Diff between Planned Cost - Target Cost

Hi all of you,
Could you please explain me the difference between Planned Cost and Target Cost. Why do we go for the settlement of Variance (Diff between Actual cost and Target Cost).
Please give me your valuable suggestions regarding.
Thanks & Regards
Ramki

HI,
Let us say, for the product X, my planned cost through standard cost estimate is 100 Rs. This has been found through executing the t code Ck40n or Ck11n.
One more assumption is, We have created production order with quanity 10. Did Goods receipt 10 nos.
Now ,,
Planned cost is = Std cost estimate cost x Qunaity=100 x 10= 1000
Target cost: This is being used for comparison purpose. You can have many versions of cost using target cost. let us say, I want to have target version price should be equal to priliminary cost estimate instead of std cost estimate. This can be achived through customizing in t code OKV6. And production order will pick up the target cost value as per the target cost version.
This target cost field in Prod. order gets updated once you run variance calculation.
Actual cost:
Standard cost * actual qty= 100*10=1000
Settlement:
While doing GR/GI to order, the cost is captured under the production order. if there is a difference between actual and plan, that should be posted to Price diffference account.That activiry is being done at the time of settlement.
vijay

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Planned cost/target cost/control cost

Dear Expets,
Ps guide me on the below.
Difference between - planned cost/target cost/control cost and Plan qty/target qty/control qty in MTS or MTO.
your response will be highly appreciated.
regards
Raman Rana
Moderator: Please, avoid asking basic questions

Dear Raman,
planned costs:
The costs anticipated for a particular undertaking (such as an order).
Target costs:
The costs expected to be incurred when a specific quantity is produced.
In Cost Object Controlling, the target costs are calculated on the basis of the planned values of a service unit (such as the planned cost of a production order) and the control quantities (such as the yield delivered to stock).
Target costs can be used for purposes such as:
u2022     To determine variances
u2022     To valuate work in process
u2022     To valuate unplanned scrap
Control costs:
The costs that are compared against the target costs when the variances are calculated.
In Overhead Cost Controlling (CO-OM), the control costs are always the actual costs.
In Cost Object Controlling (CO-PC-OBJ), the control costs are either the actual costs less the work in process and scrap or the cost calculated in the preliminary cost estimate for the order, depending on the target cost version.
br, Guido

Differentiate Planned Cost, Actual Cost & Targeted Cost

Hello Friends,
I am searching for job and went for interview in Wipro. They asked me the difference between Planned, Actual and target cost..... I tried to search on Google and SAP Blog's but couldn't find the appropriate or understandable answer yet, So it would be great if you you can guide me a bit on this......
Thank You,

Hi,
Any PP related queries you can search in Forum ERP: Manufacturing.
Pls refer the link.
planned cost and actual cost
Thanks,
nandha

Diff between Full qty & target qty

What's the diff between following B & C in Itm Ctgy:
Completion Rule:
B- Itm is completed aftr full qty has been referenced
C- Itm is completed aftr target qty is fully referenced?
Similarly in Billing relevance in Itm Ctrgy:
B- Relevant for order- related billin- status acc to order qty
C- Relevant for order. related billing- status acc. to target qty?
Isn't target qty= full qty?

Hi there,
here is the logic:
1) When you define a sales order with a reference to a quotation, then item is deemed to be completed when the target quantity or full quantity is referenced into a sales order.
For eg: You have a quotation for 100 items. But the sales order has just 50 items. So remaining 50 items in quotation will still be open for the customer. Or open items exists for the quotation.
2) This setting is done when defing the invoices. Invoices are of 2 kinds standard F2 invoice & credit / debit memos.
For standard F2 invoice, we usually define status according to order quantity. That is when order is raised for 10 items, invoice is also for 10 items.
Status according to target quantity is used for credit / debit memos.
For eg: original order is for 10 items & F2 invoice is also for 10 items. But the customer returns 5 items from the original order & you create a credit memo. Inthat case credit memo is done for 5 items rather than 10 items.
Hope this clarifies your question.
Regards,
Sivanand

Diff between Planning in BPS and Planning in APO

Hello..
Can any one give me some good insight in to the difference between planning in APO and plannning BW BPS.. In what way is it diff?
thankyou..
kishore karnati

Hi Kishore,
Not sure about APO but some of the distinct features of BPS planning are:
Loose integration with the transactional data flow
Fast and simple adaptation to current and future organizational changes
Free and unrestricted definition of integrated planning scenarios
One homogeneous planning environment for the flexible design of various planning steps
One central data warehouse as basis for all information needed in the decision process
More simulative planning processes
Maybe an APO expert could comment on the other side
Hope it helps...

