9/15/22, 5:06 PM Document 627308.

1
Copyright (c) 2022, Oracle. All rights reserved. Oracle Confidential.

WS: 32/42: World Configurator Standard Costing (Doc ID 627308.1)

In this Document

Purpose
Scope
Details
Overview
Multi-level Configured Item Example
Calculating Material and Labor Costs
Important notes to remember:

APPLIES TO:

JD Edwards World Product Data Management - Version A7.3 cume 4 and later
JD Edwards World Shop Floor Management - Version A7.3 cume 4 and later
JD Edwards World Configurator - Version A7.3 cume 4 and later
JD Edwards World Sales Order Management - Version A7.3 cume 4 and later
Information in this document applies to any platform.

PURPOSE

This paper details how to cost a configured item using the standard costing system. Configured items are unique in that their
standard cost can vary for each work order. There is no bill of material (BOM) for a configured item and the routing is
configured, so the discrete standard cost roll-up concept does not apply to a configured item. Product Costing Simulation
(P30820) should never be executed for the configured item (stocking type = C) and no frozen standard costs exist for the
configured item in the Cost Component Add-Ons file (F30026.)

Since the cost of the configured item changes based on the configuration, the standard cost must be computed each time the
configured item is ordered. The system must determine the material and labor costs for each configuration. This is done when
the work order is processed and the parts list and routing are attached. The Order Processing program (P31410) performs a
cost roll up for each configured work order.

SCOPE

Anyone supporting Configurator benefits from this information.

DETAILS

Overview

Configurator only uses Standard Cost which is Cost Method 07.

The costs for a configured item are stored in the Work Order Variance file (F3102.) The Order Processing program (P31410)
populates the frozen standard costs in the variance file after performing the cost roll up. Each configuration has its own
variance record keyed by work order number.

When a configured item is completed to stock using the work order Completion (P31114) program, the Cost Ledger file
(F4105) in inventory is updated with the cost from the work order variance file. The configured item is completed to a unique

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 1/10
9/15/22, 5:06 PM Document 627308.1

location/lot in inventory. The Work Order Completion program updates the Cost Ledger file (F4105) at the time of completion.
This ensures the cost in the Item Ledger (Cardex) is correct for the configuration.

Multi-level Configured Item Example

The following simplified example illustrates how multi-level configured item costs are determined. The configured item is a
computer. The second level configured item is a computer monitor.

The Inventory Cost Level (CLEV) of a configured item must be 3. The Inventory Cost Level is located on the Item Master
record. Not having this required setup will trigger warning 015L: Configured Item should be Inv. Cost Level 3.

This allows the cost to be stored in the Cost Ledger record (F4105) at the Item/Branch/Location level. The costs of the
components of the configured item are calculated through the standard cost programs. The Simulate Rollup (P30820) and
Frozen Update (P30835) must be run for all purchased components and manufactured sub-assemblies prior to creating
work orders for configured items. The costs for these purchased items and sub-assemblies are stored in the Cost Component
Add-Ons file (F30026) and can also be viewed as 07 costs within the P4105 Cost Ledger.

The computer is made of two purchased components, a motherboard and a CD-ROM drive. The monitor is made of two non-
configured manufactured items (sub-assemblies); a picture tube and a plastic case. The monitors manufactured sub-
assemblies each have a BOM and routing, so the Simulate Rollup is able to simulate their standard costs. The picture tube and
plastic case are discrete manufactured items.

This is the frozen cost of the manufactured components, the Picture Tube and Plastic Case:

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 2/10
9/15/22, 5:06 PM Document 627308.1

This the frozen cost of the purchased components, the CD-ROM and Motherboard:

Calculating Material and Labor Costs

Configured sales quotes can be used to calculate the configured items cost. The Configurator Constants (P3209), located on
the Configurator Setup menu (G3241), must be setup to Cost Sales Quotes (CCSQ). With this featured activated, the
configured cost can be computed without running the Order Processing program (P31410). This can only be accomplished
using a sales quote. If using a sales order, the Order Processing program must be executed to determine the cost of the
configured item.

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 3/10
9/15/22, 5:06 PM Document 627308.1

When entering a configured sales order, work orders are automatically created for the configured items; the computer and the
monitor. If the sales order cost is viewed before the Order Processing (P31410) is executed, the cost only includes P rule
components. No labor or X rule costs are added until the Order Processing program is run. The subsystem can be used to run
the Order Processing program immediately after the sales order is entered.

Two work orders are created; one for the computer and one for the monitor. These work orders must now be processed
through Order Processing to attach the Parts List and Routing, and to perform a cost roll up to compute the configured cost.

When calculating the material cost for this configured item, the system starts with the lowest level of the configuration.

There are special versions of Order Processing (P31410) specific to Configurator. You must use them in order to have
correct costs. The Data Sequence Set-up is set to sort by descending order number.
XJDE0007 Gen/Print Configured W.O.'s (Batch)
XJDE0005 Gen/Print Configured W.O.'s (Subsystem)

The cost of materials to build the monitor is determined by adding the standard cost of the sub-assemblies (Picture Tube and
Plastic Case.) The cost of these assemblies is calculated using the Standard Cost Rollup (P30820). The system reads the Item
Cost Component Add-Ons (F30026) to determine the cost of the picture tube and plastic case.

