Landed Cost Calculation in Odoo

Landed cost calculation based on different Split Method

Let's take one example and check different split method and Stock valuation.

When Sales UoM and Purchase UoM same(When Purchase UoM Different keep in mind landed cost always calculate based on Purchase UoM and inventory valuation always display in Sales UoM).

Configuration

To work with Landed Cost first need to activate landed cost feature, to do go to Inventory > Configuration > Settings.

Now we need to configure Product Category to define Costing method.

Products

Wooden Table => Cost : 100, Weight : 5, Volume : 2, Category : Wooden

Wooden Chair => Cost : 200, Weight : 8, Volume : 8, Category : Wooden

Purchase Order

   Wooden Table => with Qty : 1, cost : 100

   Wooden Chair => with qty : 2, cost : 200

Landed cost Type

 Transportation => Cost:  20

 Duties => Cost:  15

Result with Different Split methods in Landed cost

1. Equal :

   Transportation = 20 / (no. of products 2) = 10

   Duties = 15 / (no. of products 2) = 7.5

   Valuation :

    Wooden Table => 100 + Transportation(10) + Duties(7.5) = 117.5

    Wooden Chair => 200 * qty(2) + Transportation(10) + Duties(7.5) = 417.5

2. By Quantity :

   Allocate cost based on qty, here we have wooden table with qty 1 and wooden chair with qty 2 so we have to allocate cost among 1:2 ratio.

   Transportation = 20

                       So, For Wooden Table = (20 * 1)/3 = 6.67

                        For Wooden Chair = (20 * 2)/3 = 13.33

   Duties = 15

              So, For Wooden Table = (15 * 1)/3 = 5

                  For Wooden Chair = (15 * 2)/3 = 10

   Valuation :

    Wooden Table => 100 + Transportation(6.67) + Duties(5) = 111.67

    Wooden Chair => 200 * Qty(2) + Transportation(13.33) + Duties(10) = 423.33

3. By Current Cost :

   Allocate cost based on products cost 100:400 ratio (1:4).

      Wooden Table Cost: 100 *1 (qty)

      Wooden Chair cost : 200 *2 (qty)

   Transportation = 20

                    So, For Wooden Table = (20 *1)/ 5 = 4

                        For Wooden Chair = (20 * 4)/5 = 16

                        

   Duties = 15

                    So, For Wooden Table = (15 *1)/ 5 = 3

                        For Wooden Chair = (15 * 4)/5 = 12

   Valuation :

    Wooden Table => 100 + Transportation(4) + Duties(3) = 107

    Wooden Chair => 200 * Qty(2) + Transportation(16) + Duties(12) = 428

4. By Weight :

   

   Wooden Table = 5 weight and Wooden Chair = 8 weight.

   So the ratio 5:8 but here for chair we have 2 qty so ratio 5:(8*2) => 5: 16

   

   Transportation = 20 allocate based on weight of products.

                    So, For Wooden Table = (20 *5)/ 21 = 4.76

                        For Wooden Chair = (20 * 16)/21 = 15.24

                        

   Duties = 15

                    So, For Wooden Table = (15 *5)/21 = 3.57

                        For Wooden Chair = (15 *16)/21 = 11.43

   Valuation :

    Wooden Table => 100 + Transportation(4.76) + Duties(3.57) = 108.35

    Wooden Chair => 200 * Qty(2) + Transportation(15.24) + Duties(11.43) = 426.65

5. By Volume :

   Wooden Table = 2 Volume and Wooden Chair = 8 Volume.

                  So the ratio 2:8

   Transportation = 20 allocate based on Volume of products.

                    So, For Wooden Table = (20 *2)/ 10 = 4

                        For Wooden Chair = (20 * 8)/ 10 = 16

                        

   Duties = 15

                    So, For Wooden Table = (15 *2)/10 = 3

                        For Wooden Chair = (15 *8)/10 = 12

   Valuation :

    Wooden Table => 100 + Transportation(4) + Duties(3) = 107

    Wooden Chair => 200 * Qty(2) + Transportation(16) + Duties(12) = 428

To check valuation of products first validate Landed cost and go to Inventory > Reports > Inventory Valuation.

Youtube Channel : http://www.youtube.com/c/PinakinNayi

..Enjoy..

What is landed cost in Odoo?

What is landed cost ?

Basically landed cost means Product Price + Extra Price.

Ultimately, we have to calculate cost price with all extra cost(customs, duties, taxes, insurance,..) then only we able to calculate correct stock valuation.

Let's take one example for better idea,

Suppose, i have 2 iPad mini, each priced at 150/unit.

- Selling price : 300 Euro in Belgium
- Transport charge : 9 Euro
- Duty : 11 Euro

Total Landed cost : 320 Euro at receipient address.

So here for 2 iPad mini i have total cost 320 Euro.

Product Cost price       : 300
+ Landed cost(9 + 11) :  20
                                      --------
                                       320

Now, in my business how can i allocate landed cost charges, so for that we have different spiting methods(equally, by quantity,...)

equal : we want to allocate cost equally. So here iPad mini 160/unit

In Odoo :
=======

Configuration :
------------------

• install landed cost module
• Set Costing Method : Real Price (on product category OR generic setting)
• Inventory Valuation : Perpetual (automated) [real]
• Stock Input Account
• Stock Output Account
• Stock Valuation Account

That's it.

Full Test Case :
-------------------

• Create one product iPad Mini (stock able type)
• Now on product category(v9) define costing method : Real Price
• Inventory Valuation : Periodic, Stock Input A/c(asset type), Stock Output A/c(expense type), Stock Valuation A/c(asset type).

• Create one landed cost type product(transport charge) : product type- service, Landed Costs : True
• Create Purchase order for "2 iPad Mini" product and complete flow(receive)
• Create Landed cost and select above incoming picking and add cost lines(transport charges) choose split method equal
• Click on compute to calculate "Valuation Adjustments".
• Now simply validate

To see updated cost price of your stock :
---------------------------------------------------
 Go to Inventory > Reports > Stock Valuation and in Inventory Value you can see the updated cost price.
Here, you can see original inventory value of your business.

Tip:
Landed cost type have different split methods,

Equal : Equally allocate the landed cost to products
By Quantity : Allocate cost based on the quantity of each products
By current cost : Allocate landed cost based on current cost of each products(after multiplying qty)
                             https://drive.google.com/file/d/0B21cUNlAdZ6gTnRNVUdMblRUR0U/view?usp=drivesdk
By weight : Allocate landed cost based on weight of each products
By Volume : Allocate landed cost based on value of each products

..Thanks..