Common Elements Used to Understand Production Costs

Field or Control	Description
Conversion Code	Define labor, machine, and other conversion costs in the manufacturing process. Use production conversion codes to define conversion rates associated with work centers or tasks. In the case of subcontracted tasks or operations, the rate should represent the cost of preparing and sending the item to the subcontractor for outside processing.
Conversion Overhead Code	Define the different types of overhead costs used in the manufacturing process. Use production overhead codes to define conversion overhead rates associated with work centers or tasks. You can specify up to four production overhead codes for the work center or task.
Cost Element	Categorize the components of an item's cost. When you perform a cost rollup, you maintain an item's cost by cost element. Cost elements also help define the debit and credit ChartField combinations in transaction processing.
Cost Type	Creates separate costing groupings with different methods of costing, such as current, revised, or forecasting. The cost type also defines how purchased components are calculated.
Cost Version	Once you have determined the cost types, you can use cost versions to determine how many iterations or versions of costs you want to calculate. By using different versions for a cost type, you can maintain a history of the different costs calculated for each cost type. You can base these cost versions on different sets of assumptions, such as different BOMs (manufacturing versus engineering), effective dates, different labor rates, or different budgets that determine the overhead expenses.
Lower Level Costs	Costs associated with the components used on the assembly.
Source Code	Identifies an item as make, buy, floor stock, expense, or planning. This determines how the system uses the item during the Cost Rollup and Update Production processes.
Standard Cost Group	Standard cost groups (also know as cost groups) enable you to group together a set of items for cost roll up and update, comparing costs and reporting inventory value.
This Level Costs	Costs associated with manufacturing a specific assembly item.
Costing Conversion Overhead Rates	Establishes the 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.
Costing Conversion Rates	Establishes the rates to use for labor and machine costs in the production process. You can enter fixed run, run, postproduction, 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 cost element. This structure gives you flexibility to set up and use several different rates.