Comparison Between the Average Costing, Standard
Cost & Periodic Costing
Average Costing
Standard functionality in
Oracle Inventory
Management module
Average Costing is a
perpetual average cost for a
single inventory organization.
Standard Cost
Standard functionality in
Oracle Inventory
Management module
Standard Cost are
maintained by the cost
master organization and
shared by the child cost
organizations. All reports,
inquiries, and processes use
the shared costs.
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Periodic Costing
Standard functionality in
Oracle Cost Management
module
Periodic Average costing
is a period end weighted
average cost across all the
inventory organizations in a
given PAC cost group
 Comparison Between the Average Costing, Standard
Cost & Periodic Costing
Average Cost
Transactions are costed in
real-item. Most of the time,
transactions are costed in the
same order of its creation.
The cost of goods sold
determined each time a sale
occurs
Standard Cost
Moving average cost is not
maintained
Differences between
standard costs and actual
costs are recorded
as variance
The cost of goods sold
determined each time a sale
occurs
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Periodic Costing
all the cost owned
transactions are processed
first to calculate accurate
PAC item cost at the of PAC
period
The cost of goods sold
determined at the end of an
accounting period
 Comparison Between the Average Costing, Standard
Cost & Periodic Costing
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Average Costing Standard Cost Periodic Costing

average cost = Fixed Cost PWAC =

(transaction value + current (Beginning Balance
inventory value) / (transaction Qty*Previous-Period
quantity + current on-hand Acquisition Cost +Received
quantity) Qty*Acquisition Cost) /
(Beginning Balance Qty +
Received Qty)

Create accounting entries Create accounting entries Create accounting entries

(distributions) based on (distributions) based on (distributions) based on Cost
inventory organization inventory organization group category level
account account accounts
 Comparison Between the Average Costing, Standard
Cost & Periodic Costing
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Average Costing Standard Cost Periodic Costing

•Optional Transfer accounting •Optional Transfer •Transfer accounting entries

entries (distributions) to GL accounting entries (distributions) to GL per
per day (distributions) to GL per day period
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