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




  • August 20, 2015 | 22 views