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Material Costs

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Our company buys most of the raw materials from other subsidiaries of the
corporation we belong. Some other materials are purchased from other
vendors, which are classified as third parties. It is mandatory for us to
categorize our material costs in two components : Intercompany materials and
third party materials.

When a Cost Rollup is performed for an item, the system automatically
separates its cost in different cost components. One of them is the Material
Cost, A1. But this scheme is not adequate for our needs, since we need two
material cost components. Does anyone know if there is a way to separate
the A1 into two or more cost components?

Currently, we have our item master categorized by GL Class and category
codes, so we can differentiate the items that are bought from intercompany
vendors and from third party vendors.

I really appreciate any guidance on this matter.

Jorge Cabrera
The Premier Group


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charset=3Diso-8859-1">
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<TITLE>Material Costs</TITLE>
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<FONT SIZE=3D2 FACE=3D"Arial">Our company buys most of the raw =
materials from other subsidiaries of the corporation we belong. =
Some other materials are purchased from other vendors, which are =
classified as third parties. It is mandatory for us to categorize =
our material costs in two components : Intercompany materials and third =
party materials. </FONT></P>



<FONT SIZE=3D2 FACE=3D"Arial">When a Cost Rollup is performed for an =
item, the system automatically separates its cost in different cost =
components. One of them is the Material Cost, A1.</FONT><FONT SIZE=3D2 =
FACE=3D"Arial"> But this scheme is not adequate for our needs, =
since we need two material cost components. Does anyone know if =
there is a way to separate the A1 into two or more cost components? =
</FONT></P>



<FONT SIZE=3D2 FACE=3D"Arial">Currently, we have our item master =
categorized by GL Class and category codes, so we can differentiate the =
items that are bought from intercompany vendors and from third party =
vendors.</FONT></P>



<FONT SIZE=3D2 FACE=3D"Arial">I really appreciate any guidance on =
this matter.</FONT>
</P>



<FONT SIZE=3D2 FACE=3D"Arial">Jorge Cabrera</FONT>

<FONT SIZE=3D2 FACE=3D"Arial">The Premier Group</FONT>
</P>

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Jorge:

We had a similar requirement in defining our input material costs into imported and local material.
We considered not having an A1 cost at all but this would have upset the rest of the OneWorld system.
Our solution has been to create two additional cost components for each part (in addition to the A1 cost). These cost components start with a letter after D as A,B,C,D cost components are used by OneWorld - everything else is available for user use.
On input of cost through P30026 (We cannot import costs from purchasing as landed costs/standard costing is used), A1 component cost is updated, the secondary cost component cost is updated and a ZZZ component cost is updated with a negative amount equal to the A1 cost/secondary cost. An example:
A1 ¯ Cost 10.00
LOC --Cost 10.00 (Secondary cost component)
ZZZ --Cost -10.00.
Roll up cost will be 10.00.
With the use of AAIs we have been able to achieve our requirements using this method.

System : Sun E4500 - 6 processor - 4GB RAM, B7331 SP7.1

Neil Mackenzie
I T Manager
Smiths Manufacturing (Pty) Ltd
Tel: +27 (0) 31 7194142
Fax +27 (0) 31 7194444
e-Mail: neil.mackenzie@smiths.co.za
 
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