Logistics cost to be added in product cost

Dear friends,
We are operating logistocs vehicles on every day morning to collect materials from another plant and also get materials from suppliers..
If the freight rate to be provided to logistcs is a constant value, we can give the rate in PO conditions inorder to add the freight cost in product cost.
Rate to be provided to logistics vehicle will be varied based on the weight and space occupation of a material and the type of vehicle used (like LCV, HCV...)
1. Incase of STO (Material from another plant) how to include the frieght rate in receiving plant product cost. Because the ratre is not a constant one it will be varied based on the above situations.
2. Incase of regular purchase order how to handle the same situation of adding freight cost in to product cost.
Thanx in advance.
Warm regards,
M.Selvaganesh,

Hi,
Check in the Below path
SPRO >> MM >> Logistics Invoice Verification >> Incoming Invoice >> Configure How Unplanned Delivery Costs Are Posted
Here check is there any GL code is maintained against your company code.
If its maintained then remove & post the invoice, then it will hit to your inventory acc
Regds,
CB

Similar Messages

Issues adding variable production cost

Hi
I am having issues to find the correct way to add production cost.
I know that basically a labour item that has cost in master data (Standard method) is added to the BOM and will then be added to the production order. However, this is a fixed cost, and even the same cost for every BOM/production oder.
How can I add variable cost to the production that i can easily change at the end of the production?
additional ...: I do receive invoices from external companies for the production/assembling - mostly some weeks after the production. Ho do i enter them into the system? Is there a way to link the received invoice to the cost of a production order?
Thanks for your help
Franz

Thanks for your answer!
Here's what I am going to do ... maybe someones interested in this too:
- Create an item with standard cost evaluation and a standard cost of 1$ (I plan to use this in BOM for production cost and purchase, mainly)
- Make this item a non-inventory, sales- and purchasing item
- Add a price to the price list (needed if used in sales and BOM sales calculations)
- Add the item, with a quantity relative to the production cost (external work) to be added, to the BOM / production order (i.e. 15.5)
- Use the item to issue a PO for this external work
- The production cost will be included in cost calaculation of item
- The invoice for the external work can be added to the system and the item does not have to be reevaluated
Franz

Cost of Goods Sold in product costing

Hi Experts,
How can we reconcile the cost components with COGS.
I am getting the planned cost estimates from the costing
Lets us take an exmaple
Planned cogs is 150000 Rs. This figure is from cost estimate
We are getting the actual cogs as 130000 Rs
This includes Raw Materials (100000) + Machine (10000) + Labour (10000) + consumables (10000)
Where can I check these actual costs and how do we come to conclution that these are right.
Is there any transaction to reconcile these values
Please clarify
Regards,
Ram

Hi,
Thank you very much for your reply,
It is having the valid information but the requirement is here i am not getting the actual split of cogs. In this report i can see the revenue, excise, and cogs.
The requirement is how to get the split of cogs for reconciling the actuals.
I am using the report KKBC_KUN as per my bsuiness
please clarify
Regards,
Ram
Edited by: Ramaraghu on Mar 7, 2011 1:35 PM

Packing cost in production cost

Hi Gurus,
My client is producing metal coated coil and from coil the produce roofing sheets. Products produce in every intermediate stage are saleable. They want to include the packing in production cost but they do packing only if that product go for sales otherwise same product they send for the next process without packing. They want packing cost in the production cost if the product goes for sale otherwise(if it is go for next process) production cost exclude packing cost. Can you please tell me how it can be done? How BOM and routing can be used in production order?
Regards
Rajib pathak

Hello .
First solution is,
Create separate material code for Packed material and Unpacked material . Here you can define the BOM & Routing for each material.
Second solution is , if you donot want to create seriate material code ,
Create two production version for intermediate material. Define BOM & Routing with packing for 1st PV and Define BOM & routing with out packing for 2nd PV.
Now create production order and select the PV manually based on your requirement. Now packing cost will be added to production order for first PV.
For that you need to do following setting .
1.BOm selection by production version at MRP view
2. Production version selection = manual at for order type at OPL8.
Note:But if run the MRP, may be this will not work.
Please try and come back
Regards
Pradeep Kumar

Flow of product costing

Hi All,
Iam new to controlling area. I want to know the entire process flow of product costing and what are journal entries reflect in this flow.
Thanks,
chandu

