D31050

11i Oracle Process
Manufacturing Cost
Management
Student Guide
14534GC11
Production 1.1
January 2001
D31050
Copyright Oracle Corporation, 2000. All rights reserved.
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Author
Elaine Butler
Technical Contributors and Reviewers
Jackie Rowles
This book was published using:
Oracle Tutor
Table of Contents
Introduction ...........................................................................................................................1-1
11i Oracle Process Manufacturing Cost Management.........................................................1-2
Course Objectives................................................................................................................1-3
Course Agenda.....................................................................................................................1-4
OPM Cost Management.......................................................................................................1-5
Multiple Cost Methods ........................................................................................................1-6
Cost Management Setup ......................................................................................................1-7
Calculating Standard Costs..................................................................................................1-8
Executing a Standard Cost Rollup .......................................................................................1-10
Formula Cost Details ...........................................................................................................1-11
Cost Burdens and Routing Costs .........................................................................................1-12
Standard Cost Period End Processing..................................................................................1-13
Required Actual Costing Setup Chronology........................................................................1-15
Actual Cost Calculation Prerequisites .................................................................................1-16
Calculating Actual Costs .....................................................................................................1-17
Raw Material Cost Calculation Methods .............................................................................1-18
Options for Spreading Costs ................................................................................................1-19
Distribution of Indirect Expenses ........................................................................................1-20
Revaluation of Inventory Cost .............................................................................................1-21
Actual Cost Period End Processing .....................................................................................1-22
Final Cost Processing Flow .................................................................................................1-25
Establishing Costing Parameters..........................................................................................2-1
Lesson Objectives................................................................................................................2-3
Lesson Overview .................................................................................................................2-4
Required Setup.....................................................................................................................2-5
Cost Management Setup Chronology ..................................................................................2-6
Categorizing Cost Method Codes ........................................................................................2-8
Establishing Cost Calendars ................................................................................................2-9
Calendar Period Statuses .....................................................................................................2-10
Concept of Component Classes ...........................................................................................2-11
Entering Cost Component Classes.......................................................................................2-12
Categorizing Cost Analysis Codes.......................................................................................2-14
Establishing Component Groups .........................................................................................2-15
Online Demonstration..........................................................................................................2-16
Practice 1 .............................................................................................................................2-17
Practice 1 Solutions .............................................................................................................2-19
Constructing Costing Warehouse Associations ..................................................................2-20
General Ledger Fiscal Policies ............................................................................................2-22
Defining Cost Revaluation Parameters................................................................................2-23
Summary - Setup Chronology .............................................................................................2-25
Practice 2 Overview.............................................................................................................2-26
Practice 2 Instructions..........................................................................................................2-27
Practice 2 Solution...............................................................................................................2-28
Constructing and Executing Standard Costs ......................................................................3-1
Objectives ............................................................................................................................3-3
Overview of Product Setup..................................................................................................3-4
Integration Setup Steps ........................................................................................................3-5
Standard Costing Setup Chronology....................................................................................3-10
11i Oracle Process Manufacturing Cost Management Table of Contents

i
Components of the Derived Standard Cost.........................................................................3-11
Setup for Cost Rollup ..........................................................................................................3-12
Defining Cost Details ..........................................................................................................3-13
Source and Target Warehouses............................................................................................3-15
Constructing Standard Cost Source Warehouses.................................................................3-16
Constructing Rollup Target Warehouses .............................................................................3-17
Practice 1 .............................................................................................................................3-18
Calculating Standard Costs..................................................................................................3-24
Executing a Standard Cost Rollup .......................................................................................3-25
Displaying Item Costs..........................................................................................................3-27
Formula Cost Details ...........................................................................................................3-28
Displaying Formula Cost Details.........................................................................................3-29
Cost Burdens and Routing Costs .........................................................................................3-34
Defining Resource Costs .....................................................................................................3-35
Defining Standard Cost Burdens .........................................................................................3-36
Standard Cost Period End Processing..................................................................................3-41
Standard Cost Process..........................................................................................................3-43
Practice 5 Standard Cost Period End Processing .................................................................3-47
Summary..............................................................................................................................3-48
Establishing Actual Costing Parameters .............................................................................4-1
11i Oracle Process Manufacturing Cost Management........................................................4-2
Objectives ............................................................................................................................4-3
Overview .............................................................................................................................4-4
Required Actual Costing Setup Chronology........................................................................4-5
Allocating Accrued GL Costs..............................................................................................4-6
Categorizing Cost Method Codes ........................................................................................4-7
Actual Costs Calculation Types...........................................................................................4-8
Categorizing Cost Calendars ...............................................................................................4-10
Defining Adjustment Reason Codes....................................................................................4-11
Practice 1 .............................................................................................................................4-12
Defining Allocation Codes ..................................................................................................4-14
Defining Expense Allocation Accounts...............................................................................4-15
Creating Allocation Definitions...........................................................................................4-16
Creating Material Cost Component Classes .......................................................................4-19
Practice 2 Solution...............................................................................................................4-24
Copying Item Costs .............................................................................................................4-26
Copying Resource Costs......................................................................................................4-28
Summary..............................................................................................................................4-30
Calculating and Processing Actual Costs.............................................................................5-1
11i Oracle Process Manufacturing Cost Management........................................................5-2
Objectives ............................................................................................................................5-3

ii
Actual Cost Calculation Prerequisites .................................................................................5-4
Material Costs Calculation Hierarchy..................................................................................5-5
Production and Burden Cost Components ...........................................................................5-6
Allocating Costs to GL Expense..........................................................................................5-8
Establishing Cost Allocation Process Controls...................................................................5-9
Performing Allocation Maintenance....................................................................................5-10
Performing Invoice Price Maintenance ...............................................................................5-11
Raw Material Cost Calculation Methods .............................................................................5-13
PMAC GL Expense Component Cost for Raw Materials ...................................................5-14
PMAC GL Expense Component Cost for Products............................................................5-15
The Period Weighted Average Cost Method .......................................................................5-16
The Perpetual Weighted Average Cost Method .................................................................5-17
The Last Transaction Cost Methods ....................................................................................5-18
Performing Actual Costs Calculations.................................................................................5-19
Adjusting Actual Costs ........................................................................................................5-20
OPM Actual Cost Adjustments Sample Parameters ...........................................................5-21
Viewing Actual Costs ..........................................................................................................5-23
Viewing Actual Cost Transactions ......................................................................................5-24
Displaying Item Costs..........................................................................................................5-25
Practice 1 Formula and Product Structure ..........................................................................5-30
Overview Performing Cost Update......................................................................................5-32
Actual Cost Process Step 1 ..................................................................................................5-34
Starting the GL Cost Update Process...................................................................................5-40
Practice 2Chart 1 Actual Cost Period End Processing....................................................5-42
Practice 2Chart 2 Actual Cost Period End Processing....................................................5-43
Summary..............................................................................................................................5-44

iii
Preface
Profile
Before You Begin This Course
Before you begin this course, you should have the following qualifications:
Describing cost management terms and concepts
Recognizing cost management processes within their company
Recognizing inventory and production processes within their company
Navigating in the Oracle applications
A working knowledge of Oracle Process Manufacturing foundation

applications
Prerequisites
There are no prerequisites for this course.
How This Course Is Organized
11i Oracle Process Manufacturing Cost Management is an instructor-led course

featuring lecture and hands-on exercises. Online demonstrations and written
practice sessions reinforce the concepts and skills introduced.

v
Related Publications
Oracle Publications
Title Part Number
None
Additional Publications
System release bulletins
Installation and users guides
read.me files
Oracle Magazine

vi
Typographic Conventions
Typographic Conventions in Text
Convention Element Example

Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.

lowercase check boxes, Select the Cant Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the
windows ORD block.
Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (I, 300);

case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)

(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.

and phrases, For further information, see Oracle7 Server
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courses, Enter user_id@us.oracle.com,
variables where user_id is the name of the user.
Quotation Interface elements Select Include a reusable module component
marks with long names and click Finish.
that have only
initial caps; This subject is covered in Unit II, Lesson 3,
lesson and chapter Working with Objects.
titles in cross-
references
Uppercase SQL column Use the SELECT command to view

names, commands, information stored in the LAST_NAME
functions, schemas, column of the EMP table.
table names

Arrow Menu paths Select File> Save.

vii
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:

[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously:
[Ctrl]+[Alt]+[Del]
Typographic Conventions in Code

Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER
(prod_pie_layer))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Navigation Paths
This course uses simplified navigation paths, such as the following example, to
direct you through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice > Entry > Invoice Batches
Summary.
2. (M) From the menu, select Query > Find.
3. (B) Click the Approve button.
Notations :
(N) = Navigator
(M) = Menu
(T) = Tab

viii
(I) = Icon
(H) = Hyperlink
(B) = Button
Typographical Conventions in Help System Paths
This course uses a navigation path convention to represent actions you perform
to find pertinent information in the Oracle Applications Help System.
The following help navigation path, for example
(Help) General Ledger > Journals > Enter Journals
represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General
Ledger entry.
2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the
help system window.
Getting Help
Oracle Applications provides you with a complete online help facility.
Whenever you need assistance, simply choose an item from the Help menu to
pinpoint the type of information you want.
To display help for a current window:
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toolbar, or hold down the Control key and type 'h'.
A web browser window appears, containing search and navigation frames on

the left, and a frame that displays help documents on the right.
The document frame provides information on the window containing the

cursor. The navigation frame displays the top-level topics for your
responsibility, arranged in a tree control.
2. If the document frame contains a list of topics associated with the window,
click on a topic of interest to display more detailed information.

ix
3. You can navigate to other topics of interest in the help system, or choose
Close from your web browser's File menu to close help.
Searching for Help
You can perform a search to find the Oracle Applications help information you
want. Simply enter your query in the text field located in the top-left frame of the
browser window when viewing help, then click the adjacent Find button.
A list of titles, ranked by relevance and linked to the documents in question, is

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x
Introduction
Chapter 1
Introduction
Chapter 1 - Page 1
11i Oracle Process Manufacturing Cost Management
11i
11i Oracle
Oracle Process
Process Manufacturing
Manufacturing
Cost
Cost Management
Management
Introduction
Introduction
Introduction
Chapter 1 - Page 2
Course Objectives
Course
Course Objectives
Objectives
After
After completing
completing this
this course,
course, you
you should
should be
be able
able to
to
do
do the
the following:
following:
Establish
Establish standard
standard costing
costing and
and actual
actual costing
costing
Allocate
Allocate general
general ledger
ledger (GL)
(GL) expenses
expenses
Assign
Assign value
value to
to inventory
inventory transactions
transactions
Revalue
Revalue inventory
inventory cost
cost
Freeze
Freeze costs
costs for
for the
the general
general ledger
ledger
Introduction
Chapter 1 - Page 3
Course Agenda
Course
Course Agenda
Agenda
Establishing
Establishing OPM
OPMCost
Cost Management
Management costing
costing
parameters
parameters
Constructing
Constructing and
and calculating
calculating standard
standard costs
costs
Establishing
Establishing and
and calculating
calculating actual
actual costs
costs
Executing
Executing the
the final
final cost
cost update
update and
and adjustments
adjustments
Introduction
Chapter 1 - Page 4
OPM Cost Management
OPM
OPM Cost
Cost Management
Management
Purchase price Cost of goods sold Inventory
Set of books

Introducing OPM Cost Management

With Oracle Processing Manufacturing Cost Management (OPMCM), you can
perform the following:
Value the cost of goods sold on shipments
Calculate inventory valuations
Assign values to inventory transactions
Calculate purchase price variance in work in progress
Revalue inventory for appreciation and depreciation
Monitor and simulate costs
Using OPMCM, you can develop and maintain multiple cost models, standard
costs, average actual costs, and composite costs.
Introduction
Chapter 1 - Page 5
Multiple Cost Methods
Multiple
Multiple Cost
Cost Methods
Methods
Cost Method A
Cost
Cost types
types available:
available: for GL posting
Standard
Standard
Target
Target or
or budget
budget Cost Method B
Current
Current average
average for sales price
projection
Rolling
Rolling average
average
Pricing
Pricing simulation
simulation Cost Method C
Composite
Composite for
for GL
GL uses actual data
to develop new
standards.
Company uses current data with actual

costing to create next year standard cost.

Defining Costs
You can define costs using the following parameters:
Item, which defines costs for individual items
Warehouse definition, which you can use to define costs by:
Items in the warehouse
Inventory in the warehouse that has a financial owner
Warehouse association that eliminates the need for duplicate data
Cost calendar and period, which define cost for each period in the cost
calendar
Multiple cost methods, a file that holds item costs, of which only one is
used to build journal entries for the general ledger (GL)
Cost component, which maps to the general ledger by the component cost
Analysis code, which maps to the general ledger by the analysis code
Introduction
Chapter 1 - Page 6
Cost Management Setup
Cost
Cost Management
Management Setup
Setup
Cost Cost Component Analysis

methods calendar classes and codes
groups
Warehouse GL fiscal
associations policy
OPM Cost Management

database

Global Cost Management Setup

To use the OPMCM application for cost management, you must define certain
basic, global data values, regardless of whether you plan to use the standard or
the actual costing method. You can then use the information in the OPMCM
database as a foundation to which standard or actual additional cost parameters
can be added.
Introduction
Chapter 1 - Page 7
Calculating Standard Costs
Calculating
Calculating Standard
Standard Costs
Costs
Different Different formula Different
ingredients versions facilities
Total item
cost

You can calculate the standard costs of items based on formula cost rollups.
You define the static costs, such as raw material and resource costs, for each
component used during production. You define the static costs using the cost of
ingredients in each specific warehouse during a specific period of time.
You define the costs for purchased items, formulas, formula ingredients, and
resources used during the production process. The cost of a produced item is
then calculated based on:
Different ingredients stored at different locations
Different formula versions
Different facilities at which overhead and associated cost vary
Introduction
Chapter 1 - Page 8
Calculating
Standard Costs
Costs
Routings
Perform cost rollup.
Formula Items
ingredients
Cost
burdens
Calculating and Viewing Standard Costs

To generate a standard cost for a product ingredient, you need to perform a cost
rollup. You can view standard and actual costs for items, formula ingredients,
cost burdens, and routings. You access all of the cost view options from the
Cost Details window.
Introduction
Chapter 1 - Page 9
Executing a Standard Cost Rollup
Executing
Executing aa Standard
Standard Cost
Cost Rollup
Rollup
Incorporate formula details,

routing details, and burden
details.
Items Cost rollup
The Standard Cost Rollup Process

The rollup incorporates formula details, routing details, and burden details for
each item selected, as follows:
You must roll up the standard cost of components into product costs
whenever standard item cost components are changed.
Whenever you add a new product, you need to perform a cost rollup.
The standard cost rollup runs as a background process, so you can initiate
the rollup, then continue with other OPM functions while it is executing.
After standard costs for all component items are defined, you should
perform an initial rollup for all items. A rollup reference number is
automatically assigned to the rollup during the process every time you
initiate a rollup. You should make a note of this reference number for
future inquiries.
Introduction
Chapter 1 - Page 10
Formula Cost Details
Formula
Formula Cost
Cost Details
Details
Formula
ingredients
Displaying Formula Cost Details

The Cost Details window displays the ingredient costs summarized by
component class and analysis code, as follows:
The sum of the ingredient components in the formula should be equal to
the product component cost in the Cost Details window.
For actual cost methods, this window displays production batch details
that contribute to the actual unit cost.
Introduction
Chapter 1 - Page 11
Cost Burdens and Routing Costs
Cost
Cost Burdens
Burdens and
and Routing
Routing Costs
Costs
Routings
Cost
burdens
Displaying Cost Burdens and Routing Costs

The Cost Burdens window displays the burden cost details for an item that
are used to calculate component costs during the cost calculation. The
burden costs are displayed for the item shown in the Cost Details window.
Calculated burden cost = (resource cost quantity of the resource used for
this burden) / item quantity.
The Routing Costs window displays the cost of resources used in
operations and routings in the production of items or intermediate items.
If you use operations and routings in your formulas, the cost rollup
process rolls up the cost of the resources used in the operations and
routings into the end-product cost, which can then be viewed using this
window.
Introduction
Chapter 1 - Page 12
Standard Cost Period End Processing
Standard
Standard Cost
Cost Period End Processing
Processing
Enter or modify formulas,

Run cost rollup.
effectiveness, routings,
cost burdens.
Run cost update
Copy from costs and preliminary.
resources code if needed.
Run inventory close
processing.
Make standard cost
adjustments.
Run test, then run
the final cost update
to the subsidiary
Complete all transactions
updating inventory. ledger.
Run inventory cost

revaluation.


