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© 2009 Oracle Corporation – Proprietary and Confidential

© 2009 Oracle Corporation – Proprietary and Confidential

© 2009 Oracle Corporation – Proprietary and Confidential
Future Advisor Webcasts Day, time August p.m. Date, 14, ET 2004 2012 9:00 am India

Future Advisor Webcasts

Day, time August p.m. Date, 14, ET 2004 2012 9:00 am India

Teleconference Access:

August 13, 2012

North America: xxxx

International: xxxx

11:30 pm ET / 9:30 pm MT /

Password: Advisor

8:30 pm PT

VOICE STREAMING ENABLED

North America:

(866) 627-3315

International:

+1-706-758-7972

Doc Id: 1148600.1

Conf Id:

Oracle CST or 69921862

© 2012 Oracle Corporation – Proprietary and Confidential

Upcoming Enterprise Asset Management (EAM) Community Webcasts:

Sept 11, 2012 : To Be Announced in Doc Id 1167580.1 October 9, 2012 : To Be Announced in Doc Id 1167580.1

For complete details on Cost Management Webcast Events, please see Note 1167580.1. For complete details on All Other upcoming Oracle Advisor Webcast Events, please Note 740966.1.

Do you have any requests for future Cost Management Advisor Webcast Events? Please email your suggestions to bonnie.barstad@oracle.com, subject: Topics of Interest.

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<Insert Picture Here>
<Insert Picture Here>
<Insert Picture Here> Guide to Understanding Setup, Cost Calculation in Periodic Average Costing Comments/
<Insert Picture Here> Guide to Understanding Setup, Cost Calculation in Periodic Average Costing Comments/

Guide to Understanding Setup, Cost Calculation in Periodic Average Costing

Comments/ Feedback to:

Divya Sudhakaran – divya.sudhakaran@oracle.com

Safe Harbor Statement The following is intended to outline our general product direction. It is

Safe Harbor Statement

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

© 2012 Oracle Corporation – Proprietary and Confidential

Oracle’s products remains at the sole discretion of Oracle. © 2012 Oracle Corporation – Proprietary and
<Insert Picture Here>
<Insert Picture Here>
<Insert Picture Here> Guide to Understanding Setup, Cost Calculation in Periodic Average Costing Comments/
<Insert Picture Here> Guide to Understanding Setup, Cost Calculation in Periodic Average Costing Comments/

Guide to Understanding Setup, Cost Calculation in Periodic Average Costing

Comments/ Feedback to:

Divya Sudhakaran – divya.sudhakaran@oracle.com

PART I • Introduction to Periodic Average Costing • Objectives • Terminology • PAC Setup
PART I • Introduction to Periodic Average Costing • Objectives • Terminology • PAC Setup

PART I

Introduction to Periodic Average Costing

Objectives

Terminology

PAC Setup

PAC Process

PART II

Cost Owned and Cost Derived Transactions

Understanding PAC Item cost calculation using some simple cases and the impact of the nature of the transaction on the Periodic Cost of the Item.

cost calculation using some simple cases and the impact of the nature of the transaction on
 Periodic Average Costing is an option that enables customers to value inventory on a
 Periodic Average Costing is an option that enables customers to value inventory on a

Periodic Average Costing is an option that enables customers to value inventory on a periodic basis.

Periodic Costing is relevant for customers with fiscal inventory reporting requirement as it is invoice-based and allows you to include additional invoiced charges in the cost of the item.

Periodic Costing is also used by customers who want invoice-price based valuation of their inventory to set standards or to update their perpetual costs.

customers who want invoice-price based valuation of their inventory to set standards or to update their
Three principal objectives of Periodic Costing:  To capture actual acquisition costs based on supplier
Three principal objectives of Periodic Costing:  To capture actual acquisition costs based on supplier

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

resource and overhead rates  To average inventory costs over a prescribed period, rather than on
 Customers having Inventory organizations that are of the same Fiscal Entity (having the same
 Customers having Inventory organizations that are of the same Fiscal Entity (having the same

Customers having Inventory organizations that are of the same Fiscal Entity (having the same tax inscription number) need to have the same average cost (legal requirement). This means that to calculate the average cost of an item that belongs to more than one inventory organization, the periodic average cost calculation has to Work across all organizations belonging to the Fiscal Cost Group. The inventory organizations belonging to the same Fiscal Cost Group will then share the costing structure and accounts.

