How Outside Processing Costs are Planned, Accounted, and Reviewed
As part of cost planning, Oracle Fusion Cloud Cost Management enables you to define outside processing service item cost and include it in the rolled up cost of standard costed items.
Oracle Cost Accounting and Oracle Fusion Cloud Receipt Accounting support processing of outside processing transactions. Accounting distributions are created in Oracle Receipt Accounting for the receipt of outside processing service item. Accounting distributions are created in Cost Accounting after the outside processing service item is delivered to Oracle Manufacturing. The Manufacturing destination type is used to identify receipt of outside processing items.
In outside processing, there are no changes for managing receipt accounting accruals. Purchase cost is included to work in process if the cost method of the outside processing item is Average or Actual. If the outside processing item is standard costed, then the standard cost is used.
Oracle Cost Management also provides the ability for cost accountants to identify supplier operations while reviewing work order costs.