Project Manufacturing Costing (Oracle Cost Management)


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Project Manufacturing Costing

You can cost all project related manufacturing transactions then capture these costs and transfer them to Oracle Projects. You can associate items and manufacturing business processes with specific projects, and optionally tasks, to track quantity and cost information through these business processes. Project manufacturing costing allows you to process and cost material and labor against a specific project or a group of projects for a specific customer.

Work Breakdown Structure: Project and Tasks

You define projects and tasks in Oracle Projects. Project tasks make up the Work Breakdown Structure of a project. Project and tasks can be referenced throughout Oracle Manufacturing Applications.

See: Setting Up a Project Work Breakdown Structure and Overview of Projects and Tasks.

Costing Methods

If you are a new Release 11 customer, you can use project manufacturing costing.

Average Costing

Project manufacturing costing is fully supported in average costing organizations that have the Project Cost Collection Enabled organization parameter set. In organizations setup for project cost collection, you can manufacture and track inventory items and perpetually value your project inventory at a weighted average cost that is specific to one project or a group of projects. This same average cost is used to value transactions and thus allows you to reconcile your inventory and work in process balances to your accounting entries.

Because project manufacturing costing can only be done in average costing organizations, all of the features of average costing -- such as being able to cost WIP resource transactions at actual rate -- are also applicable to project manufacturing costing. See: Overview of Average Costing.

Under project manufacturing costing, costs are calculated and held at the cost group level within each inventory organization. Since subinventory valuation accounts cannot be defined at a level lower than the level at which average costs are held, value in every locator belonging to a project in a particular cost group is held in that group's valuation accounts

Using cost groups, an item may have a different cost in different projects as well as a unique cost in common inventory, all within the same organization. Item costs can apply to a single project if each project belongs to a distinct cost group, or apply to a group of projects if all projects in the group are associated to the same cost group. Items in common inventory belong to the common cost group and are normally costed separately from items in projects. See: Cost Groups

Standard Costing

In a standard costing organization, you can issue items from inventory to a project and receive items into inventory from a project using user-defined project miscellaneous issue and receipt transaction types respectively. These transactions are valued at standard cost. See: Integrating with Oracle Inventory.

Project and Non-Project Manufacturing

You can cost both project referenced and non-project referenced transactions in the same organization. For example, you can define and transact both non-project or 'common' discrete jobs as well as project jobs. However, since average costing is a prerequisite for project manufacturing costing, both types of jobs are costed at average.

For a listing of Oracle Manufacturing Applications windows that include specific logic for projects, see: Project References.

For a listing of project referenced transaction, see: Project Manufacturing Transactions.

Project Inventory

You can perform the following type of inventory transactions for project referenced inventory:

Miscellaneous Issue

Miscellaneous Receipt

Subinventory Transfer

Interorganization Transfer (Direct)

Interorganization Transfer (Intransit)

Cycle Count Adjustment

Physical Inventory Adjustment

Transactions between expense subinventories are not eligible for project cost collection.

Project Jobs

You can create project jobs by assigning project and task references to jobs in the Discrete Jobs window in Oracle Work in Process. You can implement project jobs planned in Master Scheduling/MRP and Supply Chain Planning.

You can define both standard and non-standard project jobs. You can assign different WIP accounting classes to project jobs. You can also define WIP accounting classes to be valid only for a specific cost group. Doing so makes it possible to keep the WIP costs of projects belonging to the same cost group in specific general ledger accounts. You can also track WIP resource and material transactions to the project job.

Project Purchasing and Receiving

You can enter project purchase requisitions and orders directly. You can implement project purchase orders that are planned in Master Scheduling/MRP and Supply Chain Planing. You can receive items on project purchase orders, optionally inspect them, and deliver them to project locators. You can also track the status of all purchase requisitions and purchase orders for a project.

Cost Collector

You can use the Cost Collector to pass project related costs from Oracle Manufacturing Applications to the Transaction Import Interface table in Oracle Projects. These transactions can then be imported from the interface table into Oracle Projects.

The Cost Collector collects costs by project, task, and expenditure type. Non-project transactions, those without a project/task reference, are not collected. See: Cost Collector.

Task auto assignment assures that each project transaction has a task if one has not been explicitly assigned. Task Auto Assignment enables you to manage your manufacturing activities by project and collect manufacturing costs by different tasks.

See: Task Auto Assignment.

Cost Elements and Cost Subelements

Some project manufacturing transactions can capture project cost only at the cost element level. These are as follows:

Misc. Issues and Receipts into and out of Projects Locators

Interorg. Transafers between subinventories with different proj. or tasks

Subinventory Transfers between subinventories with different proj. or tasks

Other transactions support an unlimited number of user-defined cost subelements costs at the subelement level. Cost subelement delineation makes it possible to analyze performance in terms of labor, overhead, material or other direct costs.