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JD Edwards World Product Costing/Manufacturing Accounting

Standard costing has done an adequate job of providing a reasonable estimate of product profitability. But this traditional method falls short when product or costs change significantly and often. Oracle's JD EDWARDS WORLD PRODUCT COSTING / Manufacturing Accounting moves beyond standard costing methods to highlight the true profitability of your business.

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Rohit Singh
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96 views4 pages

JD Edwards World Product Costing/Manufacturing Accounting

Standard costing has done an adequate job of providing a reasonable estimate of product profitability. But this traditional method falls short when product or costs change significantly and often. Oracle's JD EDWARDS WORLD PRODUCT COSTING / Manufacturing Accounting moves beyond standard costing methods to highlight the true profitability of your business.

Uploaded by

Rohit Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ORACLE DATA SHEET

JD EDWARDS WORLD PRODUCT


COSTING/MANUFACTURING
ACCOUNTING

The Issue: Cost It Right to Manage Return on Investment


In the past, standard costing has done an adequate job of providing a reasonable
estimate of product profitability. But this traditional method falls short of the mark
when product or costs change significantly and often. As a result, your business
Effectively manage faces inaccurate and incomplete valuation of inventory, material price and usage,
manufacturing and production costs, and overhead. Keeping excess unprofitable stock or using
procurement costs. inappropriate methods of costing on key inventory items can quickly impact your
profits.

Improve profitability If you use commodities, operate in inflationary economies, or serve volatile markets,
analysis. you especially need to monitor your actual manufacturing costs closely. This ideal is
also true for the increasing number of enterprises that are moving from mass
Easily adapt costing production to mass customization. With such “market-of-one” strategies, product
line, or even single products, can change from one production run to the next. These
methods to changing
issues often make standard costing an unrealistic method of deriving realistic cost of
requirements. goods sold.

The Solution: Optimize Profitability by Using a Choice of Costing Options


Oracle’s JD Edwards World Product Costing/ Manufacturing Accounting moves
beyond standard costing methods to highlight the true profitability of your business.
The solution offers:
• Cost reporting (what the item actually costs to produce)

• Variance reporting (actual versus standard costs)

• Product and job costing:


• Materials
• Labor

• Machine
• Overhead

• User-defined cost add-ons such as freight, taxes, duty, and electricity.

Access to real and detailed costing information plays a significant role in a


manufacturing environment—and becomes even more important when your
manufacturing is multi-mode (such as process, discrete, rate-based, and repetitive).

Effectively Manage Costs and Profitability


With product costing, accounting, and reporting capabilities, Manufacturing
Accounting allows you to select the method that makes the most sense for effective
cost and profitability management—at any time during the product lifecycle. You

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ORACLE DATA SHEET

are able to establish the costing detail necessary to adequately maintain acceptable
margins based on who’s buying the product, as well as its components and
manufacturing location.

Is a standard cost for the item sufficient across the company? Is visibility into
average item cost at individual branches or locations required? Or do you need to
track the actual cost for each item lot? With Product Costing/ Manufacturing
Accounting, all these options are available.

Depending on your business requirements, you can select one or both of these:

• Standard costing: When there is so little variance from run to run that it adds
little value to assess actual product component and manufacturing costs.

• Weighed average costing: Where the cost of components or ingredients


changes frequently.

Product Costing/Manufacturing Accounting also allows you to modify the cost


accounting method for a product at a moment’s notice. You can take immediate
action on temporary disruptions in supply, as well as react to periodic and long-term
cost trends.

Perform Product Costing and Reporting at Desired Level and Detail


At your discretion, you can maintain cost and reporting information at the
branch/plant level to allow for different costs at different locations for identically
manufactured items.

After costs are established, Product Costing/Manufacturing Accounting further


tracks those costs, reports on the variances (such as engineering, planned, and
actual), and posts manufacturing transactions automatically to the general ledger.

Through product costing and reporting, you will be able to store and retrieve cost
information. Product Costing/Manufacturing Accounting also provides
informational inputs to your company’s business plan. Furthermore, you can
evaluate the following manufacturing processes to determine the impact to your
company’s bottom line:
• Manufacturing budgets (direct labor, indirect labor, and overhead)
• Product design (design and manufacturing engineering)

• Accounting (gross margin by product line or item)

Clearly, using a single costing method is inadequate in global, multimode


manufacturing environments. Factors that influence how manufacturing costs are
captured include regulatory reporting and contract requirements, as well as
component cost fluctuations and process variability. With Oracle’s JD Edwards
World Product Costing/ Manufacturing Accounting, you get product costing,
reporting, and accounting at the level and precision you need to improve process
performance and effectively manage manufacturing and procurement costs.

A Strategic Partner for Your Long-Term Needs


A solution is only as good as the company that stands behind it. That is why we are
committed to innovation, superior value, and customer satisfaction. Our singular

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ORACLE DATA SHEET

goal is to help make you stronger, enabling you to solve your most important
business challenges. We make you stronger by dedicating ourselves to continually
enhancing the value of our solutions, not only with software research and
development but also with superior consulting, education, and training support. As
your long-term business partner, we will work with you to help ensure that our
solutions grow and change with your business—making your technology investment
an asset that increases in value over time.

Feature/Function Highlights
• Item cost level options:

• Company-wide

• Branch/plant
• Location and lot number

• Item cost method options:

• Standard
• Weighted average

• Cost by multiple categories:

• Material
• Labor, direct and indirect

• Machine

• Overhead
• Cost extras

• Cost rollup, level by level

• Cost simulation
• Scrap, shrink, and yield measurements

• Budgeted costs by work order/rate schedule

• Automatic creation of journal entries


• Variance to standard analysis

• Operate in multimode manufacturing environments

Solution Integration
• Financial Management
• Human Capital Management

• Financial and Supply Chain Analytics

• Supplier Relationship Management


• Supply Chain Management

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ORACLE DATA SHEET

Copyright 2004, 2005 Oracle. All Rights Reserved.

This document is provided for information purposes only, and the contents hereof are subject to change without notice. This
document is not warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or
implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We
specifically disclaim any liability with respect to this document, and no contractual obligations are formed either directly or
indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or
mechanical, for any purpose, without our prior written permission.

Oracle, JD Edwards, and PeopleSoft are registered trademarks of Oracle Corporation and/or its affiliates. Other names may
be trademarks of their respective owners.

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