Defining the Standard Cost Foundation

Use the Cost Types page (CE_TYPE) to define cost types.

Navigation:

Set Up Financials/Supply Chain > Product Related > Cost Accounting > Cost Types

Create separate costing groupings with different methods of costing, such as current, revised or forecasting. The cost type also defines how purchased components are calculated.

To define cost versions, use the Cost Versions component (CE_VERSION).

Use the Cost Versions page (CE_VERSION) to define cost versions.

Navigation:

Cost Accounting > Item Costs > Define Rates and Costs > Cost Versions

This example illustrates the fields and controls on the Cost Versions page. You can find definitions for the fields and controls later on this page.

Use the Cost Versions page to define the different cost versions for a cost type. You can create unlimited cost versions for any cost type. By using different versions for a cost type, you can maintain a history of the different costs that are calculated for each cost type. You can base these cost versions on different sets of assumptions, such as different bills of material (BOMs; manufacturing versus engineering), effective dates, different labor rates, or different budgets that determine the overhead expenses.

Each cost version can have a status of pending, denied, or approved. You can update frozen standard costs used for accounting purposes only if the cost version status is approved. Cost versions that are related to engineering or simulation always have a status of pending.

To create standard cost groups, use the Cost Groups (CM_COSTGROUP) component.

Use the Standard Cost Groups page (CM_COSTGROUP) to (For standard costing only) Create cost groups.

Navigation:

Set Up Financials/Supply Chain > Product Related > Cost Accounting > Standard Cost Groups > Cost Groups

This example illustrates the fields and controls on the Standard Cost Groups page. You can find definitions for the fields and controls later on this page.

Standard cost groups, also known as cost groups, enable you to group together a set of items for standard cost roll up and standard cost update, comparing costs and reporting inventory value. Add items to the cost group by entering the standard cost group on the item's Define Business Unit Item - General: Common page. Then, enter a standard cost group on the Cost Rollup page or the Cost Update/Revalue page instead of defining a range of item IDs.

To create cost elements, use the Cost Element (CM_ELEMENT) component.

Use the Cost Elements page (CM_ELEMENT) to define cost elements.

Navigation:

Set Up Financials/Supply Chain > Product Related > Cost Accounting > Define Cost Elements

Cost elements categorize the components of an item's cost that are tracked through the PeopleSoft Inventory system. The debit and credit ChartField combinations in transaction processing can also be defined by cost element.

To define conversion codes, use the Conversion Codes component (CE_CONCODE). Use the Production Conversion Code component interface to load data into the tables for this component.

Use the Production Conversion Codes page (CE_CONCODE) to define production conversion codes.

Navigation:

Set Up Financials/Supply Chain > Product Related > Cost Accounting > Production Conversion Codes

This example illustrates the fields and controls on the Production Conversion Codes page. You can find definitions for the fields and controls later on this page.

Production conversion codes can be used to categorize labor, machine, and other conversion tasks and activities within work centers in the manufacturing process. Use conversion codes to define conversion rates that are associated with work centers or tasks.

To define cost conversion production overhead codes, use the Conversion Overhead Codes component (CE_OHCODE_CODE). Use the Conversion Overhead Codes component interface to load data into the tables for this component.

Use the Production Overhead Codes page (CE_OHCODE) to define conversion overhead codes.

Navigation:

Set Up Financials/Supply Chain > Product Related > Cost Accounting > Production Overhead Codes > Conversion Ovhd Codes

This example illustrates the fields and controls on the Production Overhead Codes page. You can find definitions for the fields and controls later on this page.

Production conversion overhead codes categorize the different types of overhead costs absorbed during the manufacturing process. Use conversion overhead codes to define conversion overhead rates that are associated with work centers or tasks. You can specify up to four conversion overhead codes for the work center or task.

To define cost conversion rates, use the Costing Conversion Rates component (CE_CONV_RATE). Use the Costing Conversion Rates component interface to load data into the tables for this component.

