About profit centers assignment in Material Master

Hi Frnds,
Have a doubt to clarify. As far as assigning the (Cost centers and) Profit  Centers in Material Master (MM01/MM02 ) is concerned, when we look at the costing views, there we have an option only to enter a Profit Center and not a Cost Center. Can anyone suggest to me in this regards.
My doubt is: When we purchase a Raw material/  Semi finished (in short any material), it is a cost incurred to produce a Finished product, which means this has to hit some cost center, first.
And above all when a PO etc from MM are made, there the purchasing clerk punches the RELEVANT COST CENTERS, then:
what is the use of defaulting Profit center in the material master,(without actually defaulting both cost and profit centers in costing views of MM).
(ii) when a cost object (profit center) is being defaulted, why not cost center?
Coz, primarily we need to know the cost in purchasing the material, then add up all costs and OH and then arrive at a selling price, thereby arriving at PROFIT which is where profit center is highly useful.
Plz suggest
regards
sandhya

Hi,
To clarify your doubts see my response below:
1) Only Costs can be assigned to Cost Centres. i.e.Balance Sheet items cannot be assigned to Cost Centres.
2) On the other hand Balance Sheet items can be assigned to Profit Centres.
When you purchase a Raw material or Intermediate it is not a Cost at the point of Purchase but it is only a Cost at the time of Consumption, if the same is going to be inventorised. In this case it cannot be assigned to a Cost Centre as the Inventory Account which is a Balance Sheet Account is debited in FI.
Only when the Material is issued to the Production line for manufacture of a Finished product, the Cost centre will be manually assigned. Further, you cannot assign a default Cost Centre to a material , as the material can be issued & consumed by any Cost centre and thus the Cost centre will be assigned at the time of issue.
If you purchase a material and if the same is not going to be inventorised but it is a consumable material, it is assigned to a Cost Centre as the time of purchase and it will be debited to a P&L account in FI. The Cost Centre can be defaulted from the Purchase Requisition or the Purchase Order as the case maybe.
Profit centres are defaulted in the Material master, as we need to generate Profit Centre wise Financial statements and the Inventories need to be posted to Profit Centres to generate Financial statements.
Hope this clarifies your doubts.
Regards,
Assign points if useful.

Similar Messages

  • Profit Center Assignment on material master

    Hi,
    We have not assigned profit centers on materials and there are line items that are going to unassigned or dummy
    We are into utility industry. We have 3 Profit centers Headquarters, Water Operation and Power Operation.
    We have spare parts and other materials which are used for maintaining equipment or service orders in water operation and also power operation.
    So to which profit center we need to assign these materials which are procured and used for water operation and power operation.
    Just not sure which of the 2 profit centers we need to assign the materials to.
    Thanks,
    Rajan.

    Hi,
    In standard you can assign one profit center in material master. But you can maintain different profit centers for same material but maintained in different plant.
    In Finished goods case you can set Profit center substitution in 0KEM.
    Hope this clarifies your doubt.
    Regards,
    Sany..

  • Restriction of Profit Centre assignment in Material Master

    Hi folks!!
    We have been using two different profit centres number ranges in material master, one with only numbers and the other one with alphabet sufix.
    Now we want to stop material master creator from assigning profit centre with alphabet sufix in material master.
    Please help how to do it

    You can try using the Badi
    BADI_MATERIAL_REF - Addition of customer-defined default data for material
    for writting the logic . You can restric both alpha numeric and numeric also here .
    -Hari.

  • Use of field "design documents assigned" in material master

    hi,
    kindly help me to use the field "design documents assigned" in material master. whenever i creat material master (MM01) in basic data2 view this field comes with grey/black No Link indicator. how to use this and for what .
    regards
    roshan s.

