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.........

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Default account assignment in cost element creation

hi,
in the cost element creation transaction (KA01) I need the default account assignment to be the WBS element. but in the transaction only cost center and order is showing as dafault account assignment, how can I include the WBS as cost object?
Thanks
Edited by: gayani premawardena on Sep 3, 2010 12:24 PM

Hi
If you are aware of FI substitution or validation, it works the same way
1. Go to OKC9 and click on New entries
2. Enter your contr area and choose Event = Line Item and Save.. It would ask for a transport request
3. Now click on the magnifying lens icon, then drill down on cost accounting > Line Item. Now click on Create Substitution icon and give it a name
4. Now click on Create Step and write your substitution by choosing fields from the COBL structure
It should like like, Prerequisites: IF COBL - BUKRS = XXXX and Cost Ele = YYYY,
Action to be taken if Pre-req is met - Substitute WBS = ZZZZ
Regards
Ajay M

Error in cost element creation

Hello,
I have just checked the result of my batch input for cost element creation.
For asset cost element (category 90) I use the LSMW
Forother cost element (charge, products...) I use the classic CO-CEL settings.
For example:
- if I define the following accounts : 2030000000, 2060000000, 2990000000, 6010000000, 6050000000, 6990000000
then all the cost elements are created but not those with 99 extension : 2990000000, 6990000000.
Is there a reason and a solution to that dump?
Regards
Pascal Cuenin

Hi,
I suggest you to use OAK7 transaction to create cost elements with 90 category. There is no need in LSMW for this.
Regards,
Eli

Automatic Cost Element Creation

I understand how to set the ranges OKB2 and run the batch job based on OKB3 to generate the cost elements based on the ranges but does having OKB2 configuration in place automatically setup cost elements for any new individual GL accounts that are created without having to run OKB3?

The note 415572 indicates that it applies when you use report RFBISA10 to copy a G/L account to another company code. Source company code and target company code have the same chart of accounts, however, they are assigned different controlling areas. The cost element in the controlling area of the target company code is not created automatically through RFBISA10 inspite of this, although you maintained the default settings for this account in Transaction OKB2.
But my guess is that the system should create a cost element upon just saving once we have appropriate OB13 and OKB2 without resorting to OKB3. Based on the SAP's documentation.

Cost element creation

Hi all,
I'm exploring ways to create cost elements with batch input.
In fact I need to generate cost element with category 90.
Standard CO-settings (OKB2) are made to define a range of cost elements, but it doesn't let me define a range for statistical balance sheet account cost elements, the systems only accepts individual values. OSS note 890228 seems to confirm that OKB2 is not recommended to create cost elements of category 90.
Because I need to generate a mass of cost elements of this category, I'm looking for another transaction.
Thanks for your reply.
Pascal

Hye
Upload the data using LSMW

Cost element creation: no fiscal year defined for given period

hi all,
I am getting the above erroe when I try to create the cost element with the category 1 (primary cost/cost-reducing revenues). If I use category 11 (revenues) then the error is not displayed.
Please advise.
regards,
FS

hi.........
1. first check whether fiscal year variant assigned to company code and controlling area is same.
2. check whether fiscal year variant is year dependent or not.
Regards,
Manish Jain

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

Cost Elements Values flow to COPA

Dear Experts,
We are using Costing based Operating Concern. I am clear that how to get values from SD to COPA Value Fields, I.e. assignment of Value Fields with condition types. But my confusion is how to get the values of cost element and cost element groups to COPA Value Fields.
This is not my confusion its my client requirment.
Thanks in advance,
Regards,
Balaji Bhonsle

Hi Balaji
Which cost elements are you talking about? You can directly make FI postings to COPA in F-02 by clicking on "Prf Seg"
Note that a cost element will either be posted to COPA or Cost Center or Internal order or WBS element... Real posting happens only to one of these...
Out of these, some Cost Centers merge into COGM/COGS i.e. Std cost and this is reflected as COGS.... The variance is posted as variance in COPA
Some cost centers like Marketing which do not form part of COGM/COGS, can be allocated from CO to COPA using KEU5...
This is how the values flow to COPA
Regards
Ajay M

