Standard Cost Valuation
Inventory and Work in Process continually update inventory value with each transaction. Work in Process balances are updated with each related accounting transaction. Inventory subinventory values may be reported when the quantity movement occurs.
Value by Cost Element
Inventory or work in process value is maintained and reported on by distinct cost element (such as material, material overhead, and so on), even if you assign the same general ledger valuation account to each cost element. You can also report work in process value by cost element within specific WIP accounting classes.
Standard Costing
Under standard costing, the value of inventory is determined using the material and material overhead standard costs of each inventory item. If you use Bills of Material, Inventory maintains the standard cost by cost element (material, material overhead, resource, outside processing, and overhead).
Unlimited Cost Types
You can define an unlimited number of cost types and use them with any inventory valuation and margin analysis reports. This allows you to see the potential effects of a cost rollup/update. You can also update your standard costs from any of the cost types you have defined.
When you use Bills of Material with Inventory, you can specify the cost type in explosion reports and report these costs for simulation purposes. See: Defining Cost Types and Defining Item Costs.