Hi,
The requirement of batch wise capturing of costs can be achieved by creating a separate production order for each batch of production. The production order captures all the cost, which are incurred during the production process. The details of each cost are as below.
1.For every batch of production a production order is raised in the production department. The production order contains the details of BOM and recipe.
2.The Bill of Material (BOM) details the raw material and packing material in the required portions that are required for production.
3.The recipe contains the detail process of production activity including resource such as manufacturing machineries, equipment. Each operation is assigned to its resource and each resource assigned to relevant activities such as Labour, fuel, power etc. (maximum of six parameters for each resource). Each resource is attached to a cost centre.
4. The recipe and BOM are copied to production order automatically when the order is created. The quantities of materials and activities are determined at standard levels (Planned costs).
5. A production order may contain several phases and each phase requires individual confirmation.
6.Once a phase in production process is complete the production person gives his approval by the way of confirmation.
7. At the time of giving confirmation he inputs the actual quantities incurred for material and activities. Using these inputs the Actual Cost can be arrived.
8. From controlling module, the planned rates of activities are uploaded on periodical basis. monthly or annually. The cost of material is taken at Moving Average price.
Once the batch production is complete the production person gives his final approval to the order as u201CTechnically completed (TECO)u201D.
9. At the month end / period end all these process orders are settled at the costing department.
10. The settlement results in calculating the overheads on predetermined rate and transferring the total cost of the production on to the finished product. The following entry is generated
Finished goods stock Account Dr
To factory output Account Cr.
11.The work-in-process is calculated based on the status assigned to production order. If the order has a status of u201Cu201CTechnically completed (TECO)u201D. the work-in-process is not calculated, but the order will be totally settled.
12.The standard cost of finished product is released at the beginning of every month. The standard cost is calculated based on the Bill of Material and recipe defined independently for each finished and semi finished product.
13.The variance is calculated on the difference of standard cost of material and the actual cost incurred in the production.
14. When the actual cost of power, fuel, Labour are accounted against respective cost centres in the month end, the system automatically determines the under absorption or over absorption of production costs. This difference cost will be apportioned to all the batches on a predetermined basis.
Revaluation of Production orders
Initially cost planned in cost centre accounting against activity types are used for valuating the materials that are produced. At the month end when actual cost are booked from financial accounting, revised activity price calculation is carried in cost centre accounting and with this prices the production orders are revalued. The revaluation is carried to the extent of difference between planned vs. actual activity prices. The revaluation production orders will not be carried, as production orders will be settled Immediately.
The actual cost of every batch is determined using above process. A report is generated to know the cost for each batch.
The standard cost fixed with each customer for each product is maintained in a separate database. The Costing department should compare these details with the actual cost of production and identify the difference. Accordingly a Debit/Credit note can be generated.
Once a standard cost estimate is created, it updates the material master with that rate.
Cost Object Controlling is an area in cost accounting that assigns the costs incurred in the production of company activities (such as internally manufactured materials) to those activities. Cost Object Controlling supports you in:
Reaching make-or-buy decisions
Determining price floors
Performing complex cost analysis (such as target/actual analysis)
Determining inventory values
Cost component Structure:
A control of how the results of activity price calculation or material costing are stored.
In Product Cost Controlling (CO-PC), the cost component structure determines the attributes for passing on the following costs:
Material costs passed on to material valuation as the standard price or inventory price
Product cost components are
Material
Accessories
Power
Fuel
Sal & wages
Depreciation
R&M/ Stores
Others
Admin OH
Standard Cost Estimates (Applicable for trading activity)
At the start of the fiscal year standard cost estimates will be released based on the planned raw material prices and planned manufacturing overheads. These standard prices are updated in the respective material master. These cost estimates are run only for make-to-stock materials.
The various components of cost are incurred in producing a product is captured. The following cost components are considered for materials cost, consumables and fuel, direct
Labour cost, utilities. Repairs and maintenance gases, depreciation, administrative overheads. A costing sheet will be created to capture administrative overheads cost which are not absorbed in the products as activity cost but are to be considered for inventory valuation In the first step planned activity outputs for each cost centre are planned, then planned cost that will be incurred against each activity type and primary cost element are planned, by carrying out activity price calculation the planned price of each activity is arrived. These activity types are entered in the work centers and routings. When cost estimates are created, system captures material cost from the prices mentioned in material master. The manufactured overheads are updated from the activity cost planned in cost center accounting.
Sadashivan

Over Absorption in Production Cost Center.

Dears,
We are getting the over absorption in cost center after doing of actual price calculation settlement. we have done the following transactions at month end. eventhough we are getting over absorption (i.e., credits are more than debits) Credits are activity costs are transferred from production cost center to production/process orders or product collectors.
KO8G settlement of internal orders to cost centers.
KSV5 execution of distribution cycle.
KSII execution of actual price calculation.
CON2 revaluation at actual prices.
CO88 Settlement of Production/Process Orders.
Even after doing of the above trnasactions we are getting over absorption.
kindly advise me in order to resolve this issue.

