Data Processing

The calculation for Standard Cost against PO Receipt and Standard Cost against PO Voucher Cost for retrieving received amount and vouchered amount follows several logic.

Standard Cost against PO Receipt

For each PO line receipt that meets the selection criteria, the following logic occurs:

• Actual Raw Material Received/Accepted Amount will be retrieved in functional currency under the following conditions:
  • If Inventory Recognition Point = Receipt
    • Costpoint retrieves actual received quantities from receiving and QC inspection for a particular PO/line=Raw Material Received quantity-Rejected Replace quantity – Rejected Credit Due quantity.  If there are multiple rows for the same PO line (as when receipt lines are split into multiple locations), Costpoint sums up the amounts, in addition to summing up values from different receipts for the same PO/line.
      Note: Receipt or inspection with a payment disposition of Pay does not decrease the received quantity used in calculating PPV.
    • Costpoint retrieves actual quantities from Vendor Returns = Quantity returned with rejection disposition of Rejected Replace or Rejected Credit Due. If there are multiple vendor returns, all values are summed up.
      Note: Receipt or inspection with a payment disposition of Pay does not decrease the received quantity used in calculating PPV.
    • Actual received quantity for PPV = (a) - (b)
    • Actual received amount (direct cost) for PPV=(c) x PO line gross unit cost amount.

      Example:

      PO line unit cost = $15,

      Receiving and Inspection: Received Qty = 20, Rej Rep = 3, Rej Cr = 2, Rej Pay = 1

      Vendor Returns: Returned with Rej Rep or Rej Cr = 4

      Total Received Amount = $15 x (20-3-2-4) = $15 x 11 = $165

  • If Inventory Recognition Point = Acceptance
    • Costpoint retrieves actual accepted quantities from Receiving and QC Inspection for a particular PO/line = Raw Material Accepted quantity + Rejected Pay quantity.  If there are multiple rows for the same PO line (as when receipt lines are split into multiple locations), Costpoint sums up the amounts, in addition to summing up values from different receipts for the same PO/line.  
      Note: Receipt or inspection with a payment disposition of Repair/Replace or Credit Due does not decrease the accepted quantity used in calculating PPV.
    • Costpoint retrieves actual accepted quantities from Vendor Returns = Quantity returned with rejection disposition of Rejected Replace or Rejected Credit Due.  If there are multiple vendor returns, all values are summed up.
      Note: Vendor return with a payment disposition of Pay does not decrease the accepted quantity used in calculating PPV.
    • Actual Accepted Qty for PPV = (a) - (b)
    • Actual Accepted Amount (direct cost) for PPV = (c) x PO_LN.GROSS_UNIT_CST_AMT

      Example:

      PO line unit cost = $15,

      Received Qty = 20

      Receiving and Inspection: Accepted Qty = 14, Rej Rep = 3, Rej Cr = 2, Rej Pay = 1

      Vendor Returns: Returned with Rej Rep or Rej Cr = 4

      Total Accepted Amount = $15 x (14 + 1 - 4) = $15 x 11 = $165

      Alternate Scenario

      Partially inspected with Undispositioned Qty = 5

      Receiving and Inspection: Accepted Qty = 9, Rej Rep = 3, Rej Cr = 2, Rej Pay = 1

      Vendor Returns: Returned with Rej Rep or Rej Cr = 4

      Total Accepted Amount = $15 x (9 + 1 - 4) = $15 x 6 = $90

• Actual raw material burden amount will be calculated under the following conditions; If Burden Raw Material at Receipt is selected, Costpoint retrieves the current inventory burden rate using the fiscal year and burden rate source selected, either Actual or Target, along with the account/organization corresponding to the PO line inventory abbreviation.
  • If Inventory Recognition Point = Receipt

    Costpoint multiples the Received Amount from (1 i d) by this Burden Rate to get the Raw Material Burden Amount.

