FIFO Impact on Costing

Hello Experts,
Can any one please list the impacts of FIFO valuation on costing.
Are there any settings that need to be done in Product Costing?
Is FIFO re-valuation done after the costing step? If yes what are the implications on FI accounts?

Hi
If you carry out Material Valuation in your company at plant level (valuation area = plant), you have two options:
FIFO valuation at company code level
You valuate all the stocks of a particular material in all of the valuation areas of the company code together (joint valuation). This means that there is only one FIFO price for a material in all of the valuation areas.
FIFO valuation at valuation area level
You valuate all the stocks of a particular material separately in the individual valuation areas of the company code. This means that there can be different FIFO prices for a material in the individual valuation areas of the same company code.
If you carry out Material Valuation in your company at company code level (valuation area = company code), FIFO valuation is also carried out at company code level.
If you have flagged materials as relevant for FIFO, you can no longer change the settings for the FIFO valuation level.
Regards
Odaiah Pelley

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Material with item cat.group ERLA impact on costing and sales pricing

Hello,
I would like to know if a material which is defined as item category group ERLA and which has two sub-items posted in the BOM with usage 5 with its respective std cost could be calculated for costing or not?
Can I have some information about the impact on costing and pricing in sales?
Thanks in advance
AB

No the material type should be a FG : it is relevant for sales reporting. For example I call it material "A". In the material master data within the sales screen the item category group ERLA is assigned to "A" . The material A is a grouping material with a sales BOM which contains some sub-items for example B and C which are picked and shipped together. The grouping material is not handled as stock material: only the sub-items are stocked and moved.
The customer could only require the material A with its price and receive phisically the two sub-items with a unique package unit or with two separate ones.
In this scenario the FG with ERLA item could be estimated for standard cost or not?
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Andrea

How purchasing master data setup impact CO costing run

Dear all,
Question 1:
Could somebody out there, if you have this area of integration knowledge with CO, tell me the detail process and logic of how, when a costing run is perform, the master data in the Material master fields of Procurement Type and Special Procurement Type; Purchasing Information Records; and Source List impact the successful of costing run?
Question 2:
CO guy complaints that there are missing PIR and source list for following type of material setup in material master:
A) procurement type - F, Special procurement - blank (i.e. third party)
B) procurement type - F, Special procurement - NON-blank (i.e. can be intercompany, subcontract, vendor consignment),
Hence Costing run unable to determine the price. Is it a valid complaints
Regards,
Daniel

Hi,
Though Costing is realted to the price control , cost lot size and valuation class in Material master.
It almost equvalent dependent on Special Procurement type also is costing view and MRP view.
Do refer the effect of special procurement type in costing in belowHelp Link
https://help.sap.com/saphelp_46c/helpdata/en/7e/cb7f5643a311d189ee0000e81ddfac/content.htm
Do refer the basisc of standarad costing estimates in below Link
Basics of SAP Standard Cost estimate- Understanding the flow of cost settings-Part 1

Impact of Cost component structure on PA Transfer structure in SAP

Hi All,
We were using a single Operating concern and Controlling area for existing company codes. Now, we got a new company to be created all together a new company with the same chart of accounts.
1. We have created Operating concern, COA, Company code..... and then completed the PA Transfer structure of FI-MM in KEI1
2. I have created a new Costing variant in OKKN
3. I have created the Cost component structure in OKTZ and assigned the new company code to it.
When i go back and checked the PA Transfer structure for FI-MM, i see everything showing as blank.
I have no idea the entire config got deleted.
Do you have any idea how it happens and why it happens please?
Also, will there be any relation b/n OKTZ and KEI1 and sequence to customize?
Hope you understand my query.
Appreciate your early response.
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Narasimhulu

Hi Ravi,
Thanks for your response.
I have created the FI-MM PA transfer structure for the new Controlling area. But after completing the Cost component structure and came back to check the PA Transfer structure, i was surprised since everything to deleted.
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What is impact of Complex procurment with retention on Oracle Project Cost?

Hello Experts / Dina,
Can you please explain the flow and acrrual of cost when complex purchase order has been raised with multiple retention on Oracle Project and interface the cost to Oracle Project.
Example - Complex purchase order of contract consulting is raised with amount of 1000 GBP with 4 Milstone of 250 GBP upon 25% completion of work.
I wanted to know in this scenarion how the retention payment / invoice matches to purchase order impact on cost interface to project by using PRC:Interface cost to projects.
Thanks in advance,
Regards
:-)