Hi Divraj,
The same issue i am replicating in the development server i created one assessment cycle i gave one service cost center as sender and one cost element group, the group contains 10 primary cost elements(GL's), i done postings with 10 gl's respect to this service cost center, in my assessment cycle i gave one assessment cost element in segment header the sender rule is posted amounts, the receiver tracing factor contains variable portions, actual activity and no scaling, in receiver i gave cost center group contains 4 production cost centers, sender values is share in 100%, version is zero the receiver tracing factor tab contains variable portions as actual activity and one activity i maintained, the receiver weighting factor contains 4 production cost centers and factor percentage is 100%.
Now i execute the assessment cycle in KSU5 i am getting senders in cycle but receivers i am getting zero, when i took the actual activity, variable portions and no scaling i have to maintain activity price in KP26 and this cost center i have to maintain in process order that is fine please explain me how the cost will distributed to production cost center please explain the procedure in detailed.
Hopefully i will get clarity on the concept................

Product cost by period

hello gurus,
Can anyone please tell me the what are the configuration is required to Product cost by period
thanks
rihana

Dear Rihana,
In my understanding product cost by period will be used in a REM scenario(Repetitive manufacturing).
The product cost collector serves as the cost collecting object and for each Semifinished or finished product for which
confirmation(backflush through T Code MFBF) are made a product cost collector should exist.
Product cost collector will be generally created for Order type RM01 and number ranges has to be defined.
Each product cost collector has a number and using the no,the variance and the cost will be settled periodically.
Product cost collectors will be created using T Code KKF6N or KKF6M and the preliminary cost estimate can be done through
MF30.
Regards
Mangalraj.S

Essence of product cost collectors

In REM
what is essence of product cost collector (KKF6n), {As I understand production cost collectors
are cost carrying elements}, but needs to have more insights like how it captures
production costs ( i.e through activities, price maintained in accounting view....)
Does it make any difference if product cost collector is executed before MRP run, or it has
to be executed only after MRP run

Dear Eshwer,
1.Product Cost collector is one of the master data in REM scenario.
2.This product cost collector is no where related to MRP.
3.Product Cost collector is used as a cost object in REM scenario,which means all the cost will be
booked under this product cost collector for that material.
4.Whatever the confirmations that are done in MFBF or MF41 or MF42N,the cost will get debited or
credited accordingly for that material and the impact will be seen in the product cost collector.
5.This product cost collector will be having an order number which will be used for order settlement and
variance calculation.
6.For creating a product cost collector you will require a production version.
7.so whenever you do an assembly or activity or component backflush,the cost will be booked under
this product cost collector.
8.So as such there's no relation between MRP and a product cost collector.
I hope this pints will help you to some extent.
Revert back with your further queries.
Regards
Mangalraj.S

Difference between three types of product costs

Hi,
SAP Masters
can any bode explain the what is the difference between product cost by period, product cost by sale order and the third one is there and also please esplain the master recipe

Dear Kavya,
__1.Product Cost by Period:__
Product cost Collector:
1.Product Cost collector is one of the master data in REM scenario.
2.Product Cost collector is used as a cost object in REM scenario,which means all the cost will be booked under this product
cost collector for that material which is nothing but period based costing.
3.Whatever the confirmations that are done in MFBF or MF41 or MF42N,the cost will get debited or credited accordingly for that
material and the impact will be seen in the product cost collector.
4.This product cost collector will be having an order number which will be used for order settlement and variance calculation.
5.For creating a product cost collector you will require a production version.
6.so whenever you do an assembly or activity or component backflush,the cost will be booked under this product cost collector.
2.Master Recipe:
This comes under PP-PI,where Process order's are used for production.
The master recipe is used for the manufacture of products or for rendering services.
Structure
A master recipe consists of a header and several operations, each of which is carried out at a primary resource. An operation
is subdivided into phases.
A master recipe contains process control data that can be stored in the following way:
· in the form of characteristic-based process instructions, which you define in the operation overview for the phases.
· in the form of XSteps, that you maintain in the XStep editor ( XSteps).
http://help.sap.com/saphelperp60_sp/helpdata/en/05/603bc6462311d182b50000e829fbfe/frameset.htm_
Revert back with your further queries.
Regards
Mangalraj.S

Product Cost Planning

We are embarking on production planning & I need to know best course for financials/product costing. Would the AC505 Product Cost Planning Course be suitable for a business who is about to embark on production planning . We are in manufacturing, and we will be using lots of components (BOMs) and process orders etc.

