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Periodic Costing Troubleshooting (Doc ID 456199.1)

Last updated on MARCH 12, 2021

Applies to:

Oracle Cost Management - Version 11.5.10.0 to 11.5.10.3 [Release 11.5]
Oracle Cost Management - Version 12.0.0 to 12.2.5 [Release 12 to 12.2]
Information in this document applies to any platform.
Concurrent Processes
Cost Management-> Periodic Costing -> Periodic Cost -> - Periodic Acquisition Processor
Cost Management-> Periodic Costing -> Reports -> Periodic Absorption Cost Processor
Cost Management-> Periodic Costing -> Periodic Cost -> Periodic Cost Processor
Cost Management-> Periodic Costing -> Periodic Cost -> Periodic Cost Distribution Processor

*** Checked on Relevance on 16-MAY-2018 ***

Purpose

The intention of this document is to provide information on using the functionality of Periodic Average Costing.

This involves performing the standard periodic costing setups as described in the white paper Costing by Acquisition: A Brief Guide to Periodic Average Costing (PAC) for Purchased Items. In addition, there will be setups, which are specific to Periodic Absorption Cost Process.
Periodic Absorption Cost Process involves launching three periodic processors:  Periodic Absorption Cost Processor, Periodic Cost Processor and Periodic Distribution Processor.

Periodic Costing enables customers to value their transactions on a periodic basis. Periodic Costing is required by law in the following countries:

Brazil
Spain
Colombia
France 

The main objectives of periodic costing are:
To capture actual acquisition costs based on supplier invoiced amounts plus other direct procurement charges required by national legislation or company policy.
To capture actual transaction costs using fully absorbed resource and overhead rates.
To average inventory costs over a prescribed period, rather than on a transactional basis.

GLOSSARY:


Absorption Costing
An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. (APICS Dictionary, 2003).


Bill of Materials (BOM)
A list of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly. (APICS Dictionary, 2003).


Cost Group
One or more premises of a company (e.g. manufacturing plants and/or warehouses) considered as a unit for costing purposes. All the premises belonging to the same cost group will carry the same unit cost.


Cost Owned Transactions
A transaction that carry its own value such as Purchase Order Receipt. These transactions will be considered in the calculation of the average cost of an item.


Cost Derived Transactions
A transaction that derives its costs from the average cost of an item, such as a miscellaneous issue or a sales order issue.


Inter-Organization Transfer
In the context of this document, a transfer between two facilities of the same company (e.g.: warehouses or manufacturing plants).


Periodic Average Cost
Average of all cost owned transactions related to a period of time. There are different known methods, such as periodic moving average and periodic weighted average cost.


Inventory Organization
In the context of this document, any premise of a company, such as a warehouse or manufacturing plant.
Periodic Moving Average Cost (PMAC).


The Periodic Moving Average Cost computes the average cost for the period while moving previous period's cost and inventory balance with the current period's inventory balance and cost.
PMAC = ((Prior Cost * Prior Quantity) + (inter-organization receipt qty * PMAC cost of the corresponding shipment cost group) / (Prior Quantity + inter-organization receipt qty)
Where:


Prior Quantity: Previous Period Quantity + S Trans Qty
Prior Cost: (Previous Period Quantity * Previous Period Cost) + S (Trans Qty * Unit Cost)) / Prior Quantity


Previous Period Cost: The previous period Item cost.
Trans Qty: Receipt Transaction Quantities not including inter-organization receipts in the current period.
Unit Cost: Receipt estimated prices or vendor invoice final prices within the costing period.


Periodic Costing Tables
CST_PAC_PERIODS - Holds the information about periodic costing open and closed periods for each legal entity and Cost Type association.
CST_PAC_PROCESS_PHASES table holds the status for each process phase in a particular period and organization cost group.
CST_PAC_ITEM_COSTS stores the item cost and quantity in a period and organization cost group.
CST_PAC_ITEM_COST_DETAILS table stores item cost details for a period and organization cost group.
CST_PAC_QUANTITY_LAYERS stores the layer quantity of an item by period. In the periodic LIFO method, multiple layers may exist in the same period.

CST_AE_HEADERS

CST_AE_LINES

Troubleshooting Steps

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In this Document
Purpose
Troubleshooting Steps
 General Questions
 Inter-org Transaction Type
 FOB Point
 PAC Process
References

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