Process Orders analysis Target Cost & Quantity is showing as zero

Hi,
I am facing a very pecuilar issue.
On analysing the cost (COR3) of my Process Orders the Target Cost & Quantity is showing as zero.
However, actual costs/quantity is showing correct.
What could be the possible reasons for the same.
Thanks in advance.
Regards,
Vikrant Sood

Hi,
Are you done with Goods Receipt(GR) from production to Inventory?If GR is not done,you dont see target costs in COR3
Check standard costs of the finished material in MM02-->costing veiw2.If there is no standard costs for materials,you dont see target costs in COR3.
Hope this helps you.
Thanks,
Anusha

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Process order settlement to cost center

Hi,
We have a requirement to settle only the quantity to material and the costs to
cost center from the process orders. This is to ensure the materials are
handled as non-valuated and the COGM is computed from the goods consumption
postings.
The process orders will have both co products and by products as well.
There is also one more requirement to allow Purchase orders against the non-
valuated materials.
I am planning to propose the following :-
1) To make the materials valuated but set the standard price to zero to give
the effect of non-valuated materials and at the same time can also raise
purchase orders because otherwise non-valuated materials cannot be used to
raise Purchase orders.
2) When goods receipt happens from the process order the actual costs of the
process order will remain as it is in the process order since the standard
price of the FG is zero and only the quantity will be received into inventory.
3) When process order settlement happens the full actual costs will be settled
to a price difference account and cost center tied to the price difference
account.
Do you guys see any flaws in the above design?
Edited by: FICO Consultant on Feb 21, 2012 4:28 AM

Answered

Process Orders Types and Costing effect.

Dear All,
I have a query regarding the order type in process orders.
There is an order type "Rework",. It can be used by the production people for some material(s) that may need only minute/little rework.
Can anyone please help me to understand that if production guys instead of using order type as "rework" again assign the main work order type for the process orders that were basically meant for rework then what will be its cost implications.?
Is this type is required to differentiate b/w the originally processed and reworked orders only and there is no other implications / consequences ?
Hope, I am able to put my confusion here clearly.
Thanking all you guys in advance.
Regards,
Yasir Shaikh.

Wsalam Ajay.
Thank you, I have been learning a lot from this forum and specially from you.
Being new to CO, I believe it will take me some time to get used to the technical terms. please tell me that how to check the cost of rework specific to a CC, I am also unable to understand the 2nd part related to settlement object.
PS, I was of the view that because if we use the default order type for a rework order, then keeping in mind our policy to valuate material at standard cost, we are overcasting / overvaluing our inventory.
Please correct me as even I am confused on this.
For example. For material AAA, and for Output of 1 Unit of AAA, we need 2 units of input material X, 2 units of input material Y, and 2 Units of input material Z. And now we have received material AAA for rework which only needs 1 units of material A .
Now, if we will use default order type and not rework order type then by showing output of 1 unit of material AAA, it will be costed on a standard cost of material X, Y and Z for each 2 units.
After this point , I am getting confused that if it is only a small consumption of new material then how can we assign the AAA with full cost of one unit of AAA.
Thanking you.
Yasir Shaikh.

Engineer to Order Scenario-Target Costs and Stock Valuation

I have got a query pertaining to Engineer to Order Scenario. A production order has been created with WBS element as the account assignment .Its a valuated project stock scenario, with configurable material. As per SAP standard behaviour and my limited knowledge, the Goods Receipt for FERT/HALB happens according to either of the four strategies:
     Standard Price ( if there exists one)
     Customer Exit COPCP002
     Sales Order Cost Estimate
     Preliminary Order Cost Estimate for prod order
However ,I have come across a case where although a preliminary order cost estimate exists for the production order, the system is not able to determine target costs. As a result the entire variance is posted as remaining variance at the time doing a variance calculation on the production order. Moreover at the time of Goods Receipt for FERT material,the system passses an entry Price diff A/c -Debit to Cost of Production, instead of debiting Inventory and crediting cost of production(Price Control is S, no standard price exists for the material)
Thus my query is :
1) In case of Engineer to Order Valuated Stock Scenario where prod order is created with reference to WBS element, how is the standard price (or target costs for version 0) determined
2) Under what situation at the time of goods receipt ,will an entry " Price diff A/c Dr & cost of production-Credit will be posted, instead of Inventory A/c being debited?
Awaiting a reply
-Regards
Amit Kulkarni

Hi Amit
the easy answer first: The standard price is just taken out of the material segment without WBS assignment. That means if you maintain a standard price in the accounting view of the material master for the material number + plant that will be the fallback to be used. That will at least reuslt in a inventory posting, instead of pure price differences (against a price of zero)
Why your production order cost estimate could not be derived I cannot say. But he first startegy will be to search for the cost estimate to the WBS. Is there not something in the project system to perform a project costing and save it? in that case that will be searched and used for the order target cost and inventory posting.
best regards,
                  Udo

Process order round to base quantity in recipe called out in production ver

We have a situation where our process order quantities need to round to a multiple of the base quantity in the recipe assigned to the production version selected during material requirements planning (quota arrangement). The recipe base quantity is determined by the work center volume range . Therefore we can't use the material master lot size or rounding value because the base quantity will change based on the work center chosen. So we could have two or more different recipes for the same product and we use the production version to link the recipe to the bill of material. we use production version quota arrangement to chose which should be used in planning. I read through the Material Quantity Calculation documentation but I don't see where this fits to what we need. Any help would be appreciated.

