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PO Item Price Affects Only One Material Cost Element (Doc ID 2435467.1)

Last updated on AUGUST 16, 2022

Applies to:

Oracle Fusion Manufacturing Cloud Service - Version and later
Oracle Fusion Cost Management Cloud Service - Version and later
Oracle Fusion Cost Management - Version and later
Information in this document applies to any platform.


One Item is defined with two cost elements with cost element type "MATERIAL": TP1 Cost, MARKUP.

TP1 Cost: 10

PO (Purchase Order) is created for item with price 15, which is the item cost. When the receipt is created, the system gives variance for the MARKUP cost as 5.

In COST COMPONENT MAPPING, the system allows to create only one combination of Cost Component Code ITEM_PRICE to "TP1 COST" and it doesn't allow the assignment of MARKUP to the same cost component. So the PPV (Purchase Price Variance) is hit for the markup cost.

Thus PO Item Price affects only one Material Cost Element, even if the item has two Material Cost elements. How to avoid the PPV to be hit, as it matches with the item price?


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