Costing & FinanceFree referencePDF, Excel, Word exportInfor VISUALDiscrete Manufacturing

Infor VISUAL Costing Method Reference

Costing questions in VISUAL usually come down to which method a part uses and where its cost differences show up. This reference puts the methods, cost elements and variances side by side so you can find an answer quickly.

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Group	Term	How it works	What to watch
Costing method	Standard	Inventory is valued at a fixed cost per unit set by a rollup. Differences between actual and standard are recorded as variances.	Standards go stale. Refresh them on a set schedule and explain large variances.
Costing method	Average	Inventory is valued at a running average of what was paid or produced. The average changes with each receipt.	Back dated receipts and corrections can move the average in surprising ways.
Costing method	FIFO	Oldest layers of cost are consumed first. Issues relieve inventory at the cost of the earliest receipts.	Needs layer detail to be kept accurate. Costs shift when old layers are used up.
Costing method	LIFO	Newest layers of cost are consumed first. Issues relieve inventory at the most recent costs.	Check your local accounting and tax rules before using it, as acceptance differs by country.
Costing method	Method set per part	VISUAL allows the costing method to be chosen at the part level rather than only company wide.	Mixed methods are legal but make reports harder to compare. Document why each part uses its method.
Cost element	Material	Cost of purchased and raw components consumed by the order.	Check unit of measure conversions on purchased parts, a common source of wrong costs.
Cost element	Labor	Cost of direct labor, from run time and setup time multiplied by a labor rate.	Rate tables must match the resource or employee, or labor is under or over stated.
Cost element	Burden	Overhead applied to the order, often as a rate per labor or machine hour.	Review burden rates when volume or overhead spending changes materially.
Cost element	Service or outside processing	Cost of work done by outside vendors, such as plating or heat treat.	Make sure vendor invoices are matched so the actual replaces the estimate.
Variance	Material usage variance	Difference between quantity planned and quantity issued, valued at cost.	Persistent variance points to scrap, wrong bills or unrecorded substitutions.
Variance	Labor efficiency variance	Difference between standard hours and hours actually reported.	Missing labor tickets create fake favorable variance.
Variance	Purchase price variance	Difference between the standard cost of a purchased part and the price actually paid.	Large PPV means the standard needs updating or price discipline has slipped.
Process	Cost rollup	Calculates part costs from bills of material, routings and rates, from the lowest level up.	Run it after changing bills, routings or rates, and review before posting to standard.
Process	Work order close	Finalizes costs on a work order and posts remaining differences to variance.	Close only when final labor and material have been posted.
Process	Inventory revaluation	Changes the value of stock on hand when a standard cost is updated.	Coordinate timing with finance so the period close is not disturbed.

Method names and available options depend on your VISUAL version and configuration. Treat this as a conceptual guide and confirm exact behavior and accounting treatment with your controller and auditor.

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How to use the reference

Search for a term such as standard, FIFO, burden or variance and read the how it works and what to watch columns. Use the group filter in your head: costing methods first, then the cost elements that make up a part cost, then the variances that show differences, then the processes that change cost. Export to Excel or PDF to give your new cost accountant or a project team a shared glossary.

Choosing a costing method

Standard costing suits repetitive manufacturing with stable processes, because variances tell you where actual performance departs from plan. Average costing is simpler and smooths price swings, so it fits distribution or lower volume mixes. FIFO and LIFO track layers and are used when accounting rules or pricing behavior require it. VISUAL lets the method be set per part, but the more methods you mix, the harder reconciliation becomes. Make the choice with your controller and your auditor, not only the system administrator.

Reading cost elements and variances

A part cost is normally split into material, labor, burden and service. A work order collects actual amounts under the same headings, and the differences from standard appear as variances: material usage, labor efficiency, purchase price and so on. When a variance looks wrong, work backward. Check the posting that produced it, such as a missing labor ticket or a wrong unit of measure, before changing the standard.

Material variance: check bills and issues.
Labor variance: check tickets and rates.
Purchase price variance: check standard versus invoice.
Burden: check rate basis and volume.

Common mistakes

Common errors include updating standards without revaluing inventory on a planned date, closing work orders before the last labor ticket, and leaving burden rates unchanged after a large change in volume. A related problem is comparing costs between parts that use different methods. Write down your policy: method per part class, standard update cadence, and who approves rollups.

Frequently Asked Questions

Can different parts use different costing methods in VISUAL?

The costing method can be chosen at the part level in many VISUAL setups. It is allowed, but mixing methods complicates comparisons and reconciliation. Agree a policy with finance and document why exceptions exist.

What is the difference between standard and average cost?

Standard cost is a fixed planned value, and differences from actual are posted as variances. Average cost updates as receipts arrive, so there are fewer variances but the unit cost moves over time. Standard is better for control, average for simplicity.

When should I run a cost rollup?

After changing bills of material, routings, rates or purchased part costs, and on a planned schedule such as yearly or quarterly. Review the results before posting to standard and coordinate revaluation with your period close.

Does this match my accounting rules?

It is a conceptual reference only. Accounting treatment, including LIFO acceptance, depends on your country and standards. Confirm choices with your controller and external auditor before changing methods.

If you want costing variances explained automatically, with the underlying transactions listed, we can build a read-only analysis over your VISUAL data.

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