Cost Elements, Subelements, and Expenditure Types
Some project manufacturing transactions can capture project cost only at the cost element level. Other transactions support an unlimited number of user-defined cost subelements costs at the subelement level. Cost subelement delineation is required so that you can analyze performance in terms of labor, overhead, material or other direct costs.
The Cost Collector collects costs by project, task, and expenditure type. Associating expenditure types with cost subelements ensures that project manufacturing costs can be collected and transferred to in Oracle Projects.
Subelement Correspondence to Expenditure Type
There is a many-to-one relationship between subelements in Manufacturing and expenditure types in Projects, and these relationships are defined at the organization level. As a result, for any resource, material, etc. that is used on multiple projects, the expenditure type is the same across projects. The same is true within the same project, so a resource or purchased item with two different uses in different tasks, for example, would carry the same expenditure type in both tasks.
To pass detailed data from Manufacturing to Projects, each cost subelement in Manufacturing must correspond to an expenditure type in Projects. This relationship is defined at the organization level in the Resource, Overhead, and Material Subelements forms in Cost Management, and is mandatory if the Project Cost Collection Enabled parameter is set for this organization. When defining a cost subelement the user must associate it with an expenditure type. Whenever that subelement is charged or earned in Manufacturing in a transaction that crosses a project and task boundary, the Cost Collector uses the corresponding expenditure type to pass the subelement's transaction cost to the appropriate project and task.
Cost visibility and reporting, down to the expenditure type level of detail, is available using Oracle Projects.
Elemental Cost Visibility in the General Ledger
Cost elements of an item in a project job or locator can be charged either to different valuation accounts or all to the same account in Manufacturing. Since Manufacturing passes accounting entries to General Ledger, the account detail you define determines the level of elemental detail you are able to see in your General Ledger. Either way, elemental cost visibility is maintained in Manufacturing and that detail is passed to Projects using Expenditure Types.
Cost Element Correspondence to Expenditure Type
If project cost collection is enabled in your Inventory Organization Parameters, as a prerequisite to running the Cost Collector each of the five cost elements must have two expenditure types linked to it. Users create these links in the Expenditure Types for Cost Elements window within Cost Management. These expenditure types are used when passing costs to Projects when any of the following transactions occur in Manufacturing:
- Subinventory Transfer between subinventories with different project or task
- Interorganization Transfer between locators with different project or task
- Miscellaneous Issue from a project locator
- Miscellaneous Receipt into a project locator
Of the two expenditure types for each cost element, one is used to hold the value of transfers out of projects, the other to hold the value of transfers into projects. Since they are for a specific use, you may wish to choose expenditure types which are used only for this purpose and not associated with any cost subelement.
See Also
Defining Material Sub-Elements
Defining Overhead
Associating Expenditure Types with Cost Elements
Defining Cost Types
Defining Item Costs
