1. Understanding Standard Cost in TallyPrime
Standard cost is a predetermined cost assigned to a product or service.
When you record purchases, you can use the standard cost to value the inventory.
2. Steps to Record Purchases with Standard Cost in TallyPrime:
1. Create a Purchase Invoice:
Go to Gateway of Tally > Vouchers > Press F9 (Purchase).
2. Enter Supplier Details:
Enter the supplier’s account name.
3. Add Items:
- Add the purchased items and their quantities.
- The system will automatically populate the rate with the standard cost.
4. Record the Purchase:
Save the purchase invoice.
3. Example to Record Purchases with Standard Cost in TallyPrime :
Let’s say you purchased 10 units of “Product A” from a supplier.
The standard cost of “Product A” is Rs. 100 per unit.
1. Create a Purchase Invoice:
- Go to Gateway of Tally > Vouchers > Press F9 (Purchase).
- Enter the supplier’s details.
2. Add Items:
- Add “Product A” with a quantity of 10.
- The system will automatically populate the rate as Rs. 100 per unit.
3. Save the Purchase Invoice:
Save the purchase invoice.
4. Key Points:
- Inventory Valuation: The inventory will be valued at the standard cost.
- Variance Analysis: You can compare the actual cost of purchase with the standard cost to identify variances.
- Periodic Adjustments: You may need to adjust the standard cost periodically to reflect changes in market prices or production costs.
- Financial Reporting: The standard cost will be used to calculate the cost of goods sold and gross profit.
5. Additional Considerations:
1. Multiple Cost Categories:
You can use multiple cost categories to track different types of costs, such as material, labor, and overhead.
2. Inventory Valuation Methods:
Standard costing can be used in conjunction with other inventory valuation methods like FIFO, LIFO, or weighted average.
By using standard costs in TallyPrime, you can improve your inventory management, cost control, and financial reporting.
Leave a Reply