TT-Cost Accountant Document

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Standard Operating Procedure:

Cost Accountant User Guide

Revision: 001 Release Date: 10/31/2006

Oracle Cost Management

User Workbook

Cost Management

Oracle Cost

Management

Confidential Tree Town USA Revised 10/31/2006


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COST ACCOUNTANTS DAILY TASKS: .................................................................... 3

CHANGING COSTS: ....................................................................................................10COST REPORTS: ..........................................................................................................12

Inventory Value Report: .......................................................................................... 12

EVALUATING & ANALYZING COST DATA ..........................................................15

Inventory Material Cost ............................................................................................. 15Labor & Overhead Costs........................................................................................... 18



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COST ACCOUNTANTS DAILY TASKS:

One of the cost accountants daily tasks should include looking for any zero cost items.

The cost accountant should strive to keep this list as short as possible. As we know, most

items have a cost associated with them. We are trying to find out where items werecreated, but no cost was associated with that item. This is done in Oracle by following

the navigation path: Cost Management>item costs>item costs.

The following screen should appear.

Enter Frozen as the cost type and make

sure to check the Zero Cost Items Onlybox.

Click the Find button once the data hasbeen entered.

The screen below should appear.

For each item, click theOpen button.

The screen at thebeginning of the

following page should

display.



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Go through this screen to make sure that the last PO Price is 0. If it is above 0, it means

the item is being bought. Also, check the Make/Buy field. If it is a Make item, whyis there no BOM that rolls up into a cost. If it is a Buy item, why is there no cost

associated with it.

From here, the cost accountant would need to do research. They would need to contact

the person who setup the item, and inquire why that item has no standard cost. Was the

item bought and the person forgot to enter the cost? If there is a PO Price present, thenwhy doesnt the item have a standard cost? As stated earlier, one of the cost accountants

main duties is to limit the size of the zero-cost items list. Once the research has been

done, appropriate action should be taken.

Another daily task for a cost accountant is to run the Inventory Value Report. This

report is run to identify items that have negative quantities. The navigation path to get tothis report is Inventory>Reports>All.



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Click on the Submit a New Request button. Select a Single Request and click on the

OK button.

The screen below should appear.

Click on the List of Values, and

select the Inventory Value

Report.

Upon selecting this report, a

parameters screen will display.This screen is shown below.

Change the

Negative

Quantities Onlyfield to Yes.

(You could also

leave the Negative

Quantities Only

field at No, and

change the DisplayZero Costs Only

field to Yes.)

Once youve entered your parameter data, click on the OK button.



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Click on the Submit button to run thereport.

Click on the No button when prompted

to submit another request, unless youhave another report you wish to run.

Go to the Menu bar, and select the Viewoption. From the View option, select

Requests.

The screen below should appear. Click on

the Find button.



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The report will appear in the lines of the screen below.

In this screen, you cansee that the report is

in a phase of

Running and the

status is Normal.Once the report

completes, it will

show the same phaseand status as the

report below it.

You may need to click on the Refresh Data button in order to get the report to complete.

Once the report has completed, click on the View Output button. The screen below and

to the right appears.



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From here, you need to click on the

Tools menu option. Select the CopyFile option. The report is formatted to

a more reader-friendly view.

The next page shows what this report would look like once all the aforementioned steps

are followed.



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CHANGING COSTS:

TreeTown USA is only using Standard Costing. Under standard costing, predeterminedcosts are used for valuing inventory and for charging material, resource, overhead, period

close and job close and schedule complete transactions. This section deals with how to

change frozen and pending item costs. This is done by following the standard cost updateprocedure. The standard cost update procedure enables you to define and rollup pending

costs and then update pending costs to the Frozen standard cost type. The only way to

change a frozen cost is to change the pending cost associated with it, and then perform astandard cost update.

Updating pending costs to frozen standard costs does the following:

(1) Updates the existing standard costs with the costs created in the new cost type

and creates the resulting adjustment accounting entry. The cost updaterevalues discrete job balances, creates accounting adjustments, and prints the

adjustments along with the new job values in its report.(2) Creates item cost history.

(3) Prints the Inventory, Intransit, and WIP Standard Cost Adjustment reports

that detail the valuation changes in your inventory due to the change in thestandard costs.

You can only update standard costs from the master costing organization, which must usestandard costing. The standard cost update is a batch process that can run while you

perform normal transactions. Doing so delays accounting transactions until the cost

update is complete. However, if the period close, job close, or general ledger transferprocesses are running, the standard cost update is delayed until they are complete.

Attention: Cost management does NOT update the standard costs of those items for

which you do not define a cost. The standard cost is updated to zero only if you define azero cost for the item.

The navigation path used in order to update pending costs to Frozen standard costs isCost Management>Item Costs>Standard Cost Update>Update Costs.

Upon opening the Update Costs option,you will be directed to a parameters screen

for the Update Standard Costs report.

This screen is shown at the beginning of

the next page.



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Enter all the required fields.

