Cost Planning Process

Cost Management provides robust support for planning, costing, and analysis of manufacturing costs. You can determine which work definitions to use in costing, efficiently enter and import material, resource, and overhead costs using spreadsheet, and perform cost rollup.

You can simultaneously use multiple costs; for example, one for official external reporting and one for internal simulations. By creating cost profiles, you can define flexible account defaulting rules and valuation policies. In terms of cost analysis, you can view costs by work order, operation, cost element, and variances.

You start cost planning by creating a cost scenario and then defining the various standard costs for items, the resource rates, and the overhead rates. Next, you roll up these costs for a cost scenario to generate the unit cost for assemblies. By creating multiple costs scenarios, you can compare and analyze the costs before you publish the costs. After you're satisfied with the generated costs, you publish the costs so that they can be used for costing the corresponding transactions.

Configuring Item Attributes to Enable Costing

You must configure these costing prerequisite settings on the Manage Items page of the Product Information Management work area:

• Costing Enabled - Set this attribute to Yes to ensure that item costs are reported, valued, and accounted.

• Include in Rollup - Set this attribute to Yes to ensure that items are included in the cost rollup. If this attribute isn't set, the Roll up Costs process defaults it to Yes. To ensure that an item cost isn't considered for cost rollup, you must explicitly set this attribute to No.

For more information on configuring Product Information Management settings for Cost Planning, see the guide Using Product Master Data Management.