Defining Cost Types

OPM supports Actual, Standard, and Lot costing calculation types for items. Define a cost type as one of the following:

• Standard 
• Actual Cost 
• Lot Cost 

Cost type codes identify specific groups of cost data according to their purpose. You can define unlimited number of cost types in OPM to differentiate the cost type used for inventory valuation versus simulated costs developed for Sales or Management purposes.

Defining Cost Types

• Navigate to the Cost Types window.

OPM Financials: Setup > Cost Types

• Enter the Cost Type to represent code that identifies the costing method to be used in cost calculations. For example, enter ACTUAL for actual costing. This is a required field.
• Enter a brief Description of the cost type. For example, enter Actual Costing Type for the standard cost type. This is also a required field.
• Indicate the Cost Method you are defining:

• Standard Cost

• Actual Cost

• Lot Cost 

• Usage indicates if the cost type is for general or lab use. The general usage type is set by default. 

• If you set the usage to General use, then the cost rollup considers only Production and Costing Recipes with Validity Rules at Status 'Approved for General Use' or 'Frozen' for processing. 

• If you set the usage to Lab use, then the cost rollup considers recipes with validity rules with the “Approved for General Use” status and preferred to the production or costing recipes if they exist

The usage field is valid only for the standard cost method only. If you are using the actual or lot cost type, then this field is disabled.

• Raw Material Calculation Type. This field is available only if you are defining the Actual Costing type in the Cost Type field. Indicate the type of raw material cost calculations that occur for this actual costing type. The valid options are:

• Period moving average cost (PMAC) 

• Period weighted average cost (PWAC) 

• Perpetual weighted average (PPAC) 

• Last transaction (LSTT) 

• Last invoice (LSTI)

The type descriptions (shown in parentheses) are abbreviations for these calculation types. The lookup displays both the calculation type and the abbreviation. This field is Required but it is not applicable for Lot Cost type and it is disabled. 

• Product Calculation Type is available only if you are defining the Actual Costing type in the Cost Type field. If you want OPM to derive actual costs for product components, indicate the type of calculations to perform. The valid options are:

• Period moving average cost (PMAC)

• Period weighted average cost (PWAC)

• Perpetual weighted average (PPAC)

The type descriptions (shown in parentheses) are industry standard abbreviations for these calculation types; the lookup displays both the calculation type and the abbreviation.  Product Calculation type are not applicable and they are disabled. 

• Lot Cost Type

• Start Date is only available for Lot Cost types. Enter a start date. The start date is used to collect all transactions that happened after the specified date for lot cost calculation purposes. If this field is left blank, then the Lot Cost process uses all transactions in the system for the legal entity for which the Lot Cost process is run. If you have several years worth of transaction data, a large number of transactions may be processed resulting in poor performance of the Lot Cost process. 

• Alternate Cost Type: Only Standard and Actual cost types are allowed. Under Lot Costing, you can have a subset of lot controlled items costed at the lot level. For other lot controlled items and non-lot controlled items, the alternate cost type is used to determine the cost the items.