Describe Dynamics 365 Supply Chain Management →mediumMultiple ChoiceObjective-mapped

MB-920 Describe Dynamics 365 Supply Chain Management Practice Question

Exhibit

Refer to the exhibit.
```json
{
  "PurchaseOrder": {
    "PurchaseOrderNumber": "PO000123",
    "Vendor": "Vendor A",
    "Lines": [
      {
        "ItemNumber": "ITEM001",
        "Quantity": 100,
        "UnitPrice": 10.00,
        "LineAmount": 1000.00,
        "Warehouse": "WH01",
        "DeliveryDate": "2026-05-01"
      }
    ],
    "Charges": [
      {
        "ChargeCode": "FREIGHT",
        "ChargeValue": 50.00
      }
    ]
  }
}
```

Refer to the exhibit. A purchase order is received with a freight charge. The company wants the freight cost to be allocated to inventory value for landed cost calculations. Which configuration is required?

⚠ Common exam trap

Many exam-takers confuse the 'Charges' code with debit type 'Item' (Option B) as a valid method for landed cost, but it lacks the allocation logic and does not integrate with the Landed cost module, which is specifically designed for this purpose.

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

Set up the charge code 'FREIGHT' as a landing cost and allocate it to the purchase order line.

In Dynamics 365 Supply Chain Management, to allocate a freight charge to inventory value for landed cost calculations, you must set up a charge code (e.g., 'FREIGHT') with the 'Landing cost' option enabled. This charge code is then assigned to the purchase order line, which automatically distributes the freight cost proportionally across the items, increasing their inventory value as part of the landed cost.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

✓
Set up the charge code 'FREIGHT' as a landing cost and allocate it to the purchase order line.
Why this is correct
Landing costs allocate charges to inventory value, increasing the cost of the item.
✗
Use the 'Charges' code with debit type 'Item' to post to inventory.
Why it's wrong here
Charges can be posted to inventory, but landing cost is the proper module for allocation.
✗
Add the freight charge as a fixed cost to the vendor's invoice.
Why it's wrong here
Fixed costs do not allocate to inventory value; they are expensed.
✗
Create a new item for freight and include it in the purchase order.
Why it's wrong here
Freight is a service, not an item, and should not be inventoried.

Go deeper

MB-920 Describe Dynamics 365 Supply Chain Management Practice Question

Exhibit

Why each option matters

Option-by-option breakdown

Related to this question