Over Absorption in Production Cost Center.

Dears,
We are getting the over absorption in cost center after doing of actual price calculation settlement. we have done the following transactions at month end. eventhough we are getting over absorption (i.e., credits are more than debits) Credits are activity costs are transferred from production cost center to production/process orders or product collectors.
KO8G settlement of internal orders to cost centers.
KSV5 execution of distribution cycle.
KSII execution of actual price calculation.
CON2 revaluation at actual prices.
CO88 Settlement of Production/Process Orders.
Even after doing of the above trnasactions we are getting over absorption.
kindly advise me in order to resolve this issue.

Hi Divraj,
The same issue i am replicating in the development server i created one assessment cycle i gave one service cost center as sender and one cost element group, the group contains 10 primary cost elements(GL's), i done postings with 10 gl's respect to this service cost center, in my assessment cycle i gave one assessment cost element in segment header the sender rule is posted amounts, the receiver tracing factor contains variable portions, actual activity and no scaling, in receiver i gave cost center group contains 4 production cost centers, sender values is share in 100%, version is zero the receiver tracing factor tab contains variable portions as actual activity and one activity i maintained, the receiver weighting factor contains 4 production cost centers and factor percentage is 100%.
Now i execute the assessment cycle in KSU5 i am getting senders in cycle but receivers i am getting zero, when i took the actual activity, variable portions and no scaling i have to maintain activity price in KP26 and this cost center i have to maintain in process order that is fine please explain me how the cost will distributed to production cost center please explain the procedure in detailed.
Hopefully i will get clarity on the concept................

Similar Messages

Problems with over/under absorption on production cost centers - GBB AUI

Hi,
I have a problem with over/under absorption on production cost centers after month end closing.
We are using material ledger CKMLCP and actual activity rates from direct cost centers are settled directly to products using GBB AUI account determination.
Unfortunately from time to time there appears a significant balance on production cost centers after running CKMLCP. What might be the reason? I have analysed line items on cost centers but cannot find any answers.
We are using assignment of cost elements to particular activity types (function splitting), and I have checked that all cost elements are assigned to proper activity types.
Best regards,
Karol

Hi,
DP90 is used for Resource related billing, is broad term basically when you performing service that time you have to raise billing on the basis of resources which you had spend for perticular service
DP90 is run on the basis of DYNAMIC ITEM PROCESSOR,
http://help.sap.com/saphelp_di471/helpdata/en/59/54fc37004d0a1ee10000009b38f8cf/frameset.htm
I will tell you one process from the prspective of CS module
Create notification >> Create service order >> Confirm service order >> Resource releted billing (genrates sales document) >> Invoice to customer with refrance to sales document.
Now here DP90 is used to determine material,IN SALES DOCUMENT because CS module don't have billing feature as like SD Billing.
In CS module activities/Operation,but in SD module we speciefy material codes
So DIP determines XYZ activity/operation is ABC material in SD
kapil

Material Ledger,Revaluation Production Cost Center ,Standard Cost

Hi, I have a problem with revaluation of production cost centers.
Firstly, production cost center expenses are settled via activity types onto the production order at the end of the period. However, CKMLCP revaluate cost centers after the settlement because of using standard price. So cost centers at the end of the period have some amount.
As a result we can not find actual price for production orders.
If I use standard cost in order to consume on cost centers, material ledger revaluates again this cost centers. I dont want this condition. Because this cost center is settled to other cost object before closing.
Thanks.
Message was edited by:
Ergul Taslacioglu

Hi
Go to the following path in SPRO:
Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger -> Actual Costing -> Activate Actual Costing. Double-click on "Actiavte Actual Costing" and change the indicator from "2" to "1".

