Discrete Jobs End to End Cycle with Cost Roll-up in Standard Cost Organization in R12.2

STEP 1: CREATE ITEMS

Responsibility: Inventory Navigation: Items > Master Items

Select the Organization as "M1 - Seattle Manufacturing"

Create the below items;

Item	Item Template (Type)
DYS_CAR	Finished Goods
DYS_ENGINE	Purchased Item
DYS_CHASIS	Purchased Item
DYS_WHEEL	Purchased Item
DYS_SEAT	Purchased Item

Item : DYS_CAR Template/Type: Finished Goods

Item : DYS_ENGINE Template/Type: Purchased Item

Item : DYS_CHASIS Template/Type: Purchased Item

Item : DYS_WHEEL Template/Type: Purchased Item

Item : DYS_SEAT Template/Type: Purchased Item

STEP 2: DEFINE ITEM COST

Define the Item Costs like below;

Item	Item Template (Type)	Item Cost (USD)
DYS_CAR	Finished Goods
DYS_ENGINE	Purchased Item	500
DYS_CHASIS	Purchased Item	300
DYS_WHEEL	Purchased Item	100
DYS_SEAT	Purchased Item	50

Responsibility: Inventory Navigation: Costs > Item Costs

Click on "New"

Item: DYS_ENGINE Cost Type: Pending

Click on "Open"

Click on "Costs"

Cost Element / Sub-Element: Material Unit Cost: 500 USD

Save

Query the Item "DYS_ENGINE"

Can see two records for this item. One record will be in "Frozen" Cost Type and the another one will be in "Pending" Cost Type. Currently "Frozen" cost type will show only zero (0) cost. Once we run the "Update Standard Costs" then the cost will be updated in Frozen type from Pending cost.

Note: M1 - "Seattle Manufacturing" is a Standard Costing Organization. So, we need to enter the cost in "Pending" cost type.

Likewise we can enter the Item Cost for remaining items

Item: DYS_CHASIS Unit Cost: 300 USD

Item: DYS_WHEEL Unit Cost: 100 USD

Item: DYS_SEAT Unit Cost: 50 USD

STEP 3: DEFINE RESOURCES

Define the Resources like below;

Resources Name	Resource Type	Rate	UOM
DYS_ASMLY	Machine	100	HR
DYS_LBR	Person	50	HR
DYS_PNTR	Person	25	HR

Responsibility: Bills Of Material Navigation: Routing > Resources

Select the Organization as "M1 - Seattle Manufacturing"

Enter the Resource Name, Resource Type, Charge Type and enable the "Costed" & "Standard Rate" check box and enter the Absorption Account and Variance Account.

Click on "Rates"

Likewise create the remaining Resources and enter the Resource Rates.

Resource Name: DYS_LBR Type: Person Rate: 50 USD

Resource Name: DYS_PNTR Type: Person Rate: 25 USD

STEP 4: DEFINE DEPARTMENTS

Create the new Departments and assign the Resources to each Departments like below;

Department Name	Resources
DYS_ASMLY	DYS_ASMLY DYS_LBR
DYS_PAINT	DYS_PNTR

Responsibility: Bills Of Material Navigation: Routing > Departments

Select the Organization as "M1 - Seattle Manufacturing"

Click on "Resources"

Create the another department for Painting and assign the resource.

Department Name: DYS_PAINT Resources: DYS_PNTR

Click on "Resources" and assign the Resource

Note: For this case, only Machine Resource (DYS_ASMLY) is available for 24 Hours. Person Resources (DYS_LBR and DYD_PNTR) are available only in normal day shift.

STEP 5: CREATE STANDARD OPERATIONS

Create the Standard Operations and assign the Departments like below;

Standard Operations	Department	Resources	Usage
DYSA	DYS_ASMLY	DYS_ASMLY DYS_LBR	1 2
DYSP	DYS_PAINT	DYS_PNTR	1

Responsibility: Bills Of Material Navigation: Routing > Standard Operations

Operation Code: DYSA Department: DYS_ASMLY

Click on "Operation Resources" and assign the Resources and it's "Usage/Inverse"

Note:

1. "DYS_ASMLY" Machine Resource will produce 1 Unit in 1 Hour (UOM = HR)
2. "DYS_LBR" Person resource will produce only half (0.5) unit in 1 hour. That means, 2 resources are required to complete this operation in 1 hour. So, the Inverse (Output/Hour) becomes 0.5

Likewise create one more Standard Operation and assign the Department and it's Resources.