The inventory organizations belonging to the same Fiscal Cost Group will then share the costing structure
 Cost Group (Organization Cost Group) • A group with one or more inventory organizations
 Cost Group (Organization Cost Group) • A group with one or more inventory organizations

Cost Group (Organization Cost Group)

A group with one or more inventory organizations that share same periodic item costs Cost Type

Periodic Cost Type : Periodic Cost Type holds Periodic Average item cost.

Periodic Rate cost type: Define resource rates, department overheads. Acquisition Cost

Sum of the costs associated with the acquisition of goods. Include PO Price, Invoice Price, freight, special charges and non-recoverable taxes.

with the acquisition of goods. Include PO Price, Invoice Price, freight, special charges and non-recoverable taxes.
 Cost Owned • Transactions that carry their own costs. Used to compute periodic weighted
 Cost Owned • Transactions that carry their own costs. Used to compute periodic weighted

Cost Owned

Transactions that carry their own costs. Used to compute periodic weighted average cost.

Example: PO Receipt, Return To Vendor, PO Distribution Adjustment, MISC transactions with a value, and Inter- Organization Transfer.

Cost Derived

Transactions that are transacted at the newly computed periodic weighted average cost. These transactions do not carry their own costs and do not contribute towards periodic weighted average cost calculation.

Example: Account Issues, WIP issues, Return from WIP, Material Issues, Cycle Count Adjustment, Physical Adjustment, Sub-Inventory Transfer, Sales Order Issues, and Misc. transactions w/o a user entered value.

Physical Adjustment, Sub-Inventory Transfer, Sales Order Issues, and Misc. transactions w/o a user entered value.
Define Cost group, Cost Type Org Cost Group / Cost Type Associations •Setup Inventory Organizations
Define Cost group, Cost Type Org Cost Group / Cost Type Associations •Setup Inventory Organizations
Define Cost group, Cost Type Org Cost Group / Cost Type Associations •Setup Inventory Organizations
Define Cost group, Cost Type Org Cost Group / Cost Type Associations •Setup Inventory Organizations

Define Cost group, Cost Type

Define Cost group, Cost Type Org Cost Group / Cost Type Associations •Setup Inventory Organizations for

Org Cost Group / Cost Type Associations

•Setup Inventory Organizations for each Cost group, Cost Type Association attributes

for each Cost group, Cost Type Association attributes Cost Type Associations, Accounting Options •Accounting

Cost Type Associations, Accounting Options

•Accounting Library •Post to GL

Accounting Options •Accounting Library •Post to GL Periodic Account Assignments Legal Entity / Cost Type /

Periodic Account Assignments

Legal Entity / Cost Type / Cost Group Material Category accounts Cost Group accounts

Entity / Cost Type / Cost Group Material Category accounts Cost Group accounts Open PAC Period

Open PAC Period for Legal Entity, Cost Type

Entity / Cost Type / Cost Group Material Category accounts Cost Group accounts Open PAC Period
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA) Item Master Org Standard
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA) Item Master Org Standard
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA)
Set of Books
Vision Operations
(USA)
Legal Entity
Vision Operations
(USA)

Item Master Org

Standard Costing Org Standard Costing Org Average Costing Org M1 M2 M3 PAC Cost Group:
Standard
Costing Org
Standard
Costing Org
Average
Costing Org
M1
M2
M3
PAC Cost Group: CG_XX
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA) Item Master Org Average
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA) Item Master Org Average
Set of Books Vision Operations (USA) Legal Entity Vision Operations (USA)
Set of Books
Vision Operations
(USA)
Legal Entity
Vision Operations
(USA)

Item Master Org

Average Costing Org Standard Costing Org PAC_AVG (PAV) PAC_STD (PST) PAC Cost Group: DS_CG1
Average Costing
Org
Standard
Costing Org
PAC_AVG (PAV)
PAC_STD (PST)
PAC Cost Group: DS_CG1
(USA) Item Master Org Average Costing Org Standard Costing Org PAC_AVG (PAV) PAC_STD (PST) PAC Cost
• Cost > Periodic Costing > Setup > Organization Cost Group Table: cst_cost_groups – cost_group_type
• Cost > Periodic Costing > Setup > Organization Cost Group Table: cst_cost_groups – cost_group_type

Cost > Periodic Costing > Setup > Organization Cost Group

• Cost > Periodic Costing > Setup > Organization Cost Group Table: cst_cost_groups – cost_group_type =

