Managing the Actual Costing Method

When the items are defined as actual cost, the Transaction Costing process (within the Cost Accounting Creation process):

• For purchased items, values all receipts (putaways) at the purchase order price. The cost can be later adjusted to the voucher price when the voucher is matched, posted, and landed costs are extracted, unless you have selected the Writeoff PPV and ERV check box on the Cost Profiles page.

• For makeable items, values the receipts (putaways) that are based on the completed production costs from the completed production ID or production schedule. If finished items are placed into inventory before the production ID or production schedule is complete, then an estimated cost is used at putaway. The cost is later adjusted to the completed production cost.

• Values all depletions using the putaway cost (adjusted to the voucher price once it is matched, posted, and extracted). The choice of cost flow method on the cost profile page enables the system to track which putaways are used to satisfy each depletion. The system can track items by using lot ID, serial ID, FIFO, or LIFO.

• Actual cost items can be updated to the voucher price once it is matched and posted. Putaways and depletions that were previously costed at the purchase order price are adjusted for the difference between the purchase order (PO) price and the voucher price. To delay costing actual cost items until the voucher price is available, select the Hold for Final Cost check box (on the Cost Profiles page) and run the Transaction Costing process with the Cost Mode of Mid Period.

  You also have the option to not update actual cost items to the voucher price. Select the Writeoff PPV and ERV check box on the Cost Profiles page to record any differences between the purchase order price and the vouchered price in an expense account rather than updating the inventory receipt and depletion transactions. The variance is inserted into CM_VARIANC_COST record using the transaction group 400.

The receipt costs of an actual cost item can also be manually adjusted by using the Adjust Actual Cost component. You may need to adjust an item's cost due to entry errors, variances, and other causes. You can increase or decrease the item's cost, or you can establish a new actual cost for an item. This component writes adjustments, using the transaction group 206, to the CM_USER_CST_ADJ record, where they are picked up by the Transaction Costing process.

Use the Adjust Actual Cost - Item Selection page (CM_COSTADJ_PARM) to specify the item information to adjust an actual cost item.

Navigation:

Cost Accounting > Item Costs > Update Costs > Adjust Actual Cost > Item Selection

This example illustrates the fields and controls on the Adjust Actual Cost-Item Selection page. You can find definitions for the fields and controls later on this page.

Use this page to search for the receipt to be adjusted. You can find the receipt by:

1. (required) Entering the business unit, cost book name, and item ID for which you want to update the actual cost.

   You can select only those items that are actual costed in at least one business unit book.

2. (optional) Refining the search by selecting a specific Receipt No (receipt number).

   You can include or exclude consigned receipts by selecting B (include both), N (exclude consigned items), or Y (include consigned items). You can also specify a receipt to a specific storage area.

3. Click the Search button after you make selections.

   The system automatically displays the results of the search on the Adjustment Detail page.

Use the Adjust Actual Cost - Production Selection page (CM_ACTC_INQUIRY) to specify the manufacturing information to adjust an actual cost item.

Navigation:

Cost Accounting > Item Costs > Update Costs > Adjust Actual Cost > Production Selection

This example illustrates the fields and controls on the Adjust Actual Cost-Production Selection page. You can find definitions for the fields and controls later on this page.

Use this page to search for the receipt that is to be adjusted for production information. You can find the receipt by:

1. (required) Entering the business unit, and cost book name.

2. (required) Entering either a production ID or production area and item ID.

3. (optional) Entering a group ID for production schedules.

4. Click the Search button after you make the selections.

   The system automatically displays the results of the search on the Adjustment Detail page.

Use the Adjust Actual Cost - Adjustment Detail page (CM_COSTADJ_ACTUAL) to apply an actual cost adjustment to an item.

Navigation:

• Cost Accounting > Item Costs > Update Costs > Adjust Actual Cost > Item Selection. Enter search criteria and click the Search button.

• Cost Accounting > Item Costs > Update Costs > Adjust Actual Cost > Production Selection. Enter search criteria and click the Search button.

The Adjustment Details page displays the results of the search from the Item Selection page or the Production Selection page. Use the different tabs on this page to display the receipts in date and time order, in receiver number order, in lot or serial ID order, or production ID or area order. Use this page to apply an actual cost adjustment to an item's receipt.

Use the Auto-adjust group box to apply one cost or percentage adjustment to all the selected receipt lines in the Item Adjustment Selection group box.

Use the Item Adjustment Selection group box to adjust individual receipt lines. Receipt lines appear based on the selection criteria from the Item Selection or Production Selection pages. The receipts lines can be adjusted individually by using the appropriate Increase(percent increase), Decrease (percent decrease), or New Cost fields on the selected row. To adjust several receipts at one time, use the Auto-adjust group box.