Fixed costs & Variable costs
Hi,
what is the difference between fixed and variable costs when we are doing cost center planning.
On what basis, we need to enter these costs?
Regards,
Krishna
Hi,
Fixed cost doesnt depend on quantity whereas Variable cost is directly proportional to quantity.
Total Cost= Fixed cost + Variable cost X Quantity
For eg. You produce pencils in a shop then rent of shop will be fixed cost and rate of labour per pencil will be variable cost. Irrespective of no of pencils produced you will have to pay fixed cost ie rent.
Hope this helps.
Regards
Similar Messages
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Fixed and variable cost component break up in PCA
Hi,
Is it possible to get fixed and variable cost component break up and contribution report in PCA at each product group level and lower level of node. I think this requires development. As my client requires the report to have cost break up into fixed and variable in PCA at each line item level. Can anyone solve thisHello
You can get the report by using the report painter, no development will be required.
Regards
Madhav -
Fixed and variable cost element's cost
hi,
i would like to clarify. need your kind advice.
1) can direct cost has both fixed and variable cost? can have example?
2) can indirect cost has both fixed and variable cost? can have example?
3) direct cost only happens in direct cost center and indirect cost only happens in indirect cost center?
4) can direct cost center assign to fixed cost element and variable cost element? Likewise, indirect cost center assign to fixed cost element and variable cost element?
thanksHi,
As per my understanding
Direct cost to a department could be variable or fixed.
Example: A supervisor in the X department would be a direct cost to the Dept A department. Since the X salary is likely to be the same amount each month regardless of the quantity of products manufactured, it is a fixed cost to the department. The supplies furnished to the X department will be a direct cost to the department, but will be a variable cost to the department if the total amount of supplies used in the department increases as the volume or activity in the department increases.
Indirect cost is the Power used to operate a production machine.
Example: The cost of the Power is variable because the total Power used is greater when more products are manufactured on the machine. Depreciation on the production machine is also an indirect product cost, except it is usually a fixed cost. That is, the machineu2019s total depreciation expense is the same each year regardless of volume produced on the machine.
As you can see, costs can be direct and indirect depending on the cost object: product, department. The cost is fixed if the total amount of the cost does not change as volume changes. If the total cost does change in proportion to the change in the activity or volume, it is a variable cost. -
Fixed Cost & Variable cost in Production Order
Hi ,
I have maintained the fixed cost & Variable cost in KP 26 for the activity type .
for 1 hr
Fixed cost : 1
Variable cost :1
Operation duration is 1 hr , when i check the Planned cost it shows total plan cost is 6.92 ,
Fixed cost as 3.46 and variable cost as 3.46 ,
How the system calculates 6.82 ,
I have maintained the valuation Variant for the activity type is Plan price for the period .
As per my understanding system has to calculate the Planned cost as 2 (1 for fixed + 1 for Variable )
Can anybody explain me why the system calculated the price as 6.82 ...
Thanks in Advance ...Dear,
Please check the following :
1.Goto CR02-Slect the Costing tab -Check the Formula Key assinged in the Work Centre costing tab .??
2.Please note that variable cost is dependant on quantity, where as fixed cost is independent of quantity.
For example, if you have updated Rs.300 in variable and Rs.200 in Fixed cost fields and you quanity of activity type consumed is 100 minutes.Your fixed cost will be Rs.200 and variable cost will Rs.300/minute * 100 = Rs.30000
3.What s the currency in Controlling area ??
Regards
JH -
Definition of fixed and variable costs
Hi,
where do I define if a an expense account is a fixed or variable cost element? Do I have to set up separte expense accounts in the Chart of Accounts for fixed and variable?
Can you give me some info of how this is done.
Thanks
PaulHi Paul,
You can use the features of Cost Element Attributes and Cost Element Attributes Mix for this.
Pls check OKA4 and OKEC transaction codes for this. IMG -- CO -- CE Accounting -- Master Data -- Cost Elements
Once you create the Attribute Mix, you can populate it in the Cost Element Master Data.
You can describe a cost element with a maximum of eight attributes, independent of the chart of accounts. You can use these attributes for evaluations in reporting.
You can store a valid combination of permitted attributes:
--In the cost element's master data
--In cost center planning for the combination cost center/cost element
Pls revert back for further explanation...
Srikanth Munnaluri -
Product costing - Fixed and variable cost.
HI,
I like to know how the cost is divided into fixed and variable at the cost compent level.
as there is only one setting available at Define Cost Component Structure.
Kindly let me know how this is done and possible forward the Product costing document and setting.
my e-mail :[email protected]
With Regards
Krishna Singareddy
Edited by: krishna singareddy on Feb 26, 2008 8:26 PM
Edited by: krishna singareddy on Feb 26, 2008 8:27 PMHi, FICO MOH ,
Do u have any logic if a coast element has 100 how do u divide it among the fixed and variable.
what is the persentage or based on what it is defined .
can u put some example pls
with regards
krishna -
Product Costs Split is required, that is fixed and Variable costs
Hi All,
In a Sales Order screen (VA03), if we check the Costing, by clicking on EXTRAS -> COSTING, we get Total Costs, Fixed Costs and Variable Costs.
Can someone please help me in getting these costs, I have used Table KEKO,
In KEKO (filtered based on Material, Plant, Sales Document, Item) and executed it, taken the resultant ProdCstgNo (KALNR)
In KEPH used that KALNR, as a result I am getting 4 records, However 2 records are not correct, and 2 are correct.
In correct ones I have to add few costs to get FIXED COSTS and few costs to get VARIABLE COSTS.