Table: cst_cost_groups – cost_group_type = 2

• Cost > Periodic Costing > Setup > Organization Cost Group Table: cst_cost_groups – cost_group_type =
Periodic Cost Type Periodic Rates Cost Type
Periodic Cost Type Periodic Rates Cost Type
Periodic
Cost
Type
Periodic
Rates
Cost Type
Periodic Cost Type Periodic Rates Cost Type
• Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations
• Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations
• Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations

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

Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations Table: cst_cost_group_assignments

Table: cst_cost_group_assignments

Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations Table: cst_cost_group_assignments
Table: cst_le_cost_types
Table: cst_le_cost_types
Table: cst_le_cost_types

Table: cst_le_cost_types

Table: cst_le_cost_types
Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations >
Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations >
Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations >

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

Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations > Accounting
Cost > Periodic Costing > Setup > Org Cost Group / Cost Type Associations > Accounting
Cost > Periodic Costing > Setup > Periodic Account Assignments Table:mtl_fiscal_cat_accounts
Cost > Periodic Costing > Setup > Periodic Account Assignments Table:mtl_fiscal_cat_accounts
Cost > Periodic Costing > Setup > Periodic Account Assignments Table:mtl_fiscal_cat_accounts

Cost > Periodic Costing > Setup > Periodic Account Assignments

Cost > Periodic Costing > Setup > Periodic Account Assignments Table:mtl_fiscal_cat_accounts
Cost > Periodic Costing > Setup > Periodic Account Assignments Table:mtl_fiscal_cat_accounts

Table:mtl_fiscal_cat_accounts

Table:cst_org_cost_group_accounts
Table:cst_org_cost_group_accounts

Table:cst_org_cost_group_accounts

Table:cst_org_cost_group_accounts
Cost > Periodic Costing > Setup > Periodic Account Assignments • If you receive below
Cost > Periodic Costing > Setup > Periodic Account Assignments • If you receive below
Cost > Periodic Costing > Setup > Periodic Account Assignments • If you receive below

Cost > Periodic Costing > Setup > Periodic Account Assignments

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.”

correctly: “30005There are no accounts defined for the category, for the cost type, cost group and
• Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods Table:cst_pac_periods
• Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods Table:cst_pac_periods

Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods

• Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods Table:cst_pac_periods

Table:cst_pac_periods

• Cost > Periodic Costing > Period Close Cycle > Periodic Accounting Periods Table:cst_pac_periods
Enter Transactions in the Inventory Organizations Run Periodic Acquisition Cost Adjustment Processor (AP Invoices in
Enter Transactions in the Inventory Organizations Run Periodic Acquisition Cost Adjustment Processor (AP Invoices in
Enter Transactions in the Inventory Organizations
Enter Transactions in the
Inventory Organizations
Enter Transactions in the Inventory Organizations Run Periodic Acquisition Cost Adjustment Processor (AP Invoices in

Run Periodic Acquisition Cost Adjustment Processor

(AP Invoices in the current PAC period whose parent PO receipts are in prior PAC periods)

period whose parent PO receipts are in prior PAC periods) Run Periodic Acquisition Cost Processor (AP

Run Periodic Acquisition Cost Processor

(AP Invoices and PO receipts in the current PAC period)

(AP Invoices and PO receipts in the current PAC period) Run Periodic Cost Processor - Compute

Run Periodic Cost Processor - Compute Periodic Average Cost

Run Periodic Cost Processor - Compute Periodic Average Cost Run Periodic Cost Distribution Processor (Accounting

Run Periodic Cost Distribution Processor

(Accounting options if enabled)

Distribution Processor (Accounting options if enabled) Transfer Periodic Cost Distributions to GL (Accounting

Transfer Periodic Cost Distributions to GL

(Accounting options if enabled)

Processor (Accounting options if enabled) Transfer Periodic Cost Distributions to GL (Accounting options if enabled)
• PAC Process is performed in 5 phases Periodic Acquisition Cost Adjustment Processor Periodic Acquisition
• PAC Process is performed in 5 phases Periodic Acquisition Cost Adjustment Processor Periodic Acquisition
•

PAC Process is performed in 5 phases

• PAC Process is performed in 5 phases Periodic Acquisition Cost Adjustment Processor Periodic Acquisition Cost