Hello,
As per Oracle Costing user guide on retainage.....
"Oracle Projects does not report on or interface project-related retainage distribution
lines as commitments or actual costs. Instead, Oracle Projects captures the full amount
of the expense as a commitment and, when applicable, for the funds check. Later, the
full amount of the expense is interfaced to Oracle Projects as an actual cost. Retainage is
related to the payment of the invoice and it ultimately does not have an impact on the
overall project cost."
So in relation with my previous example, if period end accounting is enable on procurment side then on raising of purchase order of 1000GBP and interfacing cost to oracle project, will be treated as commitment amount(1000GBP)? and when the invoiced raised / matched and accounted for 1st milestone let say 300 GBP then complete 1000GBP will be interface as actual cost or just 300 GBP will be as actual cost?
Really appreciate if you can me help in understand. :-)
Thanks

Layer Cost Worker Error

Hi All,
The Layer Cost Worker concurrent program is scheduled & running with error. When I fetch the details from back end, I found out that it was a child concurrent program of costing manager.
And Cosing Manager status_code was 'I'. So if I cancel the parent, then the chils concurrent program also gets stopped.
But, I want to know what impact it will cause if I cancel costing manger. And how can I solve the issue in layer cost worker CCP.
Thanks,
R. Balachandran

If Costing manager is stopped then you will end up with material txns not being costed which will effect your FIFO or LIFO costed items.

Sales Analysis report does not match Cost of Sales Account

My client is running SAP B1 8.81 PL 6. He has set all items to standard costing method. He has discovered that the difference between the Sales Amount and the Gross Profit amount on the Sales Analysis report, which should equal the Cost of Sales for the Items, does not match the Cost of Sales G/L account on the P&L report. If you look at a sample of rows, the above difference divided by the quantity equals the standard cost of the item. There are no manual journal entries that affect the COS account for the posting period that is being analyzed. I cannot see any mathmatical difference or problem with the above analysis, nor can I find the problem. There is about an $85K difference between the reports. The Sales Amount on the Sales Analysis report matches the revenue account on the P&L to the penny. Has anyone ever compared these 2 reports? Thank you for your help.
Bill Turek

If you right click on an Invoice and choose "Gross Profit" it will give you a setting on how you want to calculate the Gross Profit for that invoice.
In the accounting point of view the "Base Price" should be "Item Cost" so that the Gross Profit will be (Net Selling Price - Item Cost = Gross Profit). This will give you the same Gross Profit amount between P and L and Sales Analysis Report.
However, SAP B1 gives the user the ability to select a different base price other than the Item Cost.
This gives the user the flexibility for the Sales Report. Example (Net Sales Price - Vendor Sales Price = Gross Profit). People do this sometimes because the item's cost fluctuates if you use FIFO or average cost and they want a uniform cost to calculate their Gross Profit.
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See screenshot:
-Eric Alo-
B1 Financial Consultant

Cost of Sales & Period Account.......

Hi SAP guru's,
- What is the diff. between Cost of Sales Accounting and Period Accounting approach?
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sure we will assign good points
thanks
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If you right click on an Invoice and choose "Gross Profit" it will give you a setting on how you want to calculate the Gross Profit for that invoice.
In the accounting point of view the "Base Price" should be "Item Cost" so that the Gross Profit will be (Net Selling Price - Item Cost = Gross Profit). This will give you the same Gross Profit amount between P and L and Sales Analysis Report.
However, SAP B1 gives the user the ability to select a different base price other than the Item Cost.
This gives the user the flexibility for the Sales Report. Example (Net Sales Price - Vendor Sales Price = Gross Profit). People do this sometimes because the item's cost fluctuates if you use FIFO or average cost and they want a uniform cost to calculate their Gross Profit.
In summary if the Base Price is not set to "Item Cost" then there will be difference in the Gross Profit between the P and L and Sales Analysis Report.
See screenshot:
-Eric Alo-
B1 Financial Consultant

Material Cost Estimate with different lot size.

What happens if the material cost estimate is run twice using different lot sizes each time (all other parameters unchanged) for the same period?
Will the cost estimate run later overwrites the results from cost estimate run earlier (though the lot size is different)? What is the role of lot size in a material cost estimate?

The costing lot size impacts your cost estimate if you have lot size independent costs (i.e. setup cost). Those fixed costs are spread over the costing lot sizee to give you a cost per unit.. Larger costing lot sizes can also help you minimize rounding issues.
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Cost Estimate by Material Valuation Type

Hi,
Anybody knows about the impact of cost estimate (or standard cost) by material Valuation Type level instead of by Plant level? Especially how is the impact on Moving Average Price calculatio (is it calculated for both valuation type level and plant level?) and the inpact on Production order confirmation (which value will be taken for finish product inventory? Is it Plant level standard price or valuation type standard price?)
Thanks in advance

Hi,
In Split Valuation --
At plant level the material is always valued @Moving average price(MVP)
More specific to the material ,the valuation will be made @ valuation type level --either at Standard cost or MVP. as you wish.
In production order confirmation the valuation will be made @ valuation type level .
For your inventory valuation, you may go for plant level valuation or valuation type level.
Regards,
Murali
Assign points if it is useful

