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Laura Miller Oracle August 2001
but it is not used for inventory purposes. and variances are recorded by the system. and creates accounting adjustments. then it is not necessary to create the frozen cost for the purchased item. The standard cost is determined by a company to reflect all the costs of an item for a time period.Standard costs for items are usually set once a year. These variances are then reported to the General Ledger. This is the agreed on price that will be used for all reports and uses until the standard cost is updated. which must be using standard costs. if the item is already on a bill of material that will be rolled up at a later time. If using Work in Process. and then the cost update is used to transfer the pending cost to the standard cost. the cost update re-values discrete job balances.Submits adjustment reports . The costs can only be updated from the master costing organization. resource costs are not used because these items generally do not consume resources. If sharing costs across organizations. Actual costs of production are measured against those standards. For items that have existing transactions. . The actual cost of items is known. For these items.Moves the cost type to the frozen cost type . but can be set for a short time period as well. Also.Creates item cost history . The item must have a pending cost defined.Can save update details for rerunning the adjustment reports The variance amount that is created during the standard cost update is the new standard cost minus the old standard cost. Standard Cost update prints three reports: Inventory Standard Cost Adjustment Report (CSTRUSIA) Intransit Standard Cost Adjustment Report (CSTRUSTA) WIP Standard Cost Adjustment Report (CSTRUSJA) Purchased items use material and material overhead cost elements. the cost update program automatically revalues on-hand balances in the organizations that share costs. Note: The Use Default Cost/Controls on the item cost screen must be set to NO when trying to create a pending cost if transactions already exist. The update performs the following tasks: . The Cost Update process requires that there is an open accounting period.Creates accounting transactions . the frozen cost cannot be entered and saved. depending on the business rules of the company.
Manufactured items use the Bill of Material and routings to gather costs... These are included in the overall cost of the item. The first is the standard cost. These costs can be broken into cost sub-elements for more detail: Material . A cost rollup will compile all the cost of an assembly. and the second is for the difference between the actual cost and the standard cost. Frozen . These rolled up costs are then updated to standard costs. Users can add as many cost types as required.Extra costs associated with purchased items i. The item costs are broken down by these elements in subinventories and in Work in Process. These costs cannot be rolled up because these are the end cost. This report can be used prior to closing jobs .e. overhead and outside processing are added to the manufactured item. The Discrete Job Value report shows the costs incurred. depreciation. the costs relieved.Costs of subcontractor services i. but these two type are seeded and cannot be deleted. freight costs Resources . Each have their own set of accounts to hold costs.These are the standard costs of items. and the resulting variances. painting To divide costs across a business.These costs are created when there are new parts or when the user wants to add new costs ahead of the regular year end cost update.. subinventories and WIP classes are used. then perform the standard cost update from pending to frozen.e. Rollup pending costs (or any other cost type). the destination of rollups. labor costs Overhead .e. the costs of resources.e.People or machines used in manufacturing i. There are two seeded cost types in the system.General costs of doing business i. Pending . These accounts are setup in the organization parameters.Raw material costs Material Overhead . WIP classes have two accounts: one for costs and one for variances. This will set the desired standard to be used for the specified time period. utilities Outside Processing . In addition to material and material overhead cost elements. These costs are separate from frozen costs and can be transferred to frozen at any time by using the cost update process..
A default class can be set in the parameters. ** It is best to run the cost update at the beginning of an inventory accounting period before new transactions start for the period. These can then be transferred to the general ledger. labor. then transactions will not be processed properly and will need to be resubmitted. It is debited from other systems outside manufacturing.to review variances that may occur for job closes and make the appropriate adjustments prior to the job close. i. .standard. the Cost Manager spawns the appropriate worker: The Material Cost Worker validates costing data. payroll.. The standard rate is used and recorded against the WIP class. A WIP class is required for each type of workorder -. It is credited by any resource usage. Absorption account . The cost transaction processors must be started before entering transactions. expense non-standard. then the costed_flag is set = N or E and must be fixed and resubmitted for processing. This is generally not done. but a WIP class is mandatory. If the data cannot be validated.Used by WIP transactions These can be activated in the Request Interface Managers form: Inv > Setup > Transactions > Interface Managers Special > Launch The Cost Manager is a concurrent process that spawns workers that process the transactions.e. The Cost Manager runs in the background at a set interval. the costed_flag is set to NULL and the rows are inserted into the MTL_TRANSACTIONS_ACCOUNTS table. All accounting processing uses the following processors: Material Cost Transaction processor . asset non-standard. If the data is okay.This is used the most. i. If these are not started.Used by Inventory items Resource Cost Transactions processor .e. Resources also use accounts to track the costs. Two accounts are used: Variance account .This would be used if an actual rate was being entered against a job. When transactions are available for processing. If the data is not okay. The Resource Cost Worker validates data and moves it to WIP_TRANSACTION_ACCOUNTS for transfer.
