Actual Costing Integration

Many companies that use the JD Edwards EnterpriseOne Shop Floor Management system want to capture and track actual or average manufacturing costs. If you use actual costing, the system calculates the cost of the product built on a work order or rate schedule based on the actual hours used and the actual quantity of issued parts. The system updates the cost based on the most current information.

The system provides two methods for actual costing:

• Weighted average cost (cost method 02).

• Manufacturing last cost (cost method 09).

You can implement actual costing with the JD Edwards EnterpriseOne Manufacturing Accounting system without using the JD Edwards EnterpriseOne Product Costing system. If you use actual costing, you do not need to set up product costs for each item that you manufacture because product costs are calculated when work orders or rate schedules are completed.

A company can use a combination of actual costed items and standard costed items if the parent item is an actual costed item. Companies using one of the actual costing methods and cost extras should set up and freeze extra costs in the Item Cost Component Add-Ons table (F30026).

When you complete work orders for items that use the weighted average (02) cost method or the manufacturing last (09) cost method, the system:

• Calculates a new unit cost for the item based on shop floor activities.

• Revalues on-hand inventory for items that use cost method 09.

• Calculates and updates the weighted average cost.

• Updates the Item Cost table (F4105) with the new unit cost.

Weighted average costing (02) is useful for companies whose costs change often but not significantly.

Actual costing (09) is useful for companies that:

• Engineer or manufacture to order.

• Have costs that change often and significantly.