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Exclude from Costing Items are Items where Costs and Cost History are not maintained at the Item/Lot level. They are identified as all non-inventory items (The 'Costing Method' of non inventory items is not editable and defaults to "Exclude from Costing") and Inventory Items with a 'Costing Method' of "Exclude from Costing". For these Items:

• No costs can be maintained because they are excluded from all the Cost and Cost History tables.
• The perpetual inventory balances that may be maintained (for Inventory Items) will always have a $0.00 cost. 
• When the transactions post to the General Ledger, these line items will not be evaluated to make any of the additional costing journal entries.