The following cost transactions can occur when Oracle Work in Process is installed:

• Component Issue and Return Transactions

• Move Transactions

• Resource Charges

• Outside Processing Charges

• Overhead Charges

• Assembly Scrap Transactions

• Assembly Completion Transactions

• Job Close Transactions

• Period Close Transactions

• WIP Cost Update Transactions

Component Issue and Return Transactions

Component issue and return transactions can be launched in a variety of ways. See: Component Issue and Return Transaction Options and Backflush Transactions.

Costing Issue and Return Transactions

Issue transactions increase the WIP valuation and decrease the inventory valuation. Here are the accounting entries for issue transactions:

Here are the accounting entries for return transactions:

Subinventory accounts are defined in the Define Subinventories window in Oracle Inventory. WIP elemental accounts are defined in the WIP Accounting Classes window in WIP. See: Defining Subinventories, Subinventory General Ledger Account Fields, and WIP Accounting Classes.

See: Overview of Material Control

Move Transactions

A move transaction moves assemblies within an operation, such as from queue to run, or from one operation to the next. Move transactions can automatically launch operation completion backflushing and charge resources and overheads.

You can perform move transactions using the Move Transactions window, Open Move Transaction Interface window, or the Enter Receipts window in purchasing.

Backflush Material Transactions

With backflushing, issue component material used in an assembly or subassembly by exploding the bills of material. Then multiply the bills of material by the number of assemblies produced.

Move transactions can create operation pull backflush material transactions that issue component material from designated WIP supply subinventories and locators to a job or repetitive schedule. For backflush components under lot or serial number control, assign the lot or serial numbers during the move transaction.

When you move backward in a routing, WIP automatically reverses operation pull backflush transactions. Here are the accounting entries for move transactions:

Here are the accounting entries for return transactions:

Moved Based Resource Charging

As the assemblies you build pass through the operations on their routings, move transactions charge all pre-assigned resources with an auto-charge type of WIP Move at their standard rates.

You can charge resources based upon a fixed amount per item moved in an operation (item basis) or based upon a fixed lot charge per item moved in an operation (lot basis). For resources with a basis of lot, WIP automatically charges the lot cost upon completion of the first assembly in the operation.

You can also enter manual resource transactions associated with a move, or independent of any moves. You can manually charge resources to a job and repetitive schedule, provided that the job and repetitive schedule has a routing. You can also transact resources through the Open Resource Transaction Interface.

See: Overview of Resource Management

See: Charging Resources with Move Transactions

See: Backflush Transactions

Resource Charges

WIP supports four resource autocharging methods: Manual, WIP Move, PO Move, and PO Receipt. You can charge resources at an actual rate. You can also charge resource overheads automatically as you charge resources.

WIP Move Resource Charges

You can automatically charge resources at their standard rate to a job or repetitive schedule when you perform a move transaction using either the Move Transactions window or the Open Move Transaction Interface. When you move assemblies from the queue or run intraoperation steps forward to the to move, reject, or scrap intraoperation steps, or to the next operation, WIP charges all pre-assigned resources with an charge type of WIP Move at their standard rates.

For resources with a basis of item, WIP automatically charges the resource's usage rate or amount multiplied by the resource's standard cost upon completion of each assembly in the operation. For resources with a basis of lot, WIP automatically charges the resource's usage rate or amount multiplied by the resource's standard cost upon completion of the first assembly in the operation.

You can undo the WIP move resource charges automatically by moving the assemblies from queue or run of your current operation to queue or run of any prior operation, or by moving the assemblies from the to move, reject, or scrap intraoperation steps backward to the queue or run intraoperation steps of the same operation, or to any intraoperation step of any prior operation.

WIP applies WIP Move resource transactions to multiple repetitive schedules on a line based on how the assemblies being moved are allocated. WIP allocates moves across multiple repetitive schedules based on a first in, first out basis.

Manual Resource Charges

You can charge manual resources associated with a move transaction or independent of any moves. Manual resource transactions require you to enter the actual resource units applied rather than autocharging the resource's usage rate or amount based on the move quantity. You can charge resources using that resource's unit of measure or any valid alternate. You can manually charge resources to a job or repetitive schedule provided that the job or repetitive schedule has a routing.

If you use the Move Transactions window to perform moves and manual resource transactions at the same time, then WIP displays all pre-assigned manual resources with an charge type of manual assigned to the operations completed in the move. If the resource is a person-type resource, you can enter an employee number.

In addition to the resources that appear, you can manually charge any resource to a job or repetitive schedule, even if you have not previously assigned the resource to an operation in the job or repetitive schedule. You can also manually charge resources to an operation added ad hoc by entering any resource defined for the department associated with the operation. WIP applies manual resource transactions to the first open repetitive schedule on the line.

You can correct or undo manual resource transactions by entering negative resource units worked.

Costing Resource Charges at Resource Standard

Resource charges increase WIP valuation. Here are the accounting entries for resource transactions:

If Autocharge is set to WIP Move, WIP and labor are charged at standard. There are no resource rate or efficiency variances.