There are six major steps to execute in the standard cost final process:
Execute the cost rollup process at the end of the current period to
consolidate standard costs of components into product costs. The rollup
encompasses component costs that have changed and also new items,
formulas, products, routings, and burdens that have been added and set up
for costing. Cost rollup can be run repeatedly until the results are
satisfactory.
Execute the preliminary update costs for the general ledger in the Cost
Update window. You can then optionally run a test update of the
subsidiary ledger for testing purposes. You can later change component
costs, then run another cost update to replace those costs. This calculates
standard costs for the next period.
In the Inventory Close window, close the inventory calendar period to
prevent any further inventory transactions from being posted to the period.
Run a test, then execute the final cost update, specifying that this update is
final. This locks the component costs for the specified period.
Through an interface with a GL application, you can then export
these booked costs to the proper GL accounts.
Account mapping parameters that you establish in the
Manufacturing Accounting Controller application determine the
accounts to which costs update.
Run the inventory cost revaluation.
Introduction
Chapter 1 - Page 13
Process inventory transactions during the new current period while
preparing new costs for the next period.
Introduction
Chapter 1 - Page 14
Required Actual Costing Setup Chronology
Required
Required Actual
Actual Costing
Costing Setup
Setup
Chronology
Chronology
Allocation
definitions
Expense
allocation
amounts
Adjustment Allocation
reason codes codes
Global setup
Actual Costing
With OPMCM, you capture the actual costs from business transactions (such as
production batches and material purchase order invoices) throughout
applications. OPMCM then calculates the actual costs of production using these
actual cost components. The system provides audit trails of the transactions
from which the actual costs are derived.
Actual costs are based on real transactions, so there is minimal required cost
setup beyond the global setup. However, there are the following prerequisite
definitions to set up:
Adjustment reason codes: To provide for situations in which you have to
make adjustments to the actual calculated costs.
Allocation codes: Used to define the indirect expenses from the general
ledger accrued expense accounts. Later, you define the parameters to
allocate those expenses to the appropriate cost component classes.
Expense allocation accounts: To specify the general ledger account keys
that capture the overhead expenses to be allocated. Here you are defining
the expense pool to allocate. In the Allocation Definitions window, you
specify the products to which these expenses are allocated.
Allocation definitions specify the following parameters:
Item, component class, and related information required to identify
where the allocation results are to be placed
Statistical account keys that maintain the basis information
associated with each item
Introduction
Chapter 1 - Page 15
Actual Cost Calculation Prerequisites
Actual
Actual Cost
Cost Calculation
Calculation Prerequisites
Prerequisites
7.
Cost
adjustments
5. 6.
Interface for GL Burden
expense allocations details
1. 2. 3. 4.
Purchasing Acquisition AP Close production
receipts cost entries interface batches

This lesson covers the procedures for generating actual costs and making
adjustments to the costs that OPMCM calculates.
Before you can produce accurate actual cost calculations, you must do the
following:
Enter all purchasing receipts with any price corrections.
Complete acquisition cost entries.
Establish an Oracle or third-party accounts payable (AP) interface.
Close production batches for the period.
Enter or establish an interface to enter general ledger expense allocations.
Assign all burden details.
If cost adjustments subsequent to the update require that another update be
run, complete all cost adjustments prior to that second update.
Introduction
Chapter 1 - Page 16
Calculating Actual Costs
Calculating
Calculating Actual
Actual Costs
Costs
Calculate purchased item

costs, then apply any GL
expense allocations to
ingredients.
Total item
Calculate produced item costs
cost
using closed batches, then
apply GL expense allocations.
If used, apply actual cost

adjustments and any burden
details.
Calculating Actual Costs

Actual costs are calculated using actual process transaction costs throughout the
OPM applications. The actual data considered includes the following:
Purchasing receipts
Price changes on receipts
Invoices paid
Batch ingredient consumption
Resource usage data
Direct and indirect expense allocations
Prior inventory balances
Cost burdens and adjustments
General ledger expense allocations
Using this data, you can calculate the following actual costs:
Average purchased raw material unit cost
Actual resource usage
Weighted average actual cost of intermediate goods and finished goods
Introduction
Chapter 1 - Page 17
Raw Material Cost Calculation Methods
Raw
Raw Material
Material Cost
Cost Calculation
Calculation Methods
Methods
Cost Calculation
Methods
Period moving
average cost
Period weighted
average cost
Perpetual weighted
average cost
Last transaction cost

methods

OPMCM uses the following five methods to calculate raw material actual costs:
The period moving average cost (PMAC): Calculates the weighted
average cost (WAC) for the period while including the previous period
ending inventory balance at the prior period cost.
The period weighted average cost (PWAC): The weighted average cost of
the raw material received during the period, based on each receipt and the
quantity received.
The perpetual weighted average cost (PPAC): The average cost (AC) for
the entered receipts and quantities within the defined boundaries of the
cost calendar.
The last transaction cost method (LSTT): Uses the last transaction within
the costing period, regardless of whether the transaction is a receipt or an
accounts payable invoice.
The last invoice transaction method (LSTI): Uses the last accounts
payable invoice transaction within the costing period, even if there are
later receipts with estimated prices.
Introduction
Chapter 1 - Page 18
Options for Spreading Costs
Options
Options for
for Spreading
Spreading Costs
Costs
Perpetual weighted average cost (PPAC)
Period WAC
Period moving
AC
Period 1 Period 2 Period 3 Period 4
Smoothing Manufacturing Costs Over Time

OPMCM provides options for smoothing manufacturing costs over the time
spans that you designate. Average actual costs can be calculated using three
methods, which provide different weights to time periods:
Perpetual weighted average cost
Period weighted average cost
Period moving average cost
Introduction
Chapter 1 - Page 19
Distribution of Indirect Expenses
Distribution
Distribution of
of Indirect
Indirect Expenses
Expenses
Item cost
Indirect costs in
general ledger
Distributing Indirect Expenses of Manufacturing to Item Costs

The general ledger expense allocation distributes indirect expenses of
manufacturing to item costs. By using designated general ledger account
balances and selected allocation criteria, indirect costs can be calculated
dynamically or based on percentages that you define.
Introduction
Chapter 1 - Page 20
Revaluation of Inventory Cost
Revaluation
Revaluation of
of Inventory
Inventory Cost
Cost
Revalue from: Revalue from:

Cost Method A Cost Method A
Cost Calendar 2000 Cost Calendar 2000
Cost Period 3 Cost Period 3
OR
Revalue to: Revalue to:

Cost Method B Cost Method A
Cost Calendar 2000 Cost Calendar 2000
Cost Period 4 Cost Period 4
Valuing Inventory Costs and Transactions

Transactions in OPM are mapped to the general ledger accounts that you define
in the Manufacturing Accounting Controller application. Costs of warehouse
items are then frozen for update to the subsidiary ledger.
You can perform revaluation only between consecutive costing periods.
Introduction
Chapter 1 - Page 21
Actual Cost Period End Processing
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Complete and close POC steps

and production batches.
Complete sales shipments and

close AR.
Run inventory close
processing.
Complete cycle counts and
adjustments.
Complete purchasing and

receiving and close AP.

There are four major steps to execute in the actual cost final process:
You can select either Special>Preliminary Close or Special>Final
Close.
Preliminary close is closed to transactions, but you can still open it
and post transactions for the period.
Final close is closed to transactions, and balances are frozen. You
cannot open the period again.
To calculate actual costs, specify the period for which actual costs are to
be processed in the Actual Cost Process window.
Introduction
Chapter 1 - Page 22
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Make actual cost Enter or modify cost

adjustments. burdens.
Run inventory close

Invoice price
processing.
maintenance
Run GL expense
allocation process.
Run actual cost
process.
Run invoices price
interface.
Actual Cost Period End Processing (continued)

subsidiary ledger. You can later change component costs or make actual
cost adjustments and then run another cost update to replace those costs.
To execute the final cost update, specify that this update is final. This
locks the component costs for the specified period.
Introduction
Chapter 1 - Page 23
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Run actual cost process.
Run cost update Test update

preliminary. subsidiary ledger.
Run final cost update

and update subsidiary
ledger.
Run inventory
revaluation.

Introduction
Chapter 1 - Page 24
Final Cost Processing Flow
Final
Final Cost
Cost Processing
Processing Flow
Flow
Execute cost rollup.
Run cost update Test update to

Close inventory
calendar period.

ledger.

Final Cost Processing

There are five major steps for you to execute in the final cost process:
Execute the cost rollup process at the end of the period to consolidate
costs of components into product costs. The rollup encompasses
component costs that have changed and also new items, formulas,
products, routings, and burdens that have been added and set up for
costing.
Execute the preliminary costs update to the general ledger in the Cost
Update window.
Run test updates to the subsidiary ledgers.
Close the inventory calendar period to prevent any further inventory
transactions from being posted to the period.
After OPM calculates the standard costs as a result of cost rollup, you can
update the costs and make them available for use in reports that require
component costs from items. Also, the update process makes these figures
available for export to any general ledger software, such as Oracle General
Ledger, to which you want to post the costs.
Introduction
Chapter 1 - Page 25
Introduction
Chapter 1 - Page 26
Establishing Costing
Parameters
Chapter 2
Establishing Costing Parameters

Chapter 2 - Page 1
11i
11i Oracle
Oracle Process
Manufacturing
Cost Management
Cost Management
Establishing
Establishing Costing
Costing Parameters
Parameters

Chapter 2 - Page 2
Lesson Objectives
Lesson
Lesson Objectives
Objectives
After
After completing
completing this
this lesson,
lesson, you
you should
should be
be able
able to
to
do
do the
the following:
following:
Define
Define cost
cost method
method codes
codes
Establish
Establish the
the cost
cost calendar
calendar
Establish
Establish cost
cost component
component classes
classes and
and groups
groups
Define
Define cost
cost analysis
analysis codes
codes
Construct
Construct costing
costing warehouse
warehouse associations
associations

Chapter 2 - Page 3
Lesson Overview
Lesson
Lesson Overview
Overview
To
To use
use the
the OPMCM
OPMCM application
application for
for cost
cost management,
management,
you
you must
must define
define certain
certain basic,
basic, global
global data
data values,
values,
regardless
regardless of whether you intend to use the standard
of whether you intend to use the standard
or
or the
the actual
actual costing
costing method.
method.
Setup parameters
OPM Cost Management

database

Chapter 2 - Page 4
Required Setup
Required
Required Setup
Setup
Cost Cost Component Analysis

methods calendar classes and codes
groups
Warehouse GL fiscal
associations policy
OPM Cost Management

database


Chapter 2 - Page 5
Cost Management Setup Chronology
Cost
Cost Management
Management Setup
Setup Chronology
Chronology
7.
GL fiscal
policy
6.
5. Analysis
Warehouse
codes
associations
1. 2. 3. 4.
Cost Cost Component Component
methods calendar groups classes
Setting Up Cost Management

The order for setting up Oracle Processing Manufacturing Cost Management
(OPMCM) is as follows:
Cost methods: The cost method is used to develop item costs. Both actual
and standard costing calculation types are supported by the application.
Cost calendar: You can use multiple cost calendars to support multiple
cost methods, each with a different calculation basis.
Cost component groups (optional): You can use cost component groups to
collect specific material or resource component costs for category
groupings. Grouped costs can be displayed or reported for analysis.
Cost component classes: You can use these buckets to define the elements
of cost detail you want to view. Costs from several ingredients, routings,
or burdens can be summarized into component classes.
Cost analysis code: Component classes (such as materials, packaging, and
labor) can be subdivided by analysis codes to provide an additional level
of detail.
Cost warehouse associations: OPMCM maintains separate item costs for
each warehouse. Cost and warehouse associations can be set up to
eliminate duplicate data entry.
General ledger fiscal policy: You need to specify companywide
parameters and default values for ledgers, base currency, accounting
periods, and other information relating to general ledger account updates.

Chapter 2 - Page 6
The GL cost method on the fiscal policy identifies the cost method that is
used to post to the GL.

Chapter 2 - Page 7
Categorizing Cost Method Codes
Categorizing
Categorizing Cost
Cost Method
Method Codes
Codes
Go
Go to
to the
the Cost
Cost Method
Method Codes
Codes window
window toto define
define the
the
method
method of of calculation
calculation used
used to
to develop
develop item
item costs.
costs.
Cost
Cost method
method codes
codes identify
identify specific
specific groups
groups ofof cost
cost
data according to their purpose.
data according to their purpose.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >>Setup
Setup >> Method
Method Codes
Codes
Navigation
N = Navigator
T = Tab
M = Menu
I = Icon
H = Hyperlink
B = Button
Help = Oracle Applications Help system
(Help) Oracle Manufacturing Applications > Oracle Process Operations > OPM
Financials > OPM Cost Management >Costing Setup > Defining Cost Methods
> Entering Cost Method Codes Procedure
> Cost Method Codes Field Reference
> Standard Costing

Chapter 2 - Page 8
Establishing Cost Calendars
Establishing
Establishing Cost
Cost Calendars
Calendars
Go
Go to
to the
the Cost
Cost Calendars
Calendars window
window to
to define
define aa cost
cost
calendar
calendar for
for the
the fiscal
fiscal or
or calendar
calendar year.
year.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >> Cost
Cost Calendars
Calendars
Establishing the Cost Calendar

The cost calendar is not the same as the general ledger calendar nor the same as
the inventory calendar. The inventory calendar defines the periods to which
inventory transactions post and must be the same as the general ledger calendar
and periods. A cost calendar period can span many general ledger periods, but
the end date of each cost calendar period must be the same as the end date of a
general ledger period so that one set of costs applies for whole general ledger
periods.
Financials > OPM Cost Management >Costing Setup > Defining Cost Calendars
> Defining Cost Calendar Procedure
> Cost Calendar Field Reference
> Flexibility in Restricting Cost Updates

Chapter 2 - Page 9
Calendar Period Statuses
Calendar
Calendar Period
Period Statuses
Statuses
Period statuses
Cost transactions can be made

Open during open periods.
The status freezes existing costs from

Frozen additional changes in a specific
calendar period; new item cost
transactions can be added.
This status prevents any further costing

Closed
changes in the specified period.

