Actual Costs

In order to calculate actual cost, products must comply with this setup:

Products	Setup	Description
Raw materials and resale	Method 02 (Weighted Average Cost) must be set up as the main method of sales and inventories in the Item Cost File (F4105) table.	Legislation prescribes that products be valued according to their Weighted Average Cost. The JD Edwards EnterpriseOne Inventory Management system provides this functionality.
Products in progress and manufactured	Method 07 (Standard Cost) must be set up as the main method of sales and inventories in the F4105 table. Method 02 must be set up as secondary method in the F4105 table.	Method 07 is typically used in manufacturing. The localization obtains the actual cost to weighted average cost and updates it according to Method 02.

Products

Setup

Description

Raw materials and resale

Method 02 (Weighted Average Cost) must be set up as the main method of sales and inventories in the Item Cost File (F4105) table.

Legislation prescribes that products be valued according to their Weighted Average Cost.

The JD Edwards EnterpriseOne Inventory Management system provides this functionality.

Products in progress and manufactured

Method 07 (Standard Cost) must be set up as the main method of sales and inventories in the F4105 table.

Method 02 must be set up as secondary method in the F4105 table.

Method 07 is typically used in manufacturing. The localization obtains the actual cost to weighted average cost and updates it according to Method 02.

Additionally, these assumptions apply:

The actual cost calculation process is used only for discrete production and is not used for continuous production.
Products have the same setup in all branch/plants. The actual cost calculation is made according to the product costing level.
The actual cost is calculated according to Method 02 (weighted average cost).
Batch programs run by the actual cost process must be run from the Actual Cost Process Header program (P76H6001).

These programs and systems have been localized to meet Peruvian legal requirements for the actual cost calculation of products in progress and manufactured products:

JD Edwards EnterpriseOne Advanced Cost Accounting system information interface to the Item Cost Component Add-Ons (F30026) table.
The program that creates an actual bill of materials according to the period production in which the process is being run.
The Actual Cost Calculation of Products in Progress and Manufactured Products program.
The Localized Cardex Update program according to the actual cost calculation of products in progress and manufactured products.
The program that generates a journal entry by the cost difference of inventory and goods sold, between the actual cost and that registered by the system as standard cost.

Actual cost calculation by weighted average cost of WIP and FG is complex due to the large number of variables that affect the cost of a manufactured item. Variables include the materials actually used to produce the item, the labor cost used, production time, labor expenses, machinery cost, machine hours, and overheads such as electricity and power.