Here are the accounting entries for negative manual resource transactions and backward moves for WIP move resources:

Costing Labor Charges at Actual

You can charge labor charges at actual in two ways. You can enter an actual rate for the employee using the Open Resource Transaction Interface or when you define employee rates. Here are the accounting entries for labor charges using an actual or employee rate for a resource for which charge standard rate is turned off:

Any difference between the total labor charged at actual and the standard labor amount is recognized as an efficiency variance at period close.

If the Standard Rates check box is selected and you enter an actual rate for a resource, then the system charges the job or repetitive schedule at standard. If Autocharge is set to Manual and actual rates and quantities are recorded, then a rate variance is recognized immediately for any rate difference. Any quantity difference is recognized as an efficiency variance at period close. Here are the accounting entries for the actual labor charges:

PO Receipt and PO Move Transactions

You can receive purchased items associated with outside resources from an outside processing operation back into WIP in Oracle Purchasing. For these items, WIP creates resource transactions at the standard or actual rate for all outside resources with an auto charge type of PO receipt or PO move.

See: Overview of Resource Management

See: Managing Receipts

See: Introduction to Outside Processing

Outside Processing Charges

WIP automatically creates resource transactions at the standard or actual rate for all outside processing resources with an charge type of PO Receipt or PO Move when you receive assemblies from an outside processing operation back into WIP, using the Enter Receipts window in Purchasing. For outside processing resources with an charge type of PO Move, WIP also performs a move of the assemblies from the queue or run intraoperation step of your outside processing operation into the queue intraoperation step of your next operation or into the to move intraoperation step if the outside processing operation is the last operation on your routing.

If you assigned internal resources to an outside operation with an charge type of manual, then use the Move Transactions window or the Open Resource Transaction Interface to charges these resources.

If you return assemblies to the supplier, then WIP automatically reverses the charges to all automatic resources associated with the operation. You must manually reverse all manual resource charges using the Move Transactions window. For outside processing resources with an charge type of PO Move, WIP automatically moves the assemblies from the queue intraoperation step of the operation immediately following the outside processing operation into the queue intraoperation step of your outside processing operation.

If the outside processing operation is the last operation on your routing, then WIP automatically moves the assemblies from the to move intraoperation step to the queue intraoperation step. WIP applies PO Move resource transactions to multiple repetitive schedules on a line based on how the assemblies being moved are allocated. WIP allocates moves across multiple repetitive schedules based on a first in, first out basis. WIP applies PO Receipt resource transactions to the first open repetitive schedule on the line.

Costing Outside Processing Charges at Standard

When you receive the assembly from the supplier, Purchasing sends the resource charges to WIP at either standard cost or actual purchase order price, depending upon how you specified the standard rate for the outside processing resource.

If the Standard Rates option is enabled for the outside processing resource being charged, then the application charges WIP at the standard rate and creates a purchase price variance for the difference between the standard rate and the purchase order price. Here are the accounting entries for outside processing items:

Any quantity or usage difference is recognized as an outside processing efficiency variance at period close.

The accounting entries for return to supplier for outside processing are:

Costing Outside Processing Charges at Actual Purchase Order Price

If the Standard Rates option is disabled for the outside processing resource being charged, then the system charges WIP the purchase order price and does not create a purchase price variance.

Here are the accounting transactions for outside processing charges at purchase order price:

Any difference from the standard is recognized as a resource efficiency variance at period close.

See: Overview of Shop Floor Control

Overhead Charges

Move Based Overhead Charging

WIP automatically charges appropriate overhead costs as you move assemblies through the shop floor. You can charge overheads directly based on move transactions or based on resource charges. For overheads charged based on move transactions with a basis of item, WIP automatically charges overheads upon completion of each assembly in the operation. WIP automatically reverses these charges during a backward move transaction.

For overheads based on move transactions with a basis of lot, WIP automatically charges overheads upon completion of the first assembly in the operation. WIP automatically reverses these charges during a backward move transaction if it results in zero net assemblies completed in the operation.

Resource Based Overhead Charging

WIP automatically charges appropriate overhead costs as you charge resources. You can charge overheads based on resource units or value. WIP automatically reverses overhead charges when you reverse the underlying resource charge.

Costing Overhead Charges

Overhead charges increase WIP valuation. Here are the accounting entries for overhead charges:

You can reverse overhead charges by entering negative Manual resource charges or performing backward moves for WIP Move resources. The accounting entries for reverse overhead charges are:

See: Overview of Shop Floor Control.

Assembly Scrap Transactions

You can move partially completed assemblies that you consider unrecoverable to the scrap intraoperation step of that operation. If necessary, you can recover assemblies from scrap by moving them to another intraoperation step. By moving into the scrap intraoperation step, you can effectively isolate good assemblies from bad.

WIP considers a move into the scrap intraoperation step from the queue or run of the same operation as an operation completion, and thus updates operation completion information, backflushes components, and charges resource and overhead costs according to the elemental cost setup.