Chapter 2 - Page 10
Concept of Component Classes
Concept
Concept of
of Component
Component Classes
Classes
Cost
Cost component
component classes
classes are
are like
like buckets,
buckets, used
used to
to
define
define the
the level
level of
of cost
cost detail
detail you
you want
want to
to view.
view.
Component Classes Features

Component classes have the following features:
Costs from several ingredients, routings, or burdens can be summarized
into individual component classes.
When standard costs are used, you can update adjustments or indirect
components of standard product costs separately without defining formula
routings or burden details.
You can identify the standard indirect cost component, update nondirect
materials and resources within production batches, and reconcile batch
close variance at the close of a production batch.

Chapter 2 - Page 11
Entering Cost Component Classes
Entering
Entering Cost
Cost Component
Component Classes
Classes
Go
Go to
to the
the Cost
Cost Component
Component Classes
Classes window
window to to define
define
the
the elements
elements ofof cost
cost detail
detail you
you want
want to
to view.
view.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Component
Component Classes
Classes

Entering Cost Component Classes

Enter the cost component classes using the following guidelines:
If you are going to be using component groups, indicate the primary cost
component class to which other component classes are subordinate.
Component groups can be used to build component class association
hierarchies for reference and reporting.
Specify in the Usage field whether the cost component class is used to
collect material detail, burden detail, resource detail from routings,
allocation detail, or standard cost adjustment.
If the costs should not be included in the product cost calculation, select
the Exclude From Product Cost Calculation option button in the Product
Cost Calculation region.
If the component costs should not be updated in the general ledger using
the general ledger update process, select the Will not be updated to GL
area option button in the Component Cost region.
If this component class should not be used in purchase price variance
(PPV) calculations, select the Exclude from Purchase Price Variance
Calculation option button in the Purchase Price Variance Calculation
region.
Financials > OPM Cost Management >Costing Setup > Defining Cost Component
Classes

Chapter 2 - Page 12
> Defining Cost Cost Component Classes
> Defining Cost Component Classes Procedures
> Cost Component Classes Field Reference

Chapter 2 - Page 13
Categorizing Cost Analysis Codes
Categorizing
Categorizing Cost
Cost Analysis
Analysis Codes
Codes
If
If you
you want
want to
to subdivide
subdivide cost
cost components
components using
using cost
cost
analysis
analysis codes,
codes, go
go to
to the
the Cost
Cost Analysis
Analysis Codes
Codes
window.
window. With
With analysis
analysis codes,
codes, you
you can
can segregate
segregate
different
different costs for the same item within the
costs for the same item within the same
same
cost component class.
cost component class.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >> Analysis
Analysis Codes
Codes

Setting Up Cost Analysis Codes

If you want to set up an analysis code, use the following guidelines:
If one analysis code is set up, OPMCM defaults to that code in each
window in which the component is required.
If you plan to use only one analysis code for all costing calculations, use
STND (standard).
If multiple analysis codes are defined, you must enter the desired code in
each row in which the component class is required.
Financials > OPM Cost Management >Costing Setup > Defining Cost Analysis
Codes
> Defining Cost Analysis Codes Procedure
> Cost Analysis Code Field References

Chapter 2 - Page 14
Establishing Component Groups
Establishing
Establishing Component
Component Groups
Groups
If
If you
you want
want to
to collect
collect specific
specific material
material and
and resource
resource
component
component costs
costs for
for category
category groupings,
groupings, go
go to
to the
the
Component Groups window to establish component
Component Groups window to establish component
groups.
groups.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Component
Component Groups
Groups

Using Material Component Classes and Analysis Codes in

Calculations
You can define material cost components and material analysis codes specific to
an item or an item cost class.
Optionally, you can use associated codes for all material component classes and
analysis codes when calculating inventory value and purchase price variance
(PPV) for GL distribution in purchasing.
The use of codes ensures more accurate purchase price variance calculations if
more than one material component was established for an item.
The use of codes eliminates the need to maintain the Material Component Class
window, except when actual costing is used (this window will no longer have
any impact on GL bookings or PPV calculations).
Financials > OPM Cost Management >Costing Setup > Defining Component
Groups
> Defining Component Groups Procedure
> Component Groups Field Reference

Chapter 2 - Page 15
Online Demonstration
Online
Demonstration
OPM Cost Management Windows
The instructor demonstrates the application windows for the

following costing setup items:
Cost method codes
Cost calendars
Component classes
Cost analysis codes
Component groups

Chapter 2 - Page 16
Practice 1
Practice
Practice 11
In
In this
this matching
matching practice,
practice, match
match the
the correct
correct costing
costing
parameter
parameter to
to the
the sentence:
sentence:
Component
Component classes
classes
Cost
Cost method
method codes
codes
Component
Component groups
groups
1.
1. _____
_____ use
use these
these cost
cost buckets
buckets toto define
define the
the
elements
elements of
of cost
cost detail
detail you
you want
want to
to view.
view.
2.
2. _____
_____ can
can be
be subdivided
subdivided byby analysis
analysis codes
codes to
to
provide
provide an
an additional
additional level
level of
of detail.
detail.

Chapter 2 - Page 17
Practice 1
Practice
Practice 11
In
In this
this matching
matching practice,
practice, match
match the
the correct
correct costing
costing
parameter
parameter to
to the
the sentence:
sentence:
Component
Component classes
classes
Cost
Cost method
method codes
codes
Component
Component groups
groups
3.
3. _____
_____ collect
collect specific
specific material
material or
or resource
resource
component
component costs
costs for
for category
category groupings.
groupings.
4.
4. _____
_____ must
must be
be specified
specified for
for each
each cost
cost calendar.
calendar.
5.
5. _____
_____ are
are optional.
optional.

Chapter 2 - Page 18
Practice 1 Solutions
Practice
Practice 1
1 Solutions
Solutions
1.
1. Component
Component classes
classes use
use these
these cost
cost buckets
buckets toto
define
define the
the elements
elements of
of cost
cost detail
detail you
you want
want to
to view.
view.
2.
2. Component
Component classes
classes can
can be
be subdivided
subdivided byby analysis
analysis
codes to provide an additional level of detail.
codes to provide an additional level of detail.
3.
3. Component
Component groups
groups collect
collect specific
specific material
material or
or
resource
resource component
component costs
costs for
for category
category groupings.
groupings.
4.
4. Cost
Cost method
method codes
codes must
must be
be specified
specified for
for each
each cost
cost
calendar.
calendar.
5.
5. Component
Component groups
groups are
are optional.
optional.

Chapter 2 - Page 19
Constructing Costing Warehouse Associations
Constructing
Constructing Costing
Costing
Warehouse
Warehouse Associations
Associations
If
If you
you have
have multiple
multiple inventory
inventory warehouses
warehouses that that issue
issue
the
the same
same item
item and
and the
the item
item costs
costs in
in all
all of
of those
those
warehouses
warehouses areare the
the same,
same, you
you can
can use
use OPM
OPM toto
associate
associate a single costing warehouse with multiple
a single costing warehouse with multiple
inventory
inventory warehouses.
warehouses.
Costing warehouse
Inventory
warehouses

Chapter 2 - Page 20
Constructing Costing Warehouse Associations
Constructing
Constructing Costing
Costing
Warehouse
Associations
Go
Go to
to the
the Costing
Costing Warehouse
Associations window
window
to
to associate
associate aa costing
costing warehouse
warehouse with
with multiple
multiple
inventory
inventory warehouses.
warehouses.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Cost
Cost Warehouse
Associations
Financials > OPM Cost Management >Costing Setup > Defining Costing
> Defining Costing Warehouse Association Procedure
> Defining Costing Warehouse Association Field Reference

Chapter 2 - Page 21
General Ledger Fiscal Policies
General
General Ledger
Ledger Fiscal
Fiscal Policies
Policies
You
You use
use the
the Fiscal
Fiscal Policies
Policies window
window to
to specify
specify
company
company wide
wide parameters
parameters and
and default
default values
values
pertaining
pertaining to
to general
general ledger
ledger account
account postings.
postings.
Fiscal Policies
Policy specification parameters include:

Company
Maximum periods
Ledger
Set of books
Operating unit
Regions designate the subledger posting and the actual
cost material parameters.


Chapter 2 - Page 22
Defining Cost Revaluation Parameters
Defining
Defining Cost
Cost Revaluation
Revaluation Parameters
Parameters
Go
Go to
to the
the Defining
Defining Cost
Cost Revaluation
Parameters
window
windowto to further
further define
define GL
GL fiscal
fiscal policies
policies for
for aa
specified GL transaction date.
specified GL transaction date.
(N)
(N) OPM
OPM Financials
Financials >> Manufacturing
Manufacturing Accounting
AccountingController
Controller >>
Setup
Setup >> Fiscal
Fiscal Policies
Policies >> (B)
(B) Cost
Cost Revaluation
Parameters
Defining Cost Revaluation Parameters

You use the Defining Cost Revaluation Parameters window to further define
GL fiscal policies for a specified GL transaction date as follows:
In the Prior region, enter the cost method, cost calendar, and cost period
for which you are revaluing inventory.
In the Current region, enter the cost method, cost calendar, and cost period
for which you are revaluing inventory.
(Help) Oracle Manufacturing Applications >Oracle Process Operations >OPM

Financials > OPM Cost Management > Costing Setup>Defining General
Ledger Fiscal Policy

Chapter 2 - Page 23
Online
Demonstration

following costing setup items:
Costing warehouse associations
Fiscal Policies

Chapter 2 - Page 24
Summary - Setup Chronology
Summary
Summary -- Setup
Setup Chronology
Chronology
7.
GL fiscal
policy
6.
5. Analysis
Warehouse
codes
associations
1. 2. 3. 4.
Cost Cost Component Component
methods calendar groups classes

Chapter 2 - Page 25
Practice 2 Overview
Practice
Practice 22 Overview
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Defining
Defining method
method codes
codes
Defining
Defining cost
cost component
component classes
classes
Setting
Setting up
up cost
cost analysis
analysis codes
codes
Establishing
Establishing cost
cost calendar
calendar
Scenario
Scenario
Your
Your supervisor
supervisor has
has decided
decided to
to implement
implement standard
standard
costing
costing and
and has
has asked
asked you
you to
to perform
perform the
the global
global cost
cost
setup.
setup.

Chapter 2 - Page 26
Practice 2 Instructions
Practice
Instructions
Set
Set up
up aa standard
standard cost
cost method
method code,
code, xxST,
xxST, where
where
xx
xx is
is the
the number
number assigned
assigned toto you
you by
by your
your
instructor.
instructor.
Define
Define cost
cost component
component classes,
classes, with
with xx
xx as
as aa name
name
prefix, for material, packaging, indirect labor,
prefix, for material, packaging, indirect labor,
overhead,
overhead, administrative,
administrative, and
and company
company allocated.
allocated.
Set
Set up
up cost
cost analysis
analysis codes
codes for
for value-added
value-added andand
non-value-added
non-value-added costs,
costs, using
using the
the names
names xxVxxV and
and
xxNV, respectively.
xxNV, respectively.
Establish
Establish aa standard
standard cost
cost calendar,
calendar, using
using the
the
name xxS.
name xxS.

Chapter 2 - Page 27
Practice 2 Solution
Practice
Practice 22 Solution
Solution
Cost Method Codes
Cost Component Classes
Cost Analysis Codes
Cost Calendars
Method Codes
1. Open the Cost Method Codes window.
(N) Cost Management>Setup>Method Codes
2. Enter your unique identifier, xxS.
3. Enter a description.
4. Select the Financial Standard cost type.
5. Save your work.
Component Classes
Define the cost structure of all products to collect the specified cost elements
(remember to preface component classes with your unique identifier).
1. Open the Cost Component Classes window:
(N) Cost Management>Setup>Component Classes
2. Add the component classes. Start with the following: xxMATERIAL:
UsageCost Detail
3. Leave the Component Group field blank.
4. Accept the defaults.
5. Save your work and proceed:
xxPACKAGING: UsageCost Detail, Sort Sequence2
xxIND-LABOR: UsageBurden Detail, Sort Sequence5

Chapter 2 - Page 28
xxOVERHEAD, UsageCost Detail, Sort Sequence6
Select the Exclude from Purchase price Variance Calculation option
button.
xxADMIN: UsageBurden Detail, Sort Sequence7
xxCO-ALLOC: UsageAllocation Detail, Sort Sequence8
Analysis Codes
Set up the analysis codes, using your unique identifier.
1. Open the Cost Analysis Codes window:
(N) Cost Management>Setup>Analysis Codes
2. Enter the following information by selecting the new record icon from the
menu bar:
xxV: Value-added costs
xxN: Non-value-added costs
Cost Calendars
Set up your cost calendar, using your unique identifier.
1. Open the Cost Calendars window:
(N) Cost Management>Setup>Calendars
2. By default, the Company field displays the company specified in your
operator code. Enter your standard cost calendar, using your unique
identifier: xxS
3. Enter xxS as the cost method.
4. For Start Date, enter 01/JAN/current year.
5. Enter 12 periods, January through December.
Note: You can also create your calendar by copying an existing calendar
that has the same number of periods to expedite the calendar creation.

Chapter 2 - Page 29

Chapter 2 - Page 30
Constructing and Executing
Standard Costs
Chapter 3
Constructing and Executing Standard Costs

Chapter 3 - Page 1
11i
11i Oracle
Oracle Process
Manufacturing
Cost Management
Cost Management
Constructing
Constructing and
and Executing
Executing Standard
Standard Costs
Costs

Chapter 3 - Page 2
Objectives
Objectives
Objectives
After
After completing
completing this
this lesson,
lesson, you
you should
should be
be able
able to
to
do
do the
the following:
following:
Construct
Construct standard
standard cost
cost details
details
Construct
Construct standard
standard cost
cost source
source warehouses
warehouses
Construct
Construct rollup
rollup target
target warehouses
warehouses
Execute
Execute the
the standard
standard cost
cost rollup
rollup
Define
Define resource
resource costs
costs
Define
Define cost
cost burdens
burdens
Execute
Execute standard
standard cost
cost processes
processes

Chapter 3 - Page 3
Overview of Product Setup
Overview
Overview of
of Product
Product Setup
Setup
Component classes
Calendar
Cost details
Routings
Resource costs
Resources
Burden details
Effectivities
Source warehouses
Analysis codes
Target warehouses
Method codes
OPM Cost Management

database

Integration Setup for Executing Cost Updates

Before you can execute a cost update, parameters need to be established that
effectively integrate with other OPM applications. This lesson describes these
setup steps in order, with emphasis on integration ramifications.
After the parameters are established, you need to perform the necessary cost
rollups, view any error messages, and perform the cost update to create item
general ledger cost records for the Manufacturing Accounting Controller to use
and pass to the general ledger.

