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.

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