A. "New Cost" represents "Replacement Cost." The corresponding rows are for:
- Prnt (Parent) - This means parent item's replacement cost.
- Comp (Component) - This means the total cost by roll-up of the component's replacement cost.
- Shrt (Shortage) - This means to roll up the components in stock by using the default costing method (in the above case, the standard cost), then rolling up the components that are in shortage by using the replacement cost.
- If in PO Setup, flag "20. Default FOB Std Cost on PO's?" is set to "Y," the system will use the item standard cost as replacement cost.
- If not, the system will look up this item to see if it has the corresponding item vendor record (based on primary vendor in the item master). If the record is found, the system will use the last purchase cost from the item vendor table.
- If not, the system will use the last cost of the item master record.
As you can see, the above procedure to determine the replacement cost is quite complicated. This often causes confusion because most of the time the user will assume the "Last Cost" is the replacement cost.