Job Cost Projections

Transcription

1 By: Richard L Berry, BA ACA Editor's te: The Job Cost module generates projections automatically and dynamically. Projections are required for profit recognition; actual amounts are compared with projections to compute percent complete at the detail Job chart line and also for the Job as a whole. But projections can also be used as valuable management information. They enable managers to see the projected outcome of a project without having to do complicated manual calculations. There are 17 methods of projection computation, but few users get beyond method D (the default method). There are some methods which are very useful. Method Q (Quantities), method R (Remaining Unit Rate) and the S and I combination of methods are particularly useful. In this article, Richard explains in detail, using practical examples and illustrations, how the various methods of computation work and the situations in which they might be used. Introduction The beauty of JD Edwards Job Cost is that you have the capability to calculate Job projections automatically. The thing is, there is a wide variety of projection computation methods: it takes careful study to understand the use of these projections and how they work. Very few users, in my experience, make full use of these projection computations, preferring to calculate manually outside the system. But it is worth taking some time to review these methods, just to see if you may be missing out on any benefits your organization could derive from this feature. What you ll want to take into account is that different methods are useful in different situations. For example, Method B is useful where works are subcontracted, while Method U is useful when you know the quantities to complete a project,and the unit rate to apply. Method E might be useful where the project manager has a good feel for how much cost is needed to complete the project. The key to remember is not all methods are useful for all companies. But that doesn t mean it s not worth exploring what may work for you. Even if you re game to opt out of JDE projections in favor of your own calculations, why not let the system calculate them anyway? They may provide a useful cross-check against your own manually computed projections. JDE works to compute Estimate At Completion (EAC) values. Most project managers who chose to manually compute projections normally look at Estimate To Complete (ETC) values. That is to say, they would ignore historical costs and look at how much it would cost to bring the project to a successful conclusion. JDE cannot work in this way, because a project manager would have knowledge of factors that cannot be incorporated into JDE or, perhaps, into any computer system. However, projections are required in JDE if you wish to use the automatic profit recognition program, and especially if you use the percent of cost method. Costs to date are compared with EAC cost to compute the percent complete. Accurate and prudent projections are therefore needed to calculate accurate and prudent profit figures. JDE calculates projections dynamically, starting with the revised budget. At the start of a job, the projection would be equal to the revised budget. As the job progresses and actual and committed costs are accumulated, the projections would be modified. As the job draws to a close, the projection would move closer to the actual cost until the last, when projection and actual would be identical. Projections are stored in F0902 Ledger HA. Monthly movements account for changes Copyright 2006 Klee Associates, Inc. Page 1

2 in projections. To The total projection can be viewed through the cumulative balance on the F0902 ledger HA. Projections are viewed and managed using the Job Status Inquiry (JSI). To change a projection, or a method of computation, highlight a line on the JSI and double click. You may also make changes to multiple accounts using the Job Form Exit button. The standard JDE manual is quite good on the subject of Job Cost projections;. I would recommend reading it. This article complements the JDE manual with some additional practical information and examples. Copyright 2006 Klee Associates, Inc. Page 2

3 Ledgers used in JDE Job Cost Ledger Description Upd Unit Ledger Description Upd AA Actual Amounts AU Actual Units M F% Percent Complete M FA Field Progress Amounts M FU Field Progress Units M HA Projection Amounts M HU Projection Units M IA Budget Change Amounts A IU Budget Change Units A JA Job Budget Amounts JU Job Budget Units MA Change Order Amounts MU Change Order Units PA Commitment Amounts PU Commitment Units RA Remaining Unit Rate A Figure 1: Ledgers used in JDE Job Cost Some of these ledgers may be updated manually using the Job Status Inquiry (those marked with M in Figure 1) and some of them are updated automatically (those marked with A in Figure 1). You may create your own ledgers if you wish to capture other information. I worked with one customer where they customized a forecast module, which spread forecast amounts over future periods. These forecasts differed from the projections and were kept in a separate user-defined ledger. Other standard JDE ledgers can be used in Job Cost, too. Ledger CA (Currency Amount) may also be relevant in some cases. If you create your own user-defined Budget ledger, the projection module can also use it for calculating projections. te that Ledgers that cannot be updated using the Job Cost Budget Entry program are AA, AU, CA, AZ, XA, YA, HA, HU, FA, FU, PA, PU, F%, IA and IU. Methods of computation Here is a complete list of the methods of computation: Code Description Cost Type must be blank Cost Type must not be blank A Account Force B Buyout C Cost Code Percent Complete D Default E Estimate to Complete F Forced G Forced - Budget Default I Inclusion (Used with Method S) N Projection O Override P Percent Complete Q Quantities R Revenue Unit Price S Summary (Used with Method I) T Totaling (Level of Detail) Copyright 2006 Klee Associates, Inc. Page 3

