Cogs cost element

hi,
i read from forum that no cost element is needed for cogs.
"certain expense accounts are not meant to flow to Cost Accounting. Examples include Price difference accounts, variance accounts, and COGS or COS."
1) i still can see price difference account in ka03. why?
2) what does it mean cost element not needed for cogs? meaning cogs directly post to copa? if yes, what tcode i can see it being defined?
thanks

Hi,
1. Price difference account can not be made as a cost element. As generally this account you use to settle your variances to your product cost at the month End and following entry is passed in FI because of this :
Price Difference A/C Dr
To COGM A/C Cr
Generally in CO - PC, you can only get COGM not COGS. As, product costing only have cost of RM, PM, activity rates and Overheads. At the running of Std. cost, it doesn't has sales and dist. charges, which generally are getting captured from SD through condition types.
2. Also in COPA all above mentioend costs come through value fields in CO and sales and Dist. charges come through condition type from SD (connected through value fields).
So, for this reason also, COGS can not be created as a cost element as it can not be assigned to any cost object directly. You generally get COGS in COPA through report (through report painter).
Thanks & Regards,
Taral Patel

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Primary Cost Elements

Hi,
Pls tell me whether we can create Primary Cost Elements for all P&L related GL codes or there is some restrictions?
Regards,
Vikas
9891587368

Hi Viki
Please note the below mentioned important points. Although your query is answered in the thread, would like to ensure you do these checks to keep clean cost accounting records
You should not create cost elements for all P&L items. Please note not to create cost elements for following GL accounts
1) Cost of goods sold
2) Variance accounts with PRD, PRF - this results in double accounting in cost accounting books
3) If u hv sales order costing related scenarios then u can create COGS account with account assignment. Depends on your scenario
4) All other accounts u can create cost elements as per the business requirements.
But ensure u do not create COGS as cost element. If you create COGS as cost element system asks for accnt assignment object every time and to eliminate this a cost center is assigned in OKB9 for COGS cost element, which is not correct.
Please check this, very imp to hv clean cost accounting records
Assing points if the above clarifications are helpful

CO-PA: COGS accounts created as cost elements

hello,
I have a question regarding COGS accounts, being created as cost elements. This was not causing problems, because client was using real internal orders for profit analysis. In the next phase of project, during implementation of costing based CO-PA, now I have problem, because of this situation, because I can not delete created cost elements (only possible at the beginning of the new fiscal year) , and the system asks for cost object assignment during GI creation. I was considering OKB9 assignment, but I think this will cause double values in CO-PA. Maybe temporary solution, by using real internal orders till the end of the year, and then deleting existing cost elements for COGS accounts, could work?
Please, advise what to do to solve this situation.
Thanks in advance,
Dusko

Hope you are not using account based COPA
To avoid double values in COPA, you can do one of two things,
1) after the costs are transferred to the internal order, you can just keep them there without doing settlement, let the users know that there will be under absorption for the internal order.
2) If the users are not willing to have under absorption in the internal order, you can transfer the costs to a value feild in COPA which is not reflected in the report in KE30 (Remember that you may loose one value feild in COPA this way)
Both make no effect on KE30 report as data will be transfered to COPA at the time of billing
Br Naveen

IS POSSIBLE TO SPLIT COGS IN COST ELEMENTS

Is it possible to define the COGS (OM: Generate Cost of Goods Sold) to capture
Cost of Goods Sold by Cost elements ?
The way the cost is built through the WIP process is through Cost Elements:
direct material, direct labor, manufacturing overhead and material overhead
All these elements are captured separately in WIP and in separate accounts.
Is it possible to keep in separate COGS accounts (COGS -Direct Material, COGS
Direct Labor, etc.) and not just be lumped into one Total COGS account at the
time of sales issue.

I dont believe this is possible currently. I have seen users design custom programs to reclassify the entries "after the fact".
Hope this helps,
Nat.

Cost Element Creation against COGM & COGS

Dear Experts,
Some person suggest that while creating COGS GL Codes in FS00 cost element should not be assigned.
According to him if this is done then COGS will flow to COPA and thus COPA profitability report will be wrong.
Can you please tell whether this correct, how ever in our system COGS a/c also maintained with cost element in FS00.
Regards,
Alok

Postings to COPA can controlled through using proper Field Status Groups (FSG). IF you supppress postings to COPA in FSG's then I dont think you can make any postings to COPA. Hence the suggestion given by you may not be true.........

