Infor M3 Standard Cost: How to Set, Roll Up and Revalue
infor m3 standard cost
Also searched as
- m3 standard cost roll up
- m3 product costing calculate standard cost
- m3 revalue inventory standard cost change
Short answer
In M3 a standard cost is calculated by product costing from the bill of material, routing and overhead rules, then updated onto the item as the cost used for inventory valuation and variance. Changing it triggers a revaluation of stock, so plan the date, the periods and the approval before you update.
Applies to: Infor M3 Business Engine with Product Costing (PCS) and Manufacturing modules. Program names and options vary by release.
Standard cost cycle for a manufacturer
- 1Freeze the inputs: BOM structures, routings, work center rates and overhead settings must be correct and approved before you cost.
- 2Choose the costing type and the costing date. Standard costing normally uses a designated costing type kept separate from simulations.
- 3Run the product costing calculation for the items in scope, lowest level first (or let the function cascade through the structure).
- 4Review the calculated results: material, labour, machine and overhead components per item, and large changes compared to the current cost.
- 5Run simulations under another costing type to test a price or rate change without touching the live cost.
- 6Approve and update the item cost from the calculated costing, at the start of a period if your policy requires it.
- 7Run the revaluation of inventory and open manufacturing orders as your process prescribes, and post the difference to the revaluation accounts.
- 8Reconcile the inventory sub-ledger to the general ledger after the update.
Where the cost lives and how it is built
Standard cost for a manufactured item is the sum of its component costs plus operation costs. Product costing walks the BOM and routing, takes purchased item costs from the item or supplier price source, and adds labour, machine and overhead through work center rates. The result is stored in costing records and can be updated on the item and facility so that inventory transactions use it.
Because it is a roll-up, a change at a low-level component flows up. That is why teams cost in a controlled batch rather than item by item.
Revaluation and variances
When the standard changes, on-hand stock and often work in process are carried at the old value. The revaluation step restates them and posts the difference. If this is skipped, the first receipts and issues at the new cost create misleading variances.
Variances after the change come from purchase price differences, usage differences against the BOM and efficiency differences against the routing. Keep these reviewable by period so cost accountants can explain them.
Common design choices
Annual standard with periodic updates is common in discrete manufacturing. Some sites update quarterly for volatile metals or electronics. Whichever you choose, keep a documented cut-off, a clear owner and a sandbox run.
Before the live update, copy the simulation results to a spreadsheet and sign them off. That record answers audit questions later.
Try it here, free
M3 Standard Cost Rollup Calculator
Roll up a single-level unit cost and see how lot size changes the setup cost per piece.
Common pitfalls
- !Costing with stale or unapproved routings, so labour is understated.
- !Updating the live cost mid-period without a revaluation plan.
- !Running simulations under the same costing type as the live cost.
- !Missing phantom or sub-assembly items so the roll-up is incomplete.
- !Not reconciling inventory to the ledger after the update.
How an ERP-grounded AI assistant handles this
An assistant can compare calculated versus current cost per item, flag components that drive the largest change, and list items with no routing or zero price before you update. Netray can do this read-only over your M3 data, on-prem if costing data is sensitive, and it leaves the update itself to your cost accountant.
Frequently asked questions
Does M3 support actual or average costing too?
Yes, M3 supports several costing methods per item, set in the item and warehouse settings. This page covers standard cost, which is what most discrete manufacturers use for valuation and variance.
Can I test a cost change without affecting inventory?
Yes. Run the calculation under a separate costing type as a simulation and compare it. Only an explicit update puts a cost onto the item.
When should I update standard cost?
Usually at the start of a fiscal period, after approvals, so that the revaluation lands in one period and variances stay explainable.
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