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    Ekansh Jain
    How to achieve Activity based Costing in Oracle Cost...Answered
    Topic posted August 7, 2019 by Ekansh JainBronze Medal: 1,250+ Points, tagged Cost Management, Financials, Fusion, General Ledger, Inventory & Cost Management Analytics Cloud, OTBI, Payables, Public Sector, Tip, White Paper 
    56 Views, 3 Comments
    Title:
    How to achieve Activity based Costing in Oracle Cost Accounting Cloud
    Summary:
    How to achieve Activity based Costing in Oracle Cost Accounting Cloud
    Content:

    Hi,

    How to achieve the functionality of Activity based Costing in Oracle Cost Accounting Cloud.

    Thanks

    Ekansh

    Best Comment

    Sritama Sarkar

    Hi Ekansh,

      Can you elaborate more on your requirement here?

    Thanks

    Comment

     

    • Sritama Sarkar

      Hi Ekansh,

        Can you elaborate more on your requirement here?

      Thanks

    • Ekansh Jain

      Hi Sritama,

      Thanks for your response. While doing my research on activity-based costing in Cloud. I have found that it was available in EBS. However, we are looking forward to implementing it in Cloud for one of our clients. I am wondering if such kind of functionality is available in Oracle Cost Management Cloud.

      Request you to please go through the below note for more detail.

      Activity-Based Cost Modeling in Oracle Applications

      Using General Ledger and statistical budget journals, you can record and track your activity performance measures. With multiple budgets, one for actual activity-based costs and another for budgeted activity-based costs, you can tie your actual general ledger costs to actual activity-based costs and compare actual activity-based costs to budgeted activity-based costs. With the Financial Statement Generator and statistical budget journals, you can calculate and report activity unit costs. In Cost Management, you can have multiple activities where each references multiple cost types. You can specify an activity for each item cost, enter the usage, and the activity costs are automatically calculated.

      If you use Bills of Material, you can reference activity for each operation resource in a routing. You can roll up and calculate assembly activity costs for all levels of your bills of materials and routings. With the item cost inquiries and reports, you can see your activity costs by the assembly and the usage of the activity in the assembly. You can specify a cost type for all of these inquiries and reports and compare your traditional standard costing against your activity-based costs.

      Typically, you hold your activity-based costs in one or more cost types. You can evaluate your profit margins, inventory valuation, and activity product costs, by specifying the activity cost type in the Margin Analysis, Inventory Valuation, and Cost Comparison reports.

      You can charge and report resources, outside processing, and overhead by activity. You can then analyze and report various business activities, including setup, teardown, inspection, and so on.

      • Sritama Sarkar

        Hi Ekansh,

          In cloud, we have some fundamental differences from EBS (both in terminologies and functionalities). In manufacturing, when you setup your work definitions (routing) in a manufacturing plant, you specify operations that happen in a workcenter. Each of these operations consume materials and direct and indirect labor. In costing, a cost planning user creates a cost scenario, enters material cost estimates, resource rates and overhead rates and runs cost rollup. Based on the work definition structure and cost estimates, cost rollup gives you the calculates costs of your make assemblies. You can revise your estimates and re-run cost rollup to simulate various scenarios. When you are ready to freeze your standard costs, you publish your cost scenario with all the costs defined underneath. At this point, cost accounting is ready to consume these standard costs to process your transactions, perform inventory revaluation etc.

        I gave you a high level overview of how cost planning works in cloud. Let me know if you have any specific usecase and we can discuss more.