Transfer price (Internal Reveue to be allocated to Production cost Center)

Hi Sap Gurus.
My cleint using tranfer price without activiation material Ledger. The internal revenue should not reflect in Fi. For that we have created ztable and we will be able to transfer the stock between profit center and we are getting internal reveue to the sending profit sender and expenses to the receiving profit center finaally balance become a zero,(we are maintaing same gl account while doing transfer price). Now expense in receving profit center should consider as part of produt costing. how to allocate this expense to the production cost center when there is no balance.
Example
SENDING PLANT 1 MATERIAL 123456 MM PRICE (10) TP 15
RECEIVNING Plant 2 Material 123456 MM PRICE (10) TP 15
While taking STO system is posting with material master price 10, but in the production if they are using that material system should take 5 also . 10 is the cost and 5 is overhead.
help me out?

These are some few things I found out. Below is the result of a test I carried out when I tried to create a Settlement Rule for a statistical order.
Statistical order may not contain a settlement rule
Message no. KO188
Diagnosis
Order 12770, for which you are trying to create a settlement rule, is statistical.
System Response
Statistical orders cannot have a settlement rule because they cannot be settled.
Procedure
You could possibly remove the statistics indicator from the order (only if nothing has been posted to it yet).
I may be wrong but I have determined that, for production orders, you will have to use Standard Production Order Type and not a statistical order. The object class has to be production as well.
You will only be able to create a settlement rule if it is not a statistical order with the assignment category as ORD. Also, in your order type: Internal Order - Production, under general parameters, you will have to assign settlement profile 30 which is production order.
You may have to define planning profiles for co production orders, costing variant, valuation types. Maintain order types using KOT2. Example:
Order Type: PP01 Standard Production Order
Order Category: 10 PP Production Order
Number Range Interval: 1000000000--19999999999
Settlement Profile: abc
CO Partner Update: Semi-Active
Check of Classification
Next Maintain Settlement Profile: ABC Standard Production Order
Check off "To be Settled in Full
Default Allocation Structure: E.G: EB
Indicators: check off: 100% Validation. % settlement, equivalent numbers
Valid Receivers: 1 for most
Document Type: OS Order Settlement
Create Allocation etc.
Hope this gives you some pointers as to how to proceed.
Elias

Allocation of cost from service cost center to production cost center

Dear sir ,
Will I use to distribute the cost from service department to production department and that cost centers also using for activity planing will get currect result in product costing ?

Hello,
Can you clarify what you want to do ?
Allocation of cost from service cost centers to production cost centers can be done with the help of Assessment / Distribution cycles and you can do a activity planning using the same costs as well. The steps for activity planning would be as under:
1. Create primary cost planning in the service and production cost centers (KP06)
2. Create activity planning in the production cost centers (KP26) without any rate
3. Run assessment / distribution cycles to transfer cost from the service cost centers to production cost centers (KSUB / KSVB), in case you are not transferring based on activity quantity then also do SKF planning in KP46
4. Run plan cost splitting in case you have more then one activity type (do config for splitting structure beforehand) (KSS4)
5. Calculate Plan price for the production cost center activity types (KSPI)
BR // SG

Please use production cost center!

Hi Experts,
I am trying to raise a vendor invoice via FB60. After giving all the inputs like vendor, Amount, GL account, cost center. I am saving the document in ECC6. I get the error as below:
Please use production cost center! could i know why i am getting this error

Hi Umesh,
I request you to check if there is any validation in place as this is not a standard message.'
You can take help of a Abaper and get it debugged and find out of the soure.
Regards,
Andy

Reporting Direct Production Cost Center Over/Under Absorption

Hi,
I am trying to find a way to report Manufacturing Cost Center Over/Under Absorption in a similar way COGS are reported in CO-PA. I mean - I would like to breakdown Direct Manufacturing Cost Center Over/Under Absorption into cost elements (just like COGS are broken down in COPA when invoice is posted).
I wonder if this is possible in SAP without Material Ledger implemented. If yes - can it be achieved by using a standard functionality or does it require an additional development?
Thank you,
K

Thanky you for your reply Ranjan,
My intention was to show Cost center over/underabsorption broken down by cost componets (activity Labour, Machine, Overhead). Currently it is shown as a balance on cost center. I would like to be able to recognize which part of Direct manufacturing CC balance refers to Labour, which to Machine and which to Overhead. Is it possible to achieve in sandard report or additional settings/development is required.
Regards,
Karol

