# How to Calculate PMAC Actual Cost When Circular References Are Involved (Doc ID 2485895.1)

Last updated on MARCH 14, 2023

## Applies to:

Oracle Process Manufacturing Financials - Version 12.1.3 and later
Information in this document applies to any platform.

## Goal

On : 12.1.3 version, Actual Cost Process

Customer has done analysis of actual cost (PMAC) for an item in September, taking prior period balance, prior period cost, and actual cost transactions in September, and the cost that the system shows for September does not match with the customer's calculations. Customer wants to know why the system cost does not equal the qty-weighted average of the prior period cost and the current period actual cost transactions.

Prior Period Cost is 7.95256
Prior Period Balance is 286409 LBS
So Prior Period Value of inventory is 7.95256 x 286409 = \$2,277,685

Then take each actual cost transction and multiply Cost x Qty to get value of each transaction, and sum those.
Result is \$1,616,826
Also sum the unique quantities from the actual cost transactions.
Result is 204878 LBS

Then take the sum of the prior period value and the current period transaction values, and divide by the sum of the prior period balance and the unique quantities from the actual cost transactions
(\$2,277,685 + \$1,616,826) / (286409 LBS + 204878 LBS) = \$7.92716 per LBS

But Item Costs screen shows 7.979851440

Note that all actual cost transactions from September for this item are from batches. Some batches have circular references.

How can we calculate the cost that the system calculated?