invoices post actual cost. When the invoiced price differs, the cost adjustment recalculates the average or applied cost and updates Unit Cost. Standard-cost items keep their Standard Cost and post the difference as a purchase price variance instead. ### Is there a Cost Center field in Business Central? **Answer:** Not as a standard field on transactions. You create a dimension named for the cost center and mark it global, or enable the Cost Accounting feature. Dimensions are the common choice because they flow through every ledger and report. ### What is the difference between Unit Cost and Last Direct Cost? **Answer:** Last Direct Cost is the most recent purchase price from an invoice. Unit Cost is the costing-method result, such as the weighted average or the standard. They differ whenever prices change between receipts. ### Can I see how a manufactured item's cost was built? **Answer:** Yes. Use the item's Value Entries and the finished production order's cost lines, and compare with the Production BOM and Routing. The Standard Cost Worksheet also shows the rolled-up material, capacity and overhead components. ## Search terms unit cost business central, cost center in business central, business central costing method, adjust cost item entries, business central standard cost worksheet, business central cost accounting, business central dimensions cost center, business central last direct cost, business central indirect cost percent --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json