4 U Remaining Unit Rate V Revenue - Absolute Value Figure 2: Full List of Methods of Computation The Job Cost training manual has a handy Method of Computation Selection Table which is worth consulting if you are not sure which method to use; we will not reproduce it here. The training manual also includes a handy table that shows which methods update which ledger types. Method A (Account Force) Method A would be used in a situation where you want the revised budget to be equal to the actual amount. It must be used at Cost Code header accounts. That is, the Cost Type (Object) must be blank. It does not directly affect the way projections are calculated. Instead, it adjusts the revised budget at the detail level. The way that Method A works is that, at the point when a job budget is entered (ledgers JA/JU), an entry is made in ledger IA/IU, in the current period, which exactly offsets the budget. The revised budget is shown as zero, simply because there are no actual values yet. Figure 3: Budget Entry showing header account with Method A In Figure 3, you can see that the original budget has been entered and that Method A has been entered against the header account. Copyright 2006 Klee Associates, Inc. Page 4

5 Figure 4: Job Status Inquiry (Method A) showing zero Revised Budget tice, in Figure 4, that the revised budget amounts and units are zero. If we take a look at the F0902 records, as seen in Figure 5, for just one of the lines, we will see this quite clearly: F0902 Year Ledger Type BU Object Subsid. Original Budget 05 JA IA JU Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 05 IU Figure 5: Extract from F0902 showing how JA and IA offset each other and JU and IU offset each other Ledgers IA & IU are set up as budget ledgers. This means that the field Roll Original Budget to Next Year is checked. When you look at the ledger type setup for IA & IU in Figure 6, the Roll Original Budget to Next Year field has been grayed out so that it cannot be changed. This is because ledgers IA & IU are hard coded and cannot be changed or used for any other purpose. They cannot be manually updated. Copyright 2006 Klee Associates, Inc. Page 5

6 Figure 6: Budget Ledger Setup for IA If we were to enter a transaction into ledger AA/AU, we will see, as in Figure 7, that ledger IA/IU will be adjusted, and that the projected figures will be updated. Figure 7: Job Status Inquiry (Method A) showing Revised Budget equal to Actual Copyright 2006 Klee Associates, Inc. Page 6

7 Again, if we look at the F0902 shown in Figure 8, we can see how ledgers IA/IU are adjusted by the Actual amount: F0902 Year Ledger Type BU Object Subsid. Original Budget 05 JA IA JU IU AA AU HA HU Figure 8: Extract from F0902 showing how IA and IU are affected by actual amounts Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 If we look at what has happened in the F0902, we can see that ledgers IA & IU have been updated by an amount equal to the actuals. This has resulted in the revised budget being forced to be equal to the actual amount. As presented on the JSI, the revised budget is equal to the total of all the budget ledgers (in this case JA/JU and IA/IU). So Method A does not actually calculate the projected figures, it only forces the revised budget to be equal to the actual. The projection is calculated by the method at the detail line. You can see from the example in Figure 7 above, that the line for concrete ( ) has total actual and commitments of $2,000. The Revised Budget has been forced to be the same as actual: $500. Method of computation is D, so the projection is $2,000 (greater of budget or actual + commitment) You may enter actual job units and projection figures against A lines, as shown in Figure 9. Figure 9: Progress Entry (Method A) Copyright 2006 Klee Associates, Inc. Page 7

