How to: Set Up Cost Types
Chart of cost types are similar to the chart of accounts in the general ledger. You can set up the chart of cost types in the following ways:
Structure the chart of cost types similar to the income statement accounts in the general ledger chart of accounts. Then, you can transfer the general ledger chart of accounts to the chart of cost types. You can make any necessary adjustments after the transfer.
Create new chart of cost types or add new cost types to existing chart of cost types. You must create each new cost type individually.
To transfer the general ledger chart of accounts to the chart of cost types
In the Search box, enter Chart of Cost Types, and then choose the related link.
On the Actions menu, in the Functions group, choose Get Cost Types from Chart of Accounts. In the dialog box, choose the Yes button to confirm the transfer. The function uses the chart of accounts to create a chart of cost types.
The chart of cost types now contain all income statement accounts in the general ledger and include headings and subtotals. You can change the chart of cost types, as necessary. For example, you can delete duplicate existing cost types.
Important
The Register Cost Types in Chart of Accounts function updates the relationship between the chart of accounts and the chart of cost types. The No. field is filled and verified to make sure that each general ledger account is related to only one cost type. The function runs automatically before transferring general ledger entries to cost accounting.
To set up new cost types in the Chart of Cost Types window
Open the Chart of Cost Types window in edit mode.
Fill in the fields as described in the following table.
Note
You can set up and maintain cost types in either the Cost Type Card window or in the Chart of Cost Types window. In this procedure, you set up cost types in the Chart of Cost Types window.
Field Description No.
Enter the cost type number. All cost types must have a number.
Name
Enter the cost type name.
Type
Specify the purpose of the cost type. Only the cost type option indicates a cost type that you can post to. The other types are used to create totals and headings. For line types of the Total type, you must fill in the Totaling field. For line types of the End-Total type, the field is filled in automatically when you use the Indent Cost Types function.
G/L Account Range
Enter the general ledger account range.
Cost Center Code
Enter the cost center code.
Cost Object Code
Enter the cost object code.
Combine Entries
Select to set the option to allow for general ledger entries to be posted individually or posted as a combined posting for a specific day or month.
After you have created all cost types, on the Home tab, in the Process group, choose Indent Cost Types. In the dialog box, choose the Yes button.
Link the new cost type to the corresponding general ledger account.
Important
If you have entered definitions in the Totaling fields for the line type of End-Total before you run the Indent Cost Types function, then you must enter the definitions again because the function overwrites the values in all End-Total fields.
To update cost types
In the Cost Accounting Setup window, select if you want the chart of cost types to be automatically updated when the chart of accounts is changed.
In the Align G/L Account field, you can choose from the following options.
No Alignment - There is no corresponding change in the chart of cost types when you change the chart of accounts.
Automatic - A corresponding change is made in the chart of cost types when you change the chart of accounts.
Prompt - A message is displayed asking if you want to make a corresponding change in the chart of cost types when you change the chart of accounts.
See Also
Concepts
Defining the Relationship Between Cost Types and General Ledger Accounts
Defining Cost Centers and Cost Objects for Chart of Accounts
Balances Between Cost Type, Cost Center, and Cost Object
Set Up Cost Accounting
Terminology in Cost Accounting
About Cost Accounting