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 Overview

Use this procedure to allocate freight costs to inventory without landed costs.

 Before You Begin

The Inventory Management module must be integrated with Purchase Order.

 

To allocate freight costs to Inventory without landed costs

1. Select Purchase Order Setup menu > Purchase Order Options.

2. Clear the Allow Entry of Landed Cost check box on the Line Entry tab.

3. In the Allocate Freight on a Line Item Basis By field, select Quantity per Item, Weight, or Cost per Item to specify the freight allocation factoring method to be used. The allocation is factored to each item received based on the total freight amount. For more information, see Purchase Order Options - Fields.

4. Click Accept.

When these steps are performed, use Receipt of Goods Entry (with an invoice number entered) to calculate the proper amount of freight costs to be allocated to each inventory item received. Daily Receipt Registers/Update includes freight when posting to the appropriate general ledger inventory account (as defined in Inventory Management Product Line Maintenance), in lieu of a posting to the freight expense account.

Note Freight costs can be allocated to inventory without landed costs only if an invoice number is entered in Receipt of Goods Entry.

For more information, see Landed Cost and Freight FAQs.