Different cost types are predominantly used in standard cost organizations for cost tracking, cost

projection, cost simulation and analysis. A cost type is nothing but a set of costs uniquely identified by
name.
In standard cost organization, System uses "Frozen" cost for all financial transaction. Similarly, in
average cost organization, system usage "Average Cost", "Average Cost Rate Type" for all financial
transactions.
System comes with 2 pre-defined cost types - Frozen and Average.
If you are using average costing then you need to define at-least one more cost type and define that as
"Average Rates" cost type in organization options. System uses both Average and Average rate for
inventory valuation and accounting.

To create/update a cost type, navigate to BOM -> Cost Type, enter all the information in cost type form
and save the record.

Inventory Organization:
Select inventory organization name where you want to create cost type. Organization is a mandatory field.

Cost Type Code:

Enter cost type code. Cost type code is a mandatory free text field.

Cost Type:
Enter cost type name. Cost type name is a mandatory free text field.

Description:
Enter description for the cost type. Description is a 255 character length text field.

Status:
Select status of the cost type. Only active cost types can be used for standard cost update.

Multi Org Check Box: (Feature not yet available)

Enable the check box to make the cost type available in all organization.

Default Cost Type:

Select a cost type for the cost type. You can have a cost type default to itself.
Default cost type is used in cost rollup and inventory value reports if the original cost type is unavailable
for an item.