SMG Costing Setup and

workflow

Prepared By : Joseph Fawzy

Table of Contents
I. STEP I - DEFINE COST GROUP, COST TYPE.......................................................................2
II. Step II – Org Cost Group / Cost type Associations.....................................................................4
III. Step III- Periodic Account Assignments......................................................................................7
IV. STEP IV: Open PAC Period for Legal Entity, Cost Type.........................................................9
V. PAC Business process flow.........................................................................................................10

STEP I - DEFINE COST GROUP, COST TYPE

A) Cost > Periodic Costing > Setup > Organization Cost Group
Table: cst_cost_groups – cost_group_type = 2 - meaning 'Organization'

B) Inventory > Setup > Costs > Cost Types

--> Periodic Cost Type

Cost types used for Periodic Costing must be Multi Org and Non Updatable.
Periodic Rates Cost types must be Multi Org and Updatable.
Cost types used for Periodic Costing cannot be disabled.
Step II – Org Cost Group / Cost type Associations

Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations

Table: cst_cost_group_assignments

 --> Cost Type association

Note:

a) Material Relief Algorithm indicator to Use Pre-defined Materials, or Use Actual Materials. This
indicator is introduced in R12.
-- The relief algorithm is only applicable for components.
-- Resource and overhead are always relieved using the actual quantity.

Prior to R12, PAC used to relieve material based only on actuals

b) ‘Restrict Documents by Process up to date’ - This is to run PAC for partial period processing.  You
can run a partial period by entering the date in the parameter Process Up to Date field in the PAC
processors.

c) Perform Multiple Iterations pertains to IPAC (Iterative Periodic Average Cost Processing) if
enabled.
Step III- Periodic Account Assignments
Cost > Periodic Costing > Setup > Periodic Account Assignments
Define the Material Accounts, Cost Variance account for the Cost Group/ Cost Type combination to
ensure successful completion of the Periodic Cost Distributions Processor.

For a given legal entity, cost group and cost type combination:
1) The MTL Accounts tab refers to the Inventory accounts in MTL_CAT_FISCAL_ACCOUNTS.
2) The Cost Group Accounts tab refers to the Cost Group Accounts in
CST_ORG_COST_GROUP_ACCOUNTS. 

NOTE:
If you receive below error while executing the Periodic Cost Distributions Processor, then the
accounts for the specific Cost Type/ Cost Group has not been defined correctly:

“30005There are no accounts defined for the category, for the cost type, cost group and legal entity.”
STEP IV: Open PAC Period for Legal Entity, Cost Type
Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods

Table: cst_pac_periods
Note: Only one PAC Period can be open at a time. If the next PAC Period is to be opened, any open
PAC Periods must be closed.

 
PAC Business process flow
Cost > View > Request > Submit new request > Periodic Acquisition cost Adjustment Processor

Cost > View > Request > Submit new request > Periodic Acquisition cost Processor
Cost > View > Request > Submit new request > Periodic Average cost Processor
Cost > View > Request > Submit new request > Periodic cost Distribution Processor

Cost > View > Request > Submit new request > Transfer Periodic Cost Distribution to GL
HOW PAC PROCESSES TRANSACTIONS?

Finally once all the Phases have been completed successfully for the Concerned Cost Groups
associated to the Cost types, you can proceed to close any open PAC period for the concerned LE/
Cost Type.

PAC Period Close

Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods
Clicking on the Process status would show you the status of the PAC Processors and if not complete
at what phase. Review Log in case of any errors.

Note: It is important that all the open periods of inventory organizations belong to PAC cost groups
have to be closed, before closing PAC period. In case of any revenue/ profit related transactions, the
AR Period should also be closed.