Actual / Planned / Target Cost and Quantity

Hi Experts,
In the company that I am working there is the need of having a report with the following information:
Plan Cost, Actual Cost, Target Cost, Planned Quantity, Actual Quantity for diferent materials using the cost component split structure or with the different accounts.
Can anyone helpme with this need?
Regards
Edited by: DAG123 on Jun 30, 2011 2:59 PM

Hi
COSP: For External Postings (Target/Plan/Actual)
COSS: For Internal Postings (Target/Plan/Actual)
COSPD (Actual only): Settlement entries i.e. GR and GI upon confirmation, for Primary cost elements
COSSD (Actual only): Settlment entries i.e. activity confirmation
Target/Plan/Actual is differentiated by a separate indicator
br, Ajay M

Mixed costing and Target Costs

Hi
I have the following problem.
We are using within Product Costing the Mixed Costing functionality.
One semi-finished product is produced in 2 plants, standard price calculated according to a certain mix.
Everything fine in product costing so far.
When creating a PP order however, the target costs details are not taken over but only as a full amount under semi-finished consumables. Planned costs are taken over in detail.
After completion of the PP order, actual costs are made on materials, labour, etc, where the target costs are fully seen as semi-finished consumables. Therefor the variance analysis between actuals and target costs shows many differences within the Resource Usage Variance, which is not meant.
Can anyone help ?
Kind Regards,
JeVe

Thanks for your posting Rau,
Yes we did CK11N and CK24.
I think the problem is with the mixed costing.
In the calculation we have two lines per procurement alternative (one per production version), target cost on semi-finished materials cost element. Below that, there is a standard calaculation available, but only the higher level is taken into account when a PP order is created.
Maybe somewhere in the cost estimation is the problem.
In my situation I would like the PP order be targeted at the weighed average cost of the 2 production versions, but on the detailed level. But SAP just shows me the target of the 2 semi-finished products only.
The standard calculation look like
Product A 1000 euro
- 50% product line 1 550 euro
---cost beakdown:
materials 100 euro
labour 300 euro
etc. 150 euro
- 50% product line 2 450 euro
---cost beakdown:
materials 100 euro
labour 250 euro
etc. 100 euro
Target costs on the PP order are one cost element : semi-finished consumables for 1000 euros.
I would like to see target costs on the PP order :
materials 200
labour 550
other 250
Kind regards
JeVe

TARGET COST PROBLEM

Dear Gurus,
In a process order when i click on cost analysis i do not see target cost.the target cost column is empty .
Actual cost column is ok and there are values it and same is with Target/actual variances column.
What is the reason the target cost column is empty.
Thanks in advance
Regards
Ram

Hi
Target costs are populated when you do the goods receipt. System will search for the released standard cost estimate and then apply that for each material component. If these 2 conditions are passed, then you will get target cost in order.
Plan cost = Plan qty * std cost estimate
Target Cost = Actual qty * std cost estimate
Actual cost = Actual qty * actual costs
Eg:
A production order is planned for producing 10 units of a material
Then plan cost on the order = 10 units * std cost
Target costs are calculated once production is confirmed.
Suppose only 9 units were produced out of 10 planned
Then target cost = 9 units * std. costs
Edited by: Ganesh M on Feb 26, 2010 10:15 AM

Definition of target costs

Hello
Can somebody give me a clear definition of target costs?
I suggest it planned costs per unit (of material , activity , etc )* actual quantity produced
thanks

lets imagine that the output material is valuated at standatd price and thera two components of this proction order
       price   quantity
C1    10         2
C2      5         4
planned quantity for this two compnents is a bit different from standard quantity in a cost estimate. Price is a bit different as well as some time has gone since cost estimate was done :
       price   quantity
C1    8         3
C2     4         6
Then planned and target costs will be equal to the following value respectively :
planned = 83 + 46 = 48
target = 102+54 = 40
Am I right?

Target Cost was zero in production order

Hello,
We are experiencing every 1st day of the month target cost was zero for those production order which basic start date was on the 1st day of the month, this happen last march and this april it also happening but in january and february we did not experienced this issue. we wonder how this happening to us, since as we check those production order which basic start date was on the 2nd date and prior all has values in its target cost, this is for same finished material. How was this happening to our plant? how can we check and resolve this issue? am on a PP guy, as i have check the data of those order nothing peculiar for me, and it those material has cost estimate ok, this was released on the 01.01.2009 in this costing run will last untill of the year this was also been seen in the material master data current cost estimate.
As we have search for the performance assistant in SAP it thus tells us:
Total Target Costs
Total value of the target costs.
Calculated with the following formula:
Total target costs = Target cost debit + Target cost credit.
Use
Target costs are the planned costs adjusted to the actual operating rate.
The target debit on a manufacturing order is the sum of the activity-independent planned debit of the order and the activity-dependent planned debit of the order multiplied by the actual quantity of the order.
The target credit of a manufacturing order results from the goods receipt postings to stock. The delivered actual quantity is valuated with the planned price according to the price control.
The total value of the target costs is the sum of the target debit and the target credit.
The target costs are calculated during variance calculation and updated to the database.
The target costs cannot be shown until you have performed variance calculation for this target cost version. The target credit for the calculation of the total variances and production variances cannot be calculated until an actual quantity for an order exists after a goods receipt posting.
For the calculation of variances, the target costs are compared with the control costs.
Dependencies
The calculation of target costs depends on the selected target cost version.
But still we don't know how to check the issue and fixed it:
Please help us and guide us to resolve this issue
Thanks