How to Close Planned Over Heads in product costing

HI,
We are maintaining planned over heads through KP26 and Costing sheet.Kindly tell me how to close planned over head wether it is periodicall closing or other?
Kindly provide me the guide lines how to do this Planned overheads closing in the system?How many ways are there to close planned overheads in the system?
Kindly adviice me?
Thanks
Sunitha

Dear Sunitha,
To run the Cost estimate or close the planned overhead KP26 and Costing Sheet is not enough you have to move forward and you need to define Cost component Structure (OKTZ) Path: SPRO > IMG > Controlling > Product Cost Controlling > Product Cost Planning > Basic Setting for Material Costing > Define Cost Component Structure. After maintaining cost component structure you need to define Costing variant T.code OKKN Path: SPRO > IMG > Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate with Quantity Structure . Here you copy PPC1 standard and create your own costing Variant.
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thx.
Ganpat

Flow of product costing

Hi All,
Iam new to controlling area. I want to know the entire process flow of product costing and what are journal entries reflect in this flow.
Thanks,
chandu

Hi,
The requirement of batch wise capturing of costs can be achieved by creating a separate production order for each batch of production. The production order captures all the cost, which are incurred during the production process. The details of each cost are as below.
1.For every batch of production a production order is raised in the production department. The production order contains the details of BOM and recipe.
2.The Bill of Material (BOM) details the raw material and packing material in the required portions that are required for production.
3.The recipe contains the detail process of production activity including resource such as manufacturing machineries, equipment. Each operation is assigned to its resource and each resource assigned to relevant activities such as Labour, fuel, power etc. (maximum of six parameters for each resource). Each resource is attached to a cost centre.
4. The recipe and BOM are copied to production order automatically when the order is created. The quantities of materials and activities are determined at standard levels (Planned costs).
5. A production order may contain several phases and each phase requires individual confirmation.
6.Once a phase in production process is complete the production person gives his approval by the way of confirmation.
7. At the time of giving confirmation he inputs the actual quantities incurred for material and activities. Using these inputs the Actual Cost can be arrived.
8. From controlling module, the planned rates of activities are uploaded on periodical basis. monthly or annually. The cost of material is taken at Moving Average price.
Once the batch production is complete the production person gives his final approval to the order as u201CTechnically completed (TECO)u201D.
9. At the month end / period end all these process orders are settled at the costing department.
10. The settlement results in calculating the overheads on predetermined rate and transferring the total cost of the production on to the finished product. The following entry is generated
Finished goods stock Account Dr
To factory output Account Cr.
11.The work-in-process is calculated based on the status assigned to production order. If the order has a status of u201Cu201CTechnically completed (TECO)u201D. the work-in-process is not calculated, but the order will be totally settled.
12.The standard cost of finished product is released at the beginning of every month. The standard cost is calculated based on the Bill of Material and recipe defined independently for each finished and semi finished product.
13.The variance is calculated on the difference of standard cost of material and the actual cost incurred in the production.
14. When the actual cost of power, fuel, Labour are accounted against respective cost centres in the month end, the system automatically determines the under absorption or over absorption of production costs. This difference cost will be apportioned to all the batches on a predetermined basis.
Revaluation of Production orders
Initially cost planned in cost centre accounting against activity types are used for valuating the materials that are produced. At the month end when actual cost are booked from financial accounting, revised activity price calculation is carried in cost centre accounting and with this prices the production orders are revalued. The revaluation is carried to the extent of difference between planned vs. actual activity prices. The revaluation production orders will not be carried, as production orders will be settled Immediately.
The actual cost of every batch is determined using above process. A report is generated to know the cost for each batch.
The standard cost fixed with each customer for each product is maintained in a separate database. The Costing department should compare these details with the actual cost of production and identify the difference. Accordingly a Debit/Credit note can be generated.
Once a standard cost estimate is created, it updates the material master with that rate.
Cost Object Controlling is an area in cost accounting that assigns the costs incurred in the production of company activities (such as internally manufactured materials) to those activities. Cost Object Controlling supports you in:
Reaching make-or-buy decisions
Determining price floors
Performing complex cost analysis (such as target/actual analysis)
Determining inventory values
Cost component Structure:
A control of how the results of activity price calculation or material costing are stored.
In Product Cost Controlling (CO-PC), the cost component structure determines the attributes for passing on the following costs:
Material costs passed on to material valuation as the standard price or inventory price
Product cost components are
Material
Accessories
Power
Fuel
Sal & wages
Depreciation
R&M/ Stores
Others
Admin OH
Standard Cost Estimates (Applicable for trading activity)
At the start of the fiscal year standard cost estimates will be released based on the planned raw material prices and planned manufacturing overheads. These standard prices are updated in the respective material master. These cost estimates are run only for make-to-stock materials.
The various components of cost are incurred in producing a product is captured. The following cost components are considered for materials cost, consumables and fuel, direct
Labour cost, utilities. Repairs and maintenance gases, depreciation, administrative overheads. A costing sheet will be created to capture administrative overheads cost which are not absorbed in the products as activity cost but are to be considered for inventory valuation In the first step planned activity outputs for each cost centre are planned, then planned cost that will be incurred against each activity type and primary cost element are planned, by carrying out activity price calculation the planned price of each activity is arrived. These activity types are entered in the work centers and routings. When cost estimates are created, system captures material cost from the prices mentioned in material master. The manufactured overheads are updated from the activity cost planned in cost center accounting.
Sadashivan