Operation Code: DYSP Department: DYS_PNTR Resource: DYS_PNTR Usage: 1

Click on "Operation Resources" and enter the Usage

Note: Painter Resource will paint 1 Unit in 1 Hour

STEP 6: DEFINE OVERHEADS

Define one Overhead and enter the Rate/Unit

Responsibility: Inventory Navigation: Setup > Costs > Sub-Elements > Overheads

Overhead Name: DYS_OVRHED Cost Element: Overhead

Click on "Resources" and enter the Cost Type and then assign the Resources

Cost Type: Pending Resource: DYS_ASMLY

Save and Close the "Resource" Form

Click on "Rates" button and enter the Amount  

Basis: Item

Now, close the form and navigate to "Resources" form in Bills Of Materials

Note:

1. If we define Overheads based on "Basis = Item" then, the Formula is

Overhead Cost Calculation = Overhead Rate or Amount

2. If we define the Overheads based on "Basis = Resource Basis" then the formula is

Resource Overhead Cost = Resource Usage  X   Resource Cost  X  Overhead Cost

Responsibility: Bills Of Materials Navigation: Routing > Resources

Query the Resource " DYS_ASMLY" (This resource was attached in Overheads)

Click on "Overheads" button

Now, we can see the Overhead "DYS_OVRHED" which was created in the pervious step has been assigned here.

STEP 7: DEFINE ROUTING

Create the Routing for our Finished Goods "DYS_CAR"

Seq	Operation Code	Department	Resources	Usage	Inverse
10	DYSA	DYS_ASMLY	DYS_ASMLY DYS_LBR	1 2	1 0.5
20	DYSP	DYS_PNTR	DYS_PNTR	1	1

Responsibility: Bills of Materials Navigation: Routings > Routings

Click on "Operation Resources" and make sure all the assigned Resources are displaying or not for that Operation Seq.

STEP 8: DEFINE BILLS

Define the Bills of Materials for "DYS_CAR"  to produce 1 Unit

Bills	Components	Required Qty
DYS_CAR	DYS_CHASIS	1
DYS_CAR	DYS_ENGINE	1
DYS_CAR	DYS_WHEEL	5
DYS_CAR	DYS_SEAT	3

Responsibility: Bills Of Materials Navigation: Bills > Bills

Save

STEP 9: UPDATE STANDARD COST

Responsibility: Inventory Navigation: Costs > Standard Cost Update > Update Cost

Select "M1" Organization

" Update Standard Costs" program will be submitted and Running

Now, query the Item Costs for all our items

Navigation: Costs > Item Costs

Note:

1. When we run the "Update Standard Costs" program for "Pending" Cost Type, it will pull the Pending costs and push it into "Frozen" cost type.  
2. "DYS_CAR" doesn't reflect any cost. Because, the Cost Roll-up has not happened.

STEP 10: COST ROLL-UP

Responsibility: Cost Management

Navigation: Supply Chain Costing > Supply Chain Cost Rollup

Select the Organization as "M1 - Seattle Manufacturing"

Submit a single request and submit " Supply Chain Cost Rollup - Print Report"

Enter the parameters like below

Parameters:

Ran this report for "Pending" Cost Type for Specific Item "DYS_CAR"

View Output of "Supply Chain Cost Rollup - Print Report":

Material Cost Calculation:

Components	Qty	Item Cost	Total Cost
DYS_CHASIS	1	300	300
DYS_ENGINE	1	500	500
DYS_WHEEL	5	100	500
DYS_SEAT	3	50	150
MATERIAL COST			1450

Resource Cost Calculation:

Resources Name	Resource Type	Rate	UOM	Usage	Cost
DYS_ASMLY	Machine	100	HR	1	100
DYS_LBR	Person	50	HR	2	100
DYS_PNTR	Person	25	HR	1	25
Total Resource Cost					225

Overhead Cost Calculation:

Resource Name	Overheads	Department	Rate or Amount
DYS_ASMLY	DYS_OVRHED	DYS_ASML	10

Total Cost Calculation:

Cost Element	Value
Total Material Cost	1450
Total Material Overhead Cost	0
Total Resource Cost	225
Total Overhead Cost	10
Total Outside Processing Cost	0
Total Cost	1685

Add Additional Resource Overhead Cost based on Resource Usage:

Responsibility: Bills Of Materials Navigation: Routings > Resources

Query the Resource "DYS_LBR"

Add something existing overheads by clicking "Overheads" button

Added "Indirect" Overheads under "Pending" Cost Type.

Assign Overheads to Department/Resources:

Responsibility: Inventory Navigation: Setup > Costs > Sub-Elements > Overheads

Query the "Indirect" overhead

Click on "Resources"

Select "Pending" Cost Type and check our Resource "DYS_LBR"

Our Resource is available.