Chapter 3 - Page 4
Integration Setup Steps
Integration
Integration Setup
Setup Steps
Steps
Formulas
Calendar Resources
and routings
Ordering Integration Setup Steps

1. Calendar: For a company, the cost calendar needs to match the inventory
calendar.
(N) OPM Financials>Cost Management>Setup>Cost Calendar
2. Formulas and routings: Establish formulas and routings to be used by
OPM Cost Management. Be aware of scaling indicators on items and
operations and of allocation percentages on products and your costing
effectivity rules.
(N) OPM Product Development>Formula Management>Routings
(N) OPM Product Development>Formula Management>Formulas
Notes on Integration with Effectivities: If a no costing formula use
effectivity is established, then OPM uses a production formula for the cost
rollup.
If routing costs are to be used, verify that the appropriate routing and
version number are attached to the costing effectivity record.
3. Resources: Define your resources with appropriate units of measure
(UOM), component classes, and cost analysis codes.
(N) OPM Process Planning>Capacity Planning>Setup>Resources

Chapter 3 - Page 5
Integration
Integration Setup
Setup Steps
Steps
Effectivities
Production Costing
formula formula
Ordering Integration Setup Steps (continued)

4. Effectivities: Verify that the appropriate effectivities are set up for OPM
Cost Management if you have produced items. If necessary, copy
production formulas into costing versions, and define the appropriate
effectivity for your costing organization. As an alternative, you can create
your own costing versions with effectivities.
Identify the product allocation percentage for any coproducts on
your formulas. The allocation percentage for any individual
formula must equal 100%.
The allocation detail is at the detail level on formulas in both OPM
Formula and OPM Laboratory Management. You can verify any
allocation or scaling options by highlighting an item and clicking
the Additional Information button.
There is a scaling indicator on the operations included in a routing.
You can verify the scaling indicator by highlighting the operation
in the routing and clicking the Additional Information button.
(N) OPM Product Development>Formula Management
>Effectivities

Chapter 3 - Page 6
Integration
Integration Setup
Setup Steps
Steps
Analysis codes Method codes
Component
classes

5. Analysis codes: You must establish a minimum of one analysis code.
(N) OPM Financials>Cost Management>Setup>Analysis Codes
6. Method codes: If you want to use standard cost and book purchase price
variances, you need to define a method for standard costing. The cost type
indicator should be Standard Costing. Conversely, you should select a cost
type indicator of Actual Cost for the actual costing process.
(N) OPM Financials>Cost Management>Setup>Method Codes
7. Component classes: You must establish a minimum of one component
class. Typically classes can include different ones for material cost,
overhead, and direct labor.
(N) OPM Financials>Cost Management>Setup>Component
Classes

Chapter 3 - Page 7
Integration
Integration Setup
Setup Steps
Steps
Cost details Resource costs Burden details

8. Cost details: If you are using standard cost, enter the unit cost of raw
materials to be used during cost rollup.
(N) OPM Financials>Cost Management>Cost Details
Note: Before setting up cost details, establish company base currencies in the
OPM Manufacturing Accounting Controller Fiscal Policy window for each
company.
9. Resource costs: Establish the per unit cost of each resource used by your
costing model. This is the nominal cost for that resource.
(N) OPM Financials>Cost Management>Resource Costs
10. Burden details: If needed, establish burden details.
(N) OPM Financials>Cost Management>Burden Details

Chapter 3 - Page 8
Integration
Integration Setup
Setup Steps
Steps
Source Target
warehouses warehouses

11. Source warehouses: If you are using standard costing, establish a default
(for example, blank item cost class and blank item). However, specific
records could be required by your implementation.
(N) OPM Financials>Cost Management>Setup>Standard Costs
>Source Warehouses
12. Target warehouses: There must be a default established, as a minimum.
You can establish only one target warehouse for your organization.
(N) OPM Financials>Cost Management>Setup>Standard Costs
>Target Warehouses

Chapter 3 - Page 9
Standard Costing Setup Chronology
Standard
Standard Costing
Costing Setup Chronology
Chronology
3.
Target
warehouses
1. 2.
Standard cost Cost source
details warehouses
Defining Standard Costs

This lesson describes how to define the standard component cost for production
items. These costs include raw materials, burden, and other costs associated
with production. These costs can then be used by other organizations within
your company to determine the appropriate costs to use for accounting.
The cost rollup refers to rolling up individual component costs to reflect the
total standard cost of the item that is to be produced.
In order to perform a cost rollup for material costs, the following are required:
Define standard item costs: For new items or ingredients
Define standard cost source warehouses: Defines where the cost rollup
obtains the raw material costs for an item
Define target warehouses: Defines the warehouses in which you normally
stock end-products and from which you normally fill orders for these
products.

Chapter 3 - Page 10
Components of the Derived Standard Cost
Components
Components ofof the
the
Derived
Derived Standard
Standard Cost
Cost
Inventory application Cost Management
factors application factors
Item Cost method
Calendar
Warehouse and period
Standard Cost Details

The derived standard cost is based on the following cost factors, which must be
set up prior to defining cost details:
OPM Inventory application factors
Item
Warehouse
OPM Cost Management application factors
Calendar and period
Cost method
By varying these cost factors, you can derive the most cost-effective method for
producing a product.
Note: The derived cost is the per unit cost of the item being costed (for
example, for paint, it would be the cost of producing one gallon or liter of
paint).

Chapter 3 - Page 11
Setup for Cost Rollup
Setup
Setup for
for Cost
Cost Rollup
Rollup
Constituent
Component class
and analysis code
Defining Standard Cost for New Items or Ingredients

Before you can derive the cost of a product, the cost of each of its constituents
must be defined and rolled up into the product. Using the paint example again,
the paint constituents (red dye, yellow dye, base color, and paint solution) must
have a defined cost that is rolled up into the product cost for orange paint.
How to Execute the Cost Rollup
1. Complete the Cost Detail window for each constituent.
2. Define the appropriate formula and effectivity.
3. Select Cost Rollup from the OPM Cost Management menu to perform a
cost rollup.
4. If you then select the Cost Detail window for the orange paint product
using the same cost factors, you see the constituent cost summed into the
total cost for the product.

Chapter 3 - Page 12
Defining Cost Details
Defining
Defining Cost
Cost Details
Details
Go
Go to
to the
the Cost
Cost Details
Details window
window to
to define
define how
how the
the
derived
derived cost
cost is
is to
to be
be calculated.
calculated. Each
Each field
field selected
selected
defines
defines what
what items
items are
are associated
associated with
with the
the field
field
selection to apply to the derived cost.
selection to apply to the derived cost.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Cost
Cost Details
Details
Navigation
N = Navigator
T = Tab
M = Menu
I = Icon
H = Hyperlink
B = Button
(Help) Oracle Manufacturing Applications > Oracle Process Applications > OPM
Financials > OPM Cost Management Users Guide > Standard Costing Setup >
Defining Standard Item Costs
> Cost Detail Window-Format
> Cost Detail Window Prerequisites
> Defining Cost Details Procedure
> Cost Details Field Reference

Chapter 3 - Page 13
Online
Demonstration
The
The instructor
instructor demonstrates
demonstrates the
the application
application windows
windows
for
for defining
defining cost
cost details.
details.

Chapter 3 - Page 14
Source and Target Warehouses
Source
Source and
and Target
Target Warehouses
Warehouses
Material Cost
costs
- calculation
results
X =
+
Perform
cost rollup.
Source Target
warehouse warehouse

Chapter 3 - Page 15
Constructing Standard Cost Source Warehouses
Constructing
Constructing Standard
Standard Cost
Cost Source
Source
Warehouses
Warehouses
You
You use
use the
the Rollup
Rollup Source
Source Warehouse
Warehouse window
windowtoto
define
define where
where the
the cost
cost rollup
rollup obtains
obtains material
material costs
costs
for
for an
an item.
item. This
This definition
definition setup
setup is
is aa requirement
requirement for
for
executing a cost rollup.
executing a cost rollup.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Standard
StandardCosts
Costs >> Source
Source Warehouses
Warehouses

(Help) Oracle Manufacturing Applications > Oracle Process Applications >

OPM
Financials > OPM Cost Management Users Guide > Standard Costing Setup >
Defining Rollup Source Warehouses
> Defining Rollup Source Warehouse Procedure
> Rollup Source Warehouse Field Reference

Chapter 3 - Page 16
Constructing Rollup Target Warehouses
Constructing
Constructing Rollup
Rollup Target
Target Warehouses
Warehouses
Use
Use the
the Rollup
Rollup Target
Target Warehouses
Warehouses window
window toto define
define
target
target warehouses
warehouses where
where the
the standard
standard cost
cost rollup
rollup
stores
stores the
the results
results of
of the
the cost
cost calculations.
calculations.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Target
Target Warehouses
Warehouses

OPM Financials > OPM Cost Management Users Guide > Standard Costing
Setup > Defining Rollup Target Warehouses
> Defining Rollup Target Warehouse Procedure
> Rollup Target Warehouse Field Reference

Chapter 3 - Page 17
Practice 1
Practice
Practice 11
In
In this
this matching
matching practice,
practice, select
select the
the correct
correct term:
term:
Raw
Rawmaterial
material costs
costs
Derived
Derived cost
cost
Total
Total standard
standard costcost
Target
Target warehouses
warehouses
1.
1. Cost
Cost rollup
rollup refers
refers toto rolling
rolling up
up individual
individual component
component
cost
cost to
to reflect
reflect the
the _____
_____ ofof the
the item
item that
that was
was
produced.
produced.
2.
2. The
The standard
standard cost
cost source
source warehouse
warehouse is is where
where the
the
cost
cost rollup
rollup obtains
obtains thethe _____
_____ for
for an
an item.
item.
3.
3. _____
_____ are
are where
where thethe cost
cost rollup
rollup associates
associates the the costs
costs
to
to produced
produced items.
items.
4.
4. The
The _____
_____ isis the
the per
per unit
unit cost
cost of
of the
the item
item being
being
costed.
costed.

Chapter 3 - Page 18
Practice
Practice 1
1 Solutions
Solutions
1.
1. Cost
Cost rollup
rollup refers
refers to
to rolling
rolling up
up individual
individual
component
component costcost to
to reflect
reflect the
the total
total standard
standard cost
cost
of the item that was produced.
of the item that was produced.
2.
2. The standard
The standard cost
cost source
source warehouse
warehouse is is where
where the
the
cost
cost rollup obtains the raw material costs for
rollup obtains the raw material costs for an
an
item.
item.
3.
3. Target
Target warehouses
warehouses are are where
where the
the cost
cost rollup
rollup
associates
associates the
the costs
costs to to produced
produced items.
items.
4.
4. The
The derived
derived cost
cost is
is the
the per
per unit
unit cost
cost of
of the
the item
item
being costed.
being costed.

Chapter 3 - Page 19
Online
Demonstration
The
The instructor
demonstrates thethe application
application windows
windows
for the following:
for the following:
Constructing
Constructing source
source warehouses
warehouses
Constructing
Constructing rollup
rollup target
target warehouses
warehouses

Chapter 3 - Page 20
Practice 2 Overview
Practice
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Defining
Defining standard
standard cost
cost source
source warehouses
warehouses
Defining
Defining rollup
rollup target
target warehouses
warehouses
Defining
Defining standard
standard cost
cost details
details

Chapter 3 - Page 21
Practice
Instructions
Set
Set both
both your
your source
source warehouse
warehouse and and target
target
warehouse
warehouse to to Zx,
Zx, where
where xx == your
your assigned
assigned unique
unique
identification
identification letter.
letter.
Source and Target Warehouse
Open the Rollup Source Warehouses window: (N) Cost Management
>Setup>Standard Costs>Source Warehouse.
Select the 0012 calendar and your assigned xx cost period.
Leave the Item Cost Class and Item fields blank to define this
warehouse as the source warehouse for all items and all item cost
classes.
In the Warehouse field, enter Zx.
In the Allocation% field, enter 100.
Save your work.
Open the Rollup Target Warehouses window: (N) Cost Management
>Setup>Standard Costs>Target Warehouse.
Select the 0012 calendar and your assigned cost period.
Leave the Item and Item Cost Class fields blank to define this
warehouse as the target warehouse for all items and all item cost
classes.
In the Warehouse field, enter Zx.
Save your work.

Chapter 3 - Page 22
Practice
Instructions
Enter cost details for your purchased items as follows:

ZxRM1S = $1 per pound
ZxRM2S = $2 per pound
ZxPKGS = $5 each
Field ZxxRM1S ZxxRM2S ZxxPKGS

Warehouse Zxx Zxx Zxx
Calendar 0012 0012 0012
Period assigned period assigned period assigned period
Cost method STND STND STND
Component class xxMaterial xxMaterial xxPackaging
Analysis code VAL VAL VAL
Component cost $1/LB $2/LB $5/EA

Chapter 3 - Page 23
Calculating
Standard Costs
Costs
You
You can
can view
viewstandard
standard and
and actual
actual costs
costs for
for items,
items,
formula
formula ingredients,
ingredients, cost
cost burdens,
burdens, and
and routings.
routings. You
You
access all of the cost view options from the
access all of the cost view options from the CostCost
Details
Details window.
window.
Routings
Formula Items
ingredients
Cost
burdens


Chapter 3 - Page 24
Executing
Standard Cost
Cost Rollup
Rollup
The
The rollup
rollup incorporates
incorporates formula
formula details,
details, routing
routing
details,
details, and
and burden
burden details
details for
for each
each item
item selected.
selected.
Incorporate formula
details, routing details,
and burden details.
Items
Cost rollup
The Standard Cost Rollup Process

You must roll up the standard cost of components into product costs
whenever standard item cost components are changed.
Whenever you add a new product, you need to perform a cost rollup.
The standard cost rollup runs as a background process, so you can initiate
the rollup, then continue with other OPM functions while it is executing.
After standard costs for all component items are defined, you should
perform an initial rollup for all items. A rollup reference number is
automatically assigned to the rollup during the process every time you
initiate a rollup. You should make a note of this reference number for
future inquiries.

Chapter 3 - Page 25
Executing
Standard Cost
Cost Rollup
Rollup
Go
Go to
to the
the Start
Start Cost
Cost Rollup
Rollup window
window to
to enter
enter the
the
required
required parameters
parameters for
for the
the rollup.
rollup.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Standard
StandardCosts
Costs >>
Cost
Cost Rollup
Rollup


OPM Financials > OPM Cost Management Users Guide > Standard Costs
Calculation
> Standard Cost Rollup Prerequisites
> Calculating Standard Costs

Chapter 3 - Page 26
Displaying Item Costs
Displaying
Displaying Item
Item Costs
Costs
By
By selecting
selecting parameters,
parameters, you
you can
can use
use the
the Cost
Cost
Details
Details window
windowtoto display
display item
itemcosts
costs for
for aa particular
particular
cost calendar, period, and cost method
cost calendar, period, and cost method. .
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >>
Cost
Cost Details
Details (M)
(M) Special
Special>> Item
Item Cost
Cost List
List

OPM Financials > OPM Cost Management Users Guide > Calculating
Standard Costs > Viewing Standard Costs
> Viewing Item Costs Procedure
> Item Cost Selection Field Reference
> Item Cost List Field Reference

Chapter 3 - Page 27
Formula Cost Details
Formula
Formula Cost
Cost Details
Details
The
The Cost
Cost Details
Details window
windowdisplays
displays the
the ingredient
ingredient
costs
costs summarized
summarized byby component
component class
class and
and analysis
analysis
code.
code.
Formula
ingredients

The sum of the ingredient components in the formula should be equal to
the product component cost in the Cost Details window.
For actual cost methods, this window displays production batch details
that contribute to the actual unit cost.