Costing COPA and cost element category '1' for Revenue and COGS

Hi,
In my SAP environment historically Revenue GL accounts were created as cost element with category '1' (costs) and are being posted against cost centres. I know it is not SAP best practice, but it has been working like that in here for years. We have not activated and used COPA so far.
I am currently analysing options of implementing costing based COPA. I wonder if the fact that Revenue and COGS accounts are created as cost element with category '1' should cause any issues with COPA.
I know that in a perfect world it should be '11' for revenues and '12' or no cost element for COGS, I just hope we can leave CE category '1'.
Thank you,
Karol

Hi Ajay,
Thank you for explanation. I feared it would cause issues. However, I checked with one company code that has active COPA.
It has two Revenue accounts: one set as '11' , which is used for most automatic SD postings and other one with '1' category which is 'Other revenues' - sometimes used for automatic postings (configured in VKOA for services) and often used for manual revenue postings.
What I noticed is that documents posted for this 'Other Revenues' were posted against cost centre but also profitability segment was populated. However, it was only populated with sales quantity, no Revenue value field was updated. It must have been configured so it does not show error in COPA but update is not complete in PA table. No COGS split value fields are updated as these postings refer to services.
What I also obseved is that all COGS accounts are set as '1' and are linked to cost centre. But this seems to not affect COPA and it creates COPA document with correct COGS split into cost component category value fields.
So I assume this is only issue for Revenue accounts with '1'. COGS can be left with '1' for time being.
Do you know which config for Revenue account with '1' might have stopped COPA from giving error while posting invoices in SD?
Thank you,
Karol

How can we derive COGS by cost element ??

Hi Friends,
We are implementing standard costing in 11.5.9 ..
We have an interesting requirement to COGS to be created by Cost element (material, Labour, and Overhead) instead of one amount...
Any thoughts??
Rgds,

did you get this ? I have similar requirement

Material COGS as cost element - Is it advisable?

Gurus,
I have set up my COGS accounts also as cost elements of type '11' to enable direct postings to COPA during billing document save (FYI, We post to COGS during billing and not during PGI.) I would like to know what is the downside in creating COGS accounts as cost elements in CO? I would appreciate a little explanation because my knowledge of SAP CO is pretty limited.
Thank you all.
-Murugan.

Hi
Is COGS with Cost element category 11??. It should be "1" and not 11 as 11 is a revenue cost element category.
S Jayaram

COGS as Cost element

Friends,
We have make to stock scenario. We haven't created COGS as cost element. The problem we have right now is in P&L we are not able to match the values of cost of goods manufactured (posting when dr. Inv cr. Change of Inv(COGM) ) and variance. The COGM can not be matched in P&L as off set COGS is not created as cost element. If i create COGS as cost element then i have problem when doing PGI, it is asking for cost object as i created it as cost element.
Please let me know how the process should be. This is kind of urgent.

Hi PV
I would like to give some concepts on this which may help explain the issue raised by you:
1. When goods are issued, SAP posts material consumptions which are flowing into CO with Production Order as cost object. These are reflected on debit side of P&L.
2. Besides using raw materials we also use labour, activities to convert to finished goods. These labour and other expenses are also reflected as expenses on debit side of P&L with Cost Centers as cost objects.
3. In real sense these are not expenses which can simply be absorbed since at the end, the resulting product is a value added material which is converted from raw materials to Finished goods. These 2 items (raw materials & FG) are reflected on balance sheet.
4. So to reflect the increase in value from RM to FG in Balance Sheet (both are debits), we need to have a credit in P&L which is reflected in terms of COGM.
5. Credit to P&L in terms of COGM is off set by debits in P&L in terms of material consumptions, activity utilizations (like wages, power, depreciations etc). Note that this may not be equal because credits in COGM are based on Standard Cost Estimate where as debits are actual expenses which can vary significantly from the assumptions made in standard cost estimate.
The above process is more to do with how we account things in FI rather than having to do with CO.
Hope this explains that COGM is matched in P&L with other expenses like material consumptions, production expenses but not COGS.
6. COGS is something different from COGM. Theoritically COGS will be more than COGM since Sales OH are added on to COGM to arrive at COGS.
So COGS has to flow to CO only in case Sales revenue is also flowing into CO. In such scenario Sales Revenue GL account is created as revenue element with category 11. If this is the scenario then COGS will also be created as a cost element with category 1 and cost object is taken from Sales revenue element it self when you do FG delivery for a sales order.
In the above scenario, the cost objects can be Profitability segment or Sales Order.
Hope this provides some clarity on your question.
Thanks
Satya

Cogs-is it cost element or not

hi
COGS should be taken as cost element or not, it takes- what is the costobject and shall i send to copa or not
sowmya
Moderator: Please, search SDN

Hi,
Make COGS as CE in MTO scenario only (GBB-VAY) for bringing to COPA.
If it GBB-VAX do not create it as CE
regards,
neeraja

COGS created as Cost Element

Hi,
If COGS is created as cost element in CO-PA but in OKB9 no cost center is assigned & CE Category used is 1...does this means there will be double posting in CO-PA ???
Regards,
Varsha

