Doubt-product costing

Experts:- plz clarrify this one:-
2. what is the difference between:-
a.product cost planning,
b.cost object controlling
c.sales order costing.

Hi,
Product cost planning is used to calculate the standard costs of the Materials. For which we need to prepare one cost sheet which calculates the overheads used in Production and cost component structure which includes all the cost elements with which the product is costed(materials,activities etc). In planning we create a Costing variant to capture / calculate the standard cost of the product. Costing variant is again a combination of valuation variant(which includes the strategy to calculate ur materials i.e. whether standard price or mov avg price,costing sheet etc.), date control, qty structure control etc. Planning can be done in 2 ways. 1 with qty structure and 2 without qty structure. with qty structure uses a bom and routing selection and without qty structure does not. When we run a standard cost estimate the system calculates the cost of the material based on the settings we make in planning.
After making settings for the planning we need to make settings for costing the object i.e order, Cost collector etc. Cost object controlling settings are different for Order, Period(repetitive) and Sales order Production types.
In cost object controlling we need 2 more costing variants.one for calculating and capturing planned costs as per ur BOM and another for calcualting the actuals which we confirm during production(sap standard ones will be used generally for both). Once the production is confirmed, the system calculates the variance i.e. the difference between ur standard cost and the actuals. Apart from order settings we also need to make settings for calculating WIP, Variance and Settlement of Order or Cost Collector in Cost object controlling.
Sales order costing is one type of production like make to stock, make to order, repetitive. unlike others, in sales order costing production is done based on the sales order of the customer. Generally FMCG and other consumer goods are produced with make to stock and order.
Hope this would help u.
Pls assign points if useful.
Regards,
Vishnu.

Similar Messages

Product Costing:External Processing

Hi Gurus,
My doubt is I am comparing standard cost estimates of production client with another client which is its copy. The product cost estimate of a material, the cost component 'External Processing' is showing value 700 in PN client and 1000 in the New client. The cost element for 'External Processing is 700000000H as primary cost element and another as secondary cost element. I tried checking the GL account report in FBL3N regarding the postings happened in the GL accounts.
1. My question is why there is a variation of 700(of PN client) and 1000(in NEW client).
2. The second question is, from where these values are flowing.How we can trace back the flow of values for this particular cost component of External Processing' of a material cost estimate?
Is it anyway related with Exchange Rate differences? If so, how and where it is linked?
I'll be really grateful for your answers.
Looking forward for you reply soon.
Thanks,
Prithwi.

Hi,
I have checked the valuation variant 001. The startegy sequence is same only. There's no change in configuration settings as the new client is copy of production client only.
I wanted to know, the 'External processing' data or values from which.postings. How it gets picked up and how we can check its origin?
Thanks in advance for your help.
Prithwi.

Product cost component

Hello all,
I am trying to create a report painter report which dsiplays all the cost components on the columns and materials along the rows. I have chosen structure KKBE library 7EE to accomplisg the task. However I cannot come up witht the report I want to.
I have started doubting if the table and library even provides with the capability to achieve a report of such nature.
Please advice me whether the library and structure that I am using is right? if not what is the best structure that can be used??
What kind of reports can I make using structure KKBE?
I have been suggested that ABAP report is the best option that we have. Can you please confirm that for me?
I want to know what reason should I put before the management to effectively convince them that report Painter dosen't possess the capability and that ABAP needs to be used? (If that is truely the case)
Points will be duely assigned for all helpfull answers.
Thanks,
NIK

I tried defining the report however this is the error message I get when I try and execute the report.
Can someone please advise on how to fix this probs. Above all, please explain in plain english what the message is all about.
"Report contains more than one report object"
Message no. KN089
Diagnosis
The report is for more than one report object. This causes performance problems. This is not supportedc in product costing in particular.
Can't really understand what that means?
Also can you tell me what characteristics do I need to pull to define the column for cost component lets say "Direct Depreciation". If you can tell me for 1 cost comp I can emulate the info to define the rest of the columns for diff cost comp.
thanks
NIK

