Calculating Profit of COGS - different ways of calculating

Question

I found that in SAP B1 the profit calculation varies and it depends on where you look and the different settings allowed. For instance:
I am talking about the calculation method of COGS:
1. In System Initialisation/Document Setting one can set the workings of Profit on say Last Calculated Price
2. In individual (say Item Code ABC) Item Master Data one can set the calculation method on FIFO
3. In another Item Master Data (say Item code FGH) can be set on Average Cost method
So now we have 3 ways of calculating COGS in the same system - so how can one achieve consitency?
My understanding is that setting 1 is not taken into account when the system charges COGS, so does anybody know what is the purpose of this setting?
Thank you
Robert
I am trying to debate this in order to confirm my understanding

Answer 1

Robert--
The basic rule to understand in B1 is that specific settings take precedence over general settings.  The company-wide default settings that you find in the System Initialization screens set the general parameters for the system.  But they may be overridden on specific records - like the Item Master or BP Master.  On these, company policy may determine that certain items or business partners do not fit the general rules and should be treated differently in some regard.  So an authorized user may change the default settings for these records, either during the initial entry of the record or afterwards (if changes to the specific fields are permitted).  Similarly, users may change some settings on specific documents if they represent an exception situation that should not be forced to follow the usual rules.
The other consideration - which should make accountants happy - is that settings that affect journal postings generally cannot be changed once they have been used.  So for example, a customer's AR control account number cannot be changed once there are any transactions for that customer. An item's valuation method cannot be changed while there are quantities in the warehouse or open documents that may have caused journal postings.  These rules may not represent consistency, as you wish for, but they do enforce an integrity in the accounting process.
The place where these restrictions cause problems is if records are imported from a legacy system without regard to the system defaults.  Since these records are brought in and saved in a single process, they can have whatever settings are specified in the import process, which may or may not be the same as the system defualts you wanted.  Once these records are created and then used in transactions, it is very difficult to make them conform to what you wanted.  Changing the system defaults will never cause retroactive changes to existing records.
If you are having continuing problems with settings on new records, I would consider restricting authorization for adding or editing new records to those people who understand what the ramifications are.  Additional training for your personnel may also be helpful, now that you have a better understanding of how the system works.