Periodic Acquisition Cost Adjustment Processor

Periodic Acquisition Cost Processor

Phase 1: Calculate Acquisition Cost

Phase 1: Calculate Acquisition Cost

Phase 1: Calculate Acquisition Cost
Phase 1: Calculate Acquisition Cost
Phase 1: Calculate Acquisition Cost
Phase 1: Calculate Acquisition Cost
Phase 1: Calculate Acquisition Cost
Phase 1: Calculate Acquisition Cost
Cost Processor Phase 1: Calculate Acquisition Cost Periodic Cost Processor Prior PAC period balance Phase 2:
Periodic Cost Processor Prior PAC period balance Phase 2: Copy Prior Period Balances PAC low
Periodic Cost Processor
Prior PAC period balance
Phase 2: Copy
Prior Period Balances
PAC low level codes with
WIP processing
Phase 3: BOM
Explosion
Resource Cost and Overhead Cost
Phase 4: WIP Job
Information Build
PWAC calculation:
Phase 5: Periodic
cost process
Cost owned, Cost derived,
WIP Job Close
cost process Cost owned, Cost derived, WIP Job Close Phase 6: Distribution Processor(optional) Accounting

Phase 6: Distribution Processor(optional)

Phase 6: Distribution Processor(optional)
Phase 6: Distribution Processor(optional)
Phase 6: Distribution Processor(optional)
Accounting distributions for all PAC transactions
Accounting distributions for all
PAC transactions
Accounting distributions for all PAC transactions 27 Copyright © 2008, Oracle. All rights reserved.
Accounting distributions for all PAC transactions 27 Copyright © 2008, Oracle. All rights reserved.
Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods
Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods
Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods

Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods

Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods
Cost > Periodic Costing > Periodic Close Cycle > Periodic Accounting Periods
• Doc ID 1460062.1 - Periodic Average Costing - Setup and Workflow
• Doc ID 1460062.1 - Periodic Average Costing - Setup and Workflow

Doc ID 1460062.1 - Periodic Average Costing - Setup and Workflow

• Doc ID 1460062.1 - Periodic Average Costing - Setup and Workflow
 Transactions that carry their own costs.  Used to compute periodic weighted average cost.
 Transactions that carry their own costs.  Used to compute periodic weighted average cost.

Transactions that carry their own costs. Used to compute periodic weighted average cost.

Example:

PO Receipt,

Return To Vendor,

PO Distribution Adjustment,

MISC transactions with a transaction cost ,

and Inter-Organization Transfer across periodic cost groups.

And more…

transactions with a transaction cost , • and Inter-Organization Transfer across periodic cost groups. • And
 Transactions that are transacted at the newly computed periodic weighted average cost.  These
 Transactions that are transacted at the newly computed periodic weighted average cost.  These

Transactions that are transacted at the newly computed periodic weighted average cost. These transactions do not carry their own costs and do not contribute towards periodic weighted average cost calculation.

Example:

Account Issues,

WIP issues,

Return from WIP,

Material Issues,

Cycle Count Adjustment,

Physical Adjustment,

Sub-Inventory Transfer,

Sales Order Issues,

Misc. transactions w/o a user entered cost

And more

• Sub-Inventory Transfer, • Sales Order Issues, • Misc. transactions w/o a user entered cost •
 These tables store the item cost and quantity in a given PAC period CST_PAC_ITEM_COSTS
 These tables store the item cost and quantity in a given PAC period CST_PAC_ITEM_COSTS

These tables store the item cost and quantity in a given PAC period CST_PAC_ITEM_COSTS CST_PAC_ITEM_COST_DETAILS

 These tables store the item cost and quantity in a given PAC period CST_PAC_ITEM_COSTS CST_PAC_ITEM_COST_DETAILS
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen

Details/Organization Name

PST (Standard Costing)

PAV (Average Costing)

Quantity & Cost

0qty @ $20 (Frozen cost of item defined at the time of Item definition)

0qty @ $0

Miscellaneous Receipt

100 qty

100 qty @ $25

Quantity & Cost after above

100 qty @ $20 (Frozen)

100 qty @ $25

Since the Miscellaneous Receipt done in PAV was the only Cost Owned Transaction, the cost provided at the time of the transaction becomes the only basis for the PAC Item Cost The receipt done in the Standard costing org was at the frozen cost itself and we did not define a cost at the time of receipt, hence this falls under the category of Cost Derived Transaction

and we did not define a cost at the time of receipt, hence this falls under
> PST > PAV
> PST
> PST
> PST > PAV
> PST > PAV