Remaining balance on production cost centers - GBB AUI

Hi,
I have a problem with over/under absorption on production cost centers after month end closing.
We are using material ledger CKMLCP and actual activity rates from direct cost centers are settled directly to products using GBB AUI account determination.
Unfortunately from time to time there appears a significant balance on production cost centers after running CKMLCP. What might be the reason? I have analysed line items on cost centers but cannot find any answers.
We are using assignment of cost elements to particular activity types (function splitting), and I have checked that all cost elements are assigned to proper activity types.
Best regards,
Karol

Refer to OSS 183250 and note 186485.
If you dont specify in the settlement profile for the production order that the variances are not transferred from the production order into CO-PA, you will settle the variances to <b>CO-PA twice</b>: once from the production order (broken down into variance categories), and once from the sales order item. The settlement rule still references the material and not the sales order item.
Special Features of Product Cost by Sales Order with Valuated Sales Order Stock
<a href="http://help.sap.com/erp2005_ehp_02/helpdata/en/90/ba66cc446711d189420000e829fbbd/content.htm">Read the topic on 'Special Features of Product Cost by Sales Order with Valuated Sales Order Stock'</a>
You may want to check the period of the variance settlement from mfg order to sales order and ensure the settlement of sales order is also done the same period, if the type is PER.

S_ALR_87013643 Cost Center Report - Range Orders

Hi,
I am executing T Code S_ALR_87013643, which is based on Cost Center, Cost Element and Order. I am restricting the selection for 1 Production cost center and 1 Production Order.
The cost center section of the report is displaying costs against the particular cost center. However, If I see the credit given to the cost center, the credit values include all production orders against the cost center.
If I see the Order section of the report, I am able to see the debit and credit only to the extent of the relevant production order.
So the credit in the Cost center and the debit in the Production Order does not match.
Please let me know if I need to do something to arrive at the correct display in the report for better analysis..