8 Method B: Buyout method This method may be used against subcontract lines when we are certain how much a line will cost, because it has been fully subcontracted. The following calculations are performed: Projection = actual + commitment If actual + commitment = zero, then projection = revised budget Percent complete = actual projection Figure 10: Job Status Inquiry (Method B) Method C (Percent Complete from Cost Code Header) This method is used against detail lines. It calculates projections using the percent complete, which must be manually entered at the header account. In most instances, this method should be used together with Method P. The rules are as follows: Percent complete for detail lines (those with MC C ) is taken from the percent complete manually entered at the Cost Code header. If the percent complete entered at the Cost Code header is less than 100%, then the projection is calculated as actual percent complete If the percent complete entered at the Cost Code header is equal to or greater than 100%, then the projection is calculated as being equal to actual. If the percent complete entered at the Cost Code header is less than the threshold percent complete entered in the Job Master, then the computation reverts to Method D. In Figure 11, the percent complete at the header has been entered as 10%. This falls below the threshold set in the Job Master at 20% (Figure 12). Since 10% is lower than the 20% threshold, the system ignores it and computes the projection using Method D (higher of actual + commitment and budget). Percent complete at the detail level is calculated as actual projection. Copyright 2006 Klee Associates, Inc. Page 8

9 Figure 11: Job Status Inquiry (Method C) Figure 12: Job Master showing Threshold % In the following month, more costs have been accumulated. The percent complete has been changed to 25%. The percent complete for all of the accounts in the Cost Code group now show (or should show) as 25% and the projection has been calculated. Copyright 2006 Klee Associates, Inc. Page 9

10 Figure 13: Job Status Inquiry (Method C) You will notice in Figure 13, that the last line ( ) has a blank percent complete, but that a projection has been computed nevertheless,using Method D. Unfortunately this has altered the example, because the total percent complete for the Cost Code is shown as 22.64% (not the 25% entered at the header). Method D (default method: higher of budget and cost + commitments) This is the simplest method to understand. In my experience, most companies use only this method, in part because most companies do not actually need sophisticated projection computations or, if they need them, they manually compute them. Method D simply compares: 1. Revised Budget 2. Actual + Commitment The higher of the two values is used as the projection. Copyright 2006 Klee Associates, Inc. Page 10

11 Figure 13: Job Status Inquiry (Method D) Method D should not be used with Revenue accounts, where the budget and actual are credit (negative) values. For Revenue accounts, use Method V. Method E: Estimate to Complete This method allows the user to enter Estimate to Complete (ETC) values for amounts and units or Estimate at Completion (EAC) values. Initially, the EAC is the same as the revised budget figures. When actual values and units are entered, no change is made to the EAC. To change the EAC, you must either revise the budget or manually enter ETC or EAC. Once the ETC or EAC is changed, the EAC for that account remains fixed; no more changes can be made. Even if the budget is revised, the EAC will not be affected. The only way that the EAC can be changed is if you manually type in the ETC or EAC again. Changes to ETC/EAC are stored in ledgers HA/HU. When an original budget is first entered for an account, the original budget amount is stored in the HA/HU ledger in the month in which the budget is entered. So if a budget were entered in January, it would update the Period 1 field (assuming January actually is Period 1). To support this entry, a G/L Transaction (F0911) is created with document type FP. This will happen whether or not you have chosen to have a projection audit trail in Job Cost. Description 1 of this type of Journal is updated with MOC= E RevenueAmt RevenueUnit. Copyright 2006 Klee Associates, Inc. Page 11

12 Projection Method of Computation E: Estimate to Complete In Job Cost Constants (Figure 14), you may uncheck the Projection Audit Trail box. This will ensure that you do not get F0911 transactions being generated in ledger HA/HU every time there is a change to projections. However, if you use Method E for an account, you will still get F0911 transactions in ledger HA/HU for that account. Figure 14: Job Cost Constants When a budget revision is entered, the revision amount and units are stored in ledger HA/HU in the period in which the revision is made. Again, a G/L Transaction is created to support this movement. Several things happen when you manually change the ETC or EAC: 1. The very first time the ETC is changed, the new projection is copied into the Original Budget field (BORG) of the HA/HU ledger. 2. The amount of the change is stored in the current period 3. A G/L transaction is created to support the change amount. Copyright 2006 Klee Associates, Inc. Page 12

13 Example: Say that we enter a budget against account for 1,000 units and $5,000 in Period 1. In Period 3, we enter actual expense of 100 units and $750. Initially, the projected figures would not change. They would remain the same as the revised budget. But let s say that, in Period 3, we manually enter ETC units of 700 and ETC amount of $4,900. Projections would be calculated by adding the actual to date together with the ETC. The new projections would be copied into the BORG field for that account. Figure 15: Method E Progress Entry The ETC or EAC may be entered using the Account Progress Entry screen as shown in Figure 15. Or they may be entered using the Job Progress Entry screen as shown in Figure 16. Copyright 2006 Klee Associates, Inc. Page 13

14 Figure 16: Method E Progress Entry by Job To give a bit more detail about the internal processes, I have shown in Figure17 how the F0902 G/L Balances are affected. F0902 Year Before Ledger Type BU Object Subsid. Original Budget 05 JA JU HA HU After 05 JA JU HA HU AA Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 05 AU Figure 17: Method E: Extract from F0902 showing how HA and HU are affected by progress entry Here we can clearly see that the new EAC has been transferred into the Original Budget (BORG) field, but that the period-by-period history development of the EAC has also been captured. When might Method E be useful? This method would be useful when the project manager has a good idea of how much effort is required to finish the job. This can be applied to labor and to materials Copyright 2006 Klee Associates, Inc. Page 14

15 Method F: Forced You may use this method if you wish to manually enter: Percent Complete Over/under quantities and amounts EAC quantities and amounts If you do not enter percent complete, the system calculates it using the normal formula actual projection. If you enter percent complete, it will be completely independent from other figures. In other words, it does not affect the calculation of EAC; you may enter practically any value, even values more than 100% or negative values(although the system will give you a warning). You may therefore enter incorrect or nonsensical values if you are not careful. Over/Under values are stored in ledgers FA and FU. If you enter over/under values, the EAC will be calculated. Similarly, if you manually change the EAC, the over/under will be adjusted. Every time you make a change an audit trail journal will be created in ledger FA or FU, document type FP with the description Field Progress Entry. This description may be overridden by text that you can enter in the Processing Options for P (Account Progress Entry). Projected Final values cannot be less than actual values. Using the JSI, as seen in Figure 18, you can create a column based on over/under values. Figure 18: Job Status Inquiry (Method F) Copyright 2006 Klee Associates, Inc. Page 15

16 Figure 19: Job Status Inquiry (Method F) Progress Entry In Figure 19, I ve made a further change to the over/under amount. The original budget was $600. I previously expected to be over budget by $100. w I expect to be over by a further $80, thus a total of $180 over budget. After I click OK, the Projected Final will display as $680. A journal will be created for $80 in ledger FA, document type FP. F0902 Year Ledger Type BU Object Subsid. Original Budget 05 JA HA FA Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 05 AA Figure 20: Method F: Extract from F0902 showing how HA and FA are affected by progress entry In F0902, as shown in Figure 20, the forced amount is stored in ledger FA. Ledger HA has also been updated. You ll find Method F is useful for instances where you ve calculated your own EAC, and simply need to type it in. Copyright 2006 Klee Associates, Inc. Page 16

17 Method G: Forced Budget Default This method is similar to Method F, but it is used for negative amounts, usually revenue accounts. The projected final values can be less than zero The projected final value can be less than the actual value. If you do not manually enter projected final values, projected final will be equal to revised budget. Method N: Projection Method N is used at summary level accounts, or for accounts where you do not want any projection at all. You may still enter budgets and transactions, but this method will not compute projections, nor can you manually enter projections. Method O: Override This method is flexible, depending on the information that you enter. Assuming that you have budgeted amounts and quantities, Method O calculates projections differently depending on whether you have actual information, manually entered percentage of completion, or projected over/under amounts and quantities. The Job Cost manual contains a good flowchart, which illustrates how the system chooses the appropriate method of computation. I will not reproduce it in its entirety here, but Figure 21 illustrates it in part. Available Data Budget Actual PC +/- Method Projection Units $ Units $ Units $ Units $ % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts Q Q F F D D Copyright 2006 Klee Associates, Inc. Page 17

18 Available Data Budget Actual PC +/- Method Projection % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts % Complete actual units actual amounts +/- units +/- amounts Units $ Units $ Units $ Units $ F P P F F P Figure 21: Method O: Example showing how projections are computed Figure 22: Job Status Inquiry (Method O) Copyright 2006 Klee Associates, Inc. Page 18

19 Methods I and S (Include and Summary) These two methods are used together. Method I is used with detail accounts and Method S with header accounts. There must be one Method S line to one or more Method I lines, and they must all share the same cost code. The Method S line should logically be at a higher level of detail, but it will still work if it is at the same level as the Method I lines. Budget, Actual and Commitment amounts are put at the Detail level (Method I lines). You cannot enter budgets against S lines; projections are computed against S lines using the same logic as Method O. In the manual, JDE has put a strong warning against making excessive use of these methods, including some computations to support this. The reason is that projections are recomputed every time you make an adjustment to the budget, when you enter a new PO that affects commitments, and when you post journals. All of these processes would be significantly slowed if the system has to also compute projections at the header account. That being said, you should use extreme prudence in using Methods S and I. Figure 23 is a simple example of how the total of the budget for a group of accounts is compared to the total of the actual. The actual is higher than the budget for the three lines with Method I. The fourth detail line is not included in the calculation, because it uses Method D. Figure 23: Job Status Inquiry (Methods S and I) Copyright 2006 Klee Associates, Inc. Page 19

20 Method P (Percent Complete) Method P allows you to manually enter a Percent Complete. This percentage is supposed to represent the percent of physical completion of a particular activity or Cost Code. Cost Projections are computed using this percentage. Percentage of physical completion does not usually match the progression of costs, but it might work for Expense activities where costs accrue evenly in line with physical completion. This method works as follows: You may enter Percent Complete at header accounts or detail accounts Like Method C, the percentage you enter will be compared with the threshold percentage you entered in the Job Master. If your percentage is lower than the threshold, then projections will be computed like Method D (the default method) If your percentage is higher than the threshold, the projection will be computed as: Actual Percentage = Projection If you do not enter anything, the system will automatically compute the percent complete for display. The system calculated percent is not stored, it is only computed for display. The manually entered percent is stored in ledger F%. If you enter more than 100%, the system will give you a warning, but the projection will be the same as the actual. Figure 24: Method P Progress Entry by Job In Figure 24, I have manually entered percentages against four of the accounts. When you view the Job Status Inquiry, as seen in Figure 25, you can see the effect. Copyright 2006 Klee Associates, Inc. Page 20

21 Figure 25: Job Status Inquiry (Method P) Expense 1: the percent is lower than the threshold, so the projection is computed using a simple comparison of the budget with the actual + commitment (Method D) Expense 2: the projection is calculated using the formula. Expense 3: the percentage was entered as 100%, so the line is considered complete and the projection is equal to the actual to date. Expense 4: I did not enter any percentage, so the system has computed it using actual and budget figures. The Projection is computed using Method D. Expense 5: I entered a value more than 100%, but for practical purposes this has been considered as 100%. You cannot very well be more than 100% physically complete on an activity. If you think that you are more than 100% complete on costs, and you are expecting some credit to come in, to eventually reduce your costs, then you should use a different method (such as F ) to manually adjust you projection downwards. Method Q (Quantities) The JDE manual is quite unclear on how this method works.,therefore I have rephrased and summarized the rules as follows, hopefully offering some clarity over the manual. You may use Method Q for both header and detail accounts where progress is measured by units completed. You can enter projected final quantity, over or under projected quantity, and actual quantity. The following conditions apply when you choose this method of computation: Projected final units are calculated the same as they are when you use the forced method (Method F). Projected final amounts depend on percent complete. The system calculates the percent complete as follows: Actual Units Projected Final Units x 100 Copyright 2006 Klee Associates, Inc. Page 21