Close this form

Click on "Rates"

Select "Pending" Cost Type and add our Department "DYS_ASMLY"

Basis: Resource Value

Note:

Previously we have defined one Overhead "DYS_OVRHED" that is based on the "Basis = Item". Now, we have defined one Overhead based on "Basis = Resource Value". The Overhead Cost Calculation will be different in both the cases.

For Item Basis, cost is direct. Whatever the Rates we have entered in Overheads form that is a Cost

For Resource Basis, cost calculation is based on the below formula.

Resource Overhead Cost Calculation = Resource Usage  X   Resource Cost  X  Overhead Cost

STEP 11: UPDATE STANDARD COST

Repeat the step 10

Responsibility: Cost Management

Navigation: Item Costs > Standard Cost Update > Update Costs

Run "Update Standard Costs " program for specific item "DYS_CAR"

Submit the program

Once it's completed, do Cost Roll-up for this Item

STEP 12: COST ROLL-UP:

Navigation: Supply Chain Costing > Supply Chain Cost Rollup

Run "Supply Chain Cost Rollup - Print Report" program

Submit and View Output for "Supply Chain Cost Rollup - Print Report"

There are no changes in the Material and Resource Costs. But, there are some changes in the Overheads.

Overhead Cost for "DYS_OVRHED" = 10 USD

Overhead Cost for "Indirect" = Resource Usage  X   Resource Cost  X  Overhead Cost

Indirect Overhead Cost = 2 X 50 X 15 = 1500 USD

Total Overhead Cost = 10 USD + 1500 USD = 1510 USD

STEP 13: INCREASE ONHAND QTY FOR COMPONENTS

Do Miscellaneous Receipts or PO Receipts for Purchased Items

Save and Close the form

STEP 14: CREATE DISCRETE JOBS

Responsibility: Work In Process Navigation: Discrete > Discrete Jobs

Create a New Discrete Job for Assembly "DYS_CAR" and Save

STEP 15: RELEASE DISCRETE JOBS

Responsibility: Work In Process Navigation: Discrete > Discrete Jobs

Query the Discrete Job# 262860 that was created in the previous step

STEP 16: WIP ISSUE

Sine this Assembly's Supply Type is "Assembly Pull", it doesn't require to perform WIP Issue. System automatically issue the components upon completion of this Assembly

STEP 17: MOVE TRANSACTIONS

Responsibility: Work In Process Navigation: Move Transactions > Move Transactions

Query the JOb# 262860 and Move the Materials from Operation Seq 10 "Queue" to Operation Seq 10 "To Move"

Move the Materials from Operation Seq 10 "To Move" to Operation Seq 20 "To Move"

Save

STEP 18: ENTER QUALITY RESULTS_

If you have enabled Quality Collection Plan then enter those Quality Results

Click "OK"

To enter the Quality Results;

Navigation: Tools > Enter Quality Results or click on button from Menu bar

Enter the Quality Results

Click OK and Save

STEP 19: WIP COMPLETION

Responsibility: Work In Process Navigation: Material Transaction > Completion Transactions

Enter the Discrete Job number# 262860 and select the Transaction Type as "WIP Completion"

Click "Continue"

Sub-Inventory: FGI Qty: 10

Click "Done"

STEP 20: CLOSE DISCRETE JOBS

Responsibility: Work In Process

Navigation: Discrete > Close Discrete Jobs > Close Discrete Jobs (Forms)

Query the Discrete Jobs# 262860 which we have completed recently

Before closing the Discrete Jobs, check the Pending Transactions. To check the Pending Transactions

Navigation: Tools > Pending Actions

Select the "Pending Actions" option from Tools Menu and check for any pending actions

Only "Material Transactions" and "Resource Transactions" are enabled.

If anything other than the below mentioned actions are enabled then that means there are some pending actions

1. Material Transactions
2. Resource Transactions
3. PO Requisitions

In our Discrete Jobs, there are no pending actions. So, it's eligible to Close

To Close the Discrete Jobs, Navigate to Tools Menu and select the Close option

Select "Summary" and click "OK"

Discrete Job Status = Pending Close

Navigation: Tools > View > Request

Can see two requests

1. Close Discrete Jobs
2. Discrete Job Value Report - Standard Costing

If there are any pending actions then the second request will not run

Select the second request "Discrete Job Value Report - Standard Costing" and check the output

View Output:

Costing:

Material Cost: 1450 USD/Unit X 10 Qty = 14,500 USD

Resource Cost: 225 USD/Unit X 10 Qty = 2,250 USD

Overhead Cost: 10 USD + 1500 USD = 1510 USD/Unit X 10 Qty = 15,100 USD

Total Cost for 1 Qty = 1450 + 225 + 1510 = 3,185 USD

Total Cost for 10 Qty = 14,500 + 2,250 + 15,100 = 31,850 USD

--- RAJU DEVARAJ