Nonmanufacturing and distribution environments involve maintaining standard costs for purchased items, which includes periodically updating standard costs. Periodic updates reflect a new frozen period and the need to update standard costs for all items. These guidelines assume the use of a separate costing version to contain the next period's standard costs. Pending cost records for all items will be entered in this costing version.

1. Define the costing version for the next period by using the Costing versionsform. Guidelines for this costing version include:

   • Assign a costing type of standard costs.

   • Assign a meaningful identifier to the next period's costing version, such as 2009-STANDARD (assuming that 2009 is the next frozen period).

   • Ensure that content includes cost records.

   • Allow the entry of cost records. Do not block the entry of pending costs.

   • Allow the entry of cost records for all sites. Entering a site will limit the entry of cost records to the specified site.

   • Prevent the activation of pending costs. The status will be changed to active after pending costs have been completely and accurately defined.

   • Enter a from-date. As a general guideline, use a future date that represents the first day in the next frozen period.

   • Indicate a fallback principle of none.

2. Analyze the need to change standard costs. Use the Standard cost variance analysisreport to analyze historical purchase price variances and to suggest a new standard cost.

3. Enter item cost records within the next period's costing version by using the Item priceform. A separate cost record must be entered for each site that purchases or stocks the item. The cost should reflect the standard costs for the period. If a cost was entered incorrectly, change the pending cost for the item. A pending cost can also be deleted.

   As an alternative, you can automatically enter costs by copying cost records, which can then be maintained by using the Item priceform. Use the Copy costing versionform to copy active item cost records (for standard costs) into the next period's costing version. Employ the option to copy active costs when you have used a two-version approach to cost data updates for the current period, because active cost records will be located in more than one costing version.

   Item cost records can be selectively copied, and the copy process can be performed multiple times, to populate the next period's costing version. Existing costs can be selectively changed by a factor or amount, and existing miscellaneous charges can also be changed by a factor or amount.

4. Review item cost records within the costing version by using the Item pricesreport. Verify the completeness and accuracy of item cost records.

5. Change the blocking flag (for the next period's costing version) to allow activation of pending cost records by using the Costing version setupform.

6. Activate all pending item cost records within the next period's costing version on the first day of the next period, but not beforehand. Use the Activate pricesform, which you can access from the Costing version setupform. The pending cost records for individual items can also be activated by using the Item priceform and by clicking the Activate button.

7. Use the Costing version setupform to set the blocking flags within the next period's costing version to prevent further data maintenance.

Repeat the steps in this procedure each time that you need to enter and activate costs for a new period.