Resource Charges (Oracle Cost Management)


	Previous	Next		Contents	Index	Glossary	Library

Resource Charges

Work in Process supports four resource autocharging methods: Manual, WIP Move, PO Move, and PO Receipt. You can charge resources at an actual rate. You can also charge resource overheads automatically as you charge resources.

WIP Move Resource Charges

You can automatically charge resources at predefined rate to a job when you perform a move transaction using either the Move Transaction window or the Open Move Transaction Interface. When you move assemblies from the Queue or Run intraoperation steps forward to the To move, Reject, or Scrap intraoperation steps, or to the next operation, Work in Process charges all pre-assigned resources with an charge type of WIP Move at their predefined rate.

For resources with a basis of Item, Work in Process automatically charges the resource's usage rate or amount multiplied by the resource's predefined cost upon completion of each assembly in the operation. For resources with a basis of Lot, Work in Process automatically charges the resource's usage rate or amount multiplied by the resource's predefined cost upon completion of the first assembly in the operation.

You can undo the WIP Move resource charges automatically by moving the assemblies from Queue or Run of your current operation to Queue or Run of any prior operation, or by moving the assemblies from the To move, Reject, or Scrap intraoperation steps backward to the Queue or Run intraoperation steps of the same operation, or to any intraoperation step of any prior operation.

Manual Resource Charges

You can charge manual resources associated with a move transaction or independently of any moves. Manual resource transactions require you to enter the actual resource units applied rather than autocharging the resource's usage rate or amount based on the move quantity. You can charge resources using that resource's unit of measure or any valid alternate. You can manually charge resources to a job, provided it has a routing.

If you use the Move Transactions window to perform moves and manual resource transactions at the same time, Work in Process displays all pre-assigned manual resources with a charge type of Manual assigned to the operations completed in the move. If the resource is a person, you can enter an employee number.

In addition to the resources displayed, you can manually charge any resource to a job, even if you have not previously assigned the resource to an operation in the job. You can also manually charge resources to an operation added ad hoc by entering any resource defined for the department associated with the operation.

You can correct or undo manual resource transactions by entering negative resource units worked.

Costing Resource Charges at Resource Standard

Resource charges increase work in process valuation. The accounting entries for resource transactions are:

Account Debit Credit

WIP accounting class resource valuation account XX

Resource absorption account XX

If Autocharge is set to WIP Move, work in process and labor are charged at a predefined amount. There are no resource rate or efficiency variances.

The accounting entries for negative Manual resource transactions and backward moves for WIP Move resources are:

Account Debit Credit

Resource absorption account XX

WIP accounting class resource valuation account XX

Costing Labor Charges at Actual

You can charge labor charges at actual in two ways. You can enter an actual rate for the employee using the Open Resource Transaction Interface or when you define employee rates. For labor charges using an actual or employee rate for a resource for which charge standard rate is turned off, the accounting entries are:

Account Debit Credit

WIP accounting class resource valuation account XX

Resource absorption account XX

Any difference between the total labor charged at actual and the predefined labor amount is recognized as an efficiency variance at period close.

If you enter an actual rate for a resource for which Charge Standard Rate is enabled, Work in Process charges the job at a predefined amount. If Autocharge is set to Manual and actual rates and quantities are recorded, a rate variance is recognized immediately for any rate difference. Any quantity difference is recognized as an efficiency variance at period close. The accounting entries for the actual labor charges are:

Account Debit Credit

WIP accounting class resource valuation account XX

Resource rate variance account (Debit when actual rate is greater than the standard rate. Credit when the actual rate is less than the standard rate.) XX XX

Resource absorption account XX

PO Receipt and PO Move Transactions

You can receive purchased items associated with outside resources from an outside processing operation back into work in process in Oracle Purchasing. For these items, Oracle Work in Process creates resource transactions at the standard or actual rate for all outside resources with an autocharge type of PO receipt or PO move. For outside resources with an autocharge type of PO move, Work in Process also moves the assemblies from the Queue or Run intraoperation step of the outside processing operation into the Queue intraoperation step of the next operation or into the To move intraoperation step if the outside processing operation is the last operation on the routing.

If you assigned internal resources to an outside operation with an autocharge type of Manual, charge the resources using the Resource Transactions window or the Open Resource Transaction Interface.

If you return assemblies to the supplier using the Receiving Returns window in Oracle Purchasing, the system automatically reverses the charges to all automatic resources associated with the operation. You must manually reverse all manual resource charges using the Resource Transactions window. For outside resources with an autocharge type of PO move, the system automatically moves the assemblies from the Queue intraoperation step of the operation immediately following the outside processing operation into the Queue intraoperation step of your outside processing operation.

If the outside processing operation is the last operation on the routing, the assemblies automatically move from the To move intraoperation step to the Queue intraoperation step.