| # Standard cost price The standard cost price of an item is a calculated price that provides an estimation of the item's value. Every item in LN must have a standard cost price before you can generate any orders for the item. The standard cost price is situation-independent, and valid for the whole logistic company. The standard cost price serves as a basis for the item's valuation price. The standard cost price can be calculated multiple times each day, and each calculation is stored. In LN, the standard cost price is calculated in the Cost Price Calculation module. If you want to examine the effect of changes of the item in LN, you can also simulate cost prices for an item in CPR. To calculate the standard cost price of an item, LN requires standard information that affects the costs, such as the materials that are used for the item (derived from the BOM), the hours that are spent to produce the item (derived from the routing), and the surcharges that apply (derived from the CPR master data). BOM The BOM is used in cost price calculation to determine the required materials to produce an item. An item's BOM provides information on: The materials of which the item consists. The quantity of materials that is used for the item. The scrap and yield on the materials. Routing The routing is used in cost price calculation to determine the number of man hours and machine hours required to produce an item. An item's routing provides information on: Which operations are carried out to produce the item. The operations' setup time and cycle time. The scrap and yield on the operations. Surcharges Surcharges are estimates to cover for indirect costs during production, for example, the costs of order intake, the costs of inspections, or the costs of depreciation of machines and buildings. Surcharges can be defined for items or warehouses. For more information, refer to Surcharges. In LN, a price calculation code stores the price calculation data that is used to calculate the cost price. The standard price calculation code specified in the Cost Price Calculation Parameters (ticpr0100m000) session, stores data to calculate the standard cost price. Other price calculation codes store the data for simulation purposes. For more information, refer to Price calculation code. Related topics Calculation of cost/valuation prices for standard/customized/STO items Cost price and valuation price Valuation prices |