Defining Cost Groups

A Cost Group is the set of accounts that hold on hand inventory. Before the advent of Cost Groups, subinventories in an Oracle Inventory organization defined both the physical and accounting attributes of the material. 

Cost groups associate account information with its related inventory item. Cost groups provide a way to track both physical and accounting attributes for a subinventory, and enable you to manage inventory that is owned by multiple owners within the same subinventory and locator.

To define costs groups:

1. Navigate to the Cost Groups window.

2. Enter an alphanumeric name to identify the Cost Group.

3. Enter a cost group Description.

4. Enter an Inactive On date. As of this date you can no longer assign this cost group to a project, however you can query and process records that use it. If you do not enter a Inactive On date, the cost group is valid indefinitely.

5. Check Multi-Org to indicate that the cost group name can be shared with other organizations.

Note: If not set to Multi-Org, the cost group is only available to the organization that it is created in. If enabled, only the cost group name is shared across organizations.

6. Enter account numbers for the following: When you define a cost group for an organization, the accounts defined in the Organization Parameters window are defaulted but can be overwritten. 

Attention: Locators that reference projects that belong to a cost group use these accounts for inventory valuation. You therefore cannot change an account if there is on-hand inventory in any of these locators.

Material: A general ledger account to accumulate material costs for this cost group. This is usually an asset account.

Material Overhead: A general ledger account to accumulate material overhead or burden costs for this cost group. This is usually an asset account.

Resource: A general ledger account to accumulate resource costs for this cost group. This is usually an asset account.

Outside Processing: A general ledger account to accumulate outside processing costs for this cost group. This is usually an asset account.

Overhead: A general ledger account to accumulate resource or department overhead costs for this cost group. This is usually an asset account.

Average Cost Variance: A general ledger account to accumulate the balances that may occur when transactions are processed for an item whose on-hand inventory is negative. This account represents the inventory valuation error caused by issuing inventory before receiving it. 

Encumbrance: A general ledger account to hold the value of encumbrances against subinventory items.

To associate WIP accounting classes with the cost group:

1. Choose the WIP Accounting Classes button. The WIP Accounting Classes for Cost Groups window appears. Select a WIP Accounting Class You can only select any Standard Discrete Accounting Class. 

2. Save your work.