WIP - Cost elements

Hello All
My WIP calculation is working fine. KKAX is calculating WIP correctly at Actual Cost and FI Postings happening fine.
When I look at the Production Order -> Cost -> Analysis , I can see the WIP based against the 2 Cost Elements linked to my 2 Line ID's.
For example :
Line ID          Cost Element
A                  1
B                   2
I can also see the 'Technical RA cost element' which we link in Result Analysis Version : OKG9 (for example : Cost element 3)
but the value is zero.
As I understand, SAP uses Cost element 3 only for internal calculation purpose and WIP is stored against Cost element 1 and 2 linked to line ID.
I want to know if my understanding is correct ?
If yes, then why SAP display's cost element 3 in Production order WIP field.
If no, in which scenarion I will ever see any value in cost element 3 against Production Order.
Best Regards
Edited by: Purohit Vijay on Nov 19, 2010 4:18 PM

HI all,
As i understood with the above discussion is Secondary Cost element which i Maintained in OKG9 is for sap internal calculation purpose and we are maintaining P&L & BS GL Account in Posting Rules for Settling Work in Process (OKG8) which is to post an accounting entry in FI.
eg:- WIP dr
       Inventory Change Work in Process cr
but i need clarity on updates(OKG4)Exactly which cost element we are maintain and what is the purpose. and like wise we are doing masking on ASSIGNMENT(OKG5).
kindly provide your valuable inputs for my clearing understanding for RA(WIP)
Best Regards

COST ELEMENT FOR G/L ACCOUNT [KA01]

HI,
KA01 GIVES ERROR
COST ELEMENT: SILT
VALID TO XXXX VALID FROM: XXX
eRROR: CREATE G/L ACCOUNT SILT FIRST.....

Hello,
You need to create a G/L account first. Create a G/L account with transaction code FS00 and give this account as the cost element in cost element creation (KA01).
If you have any doubt then check the existing cost elements in the system and check the G/L account and try to replicate in FS00.
Prase

G/L account & cost element

Pls. clarify how G/L account & cost element is utilized in case of PM orders i.e. actually how these two relate to costing in PM orders.

Hi,
Basically Cost Elements are Cost Carriers. Cost elements enable you to break down the cost associated with one cost bucket into more granular entities.
Primary Cost Element:
When cost element carriers cost between FI and CO they are called Primary, the link is established GL A/c = Cost element(Primary). Primary cost elements are like materail costs, personnel costs, energy costs... where a corresponding GL account exists in FI..to allow costs to flow...
Secondary Cost Element :
When cost element carries cost with in CO, then they are called secondary cost element.
Secondary cost elements are like production costs, material overheads, production overheads, they can be created and administered in only CO. These are used in internal cost allocation, overhead calculation, settlement transactions., it does not flow to FI...
Plant Maintenance:
Cost Elements will be linked to Value Categories. Based on that, costs will be calculated for the PM Order. Cost element creation is based on Business Requirements. For Example, if you want to see the Material Cost (without considering whether internal or external), one cost element will be defined. If you want to see the same separately, 2 different cost elements should be defined. This is apllicable for labor category as well (Internal or External).
In turn, based on cost element assignment under Allocation Structures, settlement will be done on those cost elements. In Allocation structures, Source cost elements & Settlement cost elements will be defined. Based on that, while doing order settlement, costs will be posted to concern cost elements from cost objects (Orders).
[Cost Elements|http://www.sap-basis-abap.com/sapco004.htm]
Regards,
Maheswaran.
Edited by: Maheswaran.K on May 2, 2011 8:54 AM

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

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

COGM Need to be a cost element?

Hai Gurus,
In my client both the COGM and COGS are created as G/L Accounts, we activated the Costing basesd COPA.
The question is weather the COGM is to be created as a cost element in Controlling? We know that the COGS is not to be created as cost element in case of MTS(make to stock scenario) and to be created as a cost elemnt in case of MTO(make to order scenario). In MTO scenario what is the cost element category for COGS is it 11? Please confirm weathert the COGM is to be created as a cost element in both the cases ie MTO and MTS.
Thanks and Regards
Pavan Kumar

Hi,
If you want COGS as cost element better to take it as category 11 . COGM can be created as cost element with category 1.
Regards,
Sreekanth

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

Cost Element Creation against COGM & COGS

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