Business Considerations
Periodic Costing is a two-step validation and correction process in which created GL transactions are stored in the transient layer in both standard and Periodic Costing daybooks, and transferred to the management or official layer when they are verified or corrected and the period is closed.
Carefully review the following aspects of Periodic Costing features before you begin using it. You should know that Periodic Costing:
• Bases costing on the following transactions: all transactions that add value for inventory and WIP, including procurement costs such as logistics charges, material costs, labor and burden costs
• Revaluates periodic inventory based on FIFO or WAVG cost methods
• Can be used in either complete period costing mode or standard costing plus adjustment mode
• Provides several cost adjustments, including:
• Item’s unit and total cost adjustment
• Work order’s component and operation cost adjustment
• Tracks costs by element and by base and by statutory currencies
• Provides periodic inventory and work-in-process (WIP) valuation
• Gives the opportunity to group several sites as one for costing purposes; that is, all grouped sites are considered as one and have the same item unit cost.
• Absorbs labor and burden costs into WIP.