Product Costing in SAP Retail Solution

Hi experts
I have a question about product costing in SAP Retail (SAP ECC 6.0).
In material master data (Tr. MM43 - Tr. MM42) Product Costing view for Logistics:CD sheet is activated.
Although, for Logistics:Store sheet is not activated.
In customizing, we have tried to activate the Product Costing view for Logistics:Store sheet, but there no standard dynpro to use it. So, we have some doubts:
- Do we have to create customer (Z) dynpros in order to activate Product Costing view for Logistics:Store sheet?
- Does SAP allows Product Costing functionality in SAP Retail solution?
If both answers are YES, i have another doubt:
- In our business scenario, the store is supplied by the Distribution Center. So, does it make sense to run product costing for
a articles in a Store?
We think it makes sense to apply product costing functionality in Distribution center. In order to analyze deviations from
Standard costs to real costs. But we are not sure about Stores.
Does anyone have experience in customizing product costing functionality for a SAP retail in a Logistics:Store?
Thank you for your time
Regards

hi
Product hierarchy in R3 is termed as Merchandise category hierarchy in SAP IS retail
But in R3 Product hierarchy is not used much but Merchandise category hierarchy that is termed as MCH is a basic thing reqd for defining master data that is article master data which is nothing but material master in R3
As i said Product hierarchy levels are available in R3 also but not much used
Merchandise category hierarchy levels is most commonly used in SAP IS retail
What we call material group in R3 is same as Merchandise category in SAP IS retail and material in R3 is article in Retail
Merchandise category hierarchy levels
Say a Retail mall has merchandise items
Under merchandise there are 2 divisions Food and non food
Under nonfood say there are 2 divisions say hardware and apparel
Under apparel there 2 divisions say Mens wear and ladies wear
Under mens wear you have t shirts,shirts and pants etc
Here t shirts,shirts and pants etc are individual articles
Menswear and ladies wear are material groups
Hardware and apparel are merchandise hierarchy level 1
Food and non food merchandise hierarchy level 2
Retail mall is merchandise hierarchy level 3
like that hierarchy levels are commonly defined and used as a must to have efficient master data in SAP retail and the maximum no of hierarchy to have ideally is 6 apart from Merchandise category
In our example we have defined three levels
The same functionality can be used as product hierarchy in R3 also but doesnt been put in to use much
In Retail the no of articles a store is going to manage to be will be huge hence this sort of seggregation is needed there must
For more clarity try to post this in retail forum(Trading industries)
Regards
Raja

Use of Product cost collector in REM

Hi All,
I am new to PP module, I got some doubts when working on costing of the product.
1. In REM scenario why do we need an extra step of creating product cost collector ??
2. when a product is produced will the prod cost collector is used for both debiting(raw and semi) and crediting(finished prod) ?

Dear Reddy,
1.Product cost collector is the cost collecting object for a period based production or in a REM - repetitive manufacturing
scenario.
2.Without having any product cost collector you cannot carryout production confirmation(assembly backflush) for a product.
3.So for all the products for which production confirmation will be declared requires a individual product cost collector.
4.Prior to this you require a production version for the material.
5.Production version and a product cost collector is also the master data for a REM scenario.
Now check and revert back.
Regards
Mangalraj.S

Service Product Cost & Profitability

Dear Experts,
I am having the following situation.
1) My Service product is relevant for cost but not for CATS entry.
2) Can I maintain a standard cost related to a service product?
I evaluated the option of replicating the service product to R/3 and then maintain an activity corresponding to a service product. This activity will have a cost attached.
But when the service order is saved , it creates an internal order in R/3 but this internal order does not have any information about the service product.
How do I post the revenue and cost for my service order?
Regards,
Ambarish

Dear Kandan,
1.Product Cost Collector is one of the master data in REM.
2.After material master,BOM,Rate routing,Production versions are created for the HALB & FERT item's,then the next step will be
product cost collector creation using KKF6N.
3.The controlling level for product cost collector will be Production version.
4.For each Production version an individual Product Cost Collector can be created.
5.Without a product cost collector you cannot carryout backflushing for an Inhouse manufactured items.
6.After backflushing,all the cost for producing the product will be saved(getting accumulated) in this product cost collector.
I hope this will clear all your doubts.
Regards
Mangalraj.S

CO02. Product Cost by Order.