The cost of the materials to build the computer is determined by adding the cost of the monitor plus the standard cost of the
CD-ROM and the Motherboard. Again, these are purchased items with a frozen standards cost in the Item Cost Component
Add-Ons file (F30026).

The material cost is determined to be $455 for this computer. Labor costs are also computed using Order Processing (P31410.)
The system reads the R Assembly Inclusion Rules (P3293) for the monitor and determines a labor cost using the frozen labor
rates for each work center. After computing the routing cost (labor and overhead) for the monitor, the system reads the R
rules for the computer and adds the monitor labor and overhead cost to that of the computer to determine a total routing cost
for the top level configured item.

Assembly Inclusion R Rules for the computer configured item:

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 4/10
9/15/22, 5:06 PM Document 627308.1

Routing for Computer:

The work center 200-200:

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 5/10
9/15/22, 5:06 PM Document 627308.1

If the calculated labor cost for the labor and overhead is $23.11 and the material costs are $455, the total cost of the
computer is $478.11.

In the Order Processing CONFIGURED ITEM COSTS processing option, be sure to set a value of 1 or 2 to perform the cost roll
up on the configured work orders, and to update the sales order and Variance or Production Cost (F3102) file with the rolled-
up cost. If left blank, standard cost is not calculated.

CONFIGURED ITEM COSTS:

Enter one of the following options for calculating the standard cost for configured items in the Work Order Variance file
(F3102).
1 = Always calculate the standard cost
2 = Only calculate the standard cost if it has not already done (no variance records exist).
If left blank, standard cost will not be calculated.

To view the costs that the Order Processing program computed for the computer and monitor, go to the Daily Manufacturing
Accounting menu (G3116), select the Production Cost Inquiry (formerly Variance Inquiry) program (P3102) and inquire on the
work orders.

The cost is also found on the sales order detail.

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 6/10
9/15/22, 5:06 PM Document 627308.1

Variance Inquiry for the computer work order - notice the Frozen Amount has been computed.

Variance Inquiry for the monitor work order, the total cost of the monitor is included in the Material (A1) cost of the computer
(top level configured item.)

Continuing with the manufacturing process, the monitor is built, the parts are issued to the monitor work order and the
monitor work order is completed. When the monitor work order is completed, the item cost ledger (F4105) for the configured
item is populated with the standard cost from the Variance (F3102) file for the specific lot/location to which the configured
item is completed. The Item Ledger record is created with the configured cost, as well.

The monitor work order is completed to stock location 1, lot 1B.

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 7/10
9/15/22, 5:06 PM Document 627308.1

Upon completion of the work order, the Completion program (P31114) updates the Inventory Cost Ledger (F4105) with the
frozen cost from the Variance File (F3102.)

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 8/10
9/15/22, 5:06 PM Document 627308.1

Also at time of work order completion, the Item Ledger (F4111) record is created with the correct cost from the Item Cost
Ledger (P4105.)

Now that the monitor is complete and in stock, it is issued to the computer work order. The computer is reported as complete,
and again the Item Cost Ledger is updated and an Item Ledger record is created with the configured cost for the computer
item.

The computer’ work order is completed to stock, Item Cost Ledger is updated and the Item Ledger record is created to bring
the computer into stock.

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 9/10
9/15/22, 5:06 PM Document 627308.1

Now that the Sales Order, Item Cost Ledger and Item Ledger have correct costs, this item can continue through the sales
order process, Ship Confirm, Invoicing and Sales Update.

Important notes to remember:

Each configuration can potentially have its own cost.

Because there are no F30026 records for configured items, you can not attach extra costs (X1, X2, XA, etc.) directly at
that level.
The cost for the configuration is calculated via the Order Processing program (P31410) and stored in the Production
Cost Inquiry File (F3102.)
The processing option to run the cost roll up must be turned on in the Order Processing program.
The data sequencing of the Order Processing program (P31410) must be set to Work Order Number WADOCO in
descending order.
The sales quote can be used to get an accurate cost without creating a work order if the Configurator Constant is
turned on.
Sales order costs are not correct until the Order Processing program is run for the configured work orders.
The subsystem can be utilized to run the P31410 at the time of Sales Order entry to ensure a correct cost for margin
checking.
At the time of work order Completion (P31114) the Item Cost Ledger (P4105) is updated with the cost of the
configured item from the Variance File (F3102) so the Item Ledger record (F4111) and subsequent transactions use the
correct cost.

In the examples above and/or the attached document, user details / customer name / address / email / telephone number
represent a fictitious sample (based up made up data used in the Product name test environment). Any similarity to actual
persons, living or dead, is purely coincidental and not intended in any manner.

Didn't find what you are looking for?

https://support.oracle.com/epmos/faces/DocumentDisplay?_adf.ctrl-state=tgljbmlyb_364&id=627308.1 10/10