Oracle Cost Management

Manufacturing Functional Foundation

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 Objectives

After completing this lesson, you should be able to do

the following:
• Understand the costing methods supported in Cost
Management
• Identify the major tables used in Cost Management
• Discuss the open interfaces and application
program interfaces for Cost Management

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 Agenda

• Cost Management Overview

• Cost Management Transactions and Entity Relationship
Diagrams
• Cost Management Open Interfaces and Application
Program Interfaces

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Oracle Cost Management Overview

Item costs Analysis Audit trail

Inventory Production Profitability

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 Cost Structure

A cost structure is the collection of definitions and

methods used to cost inventory, bills of material, and
work in process. The cost structure is composed of:
• Organizations
• Cost organizations and shared costs
• Cost elements
• Subelements
• Activities
• Basis types
• General ledger accounts

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 Cost Rollup and Updates

Cost Rollup

Engineering Manufacturing
Information Information

Cost Update

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 Costing Methods

Standard

Average

FIFO/LIFO

Periodic

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 Standard Costing

Standard Cost Actual Cost Variance

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 Average Costing

Receipts for Item XYZ

Receipt Date Amount Quantity

January 13, 2005 $10.00 4

February 02, 2005 $14.00 6

February 27, 2005 $12.00 5

March 16, 2005 $11.00 5

April 08, 2005 $14.00 6

Average Unit Cost for XYZ on February 28, 2005 = $2.40

Average Unit Cost for XYZ on April 09, 2005 = $2.35

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 FIFO/LIFO Costing

FIFO (First In/First Out)

LIFO (Last in/First Out)

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 Periodic Costing

Periodic Costing is an option that enables you to value

inventory on a periodic basis. There are three principal
objectives of periodic costing:
• To capture actual acquisition costs based on
supplier invoiced amounts plus other direct
procurement charges required by national
legislation or company policy
• To capture actual transaction costs using fully
absorbed resource and overhead rates
• To average inventory costs over a prescribed
period, rather than on a transactional basis

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 Agenda

• Cost Management Overview

• Cost Management Transactions and Entity Relationship
Diagrams
• Cost Management Open Interfaces and Application
Program Interfaces

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 Defining Item Costs

To define or maintain item cost information use the Item

Cost window.

Item
Item Costs
Costs (M1)
(M1)

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 Standard Cost Type

MTL_SYSTEM_ITEMS_B

CST_COST_
CST_COST_TYPES ELEMENTS

BOM_
CST_ITEM_COSTS CST_ACTIVITIES RESOURCES

CST_ITEM_COST_DETAILS

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 Average, FIFO, LIFO Cost Types

MTL_SYSTEM_ITEMS_B

CST_COST_
CST_COST_TYPES ELEMENTS

BOM_
CST_ITEM_COSTS CST_ACTIVITIES RESOURCES

CST_QUANTITY_LAYERS

CST_LAYER_
COST_DETAILS

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 Resource and Overhead Costs

CST_COST_TYPES

CST_
RESOURCE_
COSTS
BOM_RESOURCES
OVERHEAD

RESOURCE/ CST_
OUTSIDE RESOURCE_ BOM_
PROCESSING OVERHEADS DEPARTMENTS

CST_DEPARTMENT_OVERHEADS

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 Agenda

• Cost Management Overview

• Cost Management Transactions and Entity Relationship
Diagrams
• Cost Management Open Interfaces and Application
Program Interfaces

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 Cost Management Open Interfaces and
Application Program Interfaces

• Periodic Cost Open Interface

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 Summary

In this lesson, you should have learned how to:

• Describe the costing methods supported in Cost
Management
• Identify the major tables used in Cost Management
• Discuss the open interfaces and application
program interfaces for Cost Management

Copyright © 2007, Oracle. All rights reserved.