My question is, which filter should I use to get the correct record (probably just one record) ?
Can I in some table get the summed up VARIABLE COSTS and FIXED COSTS, rather that I have to add them seperately ?
Please help, will award points promptly. ThanksHi,
In KEKO (filtered based on Material, Plant, Sales Document, Item) and executed it, taken the resultantProdCstgNo (KALNR)
In KEPH used that KALNR, as a result I am getting 4 records, However 2 records are not correct, and 2 are correct.
The table you mentioned CKMLKEPH is used for Material Ledger actual cost components.
Regd,
Khan. -
Experts,
What is the Variable Cost tab in Landed Cost, Cost meant for?
I only have the Fixed Cost that is active, the Variable Cost is not active. How do I get this active?
Thanks,
MarliHere is the answer:
The tab consists of two subtabs: Fixed Costs and Variable Costs. If your company manages a perpetual inventory system, the Variable Costs subtab is disabled. -
Fixed and Variable Breakup of Actual Cost
We have implemented Material ledger and also activated actual cost component split. We are getting the actual product cost at month end. In the costing cockpit we get the Peiodic unit price(Actual cost) as well as std price of the material. But In costing cockpit we are not able to get the breakup of Fixed and variable. Whereas we are getting Fixed and varible breakup when we check cost component report in ckm3. But there, we can see individual material wise fixed and varibale breakup.
Can anybody help me so that I can see the Actual Fixed and variable cost for all the products at a time?
With regards
Mukesh PoddarFixed price, is the fixed costs - I usually see it in relation to Overhead..
Fixed costs remain, whether you manufacutre or not.
Say you are deciding whether to out-source an assembly, If you outsource, VARIABLE cost will be saved, Material, labor for that assembly, Overhead representing fringes for that labor, the electricity to run that specific machine. However, you will still have fixed costs of: Management Salary (although some of that can be variable); insurance on the building; heating and cooling for the building; realestate taxes.
If the cost to make "in house" is 150 each and the vendor is going to charge you 100, thi is only a true saving if your fixed costs are less than 50.
SAP allows you to separate fixed and variable costs so that you do make/buy analysis, budgeting, etc
Hope this helps
Edited by: Althea Madigan on May 12, 2010 2:11 PM -
Overview report cost estimate (fix and variable)
Hello
anybody knows a overview report where i can see for the current valid cost estimates
per material
costs splitt between fix and variable costs
Alternatively it would be sufficient if this is just shown for a costing run
In CK40N and all other reports i know i have the complete costs but to see details an extra click to the between fix and variable costs is needed and i can not extract to excel.
Or is the only option an query on KEKO,KEPH, CKIS?
Cheers
TimHello
@Sachin: Thanks for the report but the output is not that good - but helpful
@Eric: Thanks this report solved my problem )
Cheers
Tim -
Reposting fixed costs to variable costs
Hi Gurus,
one of our subsidiary company uses target=actual method in the cost center accounting. Sometimes they forget to plan some cost elements during the planning process. If some costs incurred on these unplanned cost elements, SAP put all of these costs to the fixed costs during the period-end closing (activity allocation).
So far so good, but is there any possibility to repost these costs to variable costs on cost center level???
ThxThanks a lot for the quick reply.
We know the splitting method but this company don't use it. For this reason I asked about a possibility if it is possible to repost the amounts from fixed to variable costs afterwards.
I would be grateful for an other solution. -
Fixed Cost to be fixed as 40% of Variable Cost
Hi,
We want to fix the fixed cost of all the finished goods of our company to fix 40% to variable cost. Is there any way to make routing.
Presently, what we are doing, we are making several routing to get this result, but this procedure is quite lengthy,
Kindly help me out.
Regards
GRHi G R,
Why Can't fix the Fixed and Variable Cost in KP26, that Prices only will come to Routing?
If it is wrong Please revert back to me -
Hi,
Could anyone show me how fixed and variable cost are treated in SAP
In case commercial enterprise, (not implementing Product costing sub-module), how to take care fixed and variable cost ?
If it possible, could you show me the documents relevant my concern!
Thanks very much for any help!Thanks Ashok,
Yes, I am clear what you mean now.
But My concern is mixed-cost (semi-fixed or semi-variable), how the system dealt with this?
For example:
salary of sales man: Cost element 627000
fixed salary: 500
If he sells more than 20 product a month, he will receive 10 for each addition one.
So 500 is fixed cost, and the bonus is variable.
This CE 627000 is called mixed cost element.
In many cases, the accountant can not know which part is fixed, which one is variable as my example.
So at the end of period, she will use some ways to calculate
And, another problem i care: except drawing statement , what more can SAP do about fixed & variable?
Thanks very much Ashok! -
Variable Cost And Fix Cost Planning
What are the settings and are they in Product Costing sub module to be able to clearly see the difference in movement of fixed and variable costs for the activity types in the cost of a product. (Product Cost with quatitiy structure CK11N)
At present, in our settings, even though we have broken the rates as fixed and variable for the actitiy types in cost center planning, there is absolutely no impact in product cost for this. All costs move like variable costs.
Best Regards.Check in Cost component structure for cost component for the attributes.
For Activity cost type attribute you must select the control parameter as fixed and variable costs radio button.
Laxmiprasad -
i want to maintained cost element wise variable cost not activity price.
in kp06 we can plan only fixed cost, variable cost field is display status.
pl adviseHi,
When you want to maintain variable costs in KP06 it means you would like to maintain activity dependent costs.
You always need the respective activity type with respect to which activity you would be incurring the expenses.
Kind Regards
Umapathi G
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