Drag and Drop Question A company is configuring the landed cost functionality in Dynamics 365 Supply Chain Management. The company requires configuration of a cost type code for several landed cost…

The correct answer is Variance accounts; Charge accrual accounts. Dynamics 365 Landed Cost - Cost Type Code Account Concepts Context In Dynamics 365 Supply Chain Management, Landed Cost tracks the full acquisition cost of goods (freight, duties, insurance, etc.). Cost type codes define how each landed cost is categorized and posted to the…

Implement warehouse management and transportation management

Question

Drag and Drop Question A company is configuring the landed cost functionality in Dynamics 365 Supply Chain Management. The company requires configuration of a cost type code for several landed cost requirements. You need to identify which cost type code account concept to use for each requirement. Which cost type code account concepts should you use? To answer, move the appropriate account concepts to the correct requirements. You may use each account concept once, more than once, or not at all. You may need to move the split bar between panes or scroll to view content. NOTE: Each correct selection is worth one point. Answer:

Exhibit

Answer Area

Drag items

Offset accountsVariance accountsCharge accrual accountsPrice difference accounts

Correct arrangement

Variance accounts
Charge accrual accounts

Explanation

Dynamics 365 Landed Cost - Cost Type Code Account Concepts

Context

In Dynamics 365 Supply Chain Management, Landed Cost tracks the full acquisition cost of goods (freight, duties, insurance, etc.). Cost type codes define how each landed cost is categorized and posted to the general ledger. The account concept assigned to a cost type code controls where amounts post under different circumstances.

The Two Requirements and Why Each Answer Fits

Requirement 1 → Variance accounts

When the actual vendor invoice for a landed cost arrives and differs from the estimated cost that was previously posted, the difference (variance) must be captured somewhere. Variance accounts absorb that delta - the gap between what was estimated at goods receipt and what was actually invoiced. This prevents the discrepancy from distorting inventory value or the original accrual.

Requirement 2 → Charge accrual accounts

Before the vendor's invoice is received, the system needs to estimate and accrue the expected landed cost (e.g., freight is estimated but the carrier invoice hasn't arrived). The charge accrual account holds this estimated liability temporarily. When the actual invoice posts, the accrual is reversed/cleared and replaced with the real amount.

Why the Other Options Don't Fit These Requirements

Concept	Purpose	Why Not Selected Here
Offset accounts	The counterpart (debit/credit) side of a journal entry	Used as a balancing account, not for accruals or variance capture
Price difference accounts	Captures purchase price variance in standard costing scenarios	Specific to item price deviations, not landed cost estimation gaps

Common Mistakes

Confusing variance and charge accrual: Students often swap these. Remember: accrual happens first (before the invoice), variance happens after (when the real invoice differs from the accrual).
Using "Offset accounts" for variances: Offset accounts are structural journal-entry mechanics, not variance capture mechanisms.
Thinking price difference = variance: Price difference accounts relate to standard cost item pricing, not to landed cost estimate-vs-actual gaps.

Summary rule: Charge accrual = estimated cost holding account. Variance = the correction when reality diverges from the estimate.

Topics

#landed cost#cost type code#account concepts#cost configuration

Community Discussion

No community discussion yet for this question.

Full MB-330 Practice