# SYSPRO costing methods: standard, average, FIFO and last cost > Source: https://netray.co/erp-help/syspro-costing-method-standard-average-fifo-last-cost > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: ERP Help ## Short answer SYSPRO sets the costing method on each stock code, so one company can mix methods. Standard cost holds a fixed cost and posts variances, average cost blends receipts into a moving cost, FIFO values stock at the cost of the oldest layers, and last cost uses the latest purchase cost. The method drives inventory value, WIP and variance postings. ## Kind how-to ## System syspro ## Erp SYSPRO ## Module Inventory / Costing ## Query syspro costing method ## Alternate Queries - syspro standard cost vs average cost - syspro fifo costing - syspro last cost ## Applies To SYSPRO 7 and 8. Field names and available options can differ by release and by version of the inventory module, so confirm in Inventory setup and the help for your build. ## Steps ### Check and understand the method on a stock code **Items:** - Open the stock code maintenance program in Inventory and find the costing method on the stock code. - Check the cost fields: material, labour, overhead for standard, and the current unit cost for the others. - Review the cost related setup options, including how receipts and variances are posted to the GL. - Run an inventory valuation report to see the extended value under the current methods. - If you plan to change method, test on a copy company first and review the effect on the GL control accounts. - Agree the change with finance, because it alters inventory value and the way variances arise. - Document the date and reason for audit. ## Sections ### How the four methods behave **Body:** Standard cost fixes the unit cost until you roll it. Receipts and production at a different actual cost post purchase price and production variances, which makes performance visible but needs a disciplined cost roll. Average cost recomputes after every receipt, so value follows reality and variances are small. FIFO consumes the oldest layers first and suits items where cost changes quickly and layers matter, at the price of more data to carry. Last cost values stock at the latest purchase cost and is simple but can swing value sharply, so it is rarely right for finance reporting on its own. ### Effect on WIP and variances **Body:** For manufactured items, the issue of materials to a job and the receipt of the finished good use the method of each stock code. With standard costing, the job accumulates actual cost and the receipt relieves WIP at standard, leaving a variance when the job closes. See the page on jobs that will not close for how that variance behaves. With average or FIFO, the finished good is received at the actual accumulated cost, so there is little or no variance, but cost changes flow straight into margin on the next sale. ### Changing the method **Body:** Changing the method on a stock code that has on-hand stock or open jobs needs care. The system must revalue or reclassify the stock, and the GL effect can be large. Make the change in a controlled window with stock counted and open jobs reviewed, and rehearse it on a copy. Never change methods casually to fix a variance. Find the cause first, such as a stale standard, a bad receipt cost or a wrong unit of measure. ## Pitfalls - Mixing methods across components of one assembly without understanding the variance flow. - Letting standards go stale, so variances become noise. - Changing method with open jobs and stock on hand without a rehearsal. - Relying on last cost for financial valuation. - Not telling finance, so the valuation moves without explanation. ## Ai Angle An assistant over your SYSPRO data can list stock codes by costing method, show where standard cost differs from recent receipt cost, and explain a variance in plain language, in read-only mode. Netray deploys it on-prem so cost data stays private. ## Faq ### Can different stock codes use different methods? **Answer:** Yes. The method is held at stock code level, so a company can mix them. Just be sure finance understands the GL effect of each. ### Which method is best for manufacturing? **Answer:** Standard costing is common in stable repetitive manufacturing because it exposes variances. Average cost suits volatile materials. The right answer depends on how finance reviews performance. ### Where do variances post? **Answer:** To variance accounts defined in the GL integration setup. Check the mapping so purchase price and production variances reach the accounts finance expects. ### Will changing the method revalue stock? **Answer:** It can, depending on the method and setup. Test on a copy and review the journal that results before you do it in production. ## Search terms syspro costing method, syspro standard cost, syspro average cost, syspro fifo costing, syspro last cost, syspro cost roll, syspro wip variance, syspro inventory valuation --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json