Chapter 3 - Page 28
Displaying
Displaying Formula
Formula Cost
Cost Details
Details
The
The Cost
Cost Details
Details window
windowdisplays
displays the
the ingredient
ingredient
costs
costs summarized
summarized byby component
component class
class and
and analysis
analysis
code.
code.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >>
Cost
Cost Details
Details (M)
(M) Special
Special>> Item
Item Cost
Cost List
List


Standard Costs > Viewing Formula Costs
> Viewing Formula Costs Procedure
> Formula Detail Field Reference

Chapter 3 - Page 29
Online
Demonstration
The
The instructor
demonstrates thethe application
application windows
windows
for
for the
the following:
following:
Executing
Executing aa standard
standard cost
cost rollup
rollup
Displaying
Displaying cost
cost details,
details, including
including item
itemcosts
costs
details
details and
and formula
formula costs
costs details.
details.

Chapter 3 - Page 30
Practice 3 Overview
Practice
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Executing
Executing the
the cost
cost rollup
rollup
Displaying
Displaying cost
cost details,
details, item
item cost
cost list,
list, and
and formula
formula
details
details

Chapter 3 - Page 31
Practice
Instructions
View
View your
your costing
costing formula
formula for
for the
the intermediate
intermediate and
and
finished
finished goods,
goods, then
then roll
roll up
up and
and view
viewyour
your material
material
costs,
costs, using
using the
the following
following parameters:
parameters:
Calendar is 0012
Calendar is 0012
Period
Period is
is your
your assigned
assigned month
month
Cost
Cost method
method is
is STND
STND
Item
Item is
is ZxINTS,
ZxINTS, which
which uses
uses the
the formula
formula ZxINTS
ZxINTS
View
View your
your material
material costs,
costs, items
items cost
cost list,
list, and
and
formula
formula details.
details.
View your costing formulas:
Open the Formulas window: (N) Product Development>Formula
Management>Formulas.
Query the formulas and parameters listed in the instructions. Verify
the products, the ingredients, and their parameters.
Verify that the formula use is set to Costing and that the cost
calendar is included in the effective dates. (N) Product
Development>Formula Management>Formulas (B) Products
(M) Action>Effectivities
Roll up material costs for your finished goods:
Open the Cost Rollup window: (N) Cost Management>Standard
Costs>Cost Rollup.
Enter the parameters listed in the instructions.
Click Accept.
Select Start from the Action menu.
Make a note of your rollup reference number; you will need it to
check the cost rollup process status and to view cost rollup error
messages.
View your costs, details, item cost list, and formula details: (N) OPM Cost
Management>Cost Details. Query based on the following;
Warehouse: Zx

Chapter 3 - Page 32
Calendar: 0012
Period: xx

Chapter 3 - Page 33
Cost Burdens and Routing Costs
Cost
Cost Burdens
Burdens and
and Routing
Routing Costs
Costs
Routings
Cost
burdens
Displaying Cost Burdens and Routing Costs

The Cost Burdens window displays the burden cost details for an item that
are used to calculate component costs during the cost calculation. The
burden costs are displayed for the item shown in the Cost Details window.
To access the Formula Cost Details window, select Burden Details
from the Special menu in the Cost Details window.
Calculated burden cost = (resource cost quantity of the resource
used for this burden) / item quantity.
The Routing Costs window displays the cost of resources used in
operations and routings in the production of items or intermediate items.
To access the Routing Costs Details window, select Special
>Routing Details from the Cost Details window.
If you use operations and routings in your formulas, the cost rollup
process rolls up the cost of the resources used in the operations and
routings into the end-product cost, which can then be viewed using
this window.

Chapter 3 - Page 34
Defining Resource Costs
Defining
Defining Resource
Resource Costs
Costs
Go
Go to
to the
the Resource
Resource Costs
Costs window
window toto incorporate
incorporate
resource
resource costs
costs incurred
incurred during
during production
production into
into the
the
product cost by setting up production routings
product cost by setting up production routings and and
defining
defining the
the amount
amount oror number
number of
of resources
resources used.
used.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Resource
Resource Costs
Costs

Setup > Defining Resource Costs
>Defining Resource Cost Procedure
> Resource Costs Field Reference
> Selecting Resource Cost Field Reference

Chapter 3 - Page 35
Defining Standard Cost Burdens
Defining
Defining Standard
Standard Cost
Cost Burdens
Burdens
Use
Use the
the Cost
Cost Burdens
Burdens window
window toto set
set up
up and
and maintain
maintain
standard
standard resource
resource burdens.
burdens. AA burden
burden is
is aa cost
cost
associated
associated with
with aa resource
resource other
other than
than the
the resource
resource
usage assigned in the routing.
usage assigned in the routing.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Burden
BurdenDetails
Details

Setup > Defining Cost Burdens
> Defining Cost Burdens Procedure
> Cost Burden Details Field Reference

Chapter 3 - Page 36
Practice 4 Overview
Practice
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Defining
Defining resource
resource costs
costs
Defining
Defining standard
standard cost
cost burdens
burdens
As
As the
the cost
cost accounting
accounting manager
manager you
you want
want toto include
include
resource costs and burdens in your product
resource costs and burdens in your product
costs.
costs. The
The entire
entire department
department has
has the
the flu,
flu, so
so you
you will
will
be
be making
making the
the revisions
revisions and
and executing
executing the
the cost
cost
rollup.
rollup.

Chapter 3 - Page 37
Practice
Instructions
Resource
Resource costs
costs have
have been
been determined
determined as
as follows:
follows:
ZxMIXER
ZxMIXER at
at $5
$5 per
per hour
hour
ZxOVEN
ZxOVEN at
at $20
$20 per
per hour
hour
ZxPACK-LINE
ZxPACK-LINE at
at $10
$10 per
per hour
hour
ZxLABOR1
ZxLABOR1 at
at $15
$15 per
per hour
hour
ZxLABOR2
ZxLABOR2 at
at $10
$10 per
per hour
hour
Enter Resource Costs

Open the Resource Costs window: (N) Cost Management>Resource Costs
Enter the following information, using your unique identifier:
Organization: Defaults to the organization linked to your operator code
Resource: ZxMIXER
Calendar: 0012
Period: your assigned period
MTHD: STND
Nominal Cost: $5/HR
Save your work.
Repeat steps for all resources.

Chapter 3 - Page 38
Practice
Instructions
Burden
Burden thethe intermediate
intermediate product
product with
with 1/2
1/2 hour
hour of
of
ZxxLABOR1
ZxxLABOR1 resource
resource forfor setup
setup time
time that
that is
is not
not
included
included in in the
the routing.
routing. This
This cost
cost will
will be
be collected
collected
as non-value-added indirect
as non-value-added indirect labor. labor.
You
You also
also need
need to to include
include administrative
administrative overhead
overhead
as
as aa burden.
burden. The The controller
controller has
has asked
asked you
you to
to
create
create the
the resource
resource TRADMIN
TRADMINto to capture
capture the
the $100
$100
per
per hour
hour administrative
administrative costscosts andand to
to allocate
allocate 50%
50%
of
of the
the cost
cost toto your
your regular
regular finished
finished goods.
goods. This
This
cost
cost will
will also
also be be collected
collected asas non-value-added
non-value-added
indirect labor.
indirect labor.
Roll
Roll up
up costs
costs to to include
include the
the resource
resource costs
costs and
and
burden
burden details.
details.

Practice 4 - Solutions
Burden Details: Indirect Labor
Set up cost burdens in the Cost Burdens window: (N) Cost Management
>Burden Details
Item: ZxFGS
Warehouse: Zx
Calendar: 0012
Period: Your assigned period
Cost Method : STND
Resource: ZxLABOR1
Component Class: Change the component class to xxIND-LABOR
Analysis Code : NVAL
Resource Usage: 0.5
Item Qty: 100
UOM: LB
Burden Details: Administrative Overhead
Enter burden details to show the administrative overhead applied to the finished
goods. Burden details are always attached to a resource, so you will create a
resource called TRxADMIN.

Chapter 3 - Page 39
Open the Resources window: (N) OPM Product Development>Formula
Management>Setup>Resources
Resource: ZxADMIN
Standard UOM: HRS
Cost Component Class: TRBURDEN
Enter Resource Costs
Open the Resource Costs window: (N) Cost Management>Resource Costs
Organization: Defaults
Resource: ZxADMIN
Calendar: 0012
Period: Your assigned period
MTHD: STND
Nominal Cost: $100/HR
Save your work.
Burden Your Finished Good
Open the Cost Burdens window: (N) Cost Management>Burden Details
Query cost burdens for TRFGS as follows:
Organization: TR1
Item: ZxFGS
Enter the following in the Burden Details region:
Resource: ZxADMIN
Analysis code: NVAL
Resource Usage: .5
Item Quantity: 100
Edit Effectivity to Include Routing
Display your costing formula and edit your effectivity to include a routing.
Open the Formulas window: (N) OPM Product Development>Formula
Management>Formulas
Query your costing version ZxINTR.
From the Special menu select the Effectivity option.
Add the intermediate routing to the formula effectivity.
Repeat these steps for the ZxFGS.
Roll up total standard costs.
Roll up costs to include the resource costs and burden details.

Chapter 3 - Page 40
Standard
Standard Cost
Processing
Enter or modify formulas,

Run cost rollup.
effectiveness, routings,
cost burdens.
Run cost update
Copy from costs and preliminary.
resources code if needed.
Run inventory close
processing.
Make standard cost
adjustments.
Run test, then run
to the subsidiary
Complete all transactions
updating inventory. ledger.
Run inventory cost

revaluation.


There are six major steps to execute in the standard cost final process:
Execute the cost rollup process at the end of the current period to
consolidate standard costs of components into product costs. The rollup
encompasses component costs that have changed and also new items,
formulas, products, routings, and burdens that have been added and set up
for costing. Cost rollup can be run repeatedly until the results are
satisfactory.
subsidiary ledger for testing purposes. You can later change component
costs, then run another cost update to replace those costs. This calculates
standard costs for the next period.
Run a test, then execute the final cost update, specifying that this update is
final. This locks the component costs for the specified period.
Run the inventory cost revaluation.

Chapter 3 - Page 41
Process inventory transactions during the new current period while
preparing new costs for the next period.

Chapter 3 - Page 42
Standard Cost Process
Standard
Standard Cost
Cost Process
Process
1.
1. Execute
Execute the
the cost
cost rollup
rollup process
process at at the
the end
end of
of the
the
period
period to
to consolidate
consolidate the
the standard
standard cost
cost of
of
components
components into
into the
the product
product cost.
cost. This
This process
process
can
can be run repeatedly until results are satisfactory.
be run repeatedly until results are satisfactory.
(N) Cost Management>Standard costs>Cost Rollup
2.
2. Execute
Execute thethe preliminary
preliminary update
update costs
costs for
for the
the
general
general ledger
ledger (GL)
(GL) in
in the
the Cost
Cost Update
Update window.
window.
You
You can
can then
then optionally
optionally runrun aa test
test update
update ofof the
the
subsidiary ledger. You can later
subsidiary ledger. You can later changechange
component
component costs,
costs, then
then runrun another
another cost
cost update
update toto
replace those costs. This calculates the standard
replace those costs. This calculates the standard
cost
cost for
for the
the next
next period.
period.
(N) Manufacturing Accounting Controller>GL Cost Update


Chapter 3 - Page 43
Standard
Standard Cost
Cost Process
Process
3.
3. Close
Close the
the inventory
inventory calendar
calendar period
period to
to prevent
prevent any
any
further
further inventory
transactions from
from being
being posted
posted
to
to the
the period.
period. You
You can
can then
then select
select either
either
preliminary
preliminary or final close fromthe
or final close from the Special
Special menu.
menu.
(N) OPM Inventory Control>Inventory>Inventory Close

Chapter 3 - Page 44
Standard
Standard Cost
Cost Process
Process
4.
4. Run
Run aa test,
test, then
then execute
execute the
the final
final cost
cost update,
update,
specifying
specifying that
that this
this update
update is
is final.
final. This
This locks
locks the
the
component cost for the specified
component cost for the specified period.period.
(N) Cost Management>Cost Update
5.
5. Run
Run the
the inventory
inventory cost
cost revaluation.
revaluation.
6.
6. Process
Process inventory
transactions during
during the
the new
new
current
current period
period while
while preparing
preparing new
newcosts
costs for
for the
the
next
next period.
period.

Chapter 3 - Page 45
Practice 5 Overview
Practice
Overview
This
This fill-in-the-blank
fill-in-the-blank practice
practice covers
covers the
the steps
steps in
in
executing
executing thethe standard
standard cost
cost period
period end
end process.
process.
Instructions
Instructions
What
What steps
steps are
are missing
missing from
from the
the Standard
Standard Cost
Cost
Period
Period End
End Processing
Processing flowchart
flowchart on
on the
the following
following
page?
page? Where
Where there
there are
are questions
questions marks,
marks, provide
provide the
the
missing
missing process
process name.
name.

Chapter 3 - Page 46
Practice 5 Standard Cost Period End Processing
Practice
Practice 55
Standard
Standard Cost
Processing
Run cost rollup.
Run ?.
Run test, then run

Run ?.
to the subsidiary
ledger.
Run ?.

Chapter 3 - Page 47
Summary
Summary
Summary
In
In this
this lesson,
lesson, you
you should
should have
have learned
learned how
howto
to do
do the
the
following:
following:
Construct
Construct standard
standard cost
cost details
details
Construct
Construct standard
standard cost
cost source
source warehouses
warehouses
Construct
Construct rollup
rollup target
target warehouses
warehouses
Execute
Execute the
the standard
standard cost
cost rollup
rollup
Define
Define resource
resource costs
costs
Define
Define cost
cost burdens
burdens
Execute
Execute standard
standard cost
cost processes
processes

Chapter 3 - Page 48
Establishing Actual Costing
Parameters
Chapter 4
Establishing Actual Costing Parameters

Chapter 4 - Page 1
11i
11i Oracle
Oracle Process
Manufacturing
Cost Management
Cost Management
Establishing
Establishing Actual
Actual Costing
Costing Parameters
Parameters

Chapter 4 - Page 2
Objectives
Objectives
Objectives
After
After completing
completing this
this lesson,
lesson, you
you should
should be
be able
able to
to
do
do the
the following:
following:
Categorize
Categorize actual
actual cost
cost method
method codes
codes
Create
Create an
an actual
actual cost
cost calendar
calendar
Construct
Construct adjustment
adjustment reason
reason codes
codes
Define
Define allocation
allocation codes
codes
Define
Define expense
expense allocation
allocation accounts
accounts
Create
Create allocation
allocation definitions
definitions
Establish
Establish material
material component
component classes
classes and
and
analysis
analysis codes
codes
Copy
Copy item
item and
and resource
resource costs
costs

Chapter 4 - Page 3
Overview
Overview
Overview
With
With OPMCM,
OPMCM, you you capture
capture the
the actual
actual cost
cost from
from
business
business transactions
transactions throughout
throughout applications.
applications.
OPMCM
OPMCM than than calculates
calculates the
the costs
costs of
of production
production using
using
these
these cost components. The system provides audit
cost components. The system provides audit
trails
trails of
of the
the transactions
transactions from
from which
which the
the actual
actual costs
costs
are
are derived.
derived.
Business transactions
Material purchase Production batches

order invoices


Chapter 4 - Page 4
Required Actual Costing Setup Chronology
Required
Required Actual
Actual Costing
Costing Setup
Setup
Chronology
Chronology
Allocation
definitions
Expense
allocation
amounts
Adjustment Allocation
reason codes codes
Global setup
Actual Costing
Actual costs are based on real transactions, so there is minimal required cost
setup beyond the global setup. However, there are the following prerequisite
definitions to set up:
Adjustment reason codes: To provide for situations in which you have to
make adjustments to the actual calculated costs.
Allocation codes: To define the indirect expenses from the general ledger
accrued expense accounts. Later, you define the parameters to allocate
those expenses to the appropriate cost component classes.
Expense allocation accounts: To specify the general ledger account keys
that capture the overhead expenses to be allocated. Here you are defining
the expense pool to allocate. In the Allocation Definitions window, you
specify the products to which these expenses are allocated.
Allocation definitions specify the following parameters:
Item, component class, and related information required to identify
where the allocation results are to be placed
Statistical account keys that maintain the basis information
associated with each item

