Period Average Costing

Topics: Cost, Costs, Inventory Pages: 23 (6855 words) Published: June 7, 2013
Periodic Actual Cost Processing Logic
An Oracle White Paper June 2003

Periodic Actual Cost Processing Logic
Table of Contents 1.0 Executive Overview ................................................................................... 1 2.0 Introduction................................................................................................. 2 3.0 FUNCTIONAL ASPECTS ...................................................................... 2 4.0 PRE-REQUISITE...................................................................................... 2 4.1 Item Master & Item Validation Org:............................................................ 2 4.2 Cost Master: ................................................................................................ 3 4.3 Transaction Types in PAC logic: ................................................................. 3 4.3.1 Cost Owned Transactions: ................................................................... 3 4.3.2 Cost Derived Transactions ................................................................... 3 5.0 PERIODIC COST PROCESSING LOGIC......................................... 3 6.0 SET UP ........................................................................................................ 5 6.1 Some Basic Setup’s ...................................................................................... 5 6.2 Organization Cost Groups And Cost Types Matrix: .................................... 5 6.3 SETUPS...................................................................................................... 6 6.3.1 Basic Assumptions: .............................................................................. 6 6.3.2 Periodic Costing Setup ......................................................................... 6 6.3.3 BOM STRUCTURE: ........................................................................... 9 6.3.4 WORK CENTRE STRUCTURE: ....................................................... 9 6.3.5 RESOURCE / OVERHEAD SETUP ................................................ 9 7.0 BUSINESS SCENARIOS....................................................................... 10 8.0 WATCH OUT FOR...................................................................................... 27 9.0 Conclusion: ................................................................................................ 28

Periodic Actual Cost Processing Logic
1.0 EXECUTIVE OVERVIEW
Oracle Cost Management provides the functionality of Periodic costing in which users can maintain the cost of the item at fiscal cost group / Legal Entity level. The objective of this paper is to analyze in detail the functionality of periodic actual cost processing logic and the basic setup required for implementing periodic average costing. This analysis will be presented in the form of a lab exercise. This paper is intended for users who already have basic knowledge of Oracle Cost Management functionality.

2.0 INTRODUCTION
Periodic Costing is an option that enables customers to value inventory on a periodic basis. As an option to the mandatory perpetual costing system, which uses either the standard or average or FIFO or LIFO costing methods, Oracle Cost Management provides support for two methods of Periodic Costing: - Periodic Average Costing (PAC) - Periodic Incremental LIFO (Last– In First– Out) This paper describes in detail the Periodic costing setup and the cost processing logic for transactions in following scenarios: Cost for the Buy Item with invoice Match Option set as ‘At Receipt’ and with allocated freight Charges. Cost for the Buy Item with invoice Match Option set as ‘At PO’ and with allocated freight and miscellaneous charges. Periodic Cost for Assembly Item covering different costing scenarios in WIP like …having Assembly Return, Assembly scrap transactions, partial completion etc… in a period. Moreover in this paper we will basically analyze costing of various transactions in a...
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