Assembly Completion Not Cost Collected But The Components Are Interfacing To Projects (Doc ID 1642593.1)

Last updated on OCTOBER 09, 2016

Applies to:

Oracle Project Manufacturing - Version 11.5.10.2 and later
Oracle Cost Management - Version 11.5.10.2 and later
Information in this document applies to any platform.

Goal

ACTUAL BEHAVIOR
---------------
Final Assembly item not coming into Projects but rather the components are interfacing to projects

The client is invoicing at the Final Assembly level but only components of the final assemble are interfacing from Project Manufacturing to Project Billing/Costing. The final assembly is what is shipping and what the final customer is seeing.
Component level billing is not an option.

the Cost Collection manager (standard ORACLE concurrent request) is set to import material transactions according to the documentation and doesn't look at the final assembly, which in a Standard cost environment there would never be variances going into the variance account since all costs are being interfaced to Projects including the variance amounts. This is not standard costing but rather actual costing. Project manufacturing standard functionality states that standard costing can be used but the concurrent program related to standard costing has never been updated from when Oracle allowed Standard costing to be used in Project Manufacturing. This is a bug that needs to be fixed ASAP since we are defining our costing based on standard costing not actual costing.

If the WIP Assembly completion is not cost collected, then Oracle can't perform Standard costing for WIP jobs that are project related. According to the user guide standard costing has one cost per item. "Standard cost organizations have one item cost." That is not the case for the top level assembly since if more material is used in a WIP job the entire amount of the material assigned to the WIP job is imported into Projects and not the standard cost of the item. All of these items belong to the same cost group so their costs should be identical and not costed at actuals. The cost management user guide states the following: Component Issue and Return Transaction: Issue (other than Expense to Expense) to Project Job from Common Subinventory - Cost Group valuation at Cost = Notify Projects (DR:) and CR: Organization Valuation (CR:). In this case the final assembly component is valued in inventory at $154.27 but what is coming into Projects is $200.23 so when the final product is shipped and removed out of inventory, the inventory valuation is off by almost $50. This is not how standard costing works. Standard costing states that there is one cost for that item within the same cost group, which is $154.27. The variance from the work order should go to variance as per the cost management user guide. At no time is the cost of that item increased in inventory and thus when it is transferred to projects. If we had implemented actual costing or average costing there could be a variance but not with standard costing.

EXPECTED BEHAVIOR
-----------------------
Expected Final Assembly item to interface into Projects.
Expect only one item since there is only one item that is completed on the WIP job and only one item on the sales order line.
 

Solution

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