Chapter 4 - Page 5
Allocating Accrued GL Costs
Allocating
Allocating Accrued
Accrued GL
GL Costs
Costs
You
You can
can pool
pool accrued
accrued indirect
indirect costs
costs maintained
maintained in
in GL
GL
accrual
accrual accounts
accounts to
to be
be included
included in
in the
the actual
actual cost
cost
calculations.
calculations. These
These accrued
accrued costs
costs are
are captured
captured
through
through interfaces with the Oracle financial GL
interfaces with the Oracle financial GL
applications,
applications, such
such as
as Oracle
Oracle General
General Ledger.
Ledger.
Accrued Oracle GL OPM Cost Actual

indirect Management cost
costs


Chapter 4 - Page 6
Categorizing Cost Method Codes
Categorizing
Categorizing Cost
Cost Method
Method Codes
Codes
During
During required
required OPMCM
OPMCM global
global setup,
setup, you
you can
can
specify
specify actual
actual costing
costing as
as the
the cost
cost method
method in
in the
the
Cost Method window.
Cost Method window.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Method
Method Codes
Codes

Navigation
N = Navigator
T = Tab
M = Menu
I = Icon
H = Hyperlink
B = Button
Financials > OPM Cost Management > Costing Setup > Defining Cost Methods
> Entering Cost Method Codes Procedure

> Cost Method Codes Field Reference
> Actual Costing

Chapter 4 - Page 7
Actual Costs Calculation Types
Actual
Actual Costs
Costs Calculation
Calculation Types
Types
In
In the
the Raw
Raw Material
Material Calculation
Calculation Type
Type region
region of
of the
the
Cost
Cost Methods
Methods Code
Code window,
window, the
the option
option buttons
buttons forfor
period average costs calculate costs as
period average costs calculate costs as follows:follows:
Period
Period moving
moving average
average cost
cost (PMAC)
(PMAC) calculates
calculates the
the
average
average cost for the period while moving the
cost for the period while moving the cost
cost
of
of the
the previous
previous period
period with
with the
the inventory
inventory balance
balance
and
and cost
cost of
of the
the last
last period.
period.
Period
Period weighted
weighted average
average cost
cost (PWAC)
(PWAC) calculates
calculates
the weighted average cost of material
the weighted average cost of material receivedreceived
during
during aa period
period based
based onon the
the price
price for
for each
each receipt
receipt
and the quantity received.
and the quantity received.

Chapter 4 - Page 8
Actual Costs Calculation Types
Actual
Actual Costs
Costs Calculation
Calculation Types
Types
In
In the
the Raw
Raw Material
Material Calculation
Calculation Type
Type region
region of
of the
the
Cost
Cost Methods
Methods Code
Code window,
window, the
the other
other option
option buttons
buttons
calculate
calculate costs
costs as as follows:
follows:
Perpetual
Perpetual weighted average
weighted average cost
cost (PPAC)
(PPAC) computes
computes
the
the average cost for entered receipts and
average cost for entered receipts and quantities
quantities
within
within the
the defined
defined boundaries
boundaries of of the
the cost
cost calendar.
calendar.
Last
Last transaction
transaction (LSTT)
(LSTT) uses
uses the
the last
last transaction
transaction
within
within aa costing
costing period,
period, regardless
regardless of of whether
whether the
the
transaction is a receipt or an accounts
transaction is a receipt or an accounts payable payable
invoice.
invoice.
Last
Last invoice
invoice (LSTI)
(LSTI) uses
uses the
the last
last accounts
accounts payable
payable
invoice
invoice transaction
transaction within
within aa costing
costing period,
period, even
even if
if
there
there are
are later
later receipts
receipts with
with estimated
estimated prices.
prices.

Chapter 4 - Page 9
Categorizing Cost Calendars
Categorizing
Categorizing Cost
Cost Calendars
Calendars
Go
Go to
to the
the Cost
Cost Calendars
Calendars window
window to
to define
define aa cost
cost
calendar
calendar for
for the
the fiscal
fiscal or
or calendar
calendar year
year or
or for
for
multiple
multiple years.
years.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Cost
Cost Calendars
Calendars
Establishing the Cost Calendar

The cost calendar is not the same as the general ledger calendar nor the same as
the inventory calendar. The inventory calendar defines the periods to which
inventory transactions post and must be the same as the general ledger calendar
and periods. A cost calendar period can span many general ledger periods,but
the end date of each cost calendar period must be the same as the end date of a
general ledger period so that one set of costs applies for whole general ledger
periods.
Financials > OPM Cost Management > Costing Setup > Defining Cost
Calendars
> Defining Cost Calendar Procedure
> Cost Calendar Field Reference
> Flexibility in Restricting Cost Updates

Chapter 4 - Page 10
Defining Adjustment Reason Codes
Defining
Defining Adjustment
Adjustment Reason
Reason Codes
Codes
When
When you
you need
need to
to make
make adjustments
adjustments toto actual
actual costs
costs
calculated
calculated by
by OPM,
OPM, you
you use
use the
the Actual
Actual Costs
Costs
Adjustment
Adjustment Codes
Codes window
window toto enter
enter the
the necessary
necessary
component
component cost changes for new cost calculations.
cost changes for new cost calculations.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Actual
Actual Cost
Cost >> Adjustment
Adjustment Reasons
Reasons

OPM Financials > OPM Cost Management Users Guide > Actual Costing
Setup > Defining Adjustment Reason Codes
> Defining Actual costs Adjustment Codes Procedures
> Actual Cost Adjustment Codes Field Reference

Chapter 4 - Page 11
Practice 1
Practice
Practice 11
In
In this
this matching
matching practice,
practice, match
match the
the correct
correct actual
actual
costing parameter to the sentence:
costing parameter to the sentence:
Allocation
Allocation codes
codes
Expense
Expense allocation
allocation accounts
accounts
Adjustment
Adjustment reason
reason codes
codes
1.
1. _____
_____ provide
provide for
for situations
situations in
in which
which you
you have
have to
to
make
make adjustments
adjustments toto the
the actual
actual calculated
calculated costs.
costs.
2.
2. _____
_____ define
define the
the indirect
indirect expenses
expenses from
from the
the
general
general ledger
ledger accrued
accrued expense
expense accounts.
accounts.
3.
3. _____
_____ specify
specify the
the general
general ledger
ledger account
account keys
keys that
that
capture the overhead expenses to be allocated.
capture the overhead expenses to be allocated.


Chapter 4 - Page 12
Practice
Practice 1
1 Solutions
Solutions
1.
1. Adjustment
Adjustment reason
reason codes
codes provide
provide for
for situations
situations in
in
which
which you
you have
have toto make
make adjustments
adjustments to to the
the actual
actual
calculated
calculated costs.
costs.
2.
2. Allocation codes define
Allocation codes define the
the indirect
indirect expenses
expenses from
from
the general ledger accrued expense accounts.
3.
3. Expense
Expense allocation
allocation accounts
accounts specify
specify the
the general
general
ledger
ledger account
account keys
keys that
that capture
capture the
the overhead
overhead
expenses
expenses toto be
be allocated.
allocated.

Chapter 4 - Page 13
Defining Allocation Codes
Defining
Defining Allocation
Allocation Codes
Codes
Go
Go to
to the
the Allocation
Allocation Codes
Codes window
window toto create
create the
the
allocation
allocation codes
codes used
used to
to define
define the
the expenses
expenses from
from
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Actual
Actual Costs>
Costs> Expense
Expense Allocations
Allocations >> Codes
Codes


Setup > Defining Allocation Codes
> Defining Allocation Codes Procedure
> Defining Allocation Codes Window Field Reference

Chapter 4 - Page 14
Defining Expense Allocation Accounts
Defining
Defining Expense
Expense Allocation
Allocation Accounts
Accounts
Go
Go to
to the
the Expenses
Expenses to
to Allocate
Allocate window
window to
to specify
specify the
the
general
general ledger
ledger account
account keys
keys that
that capture
capture the
the
overhead
overhead expenses
expenses to
to be
be allocated.
allocated. Here,
Here, you
you are
are
defining the expense pool to allocate.
defining the expense pool to allocate.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup>
Setup>
Actual
Actual Costs
Costs >> Expense
Expense Allocations
Allocations >> Expenses
Expenses


Setup > Defining Expense Allocation Accounts
> Defining Allocation Accounts Procedure
> Expenses to Allocate Field Reference

Chapter 4 - Page 15
Creating Allocation Definitions
Creating
Creating Allocation
Allocation Definitions
Definitions
Allocation definition Allocation definition

parameters methods
Company
Calculated
percentage
Allocation code
Fixed
Method percentage
Allocation Definition Method Types

You can create allocation definitions by company for each allocation code. The
method can be either a calculated percentage or a fixed percentage, defined as
follows:
If the allocation percentage is to be calculated on the basis amount in the
basis account, select the Depends on Basis Amount option from the
Allocation Method drop-down list. You then define the account key,
balance type, and period/year-to-date.
Note: If you are using the calculated basis type, specify the account from
which the basis amount is to be used to determine the allocation
percentage. This is specified in the Key field of the Allocation Definition
Details region.
If the allocation percentage is to be calculated based on a fixed
percentage, select the other option from the Allocation Method drop-down
list. The Account Key, Balance Type, and Period/Year-to-Date fields are
bypassed. You enter a percentage in the Fixed% field only by item. The
allocation method applies to all lines for the allocation code.

Chapter 4 - Page 16
Creating
Creating Allocation
Definitions
In
In the
the Allocation
Definitions window,
window, you
you can
can specify
specify
two
two kinds
kinds of
of allocation
allocation information:
information:
The
The item,
item, component
component class,
class, and
and related
related
information
information required to identify where
required to identify where the
the
allocation
allocation results
results will
will be
be placed
placed
The
The account
account keys
keys that
that maintain
maintain the
the basis
basis
information
information (for
(for example,
example, thethe quantity
quantity of
of
production
production andand machine
machine usage)
usage) associated
associated with
with
each item
each item

Chapter 4 - Page 17
Creating
Creating Allocation
Definitions
Go
Go to
to the
the Allocation
Definitions window
window to
to specify
specify the
the
allocation
allocation destination.
destination.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup
Setup >>
Actual
Actual Costs
Costs >> Expense
Expense Allocations
Allocations >> Basis
Basis

Setup > Defining Allocation Definitions
> Defining Allocation Definition Procedure
> Allocation Definition Field Reference

Chapter 4 - Page 18
Creating Material Cost Component Classes
Creating
Creating Material
Material
Cost
Cost Component
Component Classes
Classes
You
You can
can use
use associated
associated costs
costs for
for all
all material
material
component
component classes
classes and
and analysis
analysis codes
codes when
when
calculating
calculating inventory value and purchase price
inventory value and purchase price
variance
variance for
for GL
GL distribution
distribution in
in Oracle
Oracle Purchasing.
Purchasing.
Material
components
-
X =
+
More accurate PPV calculation
and inventory value

Chapter 4 - Page 19
Creating Material Cost Component Classes
Creating
Creating Material
Material
Cost
Cost Component
Component Classes
Classes
Go
Go to
to the
the Material
Material Cost
Cost Component
Component Class
Class window
windowto
to
specify these parameters.
specify these parameters.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Setup>
Setup> Actual
Actual Costs
Costs >>
Material
Material Cost
Cost Components
Components

Setup > Using Material Component Classes/Analysis Codes
> Using Material Component Classes/Analysis Codes Procedure
> Item/Item Cost Class Specific Material Cost
> Component and Analysis Code Field Reference

Chapter 4 - Page 20
Online
Demonstration

following actual costing setup items:
Allocation codes
Expense allocation accounts
Allocation definitions
Material cost component class

Chapter 4 - Page 21
Practice 2 Overview
Practice
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Defining
Defining actual
actual cost
cost method
method codes
codes
Creating
Creating actual
actual cost
cost calendars
calendars
Creating
Creating adjustment
adjustment reason
reason codes
codes
Scenario
Scenario
Your
Your supervisor
supervisor has
has asked
asked you
you to
to perform
performthe
the
additional
additional setup
setup required
required to
to run
run an
an actual
actual cost
cost
process.
process.

Chapter 4 - Page 22
Practice
Instructions
Create
Create an
an actual
actual cost
cost method
method code,
code, xxAC,
xxAC, where
where
xx
xx is
is the
the number
number assigned
assigned to
to you
you by
by your
your
instructor.
instructor.
Create
Create an
an actual
actual cost
cost calendar,
calendar, using
using the
the name
name
xxAC.
xxAC.
Create
Create an
an adjustment
adjustment reason
reason code.
code.

Chapter 4 - Page 23
Practice 2 Solution
Practice
Practice 22 Solution
Solution
Cost Method Codes
Adjustment Reason Code
Cost Calendars
Method Codes
1. Open the Cost Method Codes window.
(N) Cost Management>Setup>Method Codes
2. Enter your unique identifier (xxAC).
4. Select the Actual Cost cost type.
5. Select the period weighted average cost in the Raw Material Calculation
Type region.
6. Select the period weighted average cost in the Product Calculation Type
region.
7. Save your work.
Cost Calendars
Set up your cost calendar, using your unique identifier.
1. Open the Cost Calendars window:
(N) Cost Management>Setup>Calendars
2. By default, the Company field displays the company specified in your
operator code. Name your cost calendar xxAC.
3. Enter your actual cost calendar, using your unique identifier: xxAC.
4. Enter xxAC as the cost method.
5. For Start Date, enter 01/JAN/current year.

Chapter 4 - Page 24
6. Enter 12 periods, January through December.
Note: You can also create your calendar by copying an existing calendar
that has the same number of periods to expedite the calendar creation.
Adjustments Reason Codes
1. Open the Actual Costs Adjustment Codes window:
(N) Cost Management>Setup>Actual Costs>Adjustment Reasons
2. Enter xxRC as the Code.
4. Save your work.

Chapter 4 - Page 25
Copying Item Costs
Copying
Copying Item
Item Costs
Costs
Change
ingredient
costs.
Set up source Copy data to

warehouse target
data. warehouse.
Perform
cost rollup.
Copy Item Costs Functionality

You can copy item and resource costs set up for one organization, warehouse,
calendar, period, and method to another organization, warehouse, calendar,
period, and method. When copying items, you can modify the cost by either a
percentage of the original cost or a fixed amount.
You can set up all of your costing data for one organization and
warehouse and then copy those costs to other organizations and
warehouses rather then set up the same or similar data repeatedly.
You can also copy from one calendar to the next if you are going to use
the same costs.
Even if the costs for the target organization or warehouse are different, it
may still be more efficient to do the following:
Set up the data for a source organization or warehouse.
Copy the data to the target organization or warehouse.
Change the ingredient costs for the target organization or
warehouse.
Perform a cost rollup for the target organization or warehouse.

