RE: Standard Cost Variances: Material Cost

Some thoughts:

First, it is important to know how you tailored MAPICS (PDM) for costing. If
you are tailored for standard costing, MAPICS will first go to item balance
standard unit cost; if that is zero it will proceed to item master unit cost
default. This is true for all activity, including MO costs. So, it sounds
like you might want to seriously consider populating the item balance
record, standard cost field. Then your MO's will reflect the cost of the
item. The only difference between actual cost and standard cost on the MO
would be if the item balance standard cost changes.

Also, obviously discuss with your accounting group. There may be some reason
they do not want item balance standard cost populated. For example, another
question to ask your accounting group is whether they have general ledger
interface turned on. If they do, then they must somehow be handling the
activity on your type 1 and 2 parts manually, since both item master and
item balance standard cost is zero. If you populate item balance standard
cost, then transactions on those parts will begin to show activity.

Just some thoughts.

Bill Mongan, CPA
Cost Accounting Manager
Generac Power Systems, Inc.
(262) 544-4811 x2097
bmongan@generac.com



-----Original Message-----
From: mapics-l-admin@midrange.com [mailto:mapics-l-admin@midrange.com]On
Behalf Of aldg
Sent: Thursday, February 14, 2002 7:05 PM
To: MAPICS Mailing List
Cc: Gershen, Al
Subject: Standard Cost Variances: Material Cost


Environment: Mapics DB/Y2K (Mod 4)
PDM, IM and PCC

Hi group:

Background: We do not populate the UCDEF field for Item Type 1 (Finished
Goods) and Item Type 2 (Manufactured Components) because these fields
interfere with our Bill of Materials (BOM) created by inhouse software by
our Sales Cost Estimating Department.  If the fields were used, the BOM ends
up overstated: It shows costs related to the original raw materials and
components (purchased and manufactured lower level) and the total Standard
Cost of the manufactured this level component.

We also do no populate the ITEMBL's Standard Unit Cost (STDUC) field for
reasons which I am not aware of (and this probably contributes to the
problem described below).

Problem:  I'm glancing at a Manufacturing "Order History - Accounting Detail
Report" (AMIH34) for a simple manufactured component (its BOM consists of
one lower level Type 2 Manufactured Component) and in the BOM section of the
report, it shows the following:

Unit Cost:  $0.0000

Standard Cost:  $0.0000

Therefore, the Variance for Material Cost on the Manufacturing "Order
History Accounting Summary" screen (AMIH14) come up at $0.00.

Here are my questions:

1. How is Unit Cost and Standard Cost populated on the AMIH34 report?

I assume that the Unit Cost comes from the UCDEF field and that the Standard
Cost comes from the STDUC field....both of which we have populated at zero
for Item Types 1 and 2.

2. If I populate the STDUC field with information from PDM (the Standard,
not Current, Unit Cost), what will the result be?

It seems that I'll end up with a full cost varience because the Unit Cost
will remain at zero and Standard Cost will be correct.

3. Why doesn't Mapics populate the STDUC field automatically as part of its
PDM Standard Costing or at least offer this as an option?

My goal is to come up with correct Material Cost Variances by populating
STDUC but leaving UCDEF at zero for Item Type 1 and 2 products.

4. Can this be done?

I look forward to your useful comments and suggestions and I wish you all
(mainly to the ladies) a very nice Valentines Day.

Regards,
Al Gershen
Grants Pass, OR
aldg@mail.rvi.net





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