Those being Cost Type,Description, Item Range, and

Sort Option. When you click on

the Cost Type list of values, you

will be shown the screen below.

Choose the Pending cost type. Upon choosing the Pending cost type, you will bedirected to the screen below.

This is the InventoryAdjustment Account

screen. Enter theCompany, Farm, CostCenter, and Account, of the

standard costs that you

would like to update.

This account is used to collect the changes in value to each item, and to automatically

generate transactions that adjust your inventory accounts. Your inventory is adjusted by

subinventory and elemental cost account. Your discrete WIP is adjusted by job and costelement account. The WIP accounting class defines the adjustment account for your

discrete jobs.

After you have entered all of this data, you will be redirected back to the parameters

screen. Enter the remaining required fields. When you click on the list of values for the

Update Option field, the following screen will display.

Choose the update option you wish to use.



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Once you have selected this, you will be redirected to the screen below. Enter the low

and high range for the items you wish to update.

Once youve completed these

fields, enter any additional fields that you wish to include on the parameters screen. Ifsatisfied, click on the OK button on the parameters screen. You should now see the

screen below.

Click on the Submitbutton to run the report.

From here, follow the

same procedures asdescribed earlier in order

to view the report.

COST REPORTS:

Reports will be essential tools for the cost accountant. Two reports that will befrequently used will be the Inventory Value Report as well as the WIP Value Report.

The Inventory Value report is used to show quantity, valuation, and detailed iteminformation for the subinventories you specify. It shows how much value is tied up in

different types of inventory. The WIP Value report details WIP inventory as of a

particular accounting period. Oracle lists the value of discrete jobs and repetitiveschedules for the period specified, lists the ending balance for each discrete job and

repetitive schedule in a particular accounting class, and subtotals by the accounting class.

In addition, the system summarizes each accounting class by cost element and lists a

subtotal for each type of accounting class. For example, your can view your WIPinventory value for all standard discrete jobs.

Inventory Value Report:

The navigation path to get to this report is

Inventory>Reports>All.



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Click on the OK button to submit a single request.

Click on the list of values box

and select the Inventory Value

Report and click OK.

Upon clicking the

OK button, the screen

to the left will appear.

Enter the parameters

you would like to see in

the report.

Once satisfied with this

data, click on the OKbutton.

The screen below willappear.



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Click on the Submit button.

Your report will run.

To view your report, use thesame procedures that were

described earlier in this

document.

WIP Value Report:

The procedures with this report are many

of the same that were used with theprevious report. The navigation path is

Work in Process>Reports.

Select a single request, and click on the

OK button.

Select the WIP Value Report

from the list of values.

Once you have selected this

report, you will be directed tothe parameters screen. This is

shown on the following page.

Enter the parameters for the

report. The two fields that are required are Period and Exchange Rate. Once youhave entered your data, click on the OK button.



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The screen below should appear. Click on the Submit button to run your report.

From here, follow the same procedures mentioned earlier in this document to view your

report.

EVALUATING & ANALYZING COST DATA

Inventory Material Cost

A cost accountant would analyze Inventory Material Costs in many of the same ways as

they analyzed WIP and Inventory values. They would run an Item Costs Report, setting

the parameters to reveal the data that they were looking for. When would this report be



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used? An example, is if someone says that inventory is overstated, the cost accountant

would work back through the data. Some things that they may look for would bediscrepancies in Unit of Measure, Quantity, a wrongly entered cost, or any combination

of these. The Item Costs Report is a great report to sort through some of this data.

The navigation path to get to thisreport is

Inventory>Reports>Costs>Items.

Click the OK button to Submit a

Single Request.

Click on the list of values and select

the Item Costs Report. Upon selecting it, you will be shown the parameters screen.

Enter all required fields and any additional fields that you wish to include.



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When selecting the Cost Type, either Frozen or Pending, you will be redirected to a

screen that looks like the one below.

Enter the low and highrange of the items you wish

to include.

The last field that you are required to enter is Report Name. Choose the report that you

wish to run. The screen below shows the options that are available.

Once youve selected

the appropriate report

name, click on theOK button.

Click the OK button

on the parametersscreen when you are

satisfied with the data

you have entered.



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Click the Submit button to run the report.

To view the report, repeat the same procedures that were discussed earlier in this

document.

Labor & Overhead Costs

To analyze the labor and overhead costs, the cost accountant should run the WIP Value

Report. This report breaks down labor and overhead that is associated with any given job

and also shows a total of where the labor is being used. The navigation path for thisreport is Work in Process>Report.

After selecting the Report menu option,you will use the same steps you used torun and view other reports.

Below, you see the parameters screen for

this report. Set the parameters to your

preferences for this report. Being that youwant to analyze labor & overhead, set the

parameters to include the data you need to

see.

Some fields that may beof particular use for

analyzing labor and

overhead would be ClassType, Job/Schedules

From.To, and

Assemblies From....To.

Depending on the

information you need, set

the parameters to satisfythese needs.



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C fid ti l T T USA R i d 10/31/2006

Documents

TT-Cost Accountant Document