    Hi Roshan,
    Insted of using this field u can assign Document directly to the Additional Data tab.
    TO attach the document to Material Master go to Additional data ---> Document data, assign Document.
    You can confirm it by pressing F1 key by selecting that Field.
    Regards,
    Dhaval
    Edited by: Dhaval Choksi on Jul 10, 2008 3:26 PM

  • Profit Centre on a Material Master

    Hi,
    I have a question, i hope you can help!
    Is it possible to have multiple profit centres on a material master? or do you have to extend the material master to another plant first?
    Many thanks
    Mark.
    Edited by: Frankie Summerbell on Jan 26, 2011 5:32 PM

    Is it possible to have multiple profit centres on a material master?
    No it is not possible to have multiple Profit center for a single material master, only one can be maintained either of 3 views
    A. Costing 1
    B. Sales
    c. Plant/storage location
    or do you have to extend the material master to another plant first?
    You can extend Material master to another plant and their you can add new profit center, if the profitability is at Plant level.Which is standard and widely used in business.

  • Remove Sales Org & Distribution Channel assigned in Material Master

    Hi,
    Is it possible to remove Sales Org & Distribution Channel assigned in Material Master. This is a newly created material I looked at MM06 to see if this assignment can be removed without setting the material for deletion. Any suggestions welcome.
    Thanks.

    the only way to get rit of existing  data is to set a deletion indicator and subsequently run archiving.
    In your case go to MM06, enter material number, sales org and distribution channel and set then the deletion indicator at this level only.
    Then go to SARA object MM_MATNR and run archiving.
    Archiving is usually a process, not just a sequence of transactions. Archiving requires customizing, and certainly the most recent OSS notes for the archiving object (this can be extremly many if your hotpackage implementation was long ago).
    this is especially needed to archive only certain organisation levels, as this functionality came with OSS notes

  • Profit center assignment to material

    Hi!
    I have divided my profit center hierarchy in such a way - that I could easily prepare a COS profit and loss statement using them. Basically I have such profit centers like:
    - Profit on sale of Goods
    - Profit on sale of Materials
    - Profit on sale of Service
    - Costs of Production
    - Other costs of sales
    - Costs of Administration
    As you can see I didn't reflect in this hierarchy an organization structure.
    I was wondering which profit center could be used for Material master assignment... Maybe you could help me - cause I didn't have much in common with MM before.
    I know that for sales order there has to be assigned one of:
    - Profit on sale of Goods
    - Profit on sale of Materials
    - Profit on sale of Service
    But I don't know whether it is OK to use them for materials master assignment. Can you suggest me some solution?
    Best wishes,
    Karol

    Hi,
    I think you can assign the following:
    Costs of Production
    Profit on sale of Materials
    Hope this helps.
    Please assign points as a way to say thanks.
    Regards,

  • Account Assignment from Material Master or Goods Receipt Document..

    We are on ECC 6.0 instance.
    For Vendor Cash Discounts we have all the postings going to a default cost center set up as the default account assignment in the cost element master. Because of the default cost center, the  postings are going to the profit center on the default cost center. But the segment getting populated at the line item level is not in line with the segment on the default PC.
    This segment is actually the one which is in line with the Profit center in the account assignment on Goods Receipt/Material document or the PC on the Material Master.
    Can someone please clarify where this segment would be coming from - from the material master or from the good receipt aka material document?
    Edited by: Pete on Jul 22, 2009 3:51 PM

    Hi,
    In material master you have assigned a profit center and all good movements will post to profit center,which is assigned to materials.in profit center you have assigned a SEGMENT.so automatically all profit center postings will post to SEGMENT.
    Hope this helps you.
    Thanks,
    Anusha

  • Change the profit center in the material master

    dear All,
    we need to change the profit center but the system is not letting because the is stock.
    i was thinking if we issue this stock on any cost center, change the profit center and then cancel the issuing material document ...
    what do you think ,,,, would this effect the accounting badly ?? if so,, please recommend other ways

