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March, 2012 Product Costing - Best Practices by Heering Ligthart

On Manufacturing Accounting

Editor's Note: There's so much to think about with product costing: the amount of detail you'll need, maintaining master data, variances… the list can go on. This article by Heering Ligthart discusses some key topics for managing Product Costing efficiently. He'll cover best practices in costing security, using "Last In" calculation, working with multiple branches, and finally recording and finding historical costs.

Introduction
I have implemented JD Edwards Manufacturing and Distribution modules at several companies and have found that there are always questions surrounding product costing setup. Cost components are essential for controllers to determine the costs for manufactured items. This raises some questions. For instance, how much detail regarding product cost do you want to keep? And how will you maintain the master data on product cost, keeping the different cost Cost components are essential for variances within boundaries and to a minimum controllers to determine the costs for to keep the costs in line with reality? manufactured items. This article highlights key topics for managing Product Costing using JDE, while keeping the costing understandable. Although the scenarios used in the article all contain a manufacturing branch with different distribution branches, most topics are applicable to distribution branches as well. While cost price programs and batches are mentioned throughout the article, they are not explained in detail. We'll cover:     Secure Costing: Look for security issues, such as where and by whom costing is updated, as well as closing "back doors" "Last in" Calculation: Use Procurement master data to support the product costing Working with Several Branches: Maintain costing by properly using batches History of Costs: Record