Understanding Simulated Costs

After performing the cost simulation, you can analyze costing information to determine the effects of the current rollup scenario and revise the costing information, as necessary. When costs are correct, run the Frozen Standard Update program (R30835).

You review costing information and set up simulated cost scenarios to help plan for future cost changes. After running the Cost Simulation program, you can review the cost simulation report, which displays the previous cost of the item, the results of the most recent cost simulation, and the variance between the two.

After reviewing the simulated costs, you revise incorrect information and create simulated costs again to include the changes. You can change only simulated costs. You can set a processing option to manually maintain the routing cost components (B and C) and protect them from being overwritten.

If you want to delete costs, you must delete them at the bill of material level at which they occur. For example, you cannot delete costs for lower-level components by locating the parent item. Instead, locate the component item number and remove the costs for the component. The system does not make the corresponding cost change to the higher level components and the parent item until you run the Cost Simulation program. To delete outside processing costs (usually cost component Dx), delete the cost component from the routing. Then delete the cost component and net-added value on the Enter Cost Components form.

If you select the Cost by Work Center option in the Manufacturing Constants program (P3009), you can define cost components by work center, as well. When you use this feature, the amounts for a cost component at multiple work centers in the Item Cost Component Detail table must match the corresponding cost component amounts in the Item Cost Component Add-Ons table (F30026). You can use simulated rate and factor codes either at the work center or the cost component level, but not at both levels.