Abstract: Embodiments of the present invention are directed to a method and system for determining an absorption costing sequence for items in a business operation. More specifically, embodiments provide an efficient mechanism for sequencing items for absorption costing, thereby also improving the efficiency of subsequent absorption costing mechanisms by reducing the number of sequencing operations performed during costing. In one embodiment, an initial hierarchy is created from a bill of materials (BOM) including items for which an absorption cost will be calculated. Thereafter, an iterative method is performed to modify the initial hierarchy and reposition each parent item at a level above all of the children items corresponding to the parent item. An absorption processing sequence for the items is then determined from the modified hierarchy. As such, all items may be efficiently repositioned before absorption costing is performed.

Abstract: Embodiments of the present invention are directed to a method for determining absorption costs for transfers between a plurality of cost groups. In one embodiment, a transferable item is identified. A plurality of cost group sets among which the transferable item is transferred is then defined. Then, a processing sequence of the plurality of cost group sets is determined. An iterative process for determining the cost of transfers between the plurality of cost groups is performed based upon the processing sequence.

Abstract: Embodiments of the present invention are directed to a method for sequencing cost calculation. In one embodiment a processing sequence, comprising a plurality of hierarchy levels, is created for a plurality of cost groups. The processing sequence is used in an iterative process for calculating the cost of an item of the plurality of cost groups. In embodiments of the present invention, the iterative process is repeated until the costs of a plurality of items of the plurality of cost groups have been calculated.

Abstract: Embodiments of the present invention are directed to a computer-implemented method for determining absorption costs for transfers between a plurality of cost groups of a business operation. In one embodiment, a processing sequence for the plurality of cost groups is determined. For iteration (n) where n>1, a periodic moving average cost of a transferable item is then calculated for each of the plurality of cost groups according to the processing sequence, where the transferable item is to be transferred between the plurality of cost groups. A difference between the periodic moving average cost calculated in iteration (n) for each of the plurality of cost groups and a periodic moving average cost calculated in iteration (n?1) for each of the plurality of cost groups is then calculated. The steps of calculating the periodic moving average cost and calculating the difference are then repeated until the difference is within a specified tolerance.