22 This calculation is not stored in the F% ledger. After the system determines whether the percent complete is 100, it applies the following calculations as appropriate: If the Percent Complete is 100: If the percent complete is 100 and the actual amount is not zero, the projected final amount is the actual amount. If the percent complete is 100 and the actual amount is zero, the projected final amount is equal to the revised budget. If the Percent Complete is Less Than 100: If the percent complete is less than 100, but greater than the threshold percent complete, and the actual amount is not zero, then: projected final amount = actual amount/percent complete If the percent complete is less than 100 and if the actual amount is zero, then the projected final amount is equal to the revised budget. Figure 26: Job Status Inquiry (Method Q) Method R (Revenue Unit Price) Method R must be used at Cost Code header accounts. Cost Type must be blank. The theory of this method is that the projected final figures are not immediately affected. Instead, like Method A, Copyright 2006 Klee Associates, Inc. Page 22

23 an entry is made in ledgers IA /IU to alter the budget units and amounts of detail lines. Method R may be used where the budget for a Cost Code may be flexible depending on the contracted quantity. If we are initially contracted to deliver a certain basic quantity, our budget may be based on that initial quantity. There may be a chance that the quantity could be increased, so our budget should increase proportionally. Method R would automatically inflate our budget depending on the revised quantities. Budget increases are computed, but not decreases. The method should work when we make changes to the EAC Units. The system computes the percentage increase of the EAC over the revised budget, and applies that percentage increase to the detail lines. Ledgers JA/JU are not affected by this. The changes to detail budgets are stored in ledgers IA/IU. JA/JU and IA/IU are added together and presented as the revised budget. That is the theory, anyway. I have not been able to get the calculation to work as it is described in the manual. I have logged a case on this issue with Oracle. If anyone has tried to use this method and has found the gotchas, please share your information. Projections are calculated at the detail level using whatever method of computation you set. Again, Method R does not directly affect projections. Instead, it affects projections in a roundabout way by first changing the revised budget. Method T (Total) Method T must be used at Cost Code header accounts where subtotals are shown on inquiries and reports. Cost Type must be blank. Projections are calculated for Amounts and Units, but the calculation of Amounts projections can only be based on budgets. In the calculation of Units projections, the following rules apply: If over/under units are zero, projections are calculated as they are for Method D; that is, using budgeted units and actual units. If over/under units are not zero, projections are calculated as revised budget + over/under units. Method U (Remaining Unit Rate) Method U allows you to enter a remaining unit rate against a detailed line and the remaining units at the related header account level (to use the words in the manual). The related header account is the higher level account with a cost code, but no cost type. You may enter a unit rate against the detail line, but if you do not enter the remaining units in the header, the unit rate will not be used. The logic of Method U is that if we know how many units are required to finish a job, then we can work out how much it will cost to finish, using a remaining unit rate. This rate may be typed in, or it may be assumed from the actual average unit rate to date. This method could be applied to any type of cost. It could apply to Expense, for example: Cost Code Cost Type Description Actual Units Actual Values ETC Units Remaining Unit Rate ETC Values EAC Units EAC Values 015 Phase T rmal Expense U Burden U In this example you can see that: 1. The ETC Units are multiplied by the remaining unit rate to arrive at the ETC value. 2. This ETC value is added to the actual value to arrive at the EAC value. 3. The EAC value is divided by the actual unit rate to arrive at the EAC units. M C Copyright 2006 Klee Associates, Inc. Page 23

