E1: 30A: 31A: Engineering Variances (F3102) Caused by Rounding in Cost Components (F30026) - (R30812/P48013/R31410) (Doc ID 2922109.1)

Last updated on MARCH 20, 2023

Applies to:

Symptoms

When a parent item uses a production unit of measure different from primary, Cost Simulation (R30812) will round costs in Cost Components (F30026). Subsequently, after costs are frozen and a Work Order is created for a large production UOM amount, Work Order (P48013) will calculate costs differently for Standard than Order Processing (R31410) does for Current. Because if the lack of decimal precision in Cost Components, there may be engineering variances even though there were not changes to the M type Bill of Material or Routing.

Steps:
1. Create a manufactured parent item (P4101, P41026) with a primary unit of measure = EA and production = BX.
2. Set the Item Unit of Measure 1 BX = 6 EA.
3. Create six purchased component items, each with a primary UOM cost of 0.25.
4. Add all purchased component items to the parent’s Bill of Material (P3002, production UOM BX) with Quantity = 1 EA.
5. Find a Work Center (P3006) and set Direct Labor and Machine rates to 1.00.
6. Create an Item Routing (P3003, production UOM BX) with Run Labor = 1.00, Run Machine = 1.00 and Time Basis = U.
7. Simulate Costs (R30812) on the parent doing a complete rollup.
8. Inquire on Cost Components (P30026); notice that all cost types are rounded. A1 is calculated as .2502. Both B1 and B3 are calculated as .1667.
9. Freeze Costs (R30835).
10. Create a Work Order (P48013) for 5000 BX.
11. Inquire on Production Costs (P31022). Notice how the Cost Component rounding affects how each cost type is calculated.
A1 = 7506.00
B1 = 5001.00
B3 = 5001.00
 
12. Run Order Processing (R31410).
13. Re-inquire on Production Costs (P31022); notice that the system calculates the Current Amount differently:

A1 = 7500.00
B1 = 5000.00
B3 = 5000.00

There is already a variance between Standard and Current Amounts even though there was no change to the Bill of Material or Routing.

Changes

Cause

My Oracle Support provides customers with access to over a million knowledge articles and a vibrant support community of peers and Oracle experts.