Dear,
What is your base unit?
What is your operation unit? if you want to maintian BBL, then maintain this unit in operation overview of that perticular opration
Now about rounding the quantity - where exactly you want to round it off...during planning or during manual creation?
Enter in material master MRP1 view, rouding value as 1, then whever it is decimal, system make it near to next whole number.
If you want the system to take range of number and to round off...then you need to use rounding profile...in MRP1 view. please come back with your exact requirement os that we will help you out.

Total Target Costs - Factory Output showing "0"

Hi,
We have repetitive manufacturing at our location here. After the backflush has been posted I am unable to see any factory output updates under target costs in my "costs" under cost collectors. We dont have std cost estimate for our materials and our material prices are periodically updated through material ledger through the monthly costing runs. All FG's have preliminary cost estimate and our target cost versions point towards this estimate. Could you please let me know what could be the reason behind not seeing any costs under the "factory ouput" under "Total target costs"?
thx,
CN

Hi
Please Transfer the source Cost Components to the Target Cost component structure ( Ex. Cost Component Structure 01, updating all the source CCS ) in T.Code : OKTZ
Please check and get back to me.

Target Vs Acual Cost Comparison for multiple process orders

Dear SAPians,
I want to take a report for target vs actual cost for all process orders and product cost collectors created in a particular period. I have checked the standard report KKBC_ORD that serve my purpose but for a single order. I want the same report for multiple process orders and product cost collectors.
Is there any standard report or should I create a report painter report. I have tried to create a report painter report based on library 7KO, but target cost was not showing for selected order.
Kindly suggest.
Shirazi

Target Costs are available in library 601 for internal orders (and can be used for process/production orders).
Regards,
Adrian

Target Cost in the settled process order become zero after cost deletion

Dear all,
User has standard cost estimates created in Jan 2010 that valid until the end of 2010 for every material in the system. user created a process order in April 2010. Target cost of the order was created based on the standard cost estimate and recipes as well as order qty. The order was also confirmed and settled in April 2010 without problem.
However, after I deleted all old costing estimates before I did a costing run for all materials in May 2010, the old order was resettled and all Target cost is removed from the order. I guess system try to look at April costing estimate but it is not there since it was deleted before I created the new costing estimate in May. Therefore, all varainces are throwed into remaining variances since the target cost become zero.
Other than mark the settled order for deletion or keep all old costing estimates, I am just wondering is anyway in the configuration to prevent the system to recaculate the target cost again for the settlement so I can avoid the problem happens?
Thanks.

Hi,
Target costs are only calculated after goods movements have occured on the order, the Target Costs are then calculated during the Variance calculation.
Target costs will only be calculated after the first goods receipt has been posted to the order. Also you have to ensure that the information to calculate target costs exists on the system in particular in OKV6.
This estimation is based on the customizing for the Target cost version in transaction OKV6 as in turn will the "real" calculation of the Target costs via the variance calculation.
So in OKV6 the Target cost will be based on preliminary costing on the order, an alternative cost estimate or the current standard cost estimate. Importantly if the choosen option is not fulfilled e.g. no current standard cost estimate, the target costs will not be predicted or calculated.
regards
Waman

Target cost calculation in Process Order based on Variance Calculation

Hi all,
I have a question on Target cost calculation in Process Order. My understanding is, the Target Costs gets calculated when the confirmation and GR is made for the Process Order.
But if the confirmation/GR is not done, whether the target costs gets calculated for only the activity types after the Variance Calculation (KKS2).
I have two scenarios. In one, the target costs got calculated for the activity types without the confirmation/GR after the Variance calculation.
In another scenario, the target costs are not getting calculated for the activity types without the confirmation/GR if I try to do the variance calculation in KKS2.
SO i want to know which scenario is correct?
Can anyone answer this question?
Thanks and Regards,
Brijesh

Hi,
In general, the target costs are calculated once you deliver the order.
Target costs for the components and the activities are updated only once you deliver the order and the target cost for the finished product gets updated when you do the variance calculation.
Consider your scenario number 1 - you said the target costs got calculated for activity types without confirmation / GR after variance calculation.
Now, if the order is not having any status like PDLV, DLV or TECO it will not calculate the variances in the first place.
Your second scenario is correct - without GR the system does not calculate any target costs. Also it will not calculate any variances because the order status is still not DLV.
Best Regards,
Sameer