When the Profitability Segment has not been assigned, the Cost center would be the default assignement.
So, when it is not Profit related, obviously Cost related. So there won't be any duplicate posting happnes.
Moreover, this is only for Automatic Account postings like, discounts, qty differences and price differences.
Thanks

COGS accounts as cost elements

Hi All,
Please help me with this.
1.We have set up COGS accounts. Should we set them as Cost Elements? If yes , then should we use cost element category "1- Primary Costs" or "12 Sales Deduction" ? Right now we dont have COPA , we are planning to implement in future . One more thing, if we don't set up them as Cost elements now and would like to set up as cost elements in future (After COPA goes live) - can we do that?
2. Regarding Revenue accounts , we don't have SD or COPA now (but will implement in future)- Should we set up revenue accounts as "11 - Revenues" in FS00. Please help me ,
Thank you,
Sri

Hi,
1. If your client specifies that he needs the data to be transfered to Controlling, then COGS has to be created as a cost element with category-1.
If your client does not want any data related to COGS in Controlling then no need to create it as a cost element.
If you are implementing COPA in your organisation in future, without creating COGS as cost element also we can get the data in COPA reports, basing on condition type.
Data flow from SD to COPA is through Condition types in Costing based Profitability analysis.
In KE4I we assign condition types to COPA value fields, Basing on that profitability document will get created.
To bring the COGS amount to COPA,
Assign VPRS condition type to relevant value field.
If your problem will get solved with this answer, kindly award me marks
Thanks,
Deepa

Cost of Goods Sold - Cost Element

Dear All,
Normally COGS a/c will not be created as a cost elemnt.Is there any specific reason for this? The client is asking the white paper on why COGS a/c not required to be as a cost element.
As per the client requirement (Distribution and Trading Business),Iam forced to define COGS account as a cost element.
I request you all to provide the detailed explanation on the COGS a/c as to why this account not to be defined as a cost element.If defined what are the consequences.
Note that in our client scenario,we have more than 1000 Profit centers and Cost Centers.
Thanks in advance.
Subbu

Dear Mr Ajay,
1. Verified procurement tab
2. Check whats the req type:KSL
3. Go to OVZH and check whats the req class assigned to this req type:030
4. Go to OVZG and check whats the acount assignment cateory in req class:NIL
5. The account assignment catg shud have consumption posting field as E: Assigned 'E' as a Account Assignment Category.
But still the system is asking GL Account (Cost Element):500000 requires a cost object.
Note that GL A/c :500000 (created as a cost element) given in GBB-VAY and GL a/c:500050 (NOT CREATED AS A COST ELEMENT) given in GBB-VAX ,but still the system is throwing an error that Cost Element needs a cost object.
and also note that when issuing material agaist the Internal Order or Cost Center,the system is allowing posting.
Please help me as how to come out from this issue.
Regards
Subbu

Cost of Goods Sold - Cost Element asking Cost Object

Dear All,
We have defined a G/L account :500000 (Cost of Goods Sold - Field Status Group:G030).
Normally we should not create it as a cost element,but when CRM consultant does a transaction ,system asks that GL account :500000 not created as a cost element,Hence that time I have created as a cost element.
Now every time ,system is asking for cost object for this cost element.
As you all know that ,we can maintain in OKB9,but in our scenario,we have more than 3500 Cost Centers,which is not possible.
Can anybody share as how to resolve this issue?
Regards
Subbu

Thanks Mr Ajay for understanding my question.
As I told mentioned in my initial question that I have created the GL:500000 (COGS) when CRM/SD issues the stock for delivery.
What my FI done is that the same GL (500000) is assigned both in GBB-VAX and GBB-VAY as per the client requirement.
Now suggest me as how to come out from this situation?
If I need to do Validation ,request you to give your guidance as how to do it as I never done.
Thnaks in advance.
Su

Cost of Goods Sold by Cost Elements Accounting

EBS Version: 12.1.3
Is it possible to define the COGS (OM: Generate Cost of Goods Sold) to capture Cost of Goods Sold by Cost Elements ?
The way the cost is built through the WIP process is through Cost Elements:
* direct material,
* direct labor,
* manufacturing overhead
* material overhead
* etc...
All these elements are captured separately in WIP and in separate accounts.
Is it possible to keep in separate COGS accounts (COGS -Direct Material, COGS Direct Labor, etc.) and not just be lumped into one Total COGS account at the time of sales order issue.
Is It possible with SLA Customization (derivation rules, etc.)? or modifying workflow?? I need detailed solution please!!!
I need the information in SLA, i don't care if not possible in material distributions.
Thanks...

I need help experts!!!

Cogs cost element

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