    Example:

    Burden Rate = 20%,

    Raw Material Burden Amount = $165 x 0.20 = $33

  • If Inventory Recognition Point=Acceptance

    Costpoint multiplies the (Accepted + Rej Pay) Amount from (1 ii d) by this Burden Rate to get the Raw Material Burden Amount.

    Example:

    Burden Rate = 20%,

    Raw Material Burden Amount = $165 x 0.20 = $33

    Alternate Scenario – partially inspected with Undispositioned Qty = 5

    Raw Material Burden Amount = $90 x 0.20 = $18

• Current Standard Material Direct Unit Cost and Standard Material Burden Unit Cost based on the Standard Cost Valuation method for the project will be retrieved.

  Example:

  Standard Material Direct Unit Cost = $10,

  Standard Material Burden Unit Cost = $1

• Standard Raw Material Received/Accepted Amount will be calculated under the following conditions:
  • If Inventory Recognition Point = Receipt

    Costpoint calculates the Standard Raw Material Received Amount for that receipt line based on Received Qty for PPV as calculated in (1 i c) above, multiplied by the Standard Material Direct Unit Cost from (3) above. This is the standard cost of the Raw Material received against the PO line.

    Example:

    Raw Material Received Amount (Standard) = 11 x $10 = $110

  • If Inventory Recognition Point = Acceptance

    Costpoint calculates the Standard Raw Material Accepted Amount for that receipt line based on Accepted Qty for PPV as calculated in (1 ii c) above, multiplied by the Standard Material Direct Unit Cost from (3) above. This is the standard cost of the Raw Material accepted against the PO line.

    Example:

    Raw Material Accepted + Rej Pay Amount (Standard) = 11 x $10 = $110

    Alternate Scenario – partially inspected with Undispositioned Qty = 5

    Raw Material Accepted + Rej Pay Amount (Standard) = 6 x $10 = $60

• Standard Raw Material Received/Accepted Burden Amount will be calculated under the following conditions:
  • If Inventory Recognition Point = Receipt

    Costpoint calculates the Standard raw material burden amount for that receipt line based on Received Qty for PPV as calculated in (1 i c) above, multiplied by the Standard Material Burden Unit Cost from (3) above.  This is the standard cost of the Raw Material Burden Amount received against the PO line.

    Example:

    Raw Material Burden Amount (Standard) = 11 x $1 = $11

  • If Inventory Recognition Point = Acceptance

    Costpoint calculates the Standard raw material burden amount for that receipt line based on Accepted Qty for PPV as calculated in (1 ii c) above, multiplied by the Standard Material Burden Unit Cost from (3) above.  This is the standard cost of the Raw Material Burden Amount accepted against the PO line.

    Example:

    Raw Material Accepted + Rej Pay Burden Amount (Standard) = 11 x $1 = $11

    Alternate Scenario – partially inspected with Undispositioned Qty = 5

    Raw Material Accepted + Rej Pay Amount (Standard) = 6 x $1 = $6

• Purchase price variance amount of the material direct cost will be calculated under the following conditions:  
  • If Inventory Recognition Point = Receipt

    Raw Material Purchase Price Variance = (4 i) – (1 i).

    Example:

    RM Purchase Price Variance = $110 - $165 = -$55

  • If Inventory Recognition Point = Acceptance

    Raw Material Purchase Price Variance = (4 ii) – (1 ii).

    Example:

    RM Purchase Price Variance = $110 - $165 = -$55

    Alternate Scenario – partially inspected with Undispositioned Qty = 5

    RM Purchase Price Variance = $60 - $90 = - $30

• Purchase price variance amount of the material burden cost will be calculated under the following conditions:
  • If Inventory Recognition Point = Receipt

    Raw Material Burden Variance = (5 i) – (2 i).

    Example:

    RM Burden Variance = $11 - $33 = -$22

  • If Inventory Recognition Point=Acceptance

    Raw Material Burden Variance = (5 ii) – (2 ii).