Chapter 4 - Page 26
Copying Item Costs
Copying
Copying Item
Item Costs
Costs
In
In the
the Copy
Copy Item
Item Costs
Costs window,
window, you
you can
can copy
copy one
one
item,
item, a range of items, one item cost class, or
a range of items, one item cost class, or aa range
range
of
of item
item cost
cost classes
classes defined
defined for
for one
one organization,
organization,
warehouse,
warehouse, calendar,
calendar, period,
period, and
and cost
cost method
method to to
another.
another.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Copy
Copy Costs>
Costs>
Copy
Copy Item
Item Costs
Costs

OPM Financials > OPM Cost Management Users Guide > Non-iterative Cost
Processing > Copying Costs
> Copying Item Costs Procedure
> Copy Item Costs Field Reference
> Copying Costs Examples

Chapter 4 - Page 27
Copying Resource Costs
Copying
Copying Resource
Resource Costs
Costs
Change
resource
costs.
Set up source Copy data to

organization target
data. organization.
Perform
cost rollup.
Copy Resource Costs Functionality

With the Copy Resource Costs window, you can copy resource costs defined for
one organization, calendar, period, cost method, and resource class to another.
Even if the costs for the target organization are different, it may still be more
efficient to do the following:
Set up the data for a source organization.
Copy the data to the target organization.
Change resource costs for the target organization.
Perform a cost rollup for the target organization.

Chapter 4 - Page 28
Copying Resource Costs
Copying
Copying Resource
Resource Costs
Costs
In
In the
the Copy
Copy Resource
Resource Costs
Costs window,
window, you
you can
can copy
copy
the
the resource
resource costs
costs defined
defined for
for one
one organization,
organization,
calendar,
calendar, period,
period, cost
cost method,
method, and
and resource
resource class
class to
to
another.
another.
(N)
(N) OPM
OPM Financials>
Financials> Cost
Cost Management
Management >> Copy
Copy Costs
Costs >>
Copy
Copy Resource
Resource Costs
Costs


OPM Financials > OPM Cost Management Users Guide > Non-iterative Cost
Processing > Copying Resource Costs
> Copying Resource Costs Procedure
> Copy Resource Costs Field Reference

Chapter 4 - Page 29
Summary
Summary
Summary
In
In this
this lesson,
lesson, you
you should
should have
have learned
learned how
howto:
to:
Categorize
Categorize actual
actual cost
cost method
method codes
codes
Create
Create an
an actual
actual cost
cost calendar
calendar
Construct
Construct adjustment
adjustment reason
reason codes
codes
Define
Define allocation
allocation codes
codes
Define
Define expense
expense allocation
allocation accounts
accounts
Create
Create allocation
allocation definitions
definitions
Establish
Establish material
material component
component classes
classes and
and
analysis
analysis codes
codes
Copy
Copy item
item and
and resource
resource costs
costs


Chapter 4 - Page 30
Calculating and Processing
Actual Costs
Chapter 5
Calculating and Processing Actual Costs

Chapter 5 - Page 1
11i
11i Oracle
Oracle Process
Manufacturing
Cost Management
Cost Management
Calculating
Calculating and
and Processing
Processing Actual
Actual Costs
Costs

Chapter 5 - Page 2
Objectives
Objectives
Objectives
After
After completing
completing this
this lesson,
lesson, you
you should
should be
be able
able to
to
do
do the
the following:
following:
Process
Process cost
cost allocations
allocations
Perform
Perform allocation
allocation and
and invoice
invoice price
price maintenance
maintenance
Calculate
Calculate and
and adjust
adjust actual
actual costs
costs
Execute
Execute standard
standard cost
cost period
period final
final processing
processing
Execute
Execute actual
actual cost
cost period
period final
final processing
processing
Update
Update accounting
accounting costs
costs

Chapter 5 - Page 3
Actual
Actual Cost
Cost Calculation
Calculation Prerequisites
Prerequisites
7.
Cost
adjustments
5. 6.
Interface for GL Burden
expense allocations details
1. 2. 3. 4.
Purchasing Acquisition AP Close production
receipts cost entries interface batches

This lesson covers the procedures for generating actual costs and making
adjustments to the costs that OPMCM calculates.
Before you can produce accurate actual cost calculations, you must do the
following:
Enter all purchasing receipts with any price corrections.
Complete acquisition cost entries.
Establish an Oracle or third-party accounts payable (AP) interface.
Close production batches for the period.
Enter or establish an interface to enter general ledger (GL) expense
allocations.
Assign all burden details.
If cost adjustments subsequent to the update require that another update be
run, complete all cost adjustments prior to that second update.

Chapter 5 - Page 4
Material Costs Calculation Hierarchy
Material
Material Costs
Costs Calculation
Calculation Hierarchy
Hierarchy
Invoice price
Adjusted
receipt price
Purchase order
price
Calculating Material Costs

Material costs are calculated using the following guidelines:
OPM bases the calculation on prices for material receipts received through
the Oracle Purchasing application.
The cost of acquiring material (for example, freight costs) optionally can
be included in cost calculations.
An interface with Oracle Accounts Payable or a third-party accounts
payable package obtains the invoice price derived by OPM.
If the final invoice price (the amount actually paid for material, pegged to
a receipt) exists during the same calendar period as the material receipt,
OPM uses the invoice price to calculate the material costs.

Chapter 5 - Page 5
Production and Burden Cost Components
Production
Production and
and Burden
Burden Cost
Cost
Components
Components
Production
Production batch
batch costs
costs are
are calculated
calculated using
using the
the
following
following guidelines:
guidelines:
The
The actual
actual ingredient
ingredient usage
usage is
is calculated
calculated from
from the
the
OPM Production application captured
OPM Production application captured closedclosed
batches.
batches.
The
The ingredient
ingredient cost
cost is
is calculated
calculated using
using the
the actual
actual
cost
cost calculation
calculation for
for your
your cost
cost method.
method.
Production batch costs

Chapter 5 - Page 6
Production and Burden Cost Components
Production
Production and
and Burden
Burden Cost
Cost
Components
Components
Burden
Burden cost
cost details
details are
are calculated
calculated using
using the
the following
following
guidelines:
guidelines:
Actual
Actual burden
burden cost
cost calculations
calculations are
are identical
identical to
to the
the
standard
standard cost burden calculations used during the
cost burden calculations used during the
standard
standard cost
cost rollup
rollup process.
process.
You
You can
can define
define and
and complete
complete burden
burden costing
costing for
for
materials
materials or
or products.
products.
You
You must
must complete
complete burden
burden
costing before computing
costing before computing
production
production costs.
costs.
Burden cost details


Chapter 5 - Page 7
Allocating Costs to GL Expense
Allocating
Allocating Costs
Costs to
to GL
GL Expense
Expense
You
You can
can use
use interfaces
interfaces to
to Oracle
Oracle GL
GL or
or third-party
third-party GL
GL
applications
applications to
to import
import defined
defined expense
expense allocations.
allocations.
You need to make any adjustments to allocations
You need to make any adjustments to allocations
before
before performing
performing actual
actual cost
cost calculations.
calculations. As
As an
an
alternative,
alternative, you can enter account balances into OPM
you can enter account balances into OPM
manually, using the Allocation Maintenance
manually, using the Allocation Maintenance window.window.
Oracle OPM Cost

General Management
Ledger

Chapter 5 - Page 8
Establishing Cost Allocation Process Controls
Establishing
Establishing Cost
Cost Allocation
Allocation
Process
Process Controls
Controls
To
To process
process aa cost
cost allocation,
allocation, go
go to
to the
the Cost
Cost
Allocation
Allocation Process
Process Control
Control window.
window.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Expenses
Expenses >>
Actual
Actual Costs
Costs >> Allocations
Allocations
Navigation
N = Navigator
T = Tab
M = Menu
I = Icon
H = Hyperlink
B = Button
(Help) Oracle Manufacturing Applications >Oracle Process Applications >

OPM Financials > OPM Cost Management Users Guide > Actual Cost
Calculations > Processing Cost Allocations
> Processing Cost Allocation Procedure
> Cost Allocation Processing Field Reference

Chapter 5 - Page 9
Performing Allocation Maintenance
Performing
Performing Allocation
Allocation Maintenance
Maintenance
Using
Using the
the Cost
Cost Allocation
Allocation General
General Ledger
Ledger Account
Account
Maintenance
Maintenance window,
window, you
you can
can modify
modify accrued
accrued
expenses
expenses that
that were
were allocated
allocated from
fromthe
the general
general ledger
ledger
through
through the
the interface
interface with
with Oracle
Oracle GL
GL or
or aa third-party
third-party
GL application..
GL application
(N)
(N) OPM
OPM Financials
Financials >> Actual
Actual Costs
Costs >>Expenses>
Expenses>Maintenance
Maintenance


Chapter 5 - Page 10
Performing Invoice Price Maintenance
Performing
Performing Invoice
Invoice Price
Price Maintenance
In
In the
the event
event you
you must
must correct
correct or
or otherwise
otherwise modify
modify
purchase
purchase order
order prices
prices that
that were
were invoiced,
invoiced, you
you can
can
use
use the
the Invoice
Invoice Price
Price Maintenance
Maintenance window
window toto enter
enter
price
price modifications.
modifications.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >> Actual
Actual Costs
Costs >>
AP
AP invoice
invoice Prices
Prices

Calculations > Maintaining Invoice Prices
> Maintaining Invoice Price Procedure
> Invoice Price Maintenance Field Reference

Chapter 5 - Page 11
Online
Demonstration

following actual cost calculations:
Cost allocation process control
Allocation maintenance
Invoice price maintenance

Chapter 5 - Page 12
Raw
Raw Material
Material Cost
Cost Calculation
Calculation Methods
Methods
Cost Calculation
Methods
Period moving
average cost
Period weighted
average cost
Perpetual weighted
average cost
Last transaction cost

methods

OPMCM uses the following five methods to calculate raw material actual costs:
The period moving average cost (PMAC): Calculates the weighted
average cost for the period while including the previous period ending
inventory balance at the prior period cost.
The period weighted average cost (PWAC): The weighted average cost of
the raw material received during the period, based on each receipt and the
quantity received.
The perpetual weighted average cost (PPAC), which is the average cost
for the entered receipts and quantities within the defined boundaries of the
cost calendar.
The last transaction cost method (LSTT): Uses the last transaction within
the costing period, regardless of whether the transaction is a receipt or an
accounts payable invoice.
The last invoice transaction cost (LSTI): Uses the last accounts payable
invoice transaction within the costing period, even if there are later
receipts with estimated prices.

Chapter 5 - Page 13
PMAC GL Expense Component Cost for Raw Materials
PMAC
PMAC GL
GL Expense
Expense Component
Component Cost
Cost
for
for Raw
Raw Materials
Materials
Component cost
raw materials =
Previous Previous GL expense
( period
inventory
balance

period
GL expense
component cost
)+ component
amount for
current period
Previous
period Received
inventory + quantity
balance


Chapter 5 - Page 14
PMAC GL Expense Component Cost for Products
PMAC
PMAC GL
GL Expense
Expense Component
Component Cost
Cost
for
for Products
Products
Component cost
products =
Previous Previous GL expense
( period
inventory
balance

period
GL expense
component cost
)+ component
amount for
current period
Previous
Received
period Produced
inventory + quantity + quantity
(if any)
balance


Chapter 5 - Page 15
The Period Weighted Average Cost Method
The
The Period
Period Weighted
Weighted Average
Average Cost
Cost Method
Method
S ( Transaction
quantity Price
) Raw material
= actual costs
Transaction
S quantity
S = the summation


Chapter 5 - Page 16
The Perpetual Weighted Average Cost Method
The
The Perpetual
Perpetual Weighted
Weighted Average
Average
Cost
Cost Method
Method
S ( Transaction
quantity Price
) Raw material
= actual costs
Transaction
S quantity
S = the summation


Chapter 5 - Page 17
The Last Transaction Cost Methods
The
The Last
Last Transaction
Transaction Cost
Cost Methods
Methods
Last transaction Raw material

in costing period = actual costs
LSTT cost method
Last AP invoice Raw material

transaction = actual costs
LSTI cost method

Chapter 5 - Page 18
Performing Actual Costs Calculations
Performing
Performing Actual
Actual Costs
Costs Calculations
Calculations
Go
Go to
to the
the Start
Start Actual
Actual Cost
Cost Process
Process window
windowtoto set
set the
the
parameters
parameters to to execute
execute the
the actual
actual cost
cost process.
process.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Actual Costs
Costs >>
Actual
Actual Cost
Cost Process
Process


Calculations > Calculate Actual Costs
> Start Actual Cost Process Field Reference
> Actual Cost Process Field Reference
> Actual Cost Process - Additional Menu Features

Chapter 5 - Page 19
Adjusting Actual Costs
Adjusting
Adjusting Actual
Actual Costs
Costs
After
After executing
executing the
the actual
actual cost
cost process,
process, you
you can
can
adjust
adjust the
the final
final calculated
calculated actual
actual cost
cost of
of aa material
material or
or
product
product based
based onon the
the quantity
quantity and
and unit
unit cost.
cost.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Actual Costs
Costs >>
Adjustments
Adjustments


Adjustments > Using Actual Cost Adjustments
> Using Actual Cost Adjustments Procedure
> Actual Cost Adjustment Field Reference

Chapter 5 - Page 20
OPM Actual Cost Adjustments Sample Parameters
OPM
OPM Actual
Actual Cost
Cost Adjustments
Adjustments
Sample
Sample Parameters
Parameters
Actual Cost Adjustments
Specified parameters for the zero activity formula example:

Component class: MATERIAL
Analysis code: ADJ
Adjustment quantity: 50
UOM: UNITS
Cost adjustment: .75
(N) OPM Cost Management > Actual Cost > Adjustments
Formula Example of Zero Activity Adjustment in Actual Costing

Formula data example is:
Current period
Cost componentMATERIAL
Analysis codeADJ
Adjustment quantity50
Cost.75
Prior period costing data is:
Analysis codeADJ
Cost1.25
Inventory balance1,000 units
The cost of the item calculated is: PMAC Cost = [(1000 x 1.25) + (50 x.
75)] / (1000 + 50) = 1.2262

Chapter 5 - Page 21
OPM Actual Cost Adjustments Sample Parameters
OPM
OPM Actual
Actual Cost
Cost Adjustments
Adjustments
Sample
Sample Parameters
Parameters
Actual Cost Adjustments
Specified Parameters for the zero quantity formula example:

Component class: MATERIAL
Analysis code: ADJ
Adjustment quantity: 0
UOM: UNITS
Cost adjustment: negative 250
(N) OPM Cost Management > Actual Cost > Adjustments
Formula Examples of Zero Quantity Adjustment in Actual Costing

Formula data example is:
Current period
Analysis codeADJ
Adjustment quantity0.0
Cost adjustmentnegative 250
Batches and PO receipts are 500 units. Cost is 1.10 per unit
Prior period costing data is:
Analysis codeADJ
Cost1.25
Inventory balance1,000 units
The cost of the item calculated is: PMAC Cost = [(1000 x 1.25) + (500 x.
1.10) - 250] / (1000+500) = 1.0333