24 I am not sure that the final step, the step where EAC units are calculated, is quite logical. But I would welcome any feedback from users who feel that it is correct. The figure in the EAC units in the header account should be ignored. This method of calculating the projection could apply to costs other than Expense such as subcontracts or materials, where we use uniform quantities of similar material. The calculation ground rules may be expressed as follows: EAC amount = actual amount + ETC amount o If you manually type in a remaining unit rate, the ETC amount = ETC units (from the header account) x the remaining unit rate you typed in. o If you do not type in a remaining unit rate, then the ETC amount is calculated as ETC units x the greater of budget unit rate or actual unit rate. If you do not type in a remaining unit rate and the system is unable to work out the budget unit rate or actual unit rate, then it resorts to Method D to compute EAC. If actual amount + commitment amount is greater than the computed EAC amount, then actual + commitment is used as the EAC amount. EAC units are calculated as follows: If there are actual unit values, and if the system is able to work out the actual unit rate, then EAC units = EAC amount / actual unit rate. Actual unit rate is actual amount / actual units. If there are actual unit values, but the system is not able to work out the actual unit rate, the EAC units are zero. If there are no actual units, the EAC units are calculated using method D This is a difficult method to understand. I have prepared an example below, which shows all the possible combinations, illustrating how the system behaves. I don t expect you to pore over this chart, but you may find it helpful as a reference. Cost Cost Revised Budget Revised Budget Actual Actual Remaining Estimate At Estimate At M L P U Code Type Account Description Amt Unit Amount Units ETC ETC Units Unit Rate Comp. Amt Comp. Unit C D E M 015 Phase T 3 B Expense U Expense Type 1 1,000 1,000 1,000 U Expense Type U Expense Type 3 1, , , U Expense Type U Expense Type 5 1, ,000 U Expense Type U Expense Type 7 1, , U Expense Type U Expense Type 9 1, , ,000 U Expense Type U Expense Type 11 1, , ,000 U Expense Type U Expense Type 13 1, , U Expense Type U Expense Type 15 1, , U Expense Type U Expense Type 17 1, U Expense Type U Expense Type 19 1, U Expense Type ,300 U 9 Copyright 2006 Klee Associates, Inc. Page 24

25 Cost Cost Revised Budget Revised Budget Actual Actual Remaining Estimate At Estimate At M L Code Type Account Description Amt Unit Amount Units ETC ETC Units Unit Rate Comp. Amt Comp. Unit C D Expense Type 21 1, ,300 U Expense Type , U Expense Type 23 1, , U Expense Type U Expense Type 25 1, U Expense Type U Expense Type 27 1, U Expense Type , U Expense Type 29 1, , U Expense Type , U Expense Type 31 1, , U Expense 16,000 3,200 6,400 1,600 20,800 2, ,200 3,600 T Phase 15 16,000 3,200 6,400 1,600 20,800-1, , T 3 Total: 16,000 3,200 6,400 1,600 20,800 2, ,200 3,900 T 1 P E U M Conclusion It s very likely that only a minority of users will go beyond the basic methods such as D, V, N and F. But for some of you, the summaries of the remaining methods may, indeed, be just what your company needs. Richard L. Berry, BA ACA, is a qualified accountant, and for the last 15 years he has been implementing JDE EnterpriseOne and World software. Richard specializes in the Real Estate and Construction industries, Professional Services, and Financials. Richard currently does training and implementation projects. Richard.Berry@ERPtips.com The use of JDE is granted to Klee Associates, Inc. by permission from J.D. Edwards World Source Company. The information on this Website and in our publications is the copyrighted work of Klee Associates, Inc. and is owned by Klee Associates, Inc. NO WARRANTY: This documentation is delivered as is, and Klee Associates, Inc. makes no warranty as to its accuracy or use. Any use of this documentation is at the risk of the user. Although we make every good faith effort to ensure accuracy, this document may include technical or other inaccuracies or typographical errors. Klee Associates, Inc. reserves the right to make changes without prior notice. NO AFFILIATION: Klee Associates, Inc. and this publication are not affiliated with or endorsed by J.D. Edwards & Company. J.D. Edwards software referenced on this site is furnished under license agreements between J.D. Edwards & Company and their customers and can be used only within the terms of such agreements. J.D. Edwards is a registered trademark of J.D. Edwards & Company. JDE and OneWorld are registered trademarks of J.D. Edwards World Source Company. WorldSoftware is a trademark of J.D. Edwards World Source Company. Klee Associates, Inc. and this publication are not affiliated with or endorsed by PeopleSoft, Inc. PeopleSoft, the PeopleSoft logo, PeopleTools, PS/nVision, PeopleCode, PeopleBooks, PeopleSoft EnterpriseOne, and PeopleSoft World are registered trademarks of PeopleSoft, Inc. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Klee Associates, Inc., is not affiliated with or endorsed by Oracle Corporation. All other company and product names used herein may be trademarks or registered trademarks of their respective owners. Copyright 2006 Klee Associates, Inc. Page 25