Hi gay
Why don't you display the costcent report and product order report one by one?
BR
Thomas

Separate gl account for cost center for movement type 201

HI Guys,
I have a the following problem:
There are three main functional areas i.g
Production - (Cost Center 10001)
Sales - (Cost Center 10002)
Admin - (Cost Center 10003)
In obyc we use 5 types of valuation classes like three sets different for production, Sales and Admin
Production
P-Electrical (GL Account 50001)
P-Tools (GL Account 50002)
P-Oil Lubes (GL Account 50003)
P-Bearing (GL Account 50004)
P-Belts (GL Account 50005)
Sales
S-Electrical (GL Account 60001)
S-Tools (GL Account 60002)
S-Oil Lubes (GL Account 60003)
S-Bearing (GL Account 60004)
S-Belts (GL Account 60005)
Admin
A-Electrical (GL Account 70001)
A-Tools (GL Account 70002)
A-Oil Lubes (GL Account 70003)
A-Bearing (GL Account 70004)
A-Belts (GL Account 70005)
I want use 5 series gl when I use Production valuation classes, 6 series when I use Sales valuation classes and 7 series when I use Admin valuation classes in VBR general modification but system allows me to use standard valuation classes.
please how I can get this problem get solved that the concerned GL accounts must be hit for proper allocation of expenses by areas.
Thanks
Ahmed

Hi
I think i have to rephrase the question .
When you do a goods issue via migo and movement type 201 the user should not be allowed to input the GL account as it should be automatically determined through valn class setting in GBB-VBR.
But in my case the system is also giving the GL account field as available to user for input .This is wrong .
How to make this field suppress / greyed out is the problem ?

Cost center catogery

why we are giving cost center catogory at the time of cost center creation. what are the impact will come due to assigning cost center category. now we have give Categary T for all cost center. now we anted to create cost center for each and every department to see indivudial expenses. for that what categary i have to give from the following and what is the use to give catergory
9     Allocation
A     Administration
G     Logistics
L     Management
M     Material
P     Production
S     Service
T     Sales

Hi Laxmi,
The master data of an activity type includes one or more cost center categories. The activity type may be used only by cost centers of the appropriate categories (for all those cost centers with that Cost Center Category)
For example, you created two Cost Centers A and B. In A's master data, Cost Center category is "P"(Production) and B's master data, Cost Center Category is "M"( Maintenance).
Now, you are creating the master data for Activity Type "labour Hr". In that master data, you need to mention the Cost Center Category. If you give "P" there, that means that Activity Type can be linked (planning in KP26) to Cost Center "A" only....
We define categories in Customizing. For each category, we can define default values for the "Lock" and "Record quantity" indicators, for transfer to cost center master data. We need to maintain these indicators only if the entry diverges from the default cost center category.
In addition, we may use the categories for reports and evaluations.
Examples
Production cost center
Service cost center
Administration cost center
Pls revert back for further explanation...
Srikanth Munnaluri
Edited by: Srikanth Munnaluri on Feb 25, 2009 6:46 PM

Production cost in SAP

Hi,
i have calculated the standard price of product in SAP. but at the end my production cost seems very high and i don't understand why
this is what i did:
first i upload the budget in the system in KP06 for the full year
i upload the quantities of activities in KP26 for the full year also
then i run the assessment cycle to bring the budget at the level of the "production cost center"
then i splitted the budget per activity in KSS4, to get the budget of each activity/cost center.
i calculated the price of activities in KSPI.
then i run CK40N, to calculate the standard price of the different product.
but my problem is that:
why when i make the sum of all the production cost for all the product, i don't find again the initial budget i put in the system?
thanks for your comments

Hi SAPXPT,
Try transaction RKACSHOW, see note 28145. RKACSHOW shows all the tables that are updated on an order.
Regards,Declan

Cost center empty at month end

dear all,
iw ant toa ask you one fundamental question.
is it require that the cost center should be empty at period end.
i cam across the situation that some production cost center get some cost which cant be go to product.
if i creat one more cost center cost will remain threre i know ican transfer the cots to copa but dont know how to do it
please suggest
Moderator: Please, read basic CO-PA material

HI,
it is usual that cost centers are zero balanced (not empty) at month end.
This can be achieved by settling cost center balances to CO-PA value fields using T-code KEU5 (creation of settlement cycle is done in KEU1).
best regards, Christian

Over Absorption in Production Cost Center.

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