Actual Costing

If Use Actual Cost Price for Receipt Posting is selected together with Financial Transactions by Work Center the costs for WIP transfers are calculated using actual costs. The effective cost component structure of the end item is used to calculate the costs.

The actual value of the WIP transfers amounts is calculated by selecting all incoming financial transaction related to the operation set minus the outgoing financial transactions. The result is multiplied by the current receipt quantity divided by the total quantity received.

All costs that are not already transferred to the effective cost component structure of the end item are handled using a completion transaction. The receipt transaction with the cost on cost component level is now possible.

In Infor LN 10.4 it is possible to use Subcontracting with Material Flow in combination with actual costing.

If items with operation subcontracting with material flow is implemented, the semi-finished manufactured end items produced prior to the subcontracting operation are send to the subcontractor, the value of this subassembly item is based on the actual production order costs incurred up to the subcontracting operation.

Once the subcontracting activities are done, the work in progress is received back from the subcontractor. The work in progress received from the subcontractor is represented by means of a subassembly item with a different item code from the outgoing subassembly. In terms of value, the incoming subassembly reflects the actual production order costs up to the operation following the subcontracting operation on the production order. This includes the work in progress that was send to the subcontractor, the amount to be paid for subcontracting activities and the costs of additional materials owned by the manufacturer.

As subassemblies can be delivered from shop floor inventory through partial receipts, each time one or more subassemblies are delivered from shop floor to inventory, the appropriate portion of the actual production order costs incurred is added to the subcontracting WIP value for the outgoing subassembly.