Cost Estimate Run

Hi Gurus,
Please tell me why we run cost estimate and what is the use of it.
What are impacts of running cost estimate?
Please revert asap.
Thank You

Hi,
Cost Estimate is runned to calculate the Cost of Goods Manufactured or Cost of Goods Sold for your Materials and Update the prices in Material Master.
You have different ways of Calculating your COGS and COGM in SAP.
The Important methods are
Cost Estimate With Qunatity Structure and Without Quantity Structure.
In Cost Estimate With Qunatity Structure you will not have the option of entering the lot size for your Cost Estimation. It will be automatically determined from your BOM and Routing.
Whereas In Cost Estimate Without Quantity Structure you need to manually enter the Quantity at the time Cost Estimation.
With Regard to Impact of Cost Estimates.
While Running the Costing Run you have to Mark or Release your Cost Estimation results inorder to Update the prices in Material Master record.
Hope I have briefly given an idea baout Cost Estimates and its impact.

Fifo in sql server

i am using sql server 2008.
i am calculating envetory as FIFO method like in tally.
please go through
http://accountingexplained.com/financial/inventories/fifo-method
i have table as
create table #Stock
Transection_Date Date,
transectionType varchar(20),
Unit numeric(18,2),
UnitCost numeric(18,2)
insert into #Stock select '2014-03-01', 'Beginning Inventory', 68, 14
insert into #Stock select '2014-03-05', 'Purchase', 140, 15.50
insert into #Stock select '2014-03-09', 'Sale', 94, 19
insert into #Stock select '2014-03-11', 'Purchase', 40, 16
insert into #Stock select '2014-03-16', 'Purchase', 68, 14
insert into #Stock select '2014-03-20', 'Sale', 116, 19.50
insert into #Stock select '2014-03-29', 'Sale', 62, 21.00
select * from #Stock
drop table #Stock
expected closing stock output is
please find excel file with formula there how it calculated
excel file
Thanks Best Regard Naweez

T-SQL: FIFO Inventory Problem - Cost of Goods Sold

Consumption accounts not created as cost elements - Implications

Hi
There are following GL accounts as an Expense GL accounts:
Cost of Raw Material Consumption
Cost of Finished Goods Manufactured
Cost of Finished Goods Sold
Change in Stock WIP.
I have not created them as cost elements since its asking me cost center when i do any PGI or issue to sub contract stock, etc.
So i wanted to know the implications on CO-PA if i do not create cost element. I believe that value will flow to CO-PA on the basis of material code.
Further my doubt is, if i do not create it as cost element, how it will impact my cost center reports and product costing.
Please help. I am confused very much.
Edited by: Meenu_ND on Aug 4, 2011 7:55 PM

Hi Meenu
cogs - can not be created as cost elements- GBB-VAX- COSTING BASED COPA- MTS
Can be created as cost element -GBB-VAY- COSTING BASED COPA- MTO
always as a cost element GBB-VAY- Accounting based copa
Thanks
ram

Co product and By product product costing and settlement

Dear Friends,
Here is my question
In Disrete manufacturing Product costing
when we design product costing Business blue print
Instead of using co-product we wrongly map to co-product what will be the impact in costing point of view
can any one explain demerits in costing point of view
Product costing is based on Quanity structure
if my question is not clear, please do not hesitate to ask for more information
Thanks & Regards
Raj

Hi,
Please consider the following:
1. By-Product Scenario:
You need to maintain a costing BOM, to determine the standard price of the by-product. In the BOM of main product, you can use this by-product as a credit, the system will calculate the target cost based on the std cost from coting BOM.
If you dont maintain the byproduct in BOM of main product, and while confirming you are entering by-product, then the system will calculate production variance.
2. Co-Product Scenario:
You need to maintain Co-product tick in either MRP2 or Costing View and maintain the coproduct combination in the Joint Production. This is to be maintained for all the co-products. Once you are entering a production order, the system automatically uses this combination and brings in multiple lines in the production order for all the relevant materials (co-products).
When cost estimate is done, the system divides the cost for materials, activity costs, etc based on the weightage maintained in equivalent numbers.
Trust this helps.
Please assign pts, if useful.

Double consumption of activity costs as reflected in PCC

Hi all
While doing Confimation in APO.
we have observed that there is double consumption of activities at each stage after the first stage that is confirmed.
This has a direct impact on cost booked against activities and depreciation.
When one looks at PPCSHOW transaction in ECC6.0, for the order no 050000970308, it shows that the consumption is double .
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Ansuman

Hi,
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Regards,
Raj

FIFO Impact on Costing

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