Hi All.,
When i am doing the Product cost by order for PP Production Order through CO02, it is giving the details of Itemization of cost for only Raw Materials.
Then what about the Production Costs...or at this level.......cant we get the cost of production, production overheads....and also the material overhead.
Please provide information to clarify this doubt....
Thanks

Hi Arun.,
Thx for your reply, but what i am asking is different frrom the actual cost line items.
At the order level, when we are checking costs....only Raw material costs are picking, then what about the other costs like
Material Overheads,
Production Costs & Overheads.......
Thanks......

External Service Order PO in Product Costing

Hi,
We have Sales Order Costing process which is done on Sales Order level. During Sales order creation and save, costing is calculated automatically. Based on Sales Order MRP Run is generated and Production Order is made on the basis of Sales Order. We have requirement of External Service Purchase Order need to be flow in product costing. Already we have done external service order purchase order through production cost center and it has done GRN and vendor invoice. GRN value has flown to production cost center. next step I have doubt. In Costing variant under valuation variant - External Processing strategy sequence is done as "Net Purchase Order Price". What are the other settings are required ?
So I would request you, please guide me how external service order purchase Order can be shown to product costing ? If I want to show this external po value to costing sheet during sales order costing how it can be introduced ?
Best Regards.
Samrat Roy

Hi,
I am able to resolve this issue by myself.
Thanks,
Prithwiraj.

Rem product cost collector

Hai gurus,
I have one doubt in REM product cost calculation.
1) when I am running PCC for REM I met with following error as - Routing does not match with selection
ID 01.
How to correct the error.
Regards,
sekar chand.

Dear Sekar,
1.While creating product cost collector,use Production version as the controlling level.
2.Check RM01 is the order type and ensure your production version is without any errors.
3.Ensure you have selected rate routing in the task list type in the production version.
4.Check what routing selection id is assigned in MRP parameters in OPPQ and also in the scheduling
parameters in OPU5 for the order type PE.
5,Your routing selection id should be a one which gives the first priority to the rate routing R.
Now check and come back with your further queries.
Regards
Mangalraj.S

Re: Product Costing

Hi All,
I am having some doubt in product costing side of production. I am having a scenario,where I do create a Process order for 10 pc & I do issue Raw material (manually,using GI-261).Then I do confirmation for 9 pc.
Now
1st.: What should be the WIP. should it be equal to Price of 1 FG or Price of raw material equivalent to 1 FG.
Please Advice.
Regards,
Vivek

Hi,
Kindly don't mix up conventional cost accounting terms and the way SAP handles the cost accounting. You need to understand SAP process of handling Product Cost which is different from the conventional concept but competible with the international accounting standards.
1. At the time of GR-101 of finished or semi finished product your inventory directly increased
2. What ever the material issued for Production order GI-261 it will appear as the cost incurred over the procution order
3. What ever confirmation is done with respect to the produciton order will appear as the cost incurred of the procution order
So keeping the above in your mind your WIP for the production order will be = Cost of Material Issued for production order + Confirmation of activities cost - Value of Goods receipt for production order
Because,
1. What ever mateiral you issued is reduced form inventory value
2. What ever Material you recieived thorugh GR is increased the inventory
3. What ever remain at Production order is your WIP inventory.
Hope it clear,
Best regards,
Farman

