Nonmanufacturing and distribution environments involve maintaining standard costs for purchased items, which includes the scenario for updating standard costs throughout the frozen period. Updates may reflect new items, corrections, or cost changes. The guidelines assume the use of a two-version approach to standard cost updates, where one costing version contains the initially defined standard costs for the frozen period, and the second costing version contains the incremental updates. Each update will be entered as a cost record within the second costing version, and ultimately activated. An alternative solution employs a one-version approach by using the initially defined set of standard costs.

The two-version approach requires the definition of a second costing version, where the guidelines for defining this costing version include:

• Assign a costing type of standard costs.

• Assign a significant identifier for the costing version that communicates the contents, such as 2008-UPDATES.

• Ensure that content includes cost records.

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

• Indicate a fallback principle of none. The fallback principle only applies to cost calculations for manufactured items.

To correct, adjust, or update standard costs for new items, complete the following steps:

1. Use the Costing version setupform to allow the entry of cost data into the second costing version. Optionally prevent the activation of pending costs, where the activation will be allowed after pending costs have been completely and accurately defined. Optionally enter a from-date. As a general guideline, use a date that represents when you intend to activate the incremental updates. Alternatively, indicate a blank from-date as a policy in the costing version, and then enter the from-date when you enter each cost record.

2. Enter updates as item cost records within the second costing version by using the Item priceform.

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

4. Change the blocking flag to allow the activation of pending cost records within the second costing version by using the Costing version setupform.

5. Activate all pending item cost records within the second costing version by using the Activate pricesform, which you can access from the Costing versionsform. The pending cost records for individual items can also be activated by using the Item priceform and by clicking the Activatebutton.

6. Use the Costing version setupform to change the blocking flags within the second costing version to prevent further data maintenance. The blocking policies will prevent the entry of new pending costs and the activation of pending costs.