Updating Costs

This chapter discusses how to:

• Update item costs.

• Work with detail costing in distribution.

Updating Item Costs

This section provides an overview of item cost updates, lists a prerequisite, and discusses how to:

• Set processing options for Speed Cost Maintenance (P41051).

• Update costs for an item across multiple branch/plants.

• Update costs for multiple items across multiple branch/plants.

• Set processing options for Batch Cost Maintenance (R41802).

• Update average costs for items.

• Update current item costs with future costs.

• Set processing options for Future Cost Update (R41052).

Understanding Item Cost Updates

You can use cost maintenance procedures to update costs for individual items or for multiple items in the branch/plants, locations, and lots that you select. You select the cost method to use for updating costs. For example, you can implement a percentage increase in the standard cost for a group of items. If you use the average cost method to determine inventory costs, you can update the average cost for all items. You can increase or decrease costs by a percentage or monetary amount, or you can specify a new amount. You specify the cost method for which you want to update costs. For example, you can update an item's last-in costs, average costs, and so on. Cost changes are effective immediately. You can also update average costs or future costs for all items that you select.

The system stores item costs in the Item Cost File (F4105). After you update item costs, the system updates the F4105 table. After you update costs for an item's sales/inventory cost method, the system creates general ledger (GL) and item ledger records.

See Also

Setting Up AAIs in Distribution Systems

Entering Item Cost Information

Prerequisite

Before you complete the tasks in this section, you must verify that automatic accounting instructions (AAIs) for changes to inventory costs are set up.

See Setting Up AAIs in Distribution Systems.

Forms Used to Update Item Costs

Setting Processing Options for Speed Cost Maintenance (P41051)

Processing options enable you to specify the default processing for programs and reports.

Defaults

Process

Updating Costs for an Item Across Multiple Branch/Plants

Access the Cost Revisions form.

Sales/Inventory and Purchasing

Enter codes from UDC table (40/CM) that indicates the cost method that the system uses to calculate the cost of goods that are sold for the item. Cost methods 01–19 are reserved for use. If you maintain costs at the item level, the system retrieves the default value for this field from the data dictionary. If you maintain costs at the item and branch/plant level, the system retrieves the default value from Branch/Plant Constants program (P41001).

Updating Costs for Multiple Items Across Multiple Branch/Plants

Select Inventory Price & Cost Updates (G4123), Batch Cost Maintenance.

Setting Processing Options for Batch Cost Maintenance (R41802)

Processing options enable you to specify the default processing for programs and reports.

Process

Defaults

Print

Edits

Updating Average Costs for Items

Select Inventory Price & Cost Updates (G4123), Update Average Cost.

Two methods exist for updating average costs for items:

• Interactive.

  You can set the system constants to specify that the system updates average costs interactively.

• Batch

  You use the Average Cost Update program (R41811).

You specify the items, branch/plants, locations, and lots for which to update average costs.

Each time that a transaction affects the current cost of an item, the system updates the Average Cost Work file. You can specify the programs that update the workfile by using Define Average Cost, which contains UDC table (40/AV). When you run the R41811 program, the system:

• Accesses current cost information from the Average Cost Work File (F41051).

• Calculates the average cost for each item.

• Updates the F4105 table.

• Deletes transactions from the workfile.

Before you run the R41811 program, you should be familiar with the cost level of the items that you want to update. You should consider that:

• For all items with a cost level of 1, you must specify ALL for the branch/plant and locations.

• For all items with a cost level of 2, you specify ALL for the locations only.

• If you select to run the update over items from all three cost levels, you should select by item number only.

See Also

Setting Up Constants

Updating Current Item Costs with Future Costs

Select Inventory Price & Cost Updates (G4123), Future Cost Update.

You can replace current costs with future costs by using the Future Cost Update program (R41052). You select the cost level of the items for which to update future costs. For example, you can list the future cost for the item and branch/plant on the Cost Revisions form as cost method 05. Then, in the data selection for the R41052 program, select items with a cost method of 05.

After you run the R41052, the system prints a report that lists the new costs, the old costs, and any errors that detail invalid cost methods.

Setting Processing Options for Future Cost Update (R41052)

Processing options enable you to specify the default processing for programs and reports.

PROCESS CNTRL

Interop

Working with Detail Costing in Distribution

This section provides an overview of detail costing and discusses how to:

• Set up detail costing in distribution.

• Create simulated costs for distribution.

• Set processing options for Simulated Cost Update (R30840).

• Copy manufacturing cost components.

• Set processing options for Copy Cost Components (R41891).

Understanding Detail Costing

In a distribution environment, you cannot calculate costs from bills of material or routings. Instead, the Simulated Cost Update (R30840) program uses costs from the F4105 table to update costs in the Item Cost Component Add-Ons table (F30026).

Use a processing option to specify which cost component contains the costs. A, B, and C cost components are not hard coded.

Forms Used to Work with Detail Costing in Distribution

Setting Up Detail Costing in Distribution

Access the Branch/Plant Constants form.

Creating Simulated Costs for Distribution

Select Product Cost Detail - Distribution (G4125), Simulated Cost Update.

The Simulated Cost Update (R30840) program for distribution is similar to the Cost Simulation program for manufacturing. Use the R30840 program to copy costs from the F4105 table to the F30026 table.

After you update simulated costs to determine the effect of changes, you can update the frozen costs with simulated values by running a frozen update.

See Also

Setting Up Constants

Setting Processing Options for Simulated Cost Update (R30840)

Processing options enable you to specify the default processing for programs and reports.

Process

Defaults

Print

Copying Manufacturing Cost Components

SelectInventory Price & Cost Updates (G4123), Copy Mfg. Cost Components.

The Copy Cost Components program (R41891) copies costs from the F30026 table to the F41291 table. You can copy simulated or frozen costs for the cost method that you specify.

Setting Processing Options for Copy Cost Components (R41891)

Processing options enable you to specify the default processing for programs and reports.

From

Landed Costs

Default