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Accounting for Burdened Cost

In this section, we describe the AutoAccounting functions that are related to burden cost distribution and interface to Oracle General Ledger.

Total Burdened Cost Debit/Credit

When you run the PRC: Distribute Total Burdened Cost process, Oracle Projects creates two burdened cost distribution lines for the total burdened cost. One distribution line holds the burden cost debit and the other distribution line holds the burden cost credit. Oracle Projects creates these two distributions for all expenditure items charged to projects which are defined to burden costs.

Note: Set up the Total Burdened Cost functions only if you want to account for total burdened cost for burdened cost accounting.

The Total Burden Costs Debit/Credit function consists of the following functions: Total Burdened Cost Debit and Total Burdened Cost Credit. Each of these functions consist of the following transactions:

If you want Oracle Projects to calculate burdened labor costs, you need to implement the following two transactions for the Labor Cost Account function:

Fremont Corporation uses one expense account and one asset account to record burdened cost:
· Transfer Out to Inventory (5199)
· Inventory (1200)
Fremont defines one rule to supply the Transfer Out to Inventory account code for the Total Burdened Cost Credit transaction; this rule reverses the fully burdened cost from the employee's owning organization.
Because Fremont credits the Transfer Out to Inventory account of the employee's owning organization, Fremont can use existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield for the Total Burdened Cost Credit transaction.
Fremont defines one rule to supply the Inventory account code for the Total Burdened Cost Debit transaction; this rule debits an asset account of the project-managing organization.
Because Fremont debits the Inventory account of the project-managing organization, Fremont needs to define two rules to supply values for the Company and Cost Center segments of its Accounting Flexfield for the Total Burdened Cost Debit transaction. (Fremont uses these two rules nearly as frequently as it uses the Employee Company and Employee Cost Center rules.)
Define a Rule to Determine Company Segment Value:
Name Project Company
Description Map the project-managing organization to a company
Intermediate Value Source Parameter
Parameter Name Project Organization
Segment Value Source Segment Value Lookup Set
Lookup Set Organization to Company
Define a Rule to Determine Cost Center Segment Value:
Name Project Cost Center
Description Map the project-managing organization to a cost center
Intermediate Value Source Parameter
Parameter Name Project Organization
Segment Value Source Segment Value Lookup Set
Lookup Set Organization to Cost Center
Define a Rule to Determine Account Segment Value:
Name Transfer Out to Inventory
Description Expense account used to reverse burden labor cost from the employee's owning organization.
Intermediate Value Source Constant
Constant 5199
Segment Value Source Intermediate Value
Define a Rule to Determine Account Segment Value:
Name Inventory
Description Inventory asset account records burdened labor cost incurred on a project
Intermediate Value Source Constant
Constant 1200
Segment Value Source Intermediate Value
Enable the Burdened Cost Credit Transaction and Assign Rules:
Function Name: Total Burdened Cost Credit
Transaction Name: All Burdened
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Employee Company
1 Cost Center Employee Cost Center
2 Account Transfer Out to Inventory
Enable the Burdened Cost Debit Transaction and Assign Rules:
Function Name: Total Burdened Cost Debit
Transaction Name: All Burdened
Segment Rule Pairings
Number Segment Name Rule Name
0 Company Project Company
1 Cost Center Project Cost Center
2 Account Inventory

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