Sales Cost Specification

In standard Business Central, item charges applied to purchases and transfers — such as freight costs, royalties and other landed costs — are absorbed into the cost of goods sold without any visible breakdown. You know the total cost, but not what it is made up of.

Sales Cost Specification changes this by giving you a full cost breakdown that includes all item charges applied throughout the purchase and transfer process. Freight, royalties and any other item charge types are shown as separate lines in the cost specification, so you can see exactly how the total cost of a sold item is composed.

For businesses where landed costs are a significant part of the cost picture, this level of visibility makes a real difference — both for understanding margin and for making informed decisions about pricing and sourcing.

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Example: Bicycle Sale with Detailed Cost Breakdown

Imagine your company sells a custom assembled bicycle (Item No. BIC-2024) to a customer for 15,000 DKK.

The sale appears simple, but the actual cost comes from multiple sources:

Purchase cost of the frame – bought from supplier for 4,500 DKK

Purchase cost of wheels and gears – bought from another supplier for 2,800 DKK

Item charge for freight – shipping cost of 350 DKK allocated to the parts

Assembly labor cost – 1,200 DKK from your own assembly operation

Item charge for customs duty – 450 DKK allocated to the imported frame

Total actual cost: 9,300 DKK

Profit margin: 5,700 DKK

What the Cost Specification does:

When you look at the sales invoice for this bicycle, the app breaks down and traces each of these cost components back to their original source documents (the purchase receipts, item charges, and assembly orders). You can see exactly which purchase receipt contributed the frame cost, which item charge added the freight, and how the assembly cost was applied.

This is particularly useful when costs arrive at different times – for example, if the customs duty invoice arrives a month after the sale, the cost specification updates to show the complete picture, and you can see whether your actual margin was what you expected.

The app tracks all these cost layers through the item ledger entries and shows you the full cost breakdown for each sale or inventory movement.