Product costing with components purchased in countries with high inflation

Hi guru,
I have the following problem. My company produced in Italy but buy some component from India, that is a country with high inflation.
When I run the product costing for a finished product in Italy, in which way I can consider the high inflation in India? My doubt is that I can have a wrong product costing because the value of component is not correct
Thanks
Regards
Raffaele

Hi
Product costing allows recursive BOM with certain restrictions. Kindly check the following link for more information on recursiveness:
http://help.sap.com/saphelp_erp2005vp/helpdata/en/bc/566916eff011d189be0000e8214595/frameset.htm
Regards,
Suraj

Doubt in Cost Types

Hi,
Can any body explain me about PWAC,PMAC and PPAC? I am not able to understand the difference between PMAC,PWAC and PPAC.
regards and thanks in advcance,
VAS

Hi,
Here are the cost types, please feel free to get back to me if you have any doubts
Standard Costing
When you select this costing calculation, you define for OPM the cost of ingredients in each specific warehouse during a specific period of time. The cost information remains static during each defined time period. Standard costing enables you to define the costs for items, formulas, formula ingredients, and resources used during the production process. OPM calculates the cost of an item based on different:
•     Ingredients stored at different locations
•     Formula versions
•     Facilities where overhead and associated costs vary
Actual Costing
This is a more dynamic method of calculating production costs, in which OPM will capture the actual costs from business transactions throughout OPM. The actual data considered includes the following:
•     Purchasing receipts
•     Price changes on receipts
•     Invoices paid
•     Batch ingredient consumption
•     Resource usage data
•     Direct/indirect expense allocations
•     Prior inventory balances
•     Cost burdens
•     Cost adjustments
•     General ledger expense allocations
Calculate Actual Costs
Raw Material Costs
As part of Oracle Purchasing for Process Inventory enhancement, Oracle Purchasing receipts and AP invoices form the source for raw material cost calculations. OPM bases raw material cost calculations on the estimated prices on raw material receipts (materials received through the Oracle Purchasing application). The Actual Cost process also considers adjustments and returns. If a final invoice price (the amount actually paid for the raw material, pegged to the receipt) exists during the same calendar period as the material receipt, OPM uses the invoice price to calculate the raw material costs.
Period Moving Average Cost (PMAC)
OPM calculates the average cost for the period while moving previous period's cost with last period's inventory balance and cost.
Where:
Prev Period Inv Balance - This is the previous period inventory balance captured
from the inventory period ending balances.
Prev Period Cost - The previous period actual cost component from the cost
component details table.
Trans Qty - Receipt Transaction Quantities or AP Interfaced Quantities within the
costing period.
Price - Receipt estimated prices or AP invoice final prices within the costing period.
Period Weighted Average Cost (PWAC)
This is the strict average cost of the raw material during the period, based on the total estimated receipt (or invoiced) price for the entire inventory quantity. The period weighted average cost is a strict average cost for the period based on Period Total Quantity and Estimated or Final Prices.
Where:
Trans Qty - Receipt Quantities or AP interfaced quantities within the costing period
Price - Receipt estimated prices or AP invoice final prices within the costing period
Perpetual Weighted Average Cost (PPAC)
The perpetual weighted average cost method computes the average cost for the entered receipts and quantities within the defined boundaries of the cost calendar.
The calendar definition may in turn be identical to a fiscal year, or may span multiple fiscal years providing the flexibility of a variety of Perpetual Weighted Average cost methods.
Where:
Trans Qty - Receipt Quantities or AP interfaced quantities from the start of the costing calendar to the end of the current period.
Price - Receipt estimated prices or AP invoice final prices within the costing calendar.
Last Transaction Cost
There are two methods for determining last actual cost of a raw material:
