WIP accounting classes

What is WIP accounting class ?

Which are different accounting classes in WIP ?
Which different accounts are associated with it ?

An accounting class is a group of various General Ledger accounts which

allows you to arrive at job cost, production cost and maintenance costs.

The following are different accounting classes in Oracle WIP:

1) Standard discrete
Standard discrete accounting classes can be used to group job costs for
building subassemblies and finished goods on shop floor. You can define and
attach this accounting classes so that you can separately value and report the
costs associated with subassembly and finished goods production.

2) Asset non standard discrete

If you use non-standard discrete jobs to track production costs as assets, you
can define and assign an accounting class with a type of asset non-standard.
Asset non-standard discrete jobs are costed the same as standard discrete
jobs. Valuation accounts are charged when material is issued to a job and
final costs and variances are calculated and posted to the appropriate
variance and valuation accounts when the job is closed.

3) Expense non-standard discrete

Non-standard discrete accounting classes can be used to group and report
various types of non-standard production costs, such as field service repair.
For example to track recurring expenses - machine maintenance or
engineering projects- with non-standard jobs, you can define and assign an
accounting class with a type ofexpense non-standard to these jobs. The
valuation accounts carry the costs incurred on these expense jobs as an asset
during the period and automatically writes them off to the variance accounts
at period close.

4) Repetitive accounting class

Repetitive accounting classes are used to group production costs and must be
assigned to each repetitive line/assembly association that is created. Every
repetitive schedule for that assembly on that line uses these accounts.

5) Standard Lot based

Standard lot based jobs control the material, resources, and operations
required to build an assembly and collect costs. When you build lot based
jobs, the standard lot based accounting class is used to separately value and
report costs associated with yielded production at each individual operation
on the routing.

6) Expense non standard lot based

Expense non-standard lot based accoubting class jobs control material and
collects costs for miscellaneous activity. These jobs are used for expense work
orders for testing, prototypes, and rework where operation yield costing is not
considered. You can perform all transactions (moves, jumps, scrap, splits, and
update assemblies or routings) with the exception of job merge.

7) Maintenance accounting class

Maintenance accounting classes are used to group costs for work orders used
in Oracle Enterprise Asset Management (eAM) Module . For example, if you are
creating work orders for plant maintenance activities, you can define your
accounting classes to separately value and report the costs related to asset.

The following valuation and variance accounts are associated with each
accounting class.

Valuation accounts
1) Material account
2) Material overhead
3) Resouce
4) Overhead
5) Outside Processing

Variance accounts
1) Material account
2) Material overhead
3) Resouce
4) Overhead
5) Outside Processing
6) Standard cost
7) Bridging
8) Expense

Standard cost account is applicable to only standard costing method and

Bridging and Expense accounts are applicable to average costing method only.
Rest all accounts are appliable to both standard and avergae costing methods.
Posted by OracleOnDemand at 11:15 AM 0 comments
Labels: Cost Management, SAM, VKD, Work in Process (WIP)

Friday, October 3, 2008

Sharing Costs across Organizations
Costs of items can be shared across organizations using standard costing. This
is a unique feature of Standard Costing method.

If standard costs are shared across multiple organizations, costs are

maintained by the cost master organization and shared by the child cost
organizations. Costs cannot be entered into the child cost organizations. All
reports, inquiries, and processes use the shared costs.
Posted by OracleOnDemand at 12:51 AM 0 comments
Labels: Cost Management, SAM

Thursday, October 2, 2008

Oracle Cost Management - What is Cost Rollup?
Cost Rollup is a process by which the costs of assemblies are built, starting
with the lowest level and working up the structure to top-level assemblies.
This process is specifically called a ‘full cost rollup’. This method gives the
most current bill of material structure and component costs.

There is another way of rolling up Costs, which is the single–level rollup,

which only looks at the first level of the bill structure for each assembly in the
rollup and rolls the costs for the items at this level into the parent. This
method does not reflect structure or cost changes that have occurred at a
level below the first level of assemblies.
Posted by OracleOnDemand at 1:08 PM 1 comments
Labels: Cost Management, SAM

Tuesday, September 30, 2008

Oracle Cost Management - Standard costing

Standard costing is used by Customers who employ predetermined costs for

valuing inventory and for charging material, resource, overhead, period close,
and job close and schedule complete transactions. Differences between
standard costs and actual costs are recorded as variances.

Manufacturing industries typically use standard costing. Costs of items can be

shared across organizations using standard costing.

The unit cost of any item is the sum of the costs of all the cost elements.
There are 5 cost elements, which are defined as follows:

1. Material -- The raw material/component cost at the lowest level of the bill
of
material determined from the unit cost of the component item.

2. Material Overhead -- The overhead cost of material, which can be used for
any costs attributed to direct material costs.
3. Resource -- Direct costs, such as people (labor), machines, space, or
miscellaneous charges, required to manufacture products.

4. Overhead -- The overhead cost of resource and outside processing, which is

used as a means to allocate department costs or activities.

5. Outside Processing -- This is the cost of outside processing purchased from

a supplier.

Sub-elements can be used as smaller classifications of the cost elements.

Each cost element must be associated with one or more sub-elements. An
amount or rate is attached to each subelement.
Posted by OracleOnDemand at 11:35 PM 0 comments
Labels: Cost Management, SAM