> PAV

> PST > PAV
> PST > PAV
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 100 NA -100 200 25
BUY_QUANTITY
MAKE_QUANTITY
ISSUE_QUANTITY
TOTAL_LAYER_QUA
ITEM_COST
NTITY
100
NA
-100
200
25

BEGIN_LAYER_QUANTITY+BUY_QUANTITY + MAKE_QUANTITY – ISSUE QUANTITY = TOTAL_LAYER_QUANTITY 0+100 + 0 – (-100) = 200

Issue Quantity of -100 above denotes the Cost Derived transaction – The Miscellaneous Receipt of 100 done in PST (Standard Costing) Buy Quantity of 100 denotes the Cost Owned Transaction - The Miscellaneous Receipt of 100 done in PAV (Average Costing) Note: The item is newly created and hence would not have any begin_layer_quantity in the cst_pac_quantity_layers table. If there is a beginning layer quantity, this would be considered while arriving at the total layer quantity.

quantity, this would be considered while arriving at the total layer quantity. PAC ITEM COST: 25

PAC ITEM COST: 25

[100 * 25]/ 100 = 25

quantity, this would be considered while arriving at the total layer quantity. PAC ITEM COST: 25
 BUY_QUANTITY column stores details regarding Cost Owned Transactions  A Cost Owned Receipt would
 BUY_QUANTITY column stores details regarding Cost Owned Transactions  A Cost Owned Receipt would

BUY_QUANTITY column stores details regarding Cost Owned Transactions

A Cost Owned Receipt would be a positive value A Cost Owned Issue would be a negative value

ISSUE_QUANTITY column stores details regarding the Cost Derived transactions.

A Cost Derived Receipt would be a negative value A Cost Derived Issue would be a positive value

transactions.  A Cost Derived Receipt would be a negative value  A Cost Derived Issue
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen

Details/Organization Name

PST (Standard Costing)

PAV (Average Costing)

Quantity & Cost

0qty @ $20 (Frozen cost of item defined at the time of Item definition)

0qty @ $0

Miscellaneous Receipt

100

qty

100

qty @ $25

Quantity & Cost after above

100

qty @ $20 (Frozen)

100

qty @ $25

Miscellaneous Issue

50 qty

50 qty @ $25

Now, we make a Miscellaneous issue of item PAC01 in PST for qty:50 -

Note that this would be a cost derived transaction And in PAV for qty:50 providing same unit cost of 25 - Note that this would be a cost owned transaction What would be the Quantity and Cost now?

same unit cost of 25 - Note that this would be a cost owned transaction 
>PST > PAV
>PST
>PST
>PST > PAV

> PAV

>PST > PAV
>PST > PAV
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 50 (100 – 50) NA -50 (-100+50)
BUY_QUANTITY
MAKE_QUANTITY
ISSUE_QUANTITY
TOTAL_LAYER_QUA
ITEM_COST
NTITY
50 (100 – 50)
NA
-50 (-100+50)
100(50+0-(-50))
25

BEGIN_LAYER_QUANTITY+BUY_QUANTITY + MAKE_QUANTITY – ISSUE QUANTITY = TOTAL_LAYER_QUANTITY 0+50 + 0 – (-50) = 100

PAC ITEM COST: 25 [(100 * 25 ) – (50 * 25)]/ 50 = 25

Issue Quantity of -50 is after considering the Miscellaneous Issue of 50 done in PST (Standard Costing) – Cost Derived Buy Quantity of 50 is after considering the Miscellaneous Issue of 50 done in PAV(Average Costing) – Cost Owned Item cost calculation takes into consideration the Cost Owned only which is very clear from the above cost calculation

Item cost calculation takes into consideration the Cost Owned only which is very clear from the
• What happens if My Cost Owned Misc Issue in PAV was @ 15 instead
• What happens if My Cost Owned Misc Issue in PAV was @ 15 instead
• What happens if My Cost Owned Misc Issue in PAV was @ 15 instead
•

What happens if My Cost Owned Misc Issue in PAV was @ 15 instead of 25?