    tej yadav wrote:
    Hi, The only solution to change the "PROFIT CENTER"  for you will be to maintain message MM335 in OMT4 as a warning, then change the Profit center & again change it to error.
    Are you really thinking this is the right approach?
    ever thought about how the posting are made in the other modules then? We dont live on an MM island, so a solution  has to cover the requirements of the connected modules as well.
    if you had received stock to a material with profit center A, then value is posted to profit center A.
    if you change the profit center  in material master to B while you have stock, the value of earlier receipts will not move from profit center A to B, they stay at A.
    The next goods issue for this material is made against the profit center B.
    this results in having a postive value at profit center A (which will never go away) and having a negative value at profit center B (because you had never received to profit center B what you just issued)
    Because of this you should not change the message settings.
    Florian LINTNER wrote:
    Hi!
    >
    > post the goods issue in the prior period.
    > Change the profit center.
    > And post a new goods entry with the date of today..
    >
    > regards
    > flo
    you cannot issue anything in the prior period if everything is already issued in the current period.
    One should obtain the quantityof previous period in material master accounting view.
    Finally you have to have zero stock in current and previous period before changing profit center.
    How you approach this is based on the fact if the current period stock is bigger or smaller than the previous period stock.
    if current period stock is bigger, then issue previous period stock with previous peiod date, and issue remaining stock in current period.
    if current period stock is smaller than previous period stock, then you have to write on the delta in the current period, and subsequent issue the total stock in the previous period.
    seesen_rs wrote:
    Your approach is right. when we had this issue we solved through created dummy material and issue it to dummy material, change the profit center and receive it back..
    >
    > Both options dont affect the accounting.
    Goods issue to cost center or goods movement 309 to a dummy material will both affect accounting and create accounting documents.
    of course, if everything works well then you will get  accounting documents with opposite value after you have changed the profit center and you write on the quantity again.

  • Error in Account Assignment from Material Master to Sale Invoice.

    Dear Gurus,
    Pls guide me to resolve this problem:
    When i am generating Sales Invoice through vf01, system taking Material Assignment Group as 04, but in material Master assignment Group is 03. Due to this system unable to post accounting document.
    Every time user changing that material assignment group through VF02 and saving to post account document ( after changing system posting FI doc).
    How system take Material Assignment Group in Sale Invoice. Till now i am checking only Material master. Wht are the other parameters to define Material Assignment group in Sales invoice. <b>This is happending to particular one material only</b>
    Pls guide me.
    Regards,
    Venkat

    Hi
    While you define account assignment in TCode VKOA, you have a provision for defining the gl accounts in the combination of the following:
    1. Cust.Grp/MaterialGrp/AcctKey
    2. Cust.Grp/Account Key
    3. Material Grp/Acct Key
    4. General
    5. Acct Key
    When you save an invoice it searches in the above order to find a GL account.
    May be your setting would have been done only in 1st or 3rd ie., assining the GL account in the combination of Cust.Grp/MaterialGrp/AcctKey and GL Account. Hence if the combination doesn't, it would not generate the accounting document.
    If your business process agrees you can define gl account in Account key (4) or General (5) also, by which it would generate an accounting document even if it finds a wrong material group.
    Regards,
    Suraj

  • Account assignment on material master

    Hello. I have to include the field account assignment (T163K - KNTTP) on material master...
    The main goal is indicate if a material is asset or not...
    How can I proceed to do this?
    Thanks, Camila.

    Hi dear,
    1) You can create separate material type for Asset.
    2) You can create material group for the Asset assign material group when you are creating new material code for Asset.
    If you choose any of the above option then in MM60 as Material Type and Material Group both are displayed and you can easily identify the ASSET.
    Edited by: Deepak Kulkarni on Feb 6, 2011 10:07 AM
    Edited by: Deepak Kulkarni on Feb 6, 2011 10:09 AM

  • Profit Center field in Material Master

    Hi all
    We have 9 plants. In 2 plants we want to do profit center field (MARC-PRCTR) mandatory in material master plant date/stor. 2 view.  There is any user exit or setting required?
    Please guide
    Regards

    Hi,
    The path told in above reply is correct but making profit centre mandatory for only two plants is not possible.
    You can make it mandatory for specified Material Type or you can make it mandatory while doing selected Transaction Like MM01 or MM02 etc
    Regards,
    Amol

  • Composition assignment in Material master

    Hi friends
    I have a requirement and dont know if it can be met with EHS functionality: It is as follows:
    My client distirbutes pharma drugs...there may be some cases - they have to sell the product which is not in stock. In those cases they will sell some other drug having same composition. So I need to maintain the composition in material master.
    For this I activated specification assignment screen and created new specification type - Composition. Now I wanted to maintain the main composition in this screen which will be accesible by particular user group.
    So please let me know how to maintaint the composition (customization steps) and will there be any impact with this process?
    And I need to search the materials based on composition parameters. Finally we are not implementing EHS.
    Thanks

