Costing MethodsCost Management supports four perpetual costing
methods: Standard Costing,
Average Costing,
FIFO Costing
LIFO Costing.
You can use Average Costing for one organization and Standard
Costing for another
Organization,Cost Structure
A cost structure is the collection of definitions and methods
used to
cost inventory, bills of material, and work in process. The
cost
structure is composed of:
Organizations
Cost organizations and shared costs
Cost elements
Subelements
Activities
Basis types
General Ledger accounts
Cost ElementsProduct costs are the sum of their elemental costs.
Cost elements are
defined as follows:Material ----- The raw material/component
cost at the lowest level of the bill of material determined
from the unit cost of the component item.
Material
Overhead The overhead cost of material, calculated as a
percentage of the total cost, or as a fixed
charge per item, lot, or activity. You can use material overhead
for any costs attributed
to direct material costs. If you use Work in Process, you can
also apply material
overhead at the assembly level using a variety of allocation
charge methods.