•     LSTT - This method uses the last transaction within the costing period, regardless of whether the transaction is a receipt or an Accounts Payable invoice.
•     LSTI - This method uses the last Accounts Payable Invoice transaction within the costing period, even if there are latest receipts with estimated prices. In the absence of AP invoice transactions the latest receipt will be considered for the actual cost.
Product Costs
You can let OPM calculate actual costs of products, which is useful if you need to "spread" actual product costs for the period over more than one cost calendar period. For example, assume you have a steady level of production for 10 straight periods in a cost calendar. If production skyrockets in the 11th period, then production costs for that period skyrocket as well.
OPM uses one of the following methods to figure product cost so that those greater-than-usual product costs for the period are redistributed, and leveled, over a greater period of time:
•     1 - Period Moving Average Cost (PMAC)
•     2 - Period Weighted Average Cost (PWAC)
•     3 - Perpetual Average Cost (PPAC)
Note: Raw material calculation and product calculation types can be different. For example, raw materials can be calculated based on Period Weighted Average Cost (PWAC), and products based on Period Moving Average Cost (PMAC).
Period Moving Average Cost (PMAC)
OPM calculates the cost of the product based on closed batches in this period, and also on prior-period inventory balances and period costs.
When the product is produced, but not received or invoiced in this period, the following calculation takes place:
PMAC = [(PBAL * PCOST) + BCOST] / (PBAL + BQTY)
When the product is both produced and received or invoiced in this period, the following calculation takes place
PMAC = [(PBAL * PCOST) + BCOST + RCOST] / (PBAL + BQTY + RQTY)
Where:
PBAL - Closing inventory balance for item at current warehouse in prior period (this will be same for all cost components for item).
PCOST - Component cost from previous cost period.
BCOST - Sum of component costs of all ingredients in all batches for the specific cost component, in this period.
BQTY - Total quantity produced in all batches in this period (this will be same for all cost components for item).
RCOST - Total receipt cost for this component in this period (this amount was used in raw material cost calculation for the item).
RQTY - This is the quantity used in raw material cost calculations for this item.
Period Weighted Average Cost (PWAC)
Calculates cost of a product based on current-period transactions only; all closedbatches in the period will be considered.
When the product is produced, but not received or invoiced in this period, the following calculation takes place:
PWAC=BCOST/BQTY
When the product is both produced and received or invoiced in this period, the following calculation takes place:
PWAC=(BCOST+RCOST)/(BQTY+RQTY)
Where:
BCOST - Sum of component costs of all ingredients in all batches for the specific cost component, in this period.
BQTY - Total quantity produced in all batches in this period (this will be same for all cost components for item).
RCOST - Total receipt cost for this component in this period (this amount was used in raw material cost calculation for the item).
RQTY - This is the quantity used in raw material cost calculations for this item.
Perpetual Weighted Average Cost (PPAC)
Calculates average cost of a product based on the entire calendar's transactions and batches (up to and including the previous period), and the current period.
When the product is produced, but not received or invoiced in this period, the following calculation takes place:
PPAC=PPAC_COST+BCOST/PPAC_QTY+BQTY
When the product is both produced and received or invoiced in this period, the
following calculation takes place:
PPAC=PPAC+BCOST+RCOST/PPAC+BQTY+RQTY
Where:
PPAC_COST - Result of the transaction quantity "times" transaction component cost for calendar to prior-period transactions (this includes all the calendar to prior period receipt transaction batches and adjustments.
PPAC_QTY - Sum of transaction quantity for calendar to prior-period transactions.
BCOST - Sum of component costs of all ingredients in all batches for the specific cost component, in this period.
BQTY - Total quantity produced in all batches in this period (this will be same for all cost components for item).
RCOST - Total receipt cost for this component in this period (this amount was used in raw material cost calculation for the item).
RQTY - This is the quantity used in raw material cost calculations for this item.
Regards
Srinivas Tenali

