Redwood: Standard Cost Overhead Absorption Rules

You can define an item standard cost to include overhead cost elements from the Standard Cost Overhead Absorption Rules page in the Cost Accounting work area.  You can now create, modify, delete standard cost overhead absorption rules using Redwood pages. You can verify the existing rules and also download the information into a spreadsheet for offline analysis and collaboration.

The overhead costs are absorbed and accounted for against all receipt transaction types by default. However, you can define which transaction groups and transaction types must absorb the overhead for standard costed items. This lets you to account for overhead absorption for specific transactions. You can view, create, update and delete rules directly from the Standard Cost Overhead Absorption Rules page.

Standard Cost Overhead Absorption Rules page

Standard Cost Overhead Absorption Rules page

Some of the benefits of this feature include:

  • Better User Experience: Intuitive search, filtering, and navigation reduce manual effort and increase productivity.
  • Streamlined Overhead Management: Simplifies the application of overhead rules, saving time and reducing manual effort in cost allocation.

Steps to Enable

  1. In the Setup and Maintenance work area, search for and select the Manage Administrator Profile Values task.
  2. On the Manage Administrator Profile Values page, search for and select the ORA_CST_MANAGE_ACCOUNTING_OVERHEAD_RULES_REDWOOD_ENABLED profile option code.
  3. In the Profile Values section, set the Site level to Yes. The default value is No.
  • Yes = enables the feature
  • No = disables the feature
  1. Click Save and Close. Changes in the profile value will take effect the next time you sign in.

After you've set the profile value correctly, the task pane under Cost Accounting would show the task menu link as Standard Cost Overhead Absorption Rules. Using this link, you can access the Redwood page.

Tips And Considerations

  • If you change the value for Absorb Overheads, the new value will be applied only to the corresponding transactions that are yet to be processed and future transactions.
  • Overhead absorption rule defined at the lowest level takes precedence.
  • Provide guidance such as tutorials, company policies, and best practices in the context of the page using guided journey tasks.

Key Resources

  • Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management Guide, available on the Oracle Help Center.
  • Oracle Fusion Cloud SCM: Using Cost Management Guide, available on the Oracle Help Center.

Access Requirements

Users who are assigned a configured job role that contains the following privilege can access this feature:

  • Manage Overhead Rule (CST_MANAGE_ACCOUNTING_OVERHEAD_RULES)
  • Manage Overhead Rule by Web Service (CST_MANAGE_ACCOUNTING_OVERHEAD_RULES_WEB_SERVICE)