Cost Management Overview

Oracle Cost Management is an automatic costing system for inventory, purchasing, order management and discrete or work in process transactions. Cost Management supports different costing methods, multiple costing elements, transaction costing, activity-based costing, inventory valuation and cost variance reporting, and integration with Oracle Financials. 


Objectives of Oracle Cost Management

• Simulate, analyze, and forecast product costs
• Easily update and manage item unit costs
• Define the inventory structure and cost controls that are important to your business
• View item costs, inventory and work in process values, accounting entries, and gross margins
• Automatically transfer inventory and work in process transactions to your general ledger
• Value inventory and work in process on a perpetual basis

Key Functionality of Oracle Cost Management

• Inventory and work in process costs are up-to-date and inventory value matches the cumulative total of accounting transactions.
• Flexible cost setup features, including multiple cost elements and unlimited sub-elements, unlimited resources and overheads, and unlimited activities. Sub-elements enable you to analyze costs in greater detail. 
• Accurately define and maintain costs and associate them with items.
• Flexible account setup including accounts by organization, subinventory, and work in process accounting class so that you can distribute costs to the proper expense accounts and capture valuation in the proper asset accounts.
• Comprehensive inventory valuation and cost variance reporting. 
• Perpetual inventory and work in process balances are maintained on-line. 
• Multiple variances are supported: purchase price, standard cost, cycle count, physical inventory, work in process usage, and work in process efficiency.
• Extensive cost simulation, copying, and editing capabilities that enable you to project costs and keep them accurate.
• Flexible period-based accounting that enables you to transact in more than one open period at the same time. 
• Reconcile and analyze one open period while conducting business in a subsequent period. 
• Transfer summary or detail account activity to Oracle General Ledger and close a period at any time.