Defining Cost Component class in Oracle Process Manufacturing (OPM)

The unit cost of an item is usually broken down into several buckets that can be attributed to the various sources that form the basis of the cost, for detailed tracking and analysis purposes. Cost Component Classes are used to identify the individual buckets or component costs that make up the total cost, for example, direct material costs, freight costs, labor costs and production or conversion costs and so on.

Any number of cost component classes can be defined and used to break down the item costs. The cost component classes are classified into 5 different elements or usages: Material, Resource, Overhead, Expense Allocation and Standard Cost Adjustment types.

Navigation: OPM Financials > Setup > Cost component classes

 

 Enter the code to identify Component class & Description for the class.

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 by selecting an already defined component class from the list of values.

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

Defining Component Group:

Navigation: OPM Financials > Setup > Component Groups

Define the Component group and enter detailed description regarding the same.

 

Usage indicates if this cost component classification is being entered for use as a material, overhead, resource, or expense detail from routings. Select the suitable value,

 

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

Enter the Sort Sequence for the component class. It indicates the order in which component classes displays on forms and reports.

Product cost calculation indicator let’s you to flag whether the component class to be included or excluded from the cost rollup process. The options are,

• Include in Product Cost Calculation

• Exclude From Product Cost Calculation

Valuation Option indicator let’s you identify whether the component class must be used for valuing inventory or not. The options are,

• Will be used for inventory valuation

• Will not be used for inventory valuation

Purchase price variance calculation indicator let’s you to flag whether the cost for the component class is used in calculating the inventory valuation for purchase price variance (PPV). The options are,

• Include in Purchase Price Variance Calculation

• Exclude from Purchase Price Variance Calculation

 

This Component class will be used in Resource creation form.

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