Cost Handling in Repair Orders

Repair Orders include both service and production processes – which means cost tracking is split across different systems: the Service Ledger, Item Ledger, and Value Entries.

This section explains how costs flow through each stage and why service postings often show different values than the actual repair costs.

1. Service Line Creation (Estimated Cost)

• When you create a Service Line (e.g., via the Service Item Worksheet), the system copies the Direct Unit Cost from the item card.
• This estimated cost (e.g., 165.00) is saved in the Service Line and used later during shipment or invoicing.
• This cost becomes fixed at the time of posting and is saved as an actual value in the Service Ledger Entry, not as a reference to another cost source.

2. Repair via Production Order (Actual Cost)

• The repair is executed using a Production Order (e.g., D-1056-L-REP).
• This creates actual costs:
  • Material consumption
  • Work center times and resources
  • Routings
• These costs are posted to the Item Ledger Entry and the Value Entries.
• Example: Real production cost = 1,350.00

3. Service Posting (with Frozen Estimated Cost)

• When you post the Service Line (shipment or invoice), the system does not consider the real production cost.
• The cost field in the Service Ledger Entry is filled with the earlier Direct Unit Cost (e.g., 165.00).
• This field is a plain database field – it does not link to G/L Entries or Value Entries.
• Even if Adjust Cost for the Production Order has already been executed before service posting, the Service Ledger Entry remains unchanged.

4. Adjust Cost – Item Entries (Revaluation Attempt)

• The Adjust Cost – Item Entries batch job:
  • Re-evaluates the cost of the repaired item in the Item Ledger.
  • Creates new Value Entries to reflect real production cost.
  • Tries to update related Service Ledger Entries, but only if:
    • A Value Entry references a Service Invoice or Shipment directly.
    • The link between item entry and service posting is intact.
• If this succeeds, the Cost Amount in the Service Ledger Entry is updated.
• Otherwise, the entry keeps the wrong (low) cost.

5. Summary: Why is it designed this way?

• Business Central and COSMO Discrete Manufacturing keep service pricing logic separate from actual production costs.
• The goal is to:
  • Preserve the original pricing commitment.
  • Allow margin control and transparent deviation handling.
• Service costs are not overwritten automatically – even when production costs are higher.

Important

The Service Ledger Entry stores the cost amount as a fixed value, not as a reference.
To show the correct actual cost, the system needs a successful mapping from the Value Entry back to the Service Invoice or Shipment.
If this mapping fails, the Service Ledger Entry continues to show the originally posted estimate – even after Adjust Cost has run.

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