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About Cost Lists

A cost list is a set of costs for products or services. You can attach a cost list to either a rate list or a price list to determine the profit margin.

There are four cost methods that you can use to determine the cost of a product or service:

  • Standard Cost. This is a predetermined operating cost that is compared with the actual cost to measure the performance of a given department or operation.
  • Last Cost. This is a cost metric used in the LIFO (Last-In, First Out) costing method. LIFO calculates cost by assuming the last goods purchased are the first goods sold, so the ending inventory consists of the earliest goods purchased.
  • Next Cost. This is a costing method that allows the user to maintain the cost manually.
  • Average Cost. This is a costing method that calculates product cost as the average (arithmetic mean) of all the purchase costs of an inventoried product.

You can enter all four of these costs for each product or service that is a line item in the cost list. You use the Cost List record to choose which of these cost methods is used for all the line items in the list.

You can attach the same cost list to multiple price lists. For example, you may have two price lists with different prices for the same products—one with the prices for customers and the other with the prices for resellers. Although the products may have the same cost, regardless of the price you charge for them, you can attach the same cost list to both of these price lists.

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