Apply Landed Cost

The Apply Landed Cost module enables users to allocate additional costs (such as shipping, customs, and handling fees) to purchase orders, ensuring accurate product cost calculations.

Users can select a relevant Vendor and GRN, input the landed cost details, and apply the cost distribution based on amount (default), quantity, or equal. This ensures that the final unit cost of items reflects the total cost incurred to bring them into inventory.

1. Amount-Based Distribution

• How it works: Landed costs are allocated based on the monetary value of each item in the PO.

• Use case: When higher-value items are expected to bear a proportionally higher share of costs like insurance or customs.

• Example:

  • Item A: $1,000

  • Item B: $500

  • Total cost: $100

  • A gets ~$66.67 (66.67%), B gets ~$33.33 (33.33%) of the landed cost.

2. Quantity-Based Distribution

• How it works: Landed costs are distributed according to the number of units for each item.

• Use case: When all items are similar in nature or size, and cost should be spread evenly per unit.

• Example:

  • Item A: 10 units

  • Item B: 5 units

  • Item C: 5 units

  • Total cost: $100

  • A gets $50 (50%), B gets $25 (25%), C gets $25 (25%).

3. Equal Distribution

• How it works: Landed cost is split evenly across all item lines, regardless of value or quantity.

• Use case: When there’s no clear reason to weigh one item more than another, or for simplicity.

• Example:

  • 3 line items

  • Total cost: $75

  • Each item line gets $25.

Note: This module is intended for post-purchase landed cost adjustments and does not affect the original PO pricing.