Oracle Cost Management is a full
absorption, perpetual and periodic cost system for purchasing, inventory, and
work in process transactions. Cost Management supports multiple cost elements,
costed transactions, comprehensive valuation and variance reporting, and
thorough integration with Oracle Financials.
Cost Management automatically costs and
values all inventory, work in process, and purchasing transactions. This means
that inventory and work in process costs are up-to-date and inventory value
matches the cumulative total of accounting transactions.
Cost Management provides flexible cost
setup features, including multiple cost elements and unlimited subelements,
unlimited resources and overheads, and unlimited activities. You can use one or
more of the following cost elements: material, material overhead, resource,
outside processing, and overhead. Subelements enable you to analyze costs in
greater detail. For example, you can have multiple material overhead
subelements such as purchasing, material handling, freight, duty, and so on.
This enables you to accurately define and maintain costs and associate them
with items.
Cost Management provides flexible account
setup, including accounts by organization, subinventory, and work in process
accounting class so that you can distribute costs to the proper expense
accounts and capture valuation in the proper asset accounts.
Cost Management provides comprehensive
valuation and variance reporting. Perpetual inventory and work in process
balances are maintained on-line. Multiple variances are supported: purchase
price, standard cost, cycle count, physical inventory, work in process usage,
and work in process efficiency.
Cost Management also provides extensive
cost simulation, copying, and editing capabilities that enable you to project
costs and keep them accurate.
Cost Management supports flexible
period-based accounting that enables you to transact in more than one open
period at the same time. You can reconcile and analyze one open period while
conducting business in a subsequent period. Additionally, you can transfer
summary or detail account activity to Oracle General Ledger at any time and
close a period at any time.
Costing Methods
Cost Management supports both standard and
average costing. You can use average costing for one organization and standard
costing for another organization. See: Standard and Average Costing Compared.
Cost Management also supports Periodic Costing. See Periodic Costing