Hello Higgins:
There are 3 product costing courses:
AC505 - focus on product cost planning. for example, from BOM, routing to estimated / simulated cost.
AC520 - focus on ACTUAL cost scenario ,for example , make-to-stock , make -to order, sales, service, periodic
AC530 - focus on special module Material Ledger , for industries to get the actual cost (more precise)
so I understand that you start on Planning, so AC505 is the right course.
But I recommend to attend AC520 as well to understand the actual cost flow . so you can compare plan and actual together.
and if you like the most accurate cost , and implement ML (material ledger) - AC530 is another one.
Hope this help.
BR,
Manthana

Product Costing and Production Planning

Hi,
Is Product Costing absolutely required before implementing Production Planning, specifically PP orders? My client does not want to plan costs or need any cost estimates. They want to use a PP order to check availability for a BOM, and then issue it out to an external vendor for services. After this material is processed by the external vendor, he would ship it back and we would be doing a goods receipt at the parent level of the BOM. The whole purpose of this is to get the accurate price of the BOM parent which would include all service costs. This parent would finally be sold via the regular SD sales order process. Our Logisitics consultant suggested that the only way this could be accomplished is a PP order. All this looks okay, but he also mentioned that a PP order cannot work without Product Costing and the process cant be accomplished CO-PC. I am unable to grasp why SAP would force us to have costing when the client doesnt need any cost estimates, planning etc. Could any one please tell me if we need CO-PC for this scenario?

Dear SAPFicon,
Technically, to run PP without using product cost planning would cause a lot of problems during business process of production order. Because, once a production order is created then the data structured is freezed in the PO and if there is any missing data it will cause errors. Any errors in production order would stop the following transactions. We never know what would be the error level of the production order. The worst case, the production or should be cancel and start it all over again.
But by using product costing or product cost planning, this is a preliminary step to prevent and eliminate any error of the products tobe produced.
So, ideally, there is one person in charge to ensure that the products which be produced in the production orders are free of error.
So, the product costing is an integrated module that take data from variouse module such as PP, MM, CO, HR.
The product costing use the Logistic master data such as folllowing;
1. Bill of material
2. Routing
3. Work center
4. Material master
How you can say, that running PP without PC will run, while the to run the smooth production order, you need to mandatory parameter in Material Master that belong to Costing area.
Without having product costing, I can assure that your client will trap in a lot of troubles with their business process.
Please see the online documentation for product costing for a better overview or you are welcome to ask again
Regards,
Irhasni

MTO-Product cost by Sales Order

Hi Guys,
My client is manufacturing Energy Meters, they want Sales order based Production Planning and costing etc.,
in MTO scenario, Product cost by Sales Order
1. Sales Order will be created
2. BOM is created
3. some of raw material in the BOM list are available in the stores
My question is that
When I run MRP, the system will create planned order and PR, the system will check the availablie qty which are in the stores or not for the planned order.
Correct me if am wrong,
if the system is not checking the available qty, then there is no Planned Order, everything will be new PR for the whole sales order Qty.
Expecting your valuable reply
Thanks for your help in advance.
Regards
Elan

Dear ,
When I run MRP, the system will create planned order and PR, the system will check the availablie qty which are in the stores or not for the planned order
Answer is Yes .In Sales Order Based Production Order -MTO , you will be having pre-determined BOM and Routing , before creation of FG Sales Order .
Based on Planning Strategy 20 : If you are using 20 planning startegy , then you will frist roll the cost in Sales Order Level by going to VA02-High Lisght Line item -Extras-Cost -based on BOM and Routing , Sales order will be costed and flagged with green .Then Sales Order will be credit relased in VKM3 for MRP run in MD02.
Now , in MD02 , you need to select NETCH , 2,1,1,3,2 while executing MRP on FG item .Here , MRP system will explode the BOM till the lowest level and does net requirement calcuation for BOM Component (as depedent to FG) .If the stock alwardy available , then it will show up as Stcok in Order Report (MD4C/MD04-Planned Order -Order Report ) under Reseravtion number or else it will generate PR for componenet where as planned Order for FG.
Creation of PR or Plnned Order depends on Procurment Type -E/F as well as selection of indicator Create PR in MD02.Basically , for MTO Sales Order item , it will FG with procurement type E and compoenet will be F if there there is no farther sub-assblmy .So it should generate Planned Order for FG and PR for shortage qty of component .
Hope this is clear
Regards
JH

MESSAGE ERROR: WIP a target cost only possible with Product Cost by Period

I work with orders assign to WBS Element (Non-valuated stock).
If I enter confirmation to an order created, and then execute KKAX transaction to calculate WIP, the system shows this error message u201Cu2018WIP a target cost only possible with Product Cost by Periodu2019u201D, but actually the result has been calculated ok.
If WIP is executed collectively KKAO the error message is the same but the result is not calculated
Everything suggests that what we want is possible, but the error doesnu2019t disappear
Does anyone know what could be reason for the error?
Thanks

Hi
Check your RA key and WIP customizing... WIP at target cost is possible only in Product cost by period
Check your settlement rule in Prod Order.. I guess it would be FUL and not PER.. FUL settlement means you are in product cost by order.. There seems to be a mismatch between your settlement type (FUL/PER) and WIP config
Moreover, if your stock is non valