Bills and Cost Rollups
Bills and routings define the foundation for cost rollups, elemental distribution, and all related manufacturing costing functions.
WIP uses the bill of material to determine material requirements and control material transactions.
In addition, the primary bill for an assembly determines the standard material and material overhead costs of that ass.
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Overview of Standard Costing
Under standard costing, predetermined costs are used for valuing inventory and for charging material, resource, overhead, period close, and job close and schedule complete transactions.
Differences between standard costs and actual costs are recorded as variances.
Use standard costing for performance measurement and cost control.
Manufacturing indu.
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Phantom Costing
You can cost phantom assemblies in the following:.
1) Work in Process.
2) Discrete and repetitive manufacturing environments.
3) Standard and average organizations You can set up phantom assemblies just like any other assembly and include resource and overhead costs.
Two BOM parameters control the behavior of phantoms:.
1) Inherit Phantom Operation Seq.
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Reporting Pending Adjustments
Report pending adjustments to simulate a change in standard costs.
This launches two processes, one to simulate a cost update from the cost type that you specify to the Frozen cost type, and one to launch the Inventory, Intransit, and WIP Standard Cost Adjustment reports.
These reports enable you to preview the changes that the standard cost update.
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Setting Up Standard Costing For Manufacturing
In addition to the steps required in the previous section, the following prerequisites and steps are applicable to standard costing with Bills of Material (BOM) or Work in Process (WIP), or both.
Again, note that some of these steps were previously covered in the Setup Prerequisites.
These steps are covered again here to highlight the setup require.
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Setting Up Standard Costing
The following steps are required when setting up standard costing.
Additional steps follow in the next section for those also using WIP or BOM or both.
1) Define organization parameters: 1.1.
Costing Method is set to Standard. 1.2.
Transfer Detail to GL is appropriately set. 1.3.
Default Material Subelement account (required).
1) Define cost types..
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Standard Costing Setup
Follow the process in this section to set up perpetual standard costing.
Steps previously covered in the Setup Prerequisites or the Setup Checklist are mentioned here only if there is setup information that is specific to standard costing.
Related Topics Overview of Setting Up Cost Management Setup Checklist
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Updating Standard Costs
The standard cost update procedure lets you define and roll up pending costs, simulate changes to standard costs for analysis, and then update pending costs to the Frozen standard cost type.
Note: You can also update costs using the Supply Chain Cost Rollup.
This cost rollup enables you to roll up costs across multiple organizations connected to so.
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What if I have never used Oracle cost management?
If you have never used Oracle Cost Management, then Oracle suggests you attend one or more of the Oracle Cost Management training classes available through Oracle University. • Oracle E-Business Suite graphical user interface.
To learn more about the Oracle E-Business Suite graphical user interface, read the Oracle E-Business Suite User's Guide.
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Work in Process Transaction Cost Flow
The following diagram displays the cost flow associated with WIP transactions.
Valuation accounts are charged when material is issued to a job or schedule, or when resources, outside processing, or overhead are earned by a job or schedule.
Valuation accounts are also relieved when assemblies are completed from a job or schedule.
The following graph.