absolute amounts. The report can also include percentage cost differences. or minimum unit costs. The Maintain Cost History Privilege must be included in the user’s responsibility to perform this process. This report can sort by item. Before running cost update. This report can be run for specific item. Options to update: .for specific item . Steps to perform Standard Cost Update: 1. perform the revaluation and after completing the revaluation. it resubmits the accounting processors. as well as this level/previous level costs. The Cost Type Comparison Report displays differences in item costs for any two cost types. This process copies the pending cost to frozen costs and prints the cost update reports.range of items . and work in process. range of items or categories. Standard Cost Update is incompatible with Period Close.then the transactions will remain in the WIP_COST_TXN_INTERFACE table and will need to be resubmitted. Rollup costs 2. Update to frozen costs. Comparisons can be performed on cost elements and subelements. since accounting transactions occur in a batch process. .zero cost items . 3. category or subinventory. print and review reports: The Standard Cost Adjustment Report shows the valuation changes for inventory.items whose costs are NOT based on rollup **Note: The update process commits to the database and changes the value of inventory.specific category . Standard Cost update can be submitted even when running transactions. intransit.items whose costs are based on rollup . When submitting the cost update it: will turn off the accounting. It is recommended that this responsibility be assigned a high level of security. operations. Job Close and GL transfer processes. activities.all costs to include a combination of overhead resource activity and item costs .
This history can be viewed for each item in total and by cost element. Note: The Privilege to View Cost security function must be included in the user’s responsibility to view the cost history. Specify the general ledger account. This is used by cost management to collect the changes in values and generate transactions that adjust the inventory accounts.4. 5.When happy compare with frozen costs 4 .Update standard costs from new cost type • Using the Discrete Job Value report and the detail and summary amounts. Inventory is adjusted by subinventory and elemental cost accounts. . Explanation: Solution: Have not carried out the full procedure 1 . then the inventory and WIP on-hand quantities are saved.Update the new cost type 3 . The Privilege to Maintain Cost security function must be included as part of the user’s responsibility 6. Cost Adjustment Reports If the save option is chosen when running cost update. WIP accounting class defines the adjustment account used for discrete jobs. This history can be purged when it is no longer needed. This can then be reprinted.Copy frozen costs to a new cost type 2 . Cost History This is a history of each item that is in inventory. These reports can be purged when no longer needed Note: The Privilege to Maintain Cost security function must be included as part of the user’s responsibility Common Problems after running the Cost Update: • The user has run cost update but not all costs have changed. The history is held for each cost update. they do not agree after a cost update although the total variance does. WIP is adjusted by job and cost element accounts. This can be viewed using the View Standard Cost Update form.
and delete from CST_ITEM_COST_DETAILS where cost_type_id <0. Since Cost updates do not update closed jobs. All child organizations must have the current Inventory Accounting period open when running a cost update for a master costing organization. if you then print Discrete Job Value report for 'closed' jobs. The summary information is based on the WIP_PERIOD_BALANCES table. Running the following scripts can help keep the tables clean and increase performance: delete from CST_ITEM_COSTS where cost_type_id <0. • Updating Standard costs and getting error APP-20501 CMCICU :error processing in main() The current Inventory accounting period must be open in all child organizations that correspond to the master when updating costs for the master organization. When you perform a cost update. Since costs are inserted with a cost_type_id = negative update_id and then the changes occur. the system updates the CST_ITEM_COSTS table to get the new values. • If the standard cost update program is aborted then performance issues can occur. • Updating Standard costs and getting error APP-20501 CMCICU: error processing in main The logfile reveals: APP-20502 cmlogi has detected an internal data error Check to see if one of the Inventory organizations has been disabled. This is because Oracle WIP produces the Discrete Job Value report. then the cost_type_ids will stay in the system.The detail information (material & resources) is based on the CST_ITEM_COSTS table. . when a discrete job is closed. then the summary and details differ.
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