    Example:

    RM Burden Variance = $11 - $33 = -$22

    Alternate Scenario – partially inspected with Undispositioned Qty = 5

    RM Burden Variance = $6 - $18 = -$12

• Multiple rows are inserted into the temporary variance work tables and these rows consist of the following:
  • Raw Material Contra account/organization for the total variance amount, which is the sum of the direct and burden variance amounts.
  • Raw Material Purchase Price Variance account/org (and project, if account requires a project) for the Direct Material variance amount.
  • Raw Material Burden Variance account/org for the Material Burden variance amount.
• The following are examples of journal entry for negative and positive variance:
  • Negative variance

    Debit: Material Purchase Price Variance and/or Raw Material Burden Variance

    Credit: Raw Material Contra

    Example:

    Debit: $50 (Material PPV)

    Debit: $20 (RM Burden Variance)

    Credit: $70 (RM Contra)

  • Positive variance

    Debit: Raw Material Contra

    Credit: Material Purchase Price Variance and/or Raw Material Burden Variance

Standard Cost against PO Voucher Cost

For each PO line receipt that meets the selection criteria, the following logic occurs:

• Vouchered Amount (Actual) in functional currency from posted and unposted vouchers associated with the PO line will be retrieved. This is the invoice amount for the material (direct cost) received against the PO line, based on actual unit cost from the voucher line.

  Example:

  Voucher line unit cost = $17,

  Voucher Qty = 10

  Total Vouchered Amount = $170

• If Burden Raw Material at Receipt is selected, retrieve the current inventory burden rate using the Fiscal Year and Burden Rate Source selected on the screen – Actual or Target, along with account/organization corresponding to the PO line inventory abbreviation.  Multiply the vouchered amount from (1) by this Burden Rate to get the Raw Material Burden Amount.

  Example:

  Burden Rate = 20%,

  Raw Material Burden Amount = $170 x 0.20 = $34

• The current Standard Material Direct Unit Cost and Standard Material Burden Unit Cost based on the Standard Cost Valuation method for the project will be retrieved.

  Example:

  Standard Material Direct Unit Cost = $10,

  Standard Material Burden Unit Cost = $1

• Raw Material vouchered amount (Standard) for the receipt line based on vouchered quantity and Standard Material Direct Unit Cost * Std Material Direct Unit Cost will be calculated.  This is the standard cost of the Raw Material vouchered against the PO line.

  Example:

  Raw Material Vouchered Amount (Standard) = 10 x $10 = $100

• Raw Material Burden Amount (Standard) for the voucher line based on vouchered Qty and Standard Material Burden Unit Cost * Std Material Burden Unit Cost will be calculated.  This is the standard cost of the Raw Material Burden Amount vouchered against the PO line.

  Example:

  Raw Material Burden Amount (Standard) = 10 x $1 = $10

• Raw Material Purchase Price Variance = (#4) – (#1).  This is the PPV amount of the material direct cost.

  Example:

  RM Purchase Price Variance = $100 - $170 = -$70

• Raw Material Burden Variance = (#5) – (#2).  This is the PPV amount of the material burden cost.

  Example:

  RM Burden Variance = $10 - $34 = -$24

• Multiple rows are inserted into the temporary variance work tables, and these rows consist of the following:
  • Raw Material Contra account/organization for the total variance amount, which is the sum of the direct and burden variance amounts.
  • Raw Material Purchase Price Variance account/organization (and project, if account requires a project) for the Direct Material variance amount.
  • Raw Material Burden Variance account/organization for the Material Burden variance amount.
• The following are examples of journal entry for negative and positive variance:
  • Negative variance

    Debit: Material Purchase Price Variance and/or Raw Material Burden Variance

    Credit: Raw Material Contra

    Example:

    Debit: $70 (Material PPV)

    Debit: $24 (RM Burden Variance)

    Credit: $94 (RM Contra)

  • Positive variance

    Debit: Raw Material Contra

    Credit: Material Purchase Price Variance and/or Raw Material Burden Variance