Hi,
in some more details i have found out on our issue, one of the prerequisite for our variant calculation is Variance calculation at the manufacturing order level requires that the order is fully delivered (final confirmation is done) and technically completed ( except order pass through the mid night of period end ). Those informations can be displayed in the manufacturing order status.
order should be TECO right? but as said on this order pass through the mid night of period end can be have variance calculation, thus am right? this could be affect why the target cost was zero?
Thanks

Total target cost

Hi...,
I want to know the formula or table-field for"Total target cost" for activity type for production order.
For exm. - Tcode CO02 - goto - cost -analysis ,.. here system gives activity wise production cost.That target cost I want to give in zreport.
Thanks in advance.
hemant

Target cost is calculated field during runtime as i am aware of.
but how to calculate that which i can share with you
Total target costs = Target cost debit + Target cost credit
Target costs are the planned costs adjusted to the actual operating
    rate.
The target debit on a manufacturing order is the sum of the
    activity-independent planned debit of the order and the
    activity-dependent planned debit of the order multiplied by the actual
    quantity of the order.
The target credit of a manufacturing order results from the goods
    receipt postings to stock. The delivered actual quantity is valuated
    with the planned price according to the price control.
The total value of the target costs is the sum of the target debit and
    the target credit.
The target costs are calculated during variance calculation and updated
    to the database.
The target costs cannot be shown until you have performed variance
    calculation for this target cost version. The target credit for the
    calculation of the total variances and production variances cannot be
    calculated until an actual quantity for an order exists after a goods
    receipt posting.
For the calculation of variances, the target costs are compared with the
    control costs.
The system uses the operating rate to adjust the plan costs of a period to the actual activity
Operating rate = (Actual activity  Plan activity) X 100
Total target costs = Fixed plan costs + Variable plan costs X Operating rate
example -
The system uses the operating rate to adjust the plan
costs of a period to the actual activity. The operating rate is based on the following formula:
Operating rate = (Actual activity / Plan activity) X 100
Targeet qty is ac alculated qty = BOM ratio * actual production qty
i.e. A product X is the componet
A production plan 10
Actual prodution = 12
Component qty plan = 1
component actual qty = 2
cost of compnent = 1$
target qty = 12*1/10= 1.2
I hope it will help you

Total Target Cost in Cost Analysis report

Hi Everybody,
I have come across a problem. In transaction cor3 when I give the process order then in goto>costs>analysis in the given report I wouldnt be able to find the relevent tables for the field 'Total Target Cost' if someone could help me from where I will be able to reterive this field data int he definition they gave me the fomula
Total Target cost = Target Cost debit + target Cost credit.
If someone have any information regarding target Cost Debit and Target Cost Credit please help me out. I will be very thankful to him or her.
Regards,

Hi Everybody,
I have come across a problem. In transaction cor3 when I give the process order then in goto>costs>analysis in the given report I wouldnt be able to find the relevent tables for the field 'Total Target Cost' if someone could help me from where I will be able to reterive this field data int he definition they gave me the fomula
Total Target cost = Target Cost debit + target Cost credit.
If someone have any information regarding target Cost Debit and Target Cost Credit please help me out. I will be very thankful to him or her.
Regards,

Diff erence between target cost and plan cost

what is the diffenece between target cost and plan cost , in product cost controlling?

Hi
Plan cost is some thing anticipated cost i.e cost estimates here we can say the standard cost.
Target cost is the cost of (yeild) of the production at plan cost.
Ex: Standard cost for X product is 10
      production lot size is 100
      production yeild is 90
then your plan cost will be = 1000
and target cost will be       =   900
and the variance of 100 of 10 units will be as variance.
Regards
Laxmiprasad

Difference between the planned cost and the target cost

Hello guys,
I am really confused between the planned cost and the target cost.As Per the sap help target cost is cost required to produce certain quantity of material.And planned cost even carry the same definition.
So is there any difference between these two cost.Are they same?

Jitendra,
Genarally in CO we will define Target cost is getting calculated in the Production order based on the "Standard Cost Estimate" after GR. Planned costs are calculated based on the current costs.
Example:
Assumption: Assembly Material A with Standard Price, Component B and Component C is maintained with Moving average
Material A Cost 1EA = (component B = $10 + Component cost C = $20+ Activity Price $1) = $31, this is the standard cost estimate for the material.
Now I create a production order on 15th of the month, and the Moving average price for component is now $20 due to subsequent GR with higher price. Now the planned cost for the order would be (20201)=$41, whereas the Target cost would be still $31.
Hope I was able to clarify,
Regards,
Prasobh

Target cost and planned cost

What is the difference between Target cost and planned cost in discrete production orders? Please advise.

Dear
Planned costs will be updated after creation of production order.
Target costs will be updated after delivery of the production order.
Plan cost = Plan qty X Planned price (std. cost estimate)
Actual cost = Actual qty X Actual price
Target Cost = Actual qty X Planned price (std. cost estimate)

Diff between Planned Cost - Target Cost

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