You can also move assemblies back to the scrap intraoperation step of the previous operation for queue or run if no work has been completed at the current operation.

Costing Assembly Scrap Transactions

When you define WIP parameters, you can specify whether moves into the scrap intraoperation step require a scrap account. If you enter a scrap account or alias when you move assemblies into scrap, then the scrap account is debited and the job or repetitive schedule elemental accounts for the standard cost of the assembly through the scrap operation are credited. This removes the cost of the scrapped assemblies from the job or repetitive schedule. If you do not enter a scrap account or select an alias, then the cost of the scrap remains in the job or schedule until job or period close. If you recover assemblies from scrap, then the scrap account is credited and the job or repetitive schedule elemental accounts for the standard cost of this assembly through this operation are debited. Here are the accounting entries for scrap transactions:

The accounting entries for reverse scrap transactions are:

Overview of Shop Floor Control.

Assembly Completion Transactions

Use the Completion Transactions window, Move Transactions window, and Inventory Transaction Interface to move completed assemblies from WIP into subinventories. Completion transactions relieve the valuation account of the accounting class and charge the subinventory accounts (for example, finished goods) based upon the assembly's elemental cost structure.

Overcompletions

If you have overcompleted a job, it is not necessary to change the job quantity.

However, if you are overcompleting assemblies associated with lot based resources and overheads, these resources and overheads are over-relieved from WIP.

See: Assembly Over-Completions and Over-Moves and Move Completion/Return Transactions.

Costing Assembly Completion Transactions

Completions decrease WIP valuation and increase inventory valuation at standard costs. Here are the accounting entries for completion transactions:

Earning Assembly Material Overhead on Completion

You can assign overheads based on item, lot or total value basis. For standard discrete jobs and repetitive schedules, you can earn these overheads as you complete assemblies from WIP to inventory.

Here are the the accounting entries for material overhead on completion transactions for standard discrete jobs and repetitive schedules:

Use non-standard expense jobs for such activities as repair and maintenance. Use non-standard asset jobs to upgrade assemblies, for teardown, and to prototype production. Non-standard discrete jobs do not earn overhead on completion. Because you have already earned overhead to produce the assemblies as you are repairing or reworking, WIP prevents you from double earning material overhead on these assemblies.

Here are the accounting entries for material overhead on completion transactions for non-standard expense and non-standard asset jobs:

See: Completing and Returning Assemblies.

Job Close Transactions

Until you close a job or change the status of the job to Complete - No Charges, you can make material, resource, and scrap charges to the job. Closing a discrete job prevents any further activity on the job.

Costing Job Close Transactions

Closing a job calculates final costs and variances. The actual close date that you specify determines the accounting period that WIP uses to recognize variances. You can back date the close to a prior open period if desired.

The close process writes off the balances remaining in the WIP elemental valuation accounts to the elemental variance accounts that you defined by accounting class, leaving a zero balance remaining in the closed job.

If there is a positive balance in the job at the end of the close, here are the accounting entries for a job close:

Period Close Transactions - Standard Costing

The period close process in Inventory recognizes variances for non-standard expense jobs and repetitive schedules. It also transfers the WIP period costs to the general ledger.

Costing Nonstandard Expense Job Period Close Transactions

You can close discrete jobs and recognize variances for non-standard expense jobs at any time. In addition, the period close process automatically recognizes variances on all non-standard expense job charges incurred during the period. Therefore, open non-standard expense jobs have zero WIP accounting balances at the start of a new period.

If there is a positive balance in the job at the end of the period, here are the accounting entries for nonstandard expense jobs at period close:

Costing Repetitive Schedule Period Close Transactions

You do not close a repetitive schedule. However, you do recognize variances on a period basis that result in zero WIP accounting balances at the start of the new period. You should check your transactions and balances using the Repetitive Value Report before you close a period.

When you define WIP parameters, you can specify which repetitive schedule variances that you recognize when you close an accounting period. You can either recognize variances for all repetitive schedules when you close an accounting period, or recognize variances for those repetitive schedules with statuses of either Complete - No Charges or Cancelled.

Assuming positive balances in the repetitive schedules at the end of the period, here are the accounting entries for repetitive schedules at period close:

See: Overview of Period Close,

Overview of Discrete Job Close, and

Defining WIP Parameters.

Work in Process Standard Cost Update Transactions

The standard cost update process revalues standard and non-standard asset discrete jobs and updates pending costs to frozen standard costs. Repetitive schedules and non-standard expense jobs do not get revalued by the cost update.

The cost update creates accounting transactions by job and cost element valuation account. Each standard and non-standard asset discrete job is updated using the following formula:

If the result of the cost update is an increase in the standard cost of the job, here are the accounting entries for a cost update transaction:

If the result of the cost update is a decrease in the standard cost of the job, here are the accounting entries for a cost update transaction:

When the cost update occurs for open jobs, standards and WIP balances are revalued according to the new standard, thus retaining relief variances incurred up to the date of the update.