• What happens if My Cost Owned Misc Issue in PAV was @ 15 instead of
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen

Details/Organization Name

PST (Standard Costing)

PAV (Average Costing)

Quantity & Cost

0qty @ $20 (Frozen cost of item defined at the time of Item definition)

0qty @ $0

Miscellaneous Receipt

100

qty

100

qty @ $25

Quantity & Cost after above

100

qty @ $20 (Frozen)

100

qty @ $25

Miscellaneous Issue

50 qty

50 qty @ $25

Miscellaneous Issue

-

25 qty @ $15

Considering the previous question, we go ahead and do a Miscellaneous

Issue of the item PAC01 in PAV alone for Quantity 25 @ a unit cost of 15 This will once again be a Cost Owned Transaction

of the item PAC01 in PAV alone for Quantity 25 @ a unit cost of 15
of the item PAC01 in PAV alone for Quantity 25 @ a unit cost of 15
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 25(50-25) NA -50
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 25(50-25) NA -50

BUY_QUANTITY

MAKE_QUANTITY

ISSUE_QUANTITY

TOTAL_LAYER_QUA

ITEM_COST

NTITY

25(50-25)

NA

-50

75(25+0-(-50))

35

BEGIN_LAYER_QUANTITY+BUY_QUANTITY + MAKE_QUANTITY – ISSUE QUANTITY = TOTAL_LAYER_QUANTITY 0+25 + 0 – (-50) = 75

PAC ITEM COST: 35 [(50 * 25) – (25*15)]/ 25 = 35

Since there has been a Cost Owned Issue transaction, this will also be considered to recalculate the PAC.

Cost Owned Transactions Value => 50*25 = 1250 Cost of the Misc Issue => 25*15 => 375

PAC => (1250-375)/25 = 35

Owned Transactions Value => 50*25 = 1250 Cost of the Misc Issue => 25*15 => 375
Now, I make the issue in PAV, but don’t give an unit cost impact? What
Now, I make the issue in PAV, but don’t give an unit cost impact? What
Now, I make the issue in PAV, but don’t give an unit cost impact? What
Now, I make the issue in PAV, but don’t give an unit cost impact? What

Now, I make the issue in PAV, but don’t give an unit cost impact?

What is the

Now, I make the issue in PAV, but don’t give an unit cost impact? What is
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen
Details/Organization Name PST (Standard Costing) PAV (Average Costing) Quantity & Cost 0qty @ $20 (Frozen
Details/Organization Name
PST (Standard Costing)
PAV (Average Costing)
Quantity & Cost
0qty @ $20 (Frozen cost of
item defined at the time of Item
definition)
0qty @ $0
Miscellaneous Receipt
100
qty
100
qty @ $25
Quantity & Cost after above
100
qty @ $20 (Frozen)
100
qty @ $25
Miscellaneous Issue
50 qty
50
qty @ $25
Miscellaneous Issue
-
25
qty @ $15
Miscellaneous Issue
-
15 qty and provide no unit cost
at the time of issue
 We go ahead and do a Miscellaneous Issue of the item PAC01 in PAV alone

for Quantity 15 without providing a unit cost. Note that this is now a Cost Derived Transaction

PAC01 in PAV alone for Quantity 15 without providing a unit cost.  Note that this
PAC01 in PAV alone for Quantity 15 without providing a unit cost.  Note that this
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 25 NA -35 (-50+15)
BUY_QUANTITY MAKE_QUANTITY ISSUE_QUANTITY TOTAL_LAYER_QUA ITEM_COST NTITY 25 NA -35 (-50+15)

BUY_QUANTITY

MAKE_QUANTITY

ISSUE_QUANTITY

TOTAL_LAYER_QUA

ITEM_COST

NTITY

25

NA

-35 (-50+15)

60(25+0-(-35))

35

BEGIN_LAYER_QUANTITY+BUY_QUANTITY + MAKE_QUANTITY – ISSUE QUANTITY = TOTAL_LAYER_QUANTITY 0+25 + 0 – (-35) = 60

PAC ITEM COST: 35 - As there has been no Cost Owned Transactions in this run and the earlier derived PAC of 35 is retained.

ITEM COST: 35 - As there has been no Cost Owned Transactions in this run and
• Transaction Type: Purchase Order Since this is a transaction with its own cost, the
• Transaction Type: Purchase Order Since this is a transaction with its own cost, the

Transaction Type: Purchase Order Since this is a transaction with its own cost, the transaction would fall into the ‘Cost Owned transaction’ category and contribute towards the Periodic Item cost calculation.

Transaction Type: Sales Order Issue This transaction takes the existing cost and does not update the transaction cost. Hence, this transaction would fall into the ‘Cost Derived transaction’ category.

