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Calculating Default Actual Cost and Current Purchase Cost

This section provides an overview of costs and discusses how to use the Update Default Actual Cost process.

Page Used to Calculate Default Actual Cost and Current Purchase Cost

Page Name

Definition Name

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Usage

Update Default Actual Cost

RUN_CM_DFLTCOST

select Cost Accounting, then select Item Costs, then select Update Costs, then select Update Default Actual Cost

Calculate the value to be stored in the Default Actual Cost field or the Current Purchase Cost field on the Define Business Unit Item - General: Common page.

Understanding Costs

The values in the Default Actual Cost field and the Current Purchase Cost field are used by both processes and reports when a item value is needed. These fields are located on the Define Business Unit Item - General: Common page. The value in these fields can be manually updated or you can use the Update Default Actual Cost (CM_BUCST_UPD) process to automatically update these field.

Understanding Default Actual Cost and Current Purchase Cost

The Default Actual Cost field is used as the actual or average cost if the item does not yet have an actual cost generated from the receipt and putaway processes. This value is stored in the DFLT_ACTUAL_COST field of the BU_ITEMS_INV record. The Default Actual Cost is used in these processes and reports:

  • The Deplete On Hand Quantity process (IN_FUL_DPL). This field value is used to determine the transfer cost of an interunit transfer when the Transfer Pricing Definition component uses the default actual cost option.

  • The Reconciliation Report (INS5050) and the Stock Quantity Update process (INPOPOST) for a inventory stock count (physical count or cycle count). This field value is used to record a positive inventory adjustment when a receipt cost is not found.

  • The Adjustments page (ADJUSTMENT2_INV). The field value is used if the item requires a positive inventory adjustment prior to an actual cost being generated from receipt of the item.

  • The Cost Rollup process in PeopleSoft Manufacturing uses this field value as a preliminary cost if a receipt cost is not found.

  • The Interunit and RMA Receiving component uses the value in the Default Actual Cost field to cost the receipt of items using actual cost.

  • The Utilization Type Calculation Summary report (INS5100)

  • The Slow Moving Inventory report (INS5200) uses this field value if a receipt cost is not found.

The Current Purchase Cost field is used in PeopleSoft Manufacturing. This value is stored in the CURRENT_COST field of the BU_ITEMS_INV record. The Cost Rollup process in PeopleSoft Manufacturing uses this field value as an optional source to calculate the value of a standard-cost item. The Current Purchase Cost field is used to determine the material cost of purchased items and the lower-level material cost of a manufactured item when the cost type that you are rolling uses current costs.

Understanding the Update Default Actual Cost Process

The Update Default Actual Cost (CM_BUCST_UPD) process is a PeopleSoft Application Engine program that can update the Default Actual Cost field and the Current Purchase Cost field for all the items regardless of the item's cost profile. Before running this process, be sure to run the Cost Accounting Creation process to update the PeopleSoft Cost Management tables for any new receipts, cost adjustments, PeopleSoft Payable cost adjustments, or PeopleSoft Manufacturing finalized cost adjustment transactions. Based on your search criteria, the process:

  • Includes all the zero cost receipts, as they are originally part of average cost calculation during putaway.

  • Excludes cancelled receipts.

  • For consigned inventory items, includes all receipts irrespective of the consumption for consigned inventory items.

  • Rolls up all the cost elements into one default actual cost for each item, receiver ID, receiver line, distribution line before calculating the new cost.

  • Excludes manufacturing transactions with a cost source of 8 (Preliminary Production Cost).

Note: After the Update Default Actual Cost process is completed, you can query the PS_CM_ACT_COST_TMP and PS_CM_AVG_RCST_TMP tables to see what receipts were used during the cost calculation. These tables are cleared during the next run.

Update Default Actual Cost Page

Use the Update Default Actual Cost page (RUN_CM_DFLTCOST) to calculate the value to be stored in the Default Actual Cost field or the Current Purchase Cost field on the Define Business Unit Item - General: Common page.

Image: Update Default Actual Cost page

This example illustrates the fields and controls on the Update Default Actual Cost page. You can find definitions for the fields and controls later on this page.

Update Default Actual Cost page

Use the Update Default Actual Cost process to update the cost fields Default Actual Cost (DFLT_ACTUAL_COST) and Current Purchasing Cost (CURRENT_COST) in the Define Business Unit Item - General: Common page (BU_ITEMS_INV).