    Hi,
    On Material master side, I am not sure of the configurations to be done. But, here are the probable steps on EH&S side which you can try for coming up with a solution to your problem.
    1. First decide "specification type" under which you wish to define the composition of the material concerned. SAP has given many specification types. You may have a look at the type "Real Substance" in spro at following path:
    EH&S>Basic Data & Tools>Specification Master-->Specify Specification types
    Select type "REAL_SUB" Go in details and verify for "Material Assignment" check. This check ensures that you can link the specification (substance) created in EH&S with the material of material master, thereby creating a separate tab of "EH&S Specifications" in mm03.
    2. Go to t-code "cg02". Create a new specification and assign the relevant material to the specification created in "Material Assignments" tab.
    3. Go to the "Property tree" in the Navigation area and go to Composition> Exact Composition>"Composition" tab to maintain the composition of your drug.
    You have many more spro settings pertaining to property tree, components etc.
    4. Having maintained linking & the composition, if you access the material in mm02 transaction, you should be able to see the specification name. Double-clicking on specification, takes you directly to the "Edit Specification" screen. This way, you may limit the access to the composition of the material to a particular user group by providing the authorization to the t-code "cg02".
    Again, there are many settings to map the composition in EH&S. You need to come up with specifics.
    Hope above helps.
    Regards
    Pavan

  • Document assignment to Material Master & BoM

    Hi Experts,
    If I assign a document (Document type DRW) to material master X in MM02, later I include this material X in the BoM of material Y, would this document appear in the CS03 screen- for Y -> component item details for material X ->document tab or not?
    I think it will not appear  in BoM component if we assign document to MM02, we need to assign this in CS02.
    Please advise.
    Regards,
    Abhilash

    Abhilash,
    If you want to see the document in cs03 which you allready created in MM02, dubble click on item number it will show you the material display, where you can see that document. This document is related to material master data. OR you need to assign the document in BOM.
    You can assign the document in BOM in three ways,
    1) Attach document as an item in the item overview,
    2) Attach document to an item and 
    3) Attach document to the header material.
    1) Attaching document as an item in the item overview:
    -go to the `General Item Overview' screen
    -select the tab page `Document'
    -enter item category `D'
    -dropdown and select the document you want to attach 
    -the system automatically selects the respective document type, document part, document version and document description
    -the system also enters component quantity `1' and component unit of measure as `PC' by default.
    2) Attaching document to an item:
    -go to the `General Item Overview' screen
    -select the particular item by F2 
    -the item all data screen appears 
    -go to tab page `document assignment'
    -dropdown and select the `document type' you want to attach u2026dropdown and select the document you want to attach 
    -the system automatically selects the respective document part, document version and document description
    3) Attach document to the header material:
    -go to header overview screen 
    -go to tab page `document assignment'
    -dropdown and select the `document type' you want to attach 
    -the system automatically selects the respective, document part, document version and document description
    Pre-requisitesu2026
    -create document by transaction CV01N  
    -Customizing settingsu2026in document management customizing determines which objects can be assigned to documents per object type.
    -go to IMG -> cross-application components -> document management -> control data -> define documents type
    -select the document type for example `DRW'
    -select the sub dialog `define object links'
    -select new entries and enter following objectsu2026
    -'STPO_DOC' and screen `257'(linking document to BOM header) u2026'STKO_DOC' and screen `258'(linking document to BOM item) u2026now documents can be linked to BOM header as well as BOM item.
    Tara

  • Proper Profit center required for Material Master in Costing1

    Dear All
    We have 2 Profit center X_Pctr & Y_Pctr, while create a Material code & material code should be valid for X_Pctr, if user give
    the Y_pctr the system give the error msg invalid Pctr.
    Pls advise any enhancement. Is the BADI_MATERIAL_CHECK correct ?
    Regards
    Avijit

    Profit center is linked to Plant. There can be only one to one relationship between a plant and profit center. So if you want to transact on a material on 2 different profit centers, then you need to two plants and you have create that material in these two plants.

Maybe you are looking for