Can someone explain standard costing in NetSuite?

AI generated answer (using internal Slack threads):

Standard Costing in NetSuite is a method of inventory valuation where each item has a standard cost associated with it. This cost is typically determined by historical data or market trends and is used as a benchmark for comparing actual costs. Here are some key points to consider: 1. Outsourcing and Standard Costs: If you're using contract labor and planning to use the new Outsourcing feature, it might not integrate seamlessly with Standard Costs, especially when it comes to including Labor costs. This is something you might need to consider and possibly work around. 2. Landed Costs: Landed Costs are additional costs associated with getting your inventory ready for sale, such as shipping, handling, and import fees. In NetSuite, these costs can be added to a Purchase Order, but it does require a fair amount of user input and estimation. If these costs only make up a small percentage of your total costs (5-10%), you might question whether it's worth the extra effort to include them. 3. Complex BOMs and High Dollar Products: If your products have complex Bill of Materials (BOMs) and are high in value, using Standard Costs might be challenging. It could be worth considering other costing methods, such as Average Costing or FIFO (First-In, First-Out), depending on your specific business needs and processes. 4. Purchase Price Variances (PPV): If your manufacturing process takes a long time (up to 9 months), managing PPV can be tricky. NetSuite records PPV for Raw Materials to COGS (Cost of Goods Sold) as soon as it is received, which might not align with your accounting needs if you need to capitalize the cost until the product is sold. Remember, the choice of costing method depends on your specific business needs and processes. It's always a good idea to thoroughly evaluate the pros and cons of each method before making a decision. ****** Disclaimer: This response was generated by an artificial intelligence assistant based on previous conversations from multiple Slack channels, and may contain inaccuracies or mistakes. ******