Chapter 5 - Page 22
Viewing Actual Costs
Viewing
Viewing Actual
Actual Costs
Costs
Formula
Items
ingredients
Standard
costs
Cost
burden
Actual
costs
Routings


Chapter 5 - Page 23
Viewing Actual Cost Transactions
Viewing
Viewing Actual
Actual Cost
Cost Transactions
Transactions
If
If you
you want
want to
to view
view the
the transactions
transactions in
in aa costing
costing
period
period that
that OPM
OPM used
used to
to calculate
calculate the
the actual
actual costs,
costs,
go to the Actual Cost Transactions View
go to the Actual Cost Transactions View window.window.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Actual Cost
Cost >>
View
View Transactions
Transactions (B)
(B) Find
Find


OPM Financials > OPM Cost Management Users Guide
> Viewing Actual Cost Calculations Procedure
> Actual Cost Transactions View Field Reference

Chapter 5 - Page 24
Displaying Item Costs
Displaying
Displaying Item
Item Costs
Costs
By
By selecting
selecting parameters,
parameters, you
you can
can use
use the
the Cost
Cost
Details
Details window
windowtoto display
display item
itemcosts
costs for
for aa particular
particular
cost calendar, period, and cost method.
cost calendar, period, and cost method.
(N)
(N) OPM
OPM Financials
Financials >> Cost
Cost Management
Management >>
Cost
Cost Details
Details (M)
(M) Special
Special>> Item
Item Cost
Cost List
List


Standard Costs > Viewing Standard Costs
> Viewing Item Costs Procedure
> Item Cost Selection Field Reference
> Item Cost List Field Reference

Chapter 5 - Page 25
Online
Demonstration

following actual costing process steps:
Start actual cost process
Adjust actual costs
Display cost details
View actual costs

Chapter 5 - Page 26
Practice 1 Overview
Practice
Overview
This
This hands-on
hands-on practice
practice covers
covers the
the following
following topics:
topics:
Entering
Entering transactions
transactions for
for the
the actual
actual cost
cost process
process
Executing
Executing the
the actual
actual cost
cost process
process
Viewing
Viewing the
the status
status of
of the
the actual
actual cost
cost process
process
Scenario:
Scenario:
Standard
Standard costing
costing has
has been
been set
set up;
up; now
now your
your
company
company wants
wants to
to know
knowthe
the actual
actual cost
cost of
of the
the regular
regular
finished
finished goods,
goods, using
using standard
standard resource
resource costs
costs in
in the
the
actual
actual cost
cost calculations.
calculations.

Chapter 5 - Page 27
Practice
Instructions
Because
Because the
the actual
actual cost
cost calculation
calculation uses
uses transactions
transactions
within
within the
the system
systemto to calculate
calculate actual
actual costs,
costs, you
you need
need
to enter stock receipt transactions to test the actual
to enter stock receipt transactions to test the actual
cost
cost process.
process. InIn the
the Stock
Stock Receipts
Receipts window,
window, enter
enter the
the
following information, for warehouse
following information, for warehouse Zx: Zx:
Item Name Ship Wt. UOM Received Qty. Price
ZxRM1S LB 1,000 0.95
ZxRM2S LB 500 2.10
ZxPKGS EA 20 4.95
(N) OPM Logistics > Purchase Management > Stock Receipts

Enter Stock Receipts
1. Open the Stock Receipts window.
(N) OPM Logistics>Purchase Management>Stock Receipts
The Receipt TR1 field displays defaults from your operator code.
2. Press [Tab] to assign a new stock receipt number.
3. Use lookup to select the shipping vendor.
4. In the Receipt folder, make sure Ship Wt UOM = LB. Change the date
received to sometime during your assigned month.
5. In the Destination folder, select warehouse Zx.
6. Accept all other defaults.
7. Click the Lines button to enter details.
8. Enter your selection criteria as detailed in the table in the slide.

Chapter 5 - Page 28
Practice
Instructions
The
The items
items in
in the
the transaction
transaction need
need toto be
be included
included in
in aa
production
production batch
batch for
for the
the intermediate
intermediate and and finished
finished
products.
products. Create,
Create, release,
release, edit,
edit, certify,
certify, and
and close
close
these
these productions batches. Navigate to the
productions batches. Navigate to the
Production
Production Batches
Batches window,
window, and
and enter
enter production
production
batches
batches asas follows:
follows:
item
itemZxINTS,
ZxINTS, Plan
Plan Quantity
Quantity == 100
100
Item
ItemZxFGS,
ZxFGS, Plan
Plan Quantity
Quantity == 100
100
(N) OPM Process Execution > Production Management > Batches

Practice 1 Solutions (continued)

Create a Production Batch for ZxINTS
1. Open the Formulas window:
(N) OPM Product Development>Formula Management>Formulas
Copy your ZxINTS costing formulas to create a new version,
version 2.
Edit the effectivities for formula use to Production.
2. Open the Product Batches window, and enter the following information
using your unique identifier:
Item: ZxINTS
Effective Qty: 100 LB
(N) OPM Process Execution>Production Management>Batches
3. Click Accept or OK.
4. Save your work.
5. Make a note of your batch number.

Chapter 5 - Page 29
Practice 1 Formula and Product Structure
Practice
Practice 11
Formula
Formula and
and Product
Product Structure
Structure
Formula ZxINTS
ZxTINTS Product
Rollup
ZxTRM1S Ingredient standard cost
ZxTRM2S Ingredient
ZxBYPRODUCT Run
actual cost
Formula TRxFGS
Cost Burdens
ZxRFGS Product
ZxLABOR1
ZxTINTS Ingredient ZxADMIN
ZxPKGS Ingredient
Practice 1 Solutions (continued)

Release the Batch
1. Open the Batches window:
(N) OPM Process Execution>Production Management>Batches
2. Query up batch number.
3. Select Release from the Special menu.
4. Click OK.
Certify the Batch
1. Reopen the Batches window, and query up your batch number.
2. Select Certify from the Action menu.
3. Click OK in the Batches window.
Close the Batch
1. Select Close from the Action menu.
2. Click Yes.
3. Click OK.

Chapter 5 - Page 30
Practice
Instructions
Enter
Enter the
the following
following parameters
parameters in
in the
the Actual
Actual Cost
Cost
Process
Process window:
window:
Calendar:
Calendar: xxAC
xxAC
Cost
Cost method:
method: xxAC
xxAC
(N) OPM Financials > Cost Management > Actual Costs >
Actual Cost Process
View
View the
the actual
actual costs
costs for
for ZxINTS.
ZxINTS.
Executing the Actual Cost Process

1. Rerun the actual cost process.
2. View your ZxINTS actual cost.

Chapter 5 - Page 31
Overview Performing Cost Update
Overview
Overview
Performing
Performing Cost
Cost Update
Update
1.
1. Perform
Perform thethe cost
cost rollup
rollup for
for the
the Perform
period
period for
for standard
standard cost,
cost, or
or run
run cost rollup.
the actual cost process.
the actual cost process.
2.
2. Verify that
Verify that there
there are
are no
no major
major
errors on the cost calculation.
errors on the cost calculation. View
error messages.
3.
3. Perform
Perform thethe cost
cost update
update to
to create
create
item
itemgeneral
general ledger
ledger cost
cost records
records
for
for OPM
OPMManufacturing
Manufacturing Perform
Accounting
Accounting Controller
Controllertoto use
use and
and cost update.
pass
pass to the general ledger. IfIf an
to the general ledger. an
update
update isis not
not performed,
performed, the
the
inventory
inventory is is valued
valued at
at zero
zero cost.
cost.

Note
If you select to calculate PPV or PO transactions and you have not updated the
item costs, the entire value of that inventory is shown as an entry to the PPV
account with zero going to the inventory account.
You can update the same item in the same period a second time as long as it is
not a final cost update.

Chapter 5 - Page 32
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Complete and close POC steps

and production batches.
Complete sales shipments and

close AR.
Run inventory close
processing.
Complete cycle counts and
adjustments.
Complete purchasing and

receiving and close AP.

There are four major steps to execute in the actual cost final process:
You can select either Special>Preliminary Close or Special>Final
Close.
Preliminary close is closed to transactions, but you can still open it
and post transactions for the period.
Final close is closed to transactions and balances are frozen. You
cannot open the period again.
To calculate actual costs, specify the period for which actual costs are to
be processed in the Actual Cost Process window.

Chapter 5 - Page 33
Actual Cost Process Step 1
Actual
Actual Cost
Cost Process
Process
Step
Step 11
Close
Close the
the inventory
inventory calendar
calendar period
period to
to prevent
prevent any
any
further
further inventory
transactions from
frombeing
being posted
posted to
to
the
the period. You can then select either preliminary or
period. You can then select either preliminary or
final
final close
close from
from the
the Special
Special menu.
menu.
(N) OPM Inventory Control>Inventory>Inventory Close

Chapter 5 - Page 34
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Make actual cost Enter or modify cost

adjustments. burdens.
Run inventory close

Invoice price
processing.
maintenance.
Run GL expense
allocation process.
Run actual cost
process.
Run invoices price
interface.
Actual Cost Period End Processing (continued)

subsidiary ledger. You can later change component costs or make actual
cost adjustments and then run another cost update to replace those costs.

Chapter 5 - Page 35
Actual
Actual Cost
Cost Process
Process
Step
Step 22
To
To calculate
calculate actual
actual costs,
costs, specify
specify the
the period
period for
for which
which
actual
actual costs
costs are
are to
to be
be processed
processed inin the
the Actual
Actual Cost
Cost
Process
Process window.
window.
(N) OPM Financials > Cost Management > Actual Costs >
Actual Cost Process

Chapter 5 - Page 36
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Run actual cost process.
Run cost update Test update


ledger.
Run inventory
revaluation.


Chapter 5 - Page 37
Actual
Actual Cost
Cost Process
Process
Step
Step 33
Execute
Execute the
the preliminary
preliminary update
update costs
costs for
for the
the general
general
ledger
ledger (GL)
(GL) in
in the
the Cost
Cost Update
Update window.
window. You
You can
can then
then
optionally run a test update of the subsidiary ledger.
optionally run a test update of the subsidiary ledger.
You
You can
can later
later change
change component
component costs
costs or
or actual
actual cost
cost
adjustments
adjustments and then run another cost update to
and then run another cost update to
replace
replace those
those costs.
costs.
(N) Manufacturing Accounting Controller > GL Cost Update

Chapter 5 - Page 38
Actual
Actual Cost
Cost Process
Process
Step
Step 44
To
To execute
execute the
the final
final cost
cost update,
update, specify
specify that
that this
this
update
update is
is final;
final; this
this locks
locks the
the component
component costs
costs or
or
makes actual cost adjustments. Then run
makes actual cost adjustments. Then run anotheranother
cost
cost update
update toto replace
replace those
those costs.
costs.
(N) Manufacturing Accounting Controller > GL Cost Update

Chapter 5 - Page 39
Starting the GL Cost Update Process
Starting
Starting the
the GL
GL Cost
Cost Update
Update Process
Process
The
The cost
cost update
update process
process updates
updates the
the subsidiary
subsidiary
ledgers
ledgers and
and makes
makes all
all component
component costs
costs available
available for
for
general ledger postings.
general ledger postings.
(N)
(N) OPM
OPM Financials>
Financials> Manufacturing
Manufacturing Accounting
Accounting Controller
Controller >>
GL
GL Cost
Cost Update
Update


Calculations > Calculate Actual Costs
> Start Cost Update Field Reference

Chapter 5 - Page 40
Practice 2 Overview
Practice
Overview
This
This fill-in-the-blank
fill-in-the-blank practice
practice covers
covers the
the steps
steps in
in
executing
executing thethe actual
actual cost
cost process.
process.
Instructions:
Instructions:
What
What steps
steps are
are missing
missing from
from the
the Actual
Actual Cost
Cost Period
Period
End
End Processing
Processing flowchart
flowchart on
on the
the following
following two
two
pages?
pages? Where
Where there
there are
are questions
questions marks,
marks, provide
provide the
the
missing
missing process
process name.
name.

Chapter 5 - Page 41
Practice 2Chart 1 Actual Cost Period End
Processing
Practice
Practice 2Chart
2Chart 1
1
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Enter or modify cost

? adjustments.
burdens.
Run inventory close

Invoice price
processing.
maintenance.
Run ?.
Run ?.
Run invoices price
interface.

Chapter 5 - Page 42
Practice 2Chart 2 Actual Cost Period End
Processing
Practice
Practice 2Chart
2Chart 2
2
Actual
Actual Cost
Cost Period
Period End
End Processing
Processing
Run ?.
Run ?. Test update ?.

ledger.
Run ?.
Practice 2 Solution
1. Run the actual cost process.
2. Run the preliminary cost update.
3. Test and update the subsidiary ledger.
4. Run the final cost update and update the subsidiary ledger.
5. Run inventory revaluation.

Chapter 5 - Page 43
Summary
Summary
Summary
In
In this
this lesson,
lesson, you
you should
should have
have learned
learned how
howto:
to:
Process
Process cost
cost allocations
allocations
Perform
Perform allocation
allocation and
and invoice
invoice price
price maintenance
maintenance
Calculate
Calculate and
and adjust
adjust actual
actual costs
costs
Execute
Execute standard
standard cost
cost period
period final
final processing
processing
Execute
Execute actual
actual cost
cost period
period final
final processing
processing
Update
Update accounting
accounting costs
costs

Chapter 5 - Page 44

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11i Oracle Process

Restricted Rights Legend

Technical Contributors and Reviewers

This book was published using:

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Describing cost management terms and concepts

Recognizing cost management processes within their company

Recognizing inventory and production processes within their company

Navigating in the Oracle applications

A working knowledge of Oracle Process Manufacturing foundation

There are no prerequisites for this course.

How This Course Is Organized

11i Oracle Process Manufacturing Cost Management is an instructor-led course

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Title Part Number

System release bulletins

Installation and users guides

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Convention Element Example

Caps and Buttons, Click the Executable button.

Courier new, Code output, Code output: debug.set (I, 300);

Initial cap Graphics labels Customer address (but Oracle Payables)

Italic Emphasized words Do not save changes to the database.

Uppercase SQL column Use the SELECT command to view

Convention Element Example

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Commas Key sequences Press and release keys one at a time:

Typographic Conventions in Code

Convention Element Example

Passwords DROP USER scott

Lowercase Syntax variables CREATE ROLE role

Typographic Conventions in Navigation Paths

This simplified path translates to the following:

2. (M) From the menu, select Query > Find.

3. (B) Click the Approve button.

11i Oracle Process Manufacturing Cost Management Table of Contents

Typographical Conventions in Help System Paths

The following help navigation path, for example

(Help) General Ledger > Journals > Enter Journals

represents the following sequence of actions:

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

To display help for a current window:

A web browser window appears, containing search and navigation frames on

The document frame provides information on the window containing the

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11i Oracle Process Manufacturing Cost Management Table of Contents

Searching for Help

A list of titles, ranked by relevance and linked to the documents in question, is

Copyright Oracle Corporation, 2000. All rights reserved.

11i Oracle Process Manufacturing Cost Management Table of Contents

Copyright Oracle Corporation, 2000. All rights reserved.

Copyright Oracle Corporation, 2000. All rights reserved.

Copyright Oracle Corporation, 2000. All rights reserved.

Copyright Oracle Corporation, 2000. All rights reserved.

Copyright Oracle Corporation, 2000. All rights reserved.