1. Using Supply Chain Cost Management
  2. Create Standard Costs

Create Standard Costs

You can define standard costs for items and also define the associated valuation unit, cost element, and expense pool. You must associate the standard cost with a cost scenario.

  1. In the Cost Accounting work area, click the Manage Standard Costs task.

  2. Click the Add icon.

  3. On the Create Standard Cost page, select the cost scenario that you want to associate this standard cost with.

  4. If your cost scenario has a cost rollup group, you need to select the cost organization and cost book combination in the cost rollup group for which you want to enter the cost.

    Note: If you use any of the bulk interfaces like FBDI or the desktop spreadsheet interface to enter these standard costs, the cost organization and cost book must be specified for the incoming cost records.

  5. Select the item and valuation unit for which you're defining the standard cost.

    The item must be defined in the inventory organization before you can enter a cost for that item and valuation unit.

  6. Select Buy Cost if you're defining the cost for procured materials.

    The buy cost will be used by the Roll up Costs process to calculate the standard cost of the item only if the cost scenario is enabled for supply chain cost rollup and a buy sourcing rule exists for the item in the sourcing assignment.

    The buy cost is never used to cost inventory transactions in cost accounting.

  7. In the Standard Cost Details region, click the Add Row icon.

  8. Enter the values for Cost Element, Cost Element Type, Unit Cost, and Expense Pool (if applicable).

  9. Click Save and Close.

Note:

  • When you publish a cost scenario, the buy cost gets published. However, this published buy cost isn't used to cost transactions. Instead, it's used by the Roll up Costs process in the subsequent scenarios. Only the published standard cost is used to value the inventory and cost transactions.

  • For a periodic average cost enabled cost book, you can update or delete existing standard costs only if the corresponding period for the cost scenario is in the Open, Pending Close, or Never Opened status and the cost scenario is unpublished. After you publish a cost scenario, you can update the existing standard costs but can't delete them.

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