Use the Conversion Rates page (CE_CONRATE) to create cost conversion rates.

Navigation:

Cost Accounting > Item Costs > Define Rates and Costs > Conversion Rates > Costing Conversion Rates

This example illustrates the fields and controls on the Conversion Rates page. You can find definitions for the fields and controls later on this page.

Establish these rates to capture labor and machine costs in the production process. You can enter fixed run, run, post-production, and set up rates for both labor and machine. The rates are based on several factors, including business unit, cost type, cost version, conversion code, and conversion rate type. Each conversion rate type then points to a cost element. Multiple conversion code definitions can point to the same or different cost elements. This structure gives you flexibility to set up and use several different rates. Link these rates with a work center or task where they are used to determine the labor, machine, and subcontracting costs of an item's routing operation.

For each conversion rate type that you want to associate with a specific conversion code, enter a rate.

For subcontracted tasks or operations, the conversion cost should represent the charge from the supplier for the outside processing. If the supplier charges you a flat amount per unit, enter that charge as a per unit cost. If the supplier quotes you a rate per hour, enter that rate as a labor-setup, run, or fixed-run rate and enter the corresponding time that it takes the supplier to complete the task on the item's routing or operation list.

To define cost conversion overhead rates, use the Costing Conversion Overhead Rates component (CE_CONV_OH_RATE). Use the Overhead Rates component interface to load data into the tables for this component.

Use the Overhead Rates page (CE_CONOH_RATE) to create cost conversion overhead rates.

Navigation:

Cost Accounting > Item Costs > Define Rates and Costs > Overhead Rates > Costing Conv Ovhd Rates

This example illustrates the fields and controls on the Overhead Rates page. You can find definitions for the fields and controls later on this page.

The conversion overhead rates represent the overhead expenses that are associated with the production of the assemblies. Enter the cost conversion overhead rates to use for overhead costs based on the units produced, labor and machine hours, or labor and machine costs. The rates are based on business unit, cost type, cost version, conversion overhead code and cost element. You can establish several different rates. In the case of subcontracted tasks or operations, it should represent the cost of preparing and sending the item to the subcontractor for outside processing.

Select the rate type that you want to associate with the rate code. Valid rate types include:

Use the Copy Cost Structures page (CE_COPY_COST_STRUC) to copy cost structures.

Navigation:

Cost Accounting > Item Costs > Define Rates and Costs > Copy Cost Structures

Copy the cost foundation structures: cost types, cost elements, production conversion codes, and production overhead codes from one SetID to another. This process copies only the codes that are associated with each record and not the rates or costs that are associated with those codes.

Use the Copy Cost Types/Versions page (CE_COPY_COSTS) to copy cost rates.

Navigation:

Cost Accounting > Item Costs > Define Rates and Costs > Copy Cost Types/Versions

Copy costs and rates from one business unit to another. If another business unit has the rates and item costs that you want to use, or if you want to use one set of cost type and version information as the basis for other cost types or versions, you can use this page to copy those costs and rates.

Use the Update Conversion Rates page (CE_MANFRZ_CON) to update conversion rates.

Navigation:

Cost Accounting > Item Costs > Update Costs > Update Conversion Rates

This example illustrates the fields and controls on the Update Conversion Rates page. You can find definitions for the fields and controls later on this page.

Use this page to update the set of production conversion rates and conversion overhead rates. For standard cost items, run the Cost Update/Revalue process (RUN_CES5001) to copy these conversion rates and conversion overhead rates into production. It then uses these rates to calculate earned labor and machine costs, as well as applied overhead for the assembly completions and scrapped assemblies. If you are introducing a new conversion rate or conversion overhead rate for a single item whose cost you are updating, you must also update the set of production conversion rates and conversion overhead rates that are used to calculate the item's cost. The lower portion of the page displays the conversion rates and conversion overhead rates to copy to the frozen rates records. Save the page to update the rates.