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PACP - Periodic Absorption Cost Process Functionality (Doc ID 387617.1)

Last updated on MAY 03, 2019

Applies to:

Oracle Cost Management - Version 11.5.10.0 and later
Oracle Supply Chain Globalization - Version 11.5.10.0 and later
Information in this document applies to any platform.

Purpose

The intention of this document is to provide information on using the functionality of Periodic Absorption Cost Process.

The appropriate valuation and analysis of manufacturing costs have been for years a key factor in a successful business management. One of these approaches, Absorption Costing allocates all possible variable costs to the output units. Since indirect costs are usually known periodically, companies following absorption cost approach usually valuate inventory on a periodic cost basis.
In this context of periodic costing, the right sequence in which the cost of the items rollup of the raw materials cost into subassemblies and then from the subassemblies into the assembly item cost could be very complex in the case of scenarios where the same item is in different levels of different bills of materials and also when transfers between different manufacturing plants occur from these items. 
 

Scope

For skilled users wanting to know how Absorption Costing works when using Periodic Average Costing (PAC).

Details

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In this Document
Purpose
 The intention of this document is to provide information on using the functionality of Periodic Absorption Cost Process.
Scope
Details

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