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Prerequisites

   Define Organization Parameters (See: Organization Parameters Window

• Costing Method is set to Standard

• Transfer Detail to GL is appropriately set

• Default Material Sub-Element account (Required)

   Define cost types are defined.

   Define activities and activity costs are defined.

   Define material overhead defaults are defined

   Define item, item costs, and establish item cost controls. See: Overview of Item Setup and Control.

   Launch transaction managers are launched

   To set up inventory standard costing:

1. Define item costs. See: Defining Item Costs.

2. Set activity costs for items.

You can assign an activity to any cost. If you use the activity basis type, you can directly assign the activity cost to the item. When you use the other basis types, the cost is based on the sub-element, basis type, and entered rate or amount. The activity defaults from the sub-element; and, if needed, you can override the default. See: Defining Item Costs.

3. Edit costs.

You can mass edit item costs and activities using several predefined mass edits:

• reflect increases in supplier prices or other changes in business conditions

• change item costs to reflect new activity rates

• create new material costs based on a weighted average of actual payables invoice cost, open purchase orders, or historical purchase order receipts

• mass edit existing material and material overhead costs to a specified amount, by a percentage change, or by an absolute amount

• for Oracle Manufacturing installations, edit manufacturing shrinkage rates to a specified rate or set it equal to planning shrinkage rates

With these mass edits, you can specify a range of items or categories, a specific cost type, basis type, activity, or type of item (make or buy). The weighted average mass edits allow you to specify a transaction date range. All cost mass edits can copy from an existing cost type and simultaneously submit a cost comparison report.

Custom mass edits can be created by Oracle Consulting and or your MIS staff and added to the list of available mass edits. Each mass edit is a stored procedure in the database, and each stored procedure is registered in a mass edits table.

4. Edit item accounts. See: Mass Editing Item Accounts.

5. Copy costs between cost types. See: Copying Costs Between Cost Types.

6. Perform cost update for inventory standard costing, if needed.

This is optional if your Frozen standard costs are complete. If you use Bills of Material, and you are updating assemblies, you need to roll up your assembly costs before you update. See: Updating Standard Costs.