Product Costing Process
This chapter discusses how costs are applied and managed.
Product Costing Workflow
Illustrates the product costing workflow.
Rolling Up Routing CostsCalculate manufacturing costs, lead times, and total yield for items at a site.
Updating Burden and Overhead CostsCalculate overhead and burden as a percentage of lower-level costs.
Freezing GL CostsPrevent costs from being recalculated the next time costs are rolled up.
Revaluing CostsManually revaluate costs.
Product Costing Workflow
After you have defined item data, routings, and product structures, you can complete the product costing process.
Product Costing Workflow shows the steps for rolling up costs in the current cost set and using those costs to update the GL cost set.
Product Costing Workflow
You should roll up costs, make any adjustments, and review the updated costs in the current cost set. This lets you validate the updated costs prior to committing them as new GL standards.
Each step in the costing process is discussed in detail in the following sections.
1 Run Routing Cost Roll-Up (14.13.13), which does the following:
• Totals the labor/machine hours and cost, subcontract cost, and burden cost
• Computes the cumulative operation yield for a routing or routings
• Posts the cost data to this-level labor and burden fields for the specified cost set
2 Run Product Structure Cost Roll-Up (13.12.13), which does the following:
• Obtains purchased material and this-level labor and burden costs from the item master.
• Performs the level-by-level computation of costs for the five cost set categories. Cumulative lower‑level costs are posted for all cost categories at each assembly level.
3 Run Item Burden Cost Update (1.4.20) to adjust item burden costs. Run Item Overhead Cost Update (1.4.21) to adjust item overhead costs.
4 Use Product Structure Cost Report (13.12.4; enhanced .NET UI version at 13.12.28) to review product structure costs to identify any abnormalities such as product structure or routing errors. The report shows costs for an item and its components by structure level.
5 Use Cost Set Move to GL Set (1.4.22) to copy the approved current cost set to the GL cost set.
6 Once standard GL costs are established, use Cost Roll-Up Freeze/Unfreeze (13.12.1) to prevent the system from recalculating the costs the next time routing or product structures rollups are performed.
7 Use WIP Material Cost Revaluation (16.22) to revalue work-in-process material costs. Use Sales Order Cost Revaluation (7.1.12) to revalue line items in sales orders.
