Standard Cost - Behind the Scenes

High Level Illustratation of How Standard Cost Impacts the Shop Floor Control Process

• Standard cost is comprised of two key tables:  the cost ledger (F4105) and the cost components table (F30026)
• The cost components table contains the material, labor, outside processing, over head and extras components that make up the standard cost.  This table also contains both the simulated and frozen values for these components.
• The cost ledger table contains the sum total of these components.
• Did you know that shop floor control transactions such as material issues and work order completions hit the cardex with the standard (07) cost in the cost ledger (F4105) while the journal entries that are written for these transactions are updated with the cost from the cost components (F30026) table?
• How can this impact you?
• If these two tables get out of sync, then it can cause an integrity issue between the Cardex (F4111) and the General Ledger (F0911) making it very difficult to reconcile inventory at month end.
• What can you do to prevent this?
• Never update the standard (07) cost in the cost ledger (F4105) manually.  Always use the simulated and frozen cost programs UBE's to update the standard cost.
• There is a processing option that can secure this field from being updated manually.

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