Target Cost in Process Order not calculated

Hello,
In Process order, after deliver of FG the target cost is not getting calculated,
Could you please help me why the target cost is not calculated in process order.
I have configured all setting for WIP and Variance

Hi,
Target costs are only calculated after goods movements have occured on the order, the Target Costs are then calculated during the Variance calculation.
Target costs will only be calculated after the first goods receipt has been posted to the order. Also you have to ensure that the information to calculate target costs exists on the system in particular in OKV6.
This estimation is based on the customizing for the Target cost version in transaction OKV6 as in turn will the "real" calculation of the Target costs via the variance calculation.
So in OKV6 the Target cost will be based on preliminary costing on the order, an alternative cost estimate or the current standard cost estimate. Importantly if the choosen option is not fulfilled e.g. no current standard cost estimate, the target costs will not be predicted or calculated.
regards
Waman

Costing issue in process order

Hi everybody,
We are facing a problem now like... for a FG material we have changed the BOM, updated recipe but costing release was not done before that a process order had been created, material release carried out, process order confirmation made, GR made and the stock is there in FG location, In the cost analysis it shown Rs. 1.14 lakh as variance in FG consumption G/L.
Now we reversed the stock from FG location, canceled the confirmation and changed the order qty to 1nos, to make the order dummy, but still cost analysis shows Rs. 1.14 lakh variance in FG consumption G/L
Help us to resolve this.

Hi,
Now for the finished good create material cost estimate with quantity structure
Create standard cost estimate (marking and release to be carried out)
now for the same old process order in the cost analysis u can see different value for total target cost
carry out confirmation and u will get the total actual costs based on the activity types u have assigned
-Variance=(difference between total target cost and total actual cost)
Variance related settings are done in consultation with Controlling people.
Regards,
Raj

Material costed, production order with no target cost

I've a case of production order and I don't where to find information to solve it.
I've a product A costed from March. Standard cost is correct.
I'm creating a production order now. The cost estimate is calculated during the delivery.
I've confirmed order by CO15. I've created a variance by deleting 2 items in bom of order. And confirm less than wanted on other component. But I don't think these variances are linked to my problem.
In CO02 and cost analysis : target cost of my product equals 0.
I've checked my prod cost variant and choices are : std price, L price from PIR, moving average price.
Thanks for your helps
Christophe

How can I see that ? I've checked that material cost has taken the bom during the cost explosion. Components are also costed.
I've noticed that target cost appears after variance calculation for product.

Co03 cost analysis target

Hi,
I see there is target quantity / target cost / actual qty / actual cost.
May I know what is target quantity and target cost? Is it similar to standard?
Thanks

Hi,
Though it is correctly /conceptually defined by Raja Sekhar about the Actual Quantity and Actual Cost.
As far as the Target Costing(Quantity) is concerned,Please find my response which elaborates precisely in genral terms of the business-
There is no clear definition to target costing. Organisations that have implemented it have
had to apply their own unique approach to the concept. In essence, it is a philosophy in
which product development is based on what the market will pay for it, not on what it has
cost to produce. In other words, market price becomes the determinant of cost and not the
other way around, as is the practice with most organisations.
Target costing is a strategic management tool that seeks to reduce a productu2019s cost over its
lifetime. Therefore, the target cost is not necessarily the cost to currently build the product.
Target costing presumes interaction between cost accounting and long-range profit planning; and a commitment to continuous cost reduction.
and you can apply the same logic while executing it for your desired business process in SAP determined by your process owners.
Hope it helps you at some extent.
Cheers
Chandra

Report for production order with actual and target cost for each

Hi
Is there any report that gives me the list of all production orders in a month with its respective actual and target costs?
I can use COOIS to get a list of production orders, then double click on the prod order, then click on goto and then to cost analyis.. but can i avoid going through all this and get a report with the details i need?
thanks in advance

Thanks a lot for that.
I'm a little confused with the columns in the report.
Which columns should I keep for my requirement? -
Production Order
Total Target Cost
Total Actual Cost
Total Actual Qty
Total Target Qty
Thanks

Control Costs not Displayed in Process Order Cost Reports

Hi
After Variance calculation and settlement of Process Orders also COntrol COst appearing as Zero, is there any step I am missing or any configuration needs to be adjusted?
Thanks in Advance
Regards
Venkat

Hi,
I checked in IDES system as well, there also using standard settings control costs are not getting updated on the process orders.
I couldn't makeout how the control costs fields get updated in the process order cost reports
Regards
Venkat

Process Orders analysis Target Cost & Quantity is showing as zero

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