Product Costing operation

Hi...
What are the operations / functions are used in Product costing ? Like CK11n, CK24 etc..
With Regards,
Samrat

hi,
Step 1:
Header Data Create a costing run by specifying a name. Also enter description of the same along with date for which the costing run is taken
Finally save this data.
Step 2:
General Data Select Costing Variant, Costing Version from the available options. Enter Controlling Area and Company Code.
Step 3:
Processing - Selection of Material
Click on the parameter icon, which will open a new window change parameter window. In this window enter single material code/ range of material/ multiple material code and plant code.
Tick the field Always Recost Material and remove tick from background processing. After this save the data and go to the previous screen.
Click the execute button. The status field will show a green signal if all the materials were selected correctly, else will show red signal specifying error.
Processing Structured Explosion
This step will read the Bill of Material for the selected product/products. Go to change parameter window and remove tick from background processing. Save the data and go to the previous screen.
Execute this step and the status field will show green signal for successful execution.
Processing Costing
This step will create standard cost estimate for all the materials selected in Selection step and BOM exploded in structured explosion step.
Go to change parameter window and remove tick from background processing. Save the data and go to the previous screen.
Execute this step and the status field will show green signal for successful execution. The materials field will show total no. of materials that were costed.
Processing Analysis
After costing step is over, a report is generated that enables to process and analyze the costing results. For example, compare the costing run with other costing runs or compare the costing results with a price from the material master.
After this remove tick from background processing field in the change parameter window and return to the previous screen for executing this step.
Processing Marking
This step will mark the standard cost estimate for the costed products in the previous step. If the authorization field is locked, then it is to be opened by selecting the relevant company code.
This step would enable the results of standard cost estimate to be updated as future price in the material master.
Go to change parameter screen to make relevant changes and then execute this step after returning to the main screen.
Processing Release
This is the last step in costing run transaction. This step will update the results of standard cost estimates in the material master as the current standard price.
It is to be noted that after releasing a cost estimate for a material in a company code, no marking or release can be carried out again for the current period. Before releasing a cost estimate, is should be made sure that the future standard prices are correct.
Go to change parameter screen to make relevant changes and then execute this step after returning to the main screen. To verify the updated prices, check the material prices in material master.
At every step if there is any error or warning, the log field will display it in detail.
Pls revert in case of any doubts, if any.
if useful assign points
regards,
santosh kumar

Old material overwritten by new material code in Product cost collector

Hi SAP Gurus,
How can I work around if a product cost collector with material XXX has been overwritten by a new material YYY when creating the KKF6N.
Both material code having the same plant, same orde type,same production version but just different material code.
When saving the preliminary costing for the product cost collector for material YYY, the system prompted me the order number 700022 which is already existing and created for material XXX.
By right, this shd not be happened but indeed it did.
Now when displaying the report S_ALR_87013127 - Order Selection, the report showed the new material YYY was created with order number 700022 but the content of the data was for old material XXX.
Now my problem is how can I get back the product cost collector for material XXX as the original order number 700022 was meant for material XXX and not mat YYY.
And also when executing backflush (MFBF) for old material XXX, the error msg prompted as 'content of order 700022: Mat YYY transferred to interface (IMSEG):Mat XXX due to this I can't backflush material XXX.
Really appreciate your expertise on this urgently.
many thanks!

problem due to system bug, have to log to OSS for help.

How to calculate the Current APC (Acquisition and Production Cost)

Hi,
Please help me how to calculate the Current APC.
The Current APC (Acquisition and Production Cost) is a calculated value based on Previous Year Acquisition balance plus any value changes up to the time of the report.
The Asset History Report (RAGITT_ALV01) calculates the Current APC value &
The Current APC can also be found in the Asset Explorer (transaction code AW01N) under Country Book 10/ Posted Values tab then the line Acquisition Value and column Posted values.
I suppose that the calculation of Current APC (Acquisition and Production Cost) is getting done in the GET statements in the report RAGITT_ALV01, but unable to find the actual logic.
Please help me.
Thanks in advance,
Satish

Hi,
you'll find the logic in fm FI_AA_VALUES_CALCULATE
A.

Doubt-product costing

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