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Cost Management automatically costs and values all inventory, work in process, and purchasing transactions. This means that inventory and work in process costs are up-to-date and inventory value matches the cumulative total of accounting transactions.

Cost Management provides flexible cost setup features, including multiple cost elements and unlimited sub-elements, unlimited resources and overheads, and unlimited activities. For example, you can use one or more of the following cost elements: material, material overhead, resource, outside processing, and overhead. Sub-elements enable you to analyze costs in greater detail. For example, you can have multiple material overhead sub-elements such as purchasing, material handling, freight, duty, and so on. This enables you to accurately define and maintain costs and associate them with items.

Cost Management provides flexible account setup including accounts by organization, subinventory, and work in process accounting class so that you can distribute costs to the proper expense accounts and capture valuation in the proper asset accounts.

Cost Management provides comprehensive valuation and variance reporting. Perpetual inventory and work in process balances are maintained on-line. Multiple variances are supported: purchase price, standard cost, cycle count, physical inventory, work in process usage, and work in process efficiency.

Cost Management also provides extensive cost simulation, copying, and editing capabilities that enable you to project costs and keep them accurate.

Cost Management supports flexible period-based accounting that enables you to transact in more than one open period at the same time. You can reconcile and analyze one open period while conducting business in a subsequent period. Further, you can transfer summary or detail account activity to Oracle General Ledger and close a period at any time.

Costing Methods

See Also

Overview of Average Costing

Inventory and Manufacturing Costing Compared