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Logic For Periodic Absorption Cost For Intransit Transactions in Periodic Average Costing (PAC) (Doc ID 787599.1)

Last updated on MAY 14, 2016

Applies to:

Oracle Cost Management - Version 11.5.10.2 to 12.1.3 [Release 11.5 to 12.1]
Information in this document applies to any platform.

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


Purpose

Exemplify Intransit interorg transactions - PAC Material and Material Overhead Cost elements and Tolerance check logic scenarios

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. Absorption Costing  minimizes the variance and provide accurate absorption of cost.

Periodic Absorption Cost Processor in EBS 11.5.10

Step 0: Periodic Acquisition Cost Adjustment Processor for each cost group,
Step 1: Periodic Absorption Cost Processor for Legal Entity,
Executes for all cost groups (implicit),
Step 2: Periodic Cost Processor for each cost group,
Step 3: Periodic Distribution Cost Processor for each cost group.

IPAC in EBS R12.04 and R12.1

Step 0: Periodic Acquisition Cost Adjustment Processor for each cost group,,
Step 1: Compute Iterative Periodic Average Cost for Legal Entity,
Executes for all cost groups (implicit),
Step 2: Periodic Distribution Cost Processor for each cost group.

PAC Setup

Cost Management > Periodic Costing > Setup
Org Cost Group / Cost Type Associations > Setup Inventory Organizations for each cost group
Cost Type Association attributes:
- You should check this to enable PACP for the Legal entity / cost type.
- Define whether iteration process is needed for valuing inter-organization transactions across cost groups.
You can uncheck this to increase performance of PACP process when the tolerance is not stringent.
This can be checked only when PACP is enabled.

CST_PAC_ITMS_ABSL_CODES
Absorption Hierarchy Level Codes.


CST_PAC_INTERORG_TXNS_TEMP
Temporary table to populate inter-org transactions across cost groups, to avoid repeated execution of performance intensive cursors, towards performance enhancement.


CST_PAC_INTORG_ITMS_TEMP
Temporary table to populate inventory items having inter-org transactions across cost groups. This table is used during iteration process. Also, used to store optimal sequence of cost groups.


MTL_PAC_ACT_CST_DTL_TEMP
Temporary table to populate inter-org transactions across cost groups to compute at each iteration during iteration process.

Questions and Answers

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In this Document
Purpose
 Periodic Absorption Cost Processor in EBS 11.5.10
 IPAC in EBS R12.04 and R12.1
Questions and Answers
 1) What is the logic for Intransit interorg transactions, PAC Material and Material  Overhead Cost elements ?
 a. One way intransit transaction:
 b. Two-way intransit transactions
 2) What is Tolerance Logic?

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