Cost Component Class

 OPM Financial : Setup : Cost Component class

Material

1.Navigate to the Cost Component Classes window.

2. Enter the code to identify the Component Class. For example, enter DRYMAT for raw materials, or SOLMAT for solutions. Required

3. Enter a Description for the component class. For example, enter Raw Materials or Solutions. Required

4.You have the option of building component class association hierarchies for reference and reporting purposes. The Primary Component Class indicates the primary cost component class with which the component class you are defining now is associated. The default is the class code you specified in the Component Class. You can change the entry.

5. Component Group is an optional entry that lets you further group the component classes for analysis and reporting purposes.

6. Usage indicates if this cost component classification is being entered for use as a material, overhead, resource, or expense detail from routings. Select one of the following values (Required):

a.     Material

b.     Resource

c.      Overhead

d.     Expense Allocations

e.      Std Cost Adjustment

Once you set the usage indicator for a component class, it cannot be changed after costs have been defined using this component class.

Once costs have been created or calculated using a component class, the usage cannot be changed.

7. Enter the Sort Sequence for the component class. It indicates the order in which component classes displays on forms and reports. 1 is the first or top line and 2 indicate the second line, and so on. A zero (0) lets the application to determine the sort order. Required.

8.Product Cost Calculation indicator lets you flag those component costs to be excluded from the Cost Rollup process. Certain identifiable costs (for example, transfer costs) are for specific ingredient items, and are not required to be rolled up into the products. The valid values are:

a.     Include in Product Cost Calculation

b.     Exclude From Product Cost Calculation

Select Exclude From Product Cost Calculation if this is a non-product cost component class. The default, Include in Product Cost Calculation, applies if the component class must be included. This flag is not applicable for Lot Cost.

9.Valuation Option indicator lets you identify whether the component class must be used for valuing inventory or not. The valid values are:

a.     Will be used for inventory valuation

b.     Will not be used for inventory valuation

     10.The valid values for Purchase Price Variance are:

a.     Include in Purchase Price Variance Calculation

b.    Exclude from Purchase Price Variance Calculation

Select the Include in Purchase Price Variance Calculation option (default), if the cost for this component class is used in calculating the inventory valuation for purchase price variance (PPV). Select the Exclude from Purchase Price Variance Calculation option, if the component class must not be used in PPV calculations.

Overheads

 Expense Allocation

 Resources

1. Navigate to the Component Classes window.

  

2. Choose Resources for Usage.

3. After completing the Cost Component Classes window, open the Item Costs window by selecting Item Costs from the Inquiries menu.

4. Complete the Item Costs window. Enter the unit cost reflecting the revision or adjustment indicated on the Cost Component Classes window. See: Item Costs.

5. When you add a new cost, it is recommended that you perform a cost rollup and cost update to calculate the revised unit cost and process the GL financial cost, respectively. See: Cost Rollup and Cost Update.

Indirect Component Processing for Standard Costing

When standard costs are used, you can update adjustments or indirect components of standard product costs separately without defining formula routings and/or overhead details. You can identify the standard indirect cost component, update non-direct materials and resources within production batches, and reconcile "batch close" variance at the close of a production batch.