Transaction Type: WIP Completion & WIP Component Issue The WIP Completion transaction of is a ‘Cost Owned transaction’ & WIP Component issue would be a ‘Cost Derived transaction’

Detailed examples available in Whitepaper published:

PAC: Understanding Periodic Item cost calculation - An Oracle White Paper (Doc ID 1473592.1)

in Whitepaper published: PAC: Understanding Periodic Item cost calculation - An Oracle White Paper (Doc ID
 BUY_QUANTITY column stores details regarding Cost Owned Transactions  A Cost Owned Receipt would
 BUY_QUANTITY column stores details regarding Cost Owned Transactions  A Cost Owned Receipt would

BUY_QUANTITY column stores details regarding Cost Owned Transactions

A Cost Owned Receipt would be a positive value A Cost Owned Issue would be a negative value

ISSUE_QUANTITY column stores details regarding the Cost Derived transactions.

A Cost Derived Receipt would be a negative value A Cost Derived Issue would be a positive value

Table mtl_pac_actual_cost_details would store details as to the nature of the transactions under the txn_category column specific to each transaction_id.

would store details as to the nature of the transactions under the txn_category column specific to
TXN_CATEGORY in MPACD TXN_CATEGORY Value 1 Period Beginning 2 Cost Update(s): New Cost or Percent
TXN_CATEGORY in MPACD TXN_CATEGORY Value 1 Period Beginning 2 Cost Update(s): New Cost or Percent
TXN_CATEGORY in MPACD
TXN_CATEGORY Value
1
Period Beginning
2
Cost Update(s): New Cost or
Percent Change
3
Cost Owned Transaction(s)
5
Cost Update(s): Value Change
7
Rework Completion(s)
6
Rework Issue(s)
4
Non-Rework Completion(s)
9
Cost Derived Transaction(s)
10
Period Ending
8
Inter-Organization Transaction(s):
Iteration Process
Completion(s) 9 Cost Derived Transaction(s) 10 Period Ending 8 Inter-Organization Transaction(s): Iteration Process
 How PAC process transactions (Doc ID 759522.1)  FREQUENTLY ASKED QUESTIONS – PERIODIC AVERAGE
 How PAC process transactions (Doc ID 759522.1)  FREQUENTLY ASKED QUESTIONS – PERIODIC AVERAGE

How PAC process transactions (Doc ID 759522.1) FREQUENTLY ASKED QUESTIONS – PERIODIC AVERAGE COST AND PERIODIC ABSORPTION COSTING (PAC/PACP/IPAC) (Doc ID 559123.1) Periodic Actual Cost Processing Logic: An Oracle White Paper (Doc ID 245487.1) Thanks to Costing Development & Support Team

Cost Processing Logic: An Oracle White Paper (Doc ID 245487.1)  Thanks to Costing Development &
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Cost Management Advisor Webcast Calendar (Doc ID 1167580.1) © 2012 Oracle Corporation – Proprietary and

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Cost Management Advisor Webcast Calendar (Doc ID 1167580.1) © 2012 Oracle Corporation – Proprietary and Confidential

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Are You Ready To Get Proactive? Discover more about Get Proactive https://support.oracle.com/CSP/main/article?cmd=sho

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w&type=ATT&id=1385165.1:DISCOVER

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Avoid the unexpected© 2012 Oracle Corporation – Proprietary and Confidential Don’t leave value on the table Lower overall

Don’t leave value on the table– Proprietary and Confidential Avoid the unexpected Lower overall organizational costs through preventative

Lower overall organizational costs through preventative maintenanceAvoid the unexpected Don’t leave value on the table Reduce risks and maximize uptime Achieve resolution

Reduce risks and maximize uptimeorganizational costs through preventative maintenance Achieve resolution faster Streamline and simplify your daily

Achieve resolution fasterpreventative maintenance Reduce risks and maximize uptime Streamline and simplify your daily operations Get even more

Streamline and simplify your daily operationspreventative maintenance Reduce risks and maximize uptime Achieve resolution faster Get even more through connection 56

Get even more through connectionmaintenance Reduce risks and maximize uptime Achieve resolution faster Streamline and simplify your daily operations 56

uptime Achieve resolution faster Streamline and simplify your daily operations Get even more through connection 56

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THANK YOU

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THANK YOU © 2012 Oracle Corporation – Proprietary and Confidential 57

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