Additional Information for the Costing Structure

Appendix: Additional Information for the Costing Structure

This chapter discusses how to:

Use transaction groups.
Use cost flow diagrams.

Using Transaction Groups

Each transaction with a financial impact is embedded with a transaction group. The transaction group identifies the type of transaction that is entered and determines what records are populated, how costing is calculated, and what ChartFields are used to record accounting entries. In this section, we identify all the transaction groups by code, description, transaction process description, and specific menu paths. We divide the transaction groups into their logical categories, including:

Inventory transactions.
Earned conversion cost transactions.
Production variance transactions.
Production scrap cost transactions.
Production actual cost transactions.
Standard cost revaluation transactions.
Average cost adjustment transactions.
Actual cost adjustment transactions.
Non-stock shipment transactions.

Understanding Inventory Transactions

Inventory transactions are any material movement transactions that have a financial affect on inventory balances, such as purchase receipts, adjustments, and issues. Inventory transactions include route to production kit transactions. Route to Production kit transactions are the transactions that occur when an assembly item is completed on a production ID or schedule, and it can be routed to another production ID, where it is used as a component on the next-higher-level assembly. The component’s issue method must be set to kit in order for you to route directly to production.

This information is derived from the transaction history records (TRANSACTION_INV and TRANS_INV_CM). Transactions that can be viewed on the Inventory Transaction Detail page include these transaction groups:

Transaction Group	Description	Transaction Process	Menu Path
010	Receipt to Inspection.	Put away an item that is received from a purchase order that requires inspection.	Inventory, Putaway Stock, Complete Putaway
012	Return to Vendor.	Inventory that is returned from a storage location. The express issue request type must be marked as vendor returns.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
013	Return to Vendor from Inspection.	Inventory returned from an inspection location. The express issue request type must be marked as vendor returns.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
020	Putaway.	Put away an item that is received from a purchase order, one that doesn’t require inspection.	Inventory, Putaway Stock, Complete Putaway Inventory, Putaway Stock, Express Putaway
021	Receipts from Production.	Put away an assembly completion that is routed to a storage area or another WIP location.	Inventory, Putaway Stock, Complete Putaway Production Control, Process Production, Complete Production, Record Completions and Scrap (if Putaway Action is set to Putaway at Receipt Save Time)
022	IBU Transfer Receipts.	Receive an item that is shipped to the inventory business unit from another inventory business unit.	Inventory, Putaway Stock, InterUnit and RMA Receiving
024	Customer Returns.	Receive an item from a customer and it specifies RMA receipt.	Inventory, Putaway Stock, InterUnit and RMA Receiving
025	InterCompany Receipts.	Receive material from an inventory business unit that is associated with another general ledger, where intercompany processing is indicated.	Inventory, Putaway Stock, InterUnit and RMA Receiving
026	Expensed Issue Return.	Receive material returned from an interunit expensed issue.	Inventory, Putaway Stock, Expense Issue Return
030	Usages & Shipments.	Issuing material to fulfill a sales order, express issue, or material stock request.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
031	InterBU Transfer Shipments.	Issuing material for a shipment to another inventory business unit, which is entered through an express issue or material stock request.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
034	Shipments on Behalf of Other BU.	Issuing material for a customer shipment based on a Sales Order that is taken in an Order Management Business Unit. The Order Management and Billing units must post to a different General Ledger business unit than is posted by the inventory unit.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
035	InterCompany Transfers.	Transfer material from an inventory business unit that is associated with another general ledger, where intercompany processing is indicated.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
036	InterUnit Expensed Issue.	Expense material from an inventory business unit to an internal department of an unrelated general ledger business unit.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
037	VMI Interunit shipment	Record the shipment of non-consigned goods from an inventory business unit to a VMI business unit by debiting the cost of goods sold account and crediting the inventory account.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
038	VMI Consumption	Record the consumption of materials in a VMI business unit by debiting the cost of goods sold account and crediting the inventory account.	Data Exchanges, Process Transactions, Inventory
040	Physical Count Adjustments.	Record inventory adjustments from a physical inventory.	Inventory, Inventory Counts, Reconcile Inventory Balances, Update Stock Quantity
041	Cycle Count Adjustments.	Record inventory adjustments from a cycle count.	Inventory, Inventory Counts, Reconcile Inventory Balances, Update Stock Quantity
042	IBU Transfer Adjustments.	Receive more or less than the quantity that is shipped by using the Inter Business Unit Shipment. When the interunit receipt is closed, a comparison is made between the shipment quantity and the receipt quantity. Any differences are recorded here.	Inventory, Putaway Stock, InterUnit and RMA Receiving
050	User Adjustments.	Specify a quantity adjustment type of increase or decrease.	Inventory, Manage Inventory, Adjustments
051	Inventory Scrap.	Specify an adjustment type of scrap.	Inventory, Manage Inventory, Adjustments
052	Shipping Adjustment.	Deplete less than the quantity that is picked for a shipment that is entered by using a sales order, an express issue, or material stock request. If the picked quantity differs from the depletion quantity, that difference is accounted for here.	Inventory, Fulfill Stock Orders, Shipping, Deplete On Hand Quantity
053	Floor Stock Issues/Ret.	Specify an adjustment type of Miscellaneous Issue or Miscellaneous Receipt.	Inventory, Manage Inventory, Adjustments
054	Inventory Scrap for RTV.	Specify an adjustment type of scrap RTV.	Inventory, Manage Inventory, Adjustments
060	Bin-to-Bin Transfers.	Transfer inventory from one storage location to another. This can be a direct bin-to-bin transfer, a material release of a production pick plan for components using the issue method, or the result of a replenishment workflow work it action.	Inventory, Manage Inventory, Transfers, EZ Transfers Production Control, Process Production, Issue Materials, Material Release
220	Component Kit.	Transfer of inventory from a storage area directly to a production ID. This is accomplished in material release of a production pick plan for components using the kit issue method or by doing a single issue of a kit component. Dekitting a production ID creates reversing entries, as does a return of a kitted component.	Production Control, Process Production, Issue Materials, Material Release Production Control, Process Production, Issue Materials, Issue/Return Kit Components Production Control, Process Production, Issue Materials, De-Kit Components Production Control, Process Production, Issue Materials, Issue/Return Kit Components
221	Route To Production Kit.	Record completions of an assembly at the last operation and route the completed assembly to another production ID. The assembly must be a component whose issue method is set to kit at the next higher production ID.	Production Control, Process Production, Complete Production, Record Completions and Scrap Production Control, Process Production, Subcontract Production, Receive Subcontract Assembly Production Control, Process Production, Complete Production, Process Completions and Scrap
222	Waste Completion.	Record completion of a waste product on a PID or schedule.	Production Control, Process Production, Complete Production, Record Completions and Scrap
223	Component/Output Transfers.	Moving components or outputs from one PID to another as a result of a PID split. You can also move components from one PID to another to reallocate material issues.	Production Control, Process Production, Split Production, Production ID Split
230	Component Consumption.	Material is consumed from the WIP location during a completion or scrap transaction. The components issue method must be set to issue or replenish.	Production Control, Process Production, Complete Production, Record Completions and Scrap Production Control, Process Production, Issue Materials, Edit/Issue Components Production Control, Process Production, Complete Production, Record Completions and Scrap
231	WM Usage (Maintenance Management Usage)	Issuing material to a work order in PeopleSoft Maintenance Management to maintain or repair an asset. Material returned to inventory from a work order also uses this transaction group.	Inventory, Fulfill Work Orders, Issue to Work Orders
300	Gain/Loss on Transfer Price.	Ship an item to another inventory business unit specifying a transfer price that differs from the items cost. or Receive an Inter Business Unit Shipment for a standard cost item with a transfer price that differs from the item’s cost. Note. This transaction doesn’t appear on the Transaction History record, but is calculated as part of the Transaction Costing process when costing IBU shipments and receipts.	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing
301	InterCompany Cost of Goods.	Issuing material to an inventory business unit that is associated with another general ledger, where intercompany processing is indicated. Note. This transaction doesn’t appear on the Transaction History record, but is calculated as part of the transaction costing process when costing InterCompany shipments (transaction group 035).	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing
400	Std Cost Variance Receipts.	Receive a standard cost item from a purchase order into inspection or stock. If the purchase order price differs from the standard cost of the item, a PPV entry is calculated. Note. This transaction doesn’t appear on the Transaction History record, but is calculated as part of the Transaction Costing process when costing purchase receipts to inspection or stock. Or	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing
		Receive an actual cost item from a purchase order into inspection or stock. Later, if the purchase order price differs from the voucher price record the difference in an expense account rather than update the inventory receipt and depletion transactions. This option is only valid if you have selected the Writeoff PPV and ERV check box on the Cost Profile page. Or
		For standard cost items, voucher an invoice in Accounts Payable, match, post and run the Landed Cost Extract process. If the invoice price differs from the purchase order price, a PPV entry is posted. Note. This transaction doesn’t appear on the Transaction History record, but is calculated as part of the Vouchering and Matching process.	Accounts Payable, Batch Processes, Vouchers, Match Request Accounts Payable, Batch Processes, Vouchers, Voucher Posting Request Accounts Payable, Batch Processes, Interfaces, Landed Cost Extraction
402	Std Cost Exchange Rate Var.	Accounts for any differences between the exchange rate that is specified on a purchase order and the exchange rate that is used during the Vouchering process. Note. This transaction doesn’t appear on the Transaction History record, but is calculated as part of the Vouchering and Matching process.	Accounts Payable, Batch Processes, Vouchers, Match Request Accounts Payable, Batch Processes, Vouchers, Voucher Posting Request Accounts Payable, Batch Processes, Interfaces, Landed Cost Extraction
461	PO Voucher Variance	Run the Transaction Costing process to record the difference between a user adjusted cost and the vouchered cost. This variance is recorded for purchased items using standard or actual cost. The variance between the PO price and the user adjusted cost is recorded in transaction group 400 for standard cost items.	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing

Understanding Earned Conversion Cost Transactions

Earned conversion cost transactions account for the labor, machine, and subcontracting costs that are earned and also the manufacturing overhead that is applied when completing assemblies at an operation or to stock. The information that is on the Earned Cost Detail page is derived from the Earned Conversion Cost record (SF_EARNCONCOST). The transactions that create entries in this table are:

Transaction Group	Description	Transaction Process	Menu Path
240	Earned Labor.	Recording completions or scrap for an assembly at an operation.	Production Control, Process Production, Complete Production, Record Completions and Scrap Production Control, Process Production, Subcontract Production, Receive Subcontract Assembly Production Control, Process Production, Complete Production, Process Completions and Scrap
211	WIP Revalue (Conversion Costs).	Revaluation of WIP inventory. If conversion costs are recorded prior to the standards change, the costs are revalued as part of the WIP revaluation calculation.	Cost Accounting, Item Costs, Update Standard Costs, Cost Update/Revalue, Update Production

Understanding Production Variance Transactions

Production variance transactions represent material variances and conversion variances that are incurred on a production ID or schedule when production is closed for accounting. The information that is derived from the Production Variance record (SF_VARIANCES). The Variances Detail page uses these variances:

Transaction Group	Description	Comprised of Variance Type	Description
261	Material Variances	01	Configuration Variance
		02	Usage Variance
		03	Component Yield Variance
		08	Material Lot Size Variance
262	Conversion Variance	04	Labor Lot Size Variance
		05	Routing Process Variance
263	Rework Expense	09	Material Rework Expense
		10	Labor Rework Expense
264	Outside Processing PPV	11– For standard cost makeable items, this transaction group records the variance between the standard cost and the purchase order price of the subcontracted service.	Outside Processing PPV
265	Teardown Variance	13	Teardown Material Expense
		14	Teardown Conversion Expense
415	RTV Variances	Records the difference between the inventory value of goods being returned and the amount of the vendor refund recorded in accounts payable.
661	Actual Cost Variances	For actual cost makeable items, this transaction group records the variance between the actual cost of the components and the standard cost of the end items.
664	Subcontract Variance	For actual cost makeable items, this transaction group records the variance between the purchase order price and the voucher price of the subcontracted service for actual cost components.

Understanding Production Scrap Cost Transactions

Production scrap cost transactions account for the cost of assemblies that scrapped in process while recording operation and assembly completions. The information that appears here is derived from the Assembly Scrap Cost record (SF_SCRAPCOST). The transaction groups that are used to record scrap are:

Transaction Group	Description	Transaction Process	Menu Path
212	WIP Revaluation (Scrap)	Revaluation of WIP inventory. If assembly scrap is recorded prior to the standards change, the scrap costs are revalued as part of the WIP revaluation calculation.	Cost Accounting, Item Costs, Update Standard Costs, Cost Update/Revalue, Update Production
250	Assembly Scrap	Recording scrap for an assembly at an operation.	Production Control, Process Production, Complete Production, Record Completions and Scrap Process Production, Subcontract Production, Receive Subcontract Assembly Production Control, Process Production, Complete Production, Process Completions and Scrap

Understanding Production Actual Cost Transactions

Production actual cost transactions account for the actual cost of production when the make item uses an actual or average cost method. Actual production costs include the actual cost of materials, conversion costs, conversion overhead costs, subcontracted components, and additional costs. The transaction groups that are used to record production actual costs are:

Transaction Group	Description	Transaction Process	Menu Path
601	Wt Avg Upd Production Var.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. If the make (end) item is average costed, then this transaction group accounts for average cost updates due to new cost information on receipts from manufacturing, usually when the estimated manufacturing cost from partial receipts from work in process are updated to a finalized manufacturing cost once the production order or production schedule is complete.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
605	Wt Avg Upd Prod Writeoffs.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. If the make (end) item is average costed, then this transaction group creates a writeoff when the average cost of the item needs to be updated, due to new cost information on receipts from manufacturing, but there is not enough quantity currently in stock to absorb the updated costs.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
622	Actual Waste Cost.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. If the make (end) item is actual or average costed and a waste by-product is produced, then this transaction group credits an expense account and debits the finished goods inventory account.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
630	Overhead	Run the Transaction Costing process for a production ID or production schedule that has been closed for accounting. If the make (end) item is actual or average costed, then this transaction group debits WIP and credits a manufacturing overhead cost absorption account for overhead costs of the production. These costs are applied using material, labor, and machine amounts as the basis for allocating overhead charges to production outputs.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
640	Actual Labor Costs.	Run the Transaction Costing process for a production ID or production schedule that has been closed for accounting. If the make (end) item is actual or average costed and the operation sequence is complete, then this transaction group credits earned labor account and debits WIP with the actual labor costs.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
645	Actual Machine Costs.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. If the make (end) item is actual or average costed and the operation sequence is complete, then this transaction group credits earned machine account and debits WIP with the actual machine costs.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
651	Production Cost Writeoff.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. This transaction group is used when there is an overriding adjustment and additional costs hit WIP. This transaction group writes off those WIP costs which do not belong in finished goods.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
661	Actual Cost Variances	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. If the make (end) item is standard costed and one or more of the components uses actual or average cost, then this transaction group relieves WIP for the difference between the actual cost of the component consumption transaction and the standard cost of the component which was used to build up the standard cost of the end item. The offset is posted to a period variances ChartField. Although the inputs to standard cost end items can have standard costs themselves, the input items can still use any cost profile for accounting purposes. As components are depleted, the cost on the depletion becomes part of the actual cost of the output items.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing
664	Subcontracted Cost.	Run the Transaction Costing process for a production ID or production schedule that is closed for accounting. This transaction group records the variance between subcontracted costs on the purchase order and the actual subcontracted costs on the voucher. This transaction group is used only for actual or average cost items.	Cost Accounting, Inventory and Mfg Accounting, Created Accounting Entries, Inventory Transaction Costing, Transaction Costing

Understanding Standard Cost Revaluation Transactions

Standard cost revaluation transactions are the transactions that occur when you change standard costs and update the production cost record with the new version of costs. At that time, the system:

Calculates the change in inventory value by determining the change in cost and multiplying that difference by the quantity on hand in inspection, stores, and WIP locations.
Determines the change in WIP inventory by calculating the change in cost of components remaining in process, as well as the associated labor, machine, subcontracting, and overhead costs that are earned to that point.

The WIP revaluation information that is displayed here is associated with the revaluation of the components issued to the production ID or schedule as well as the revaluation of the assembly item itself. Detail information is derived from the Posted Item Cost Variance record (CE_ITEMCVAR_PST). The transaction groups are:

Transaction Group	Description	Transaction Process	Menu Path
200	Inventory Revalue.	Once production costs are updated, this transaction accounts for the change in inventory value in stores or WIP locations.	Cost Accounting, Item Costs, Update Standard Costs, Cost Update/Revalue, Update Production
201	Inventory Reval - Inspection.	Once production costs are updated, this transaction accounts for the change in inventory value in inspection locations.	Cost Accounting, Item Costs, Update Standard Costs, Cost Update/Revalue, Update Production
210	WIP Revalue (Comps, Assy).	Revaluation of WIP. This transaction accounts for the change in component and assembly costs that are still in process.	Cost Accounting, Item Costs, Update Standard Costs, Cost Update/Revalue, Update Production

Understanding Average Cost Adjustment Transactions

Average cost value adjustment transactions occur when adjusting the cost of the perpetual weighted average cost or the retroactive perpetual weighted average cost items and the resulting change in inventory value. Value adjustments for items using perpetual weighted average costing or retroactive perpetual weighted average costing can be:

Manually created using the Adjust Average Cost page or the Adjust Retro Costs page.
System created by the Transaction Costing subprocess within the Cost Accounting Creation process.

These transactions are displayed in this table:

Transaction Group	Description	Transaction Process	Menu Path
205	Value Adjustment.	Records an adjustment to change the value of the current inventory stock for a specific item using perpetual average or retroactive perpetual average costing. This transaction group applies only to perpetual average and retroactive perpetual average items.	Cost Accounting, Item Costs, Update Costs, Adjust Average Cost Cost Accounting, Item Costs, Update Costs, Adjust Retroactive Averages
401	Wt Avg Updates from AP.	Records an adjustment to update the perpetual weighted average cost with posted purchase price variances (PPV).	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing. Select the Apply Perpetual Average Adjs check box.
403	Wt Avg Cost Updates - ERV.	Records an adjustment to update the perpetual weighted average cost with posted exchange rate variances (ERV).	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing. Select the Apply Perpetual Average Adjs check box.
405	Wt Avg Update Writeoffs.	Records an adjustment to account for any PPV or ERV not applied into the perpetual weighted average cost.	Cost Accounting, Inventory and Mfg Accounting, Create Accounting Entries, Inventory Transaction Costing. Select the Apply Perpetual Average Adjs check box.

Understanding Actual Cost Adjustment Transactions

Actual cost value adjustment transactions occur when adjusting the cost of the actual cost items and the resulting change in inventory value. Actual cost items are adjusted using the Adjust Actual Cost component. The information that appears in the Actual Cost Adjustment inquiry pages is derived from the CM_USER_CST_ADJ record. The transaction is:

Transaction Group	Description	Transaction Process	Menu Path
206	Value Adjust/ActCost Items.	Records an adjustment to change the value of the current inventory stock for a specific item using actual costing.	Cost Accounting, Item Costs, Update Costs, Adjust Actual Cost

Understanding Non-stock Shipment Transactions

Non-stock shipment transactions are the transactions that occur when you specify a non-stocked item on a sales order in PeopleSoft Order Management and mark it for billing. The information on the Non Stock Shipment Detail page is derived from the Non-Stock Shipments record (CM_CST_NSSHIP). The transaction is:

Transaction Group	Description	Transaction Process	Menu Path
032	Non Stock Shipments	Designate a nonshippable item as ready for billing.	Order Management, Quotes and Orders, Create OM Billing Entries, Mark Lines for Billing

Using Costing Flow Diagrams

This diagram illustrates how the Transaction Costing process calculates the cost of each inventory transaction:

Detailed Costing Flow Diagram - Transaction Costing Process

The Transaction Costing process:

Expands the inventory transactions in TRANSACTION_INV into the PeopleSoft Cost Management CM_TRANSACTION table adding a separate row for each business unit and cost book combination. Interunit transactions are expanded for compound accounting entries and stored in the CM_INTRANSIT record. Shipment on Behalf of transactions are stored in the CM_SHIPONBEHALF and CM_SHIPONB_BOOK tables. Interunit Expensed Issue Returns are stored in the TRANS_INV_CM table.
Places putaway transactions into CM_RECEIPTS and dummy deplete rows in CM_DEPLETE to complete the join for CM_ONHAND_VW.
Inserts all cost adjustments from PeopleSoft Manufacturing production ID's, Payable vouchers, and user-entered cost adjustments. Stores the actual cost value adjustments in the record CM_USER_CST_ADJ where the adjustment then flows into the CM_RECEIPT_COST record to be picked up by the Accounting Line Creation process. Stores the value adjustments for items using perpetual average and retroactive perpetual average costing in the record CM_COST_ADJ, and then expands the adjustment by cost book into the CM_COST_ADJB record. The Accounting Line Creation process picks up the data from the CM_COST_ADJB record.
Adds depletion transactions into CM_DEPLETION table.
Matches up each depletion transaction in CM_DEPLETION with a qualifying putaway from CM_ONHAND_VW. These depleted depletions are inserted into the CM_DEPLETE table.
Calculates the cost of receipts and placed them into CM_RECEIPT_COST, CM_VARIANCES, and CM_VARIANC_COST tables.
Calculates the cost of depletions in CM_DEPLETE table and placed them in the CM_DEPLETE_COST table.
Calculates the cost of make items produced in PeopleSoft Manufacturing. The end item costs are computed and placed in CE_ACTUAL_COST table.

This diagram illustrates how the Accounting Line Creation process creates the accounting entries for each inventory transaction:

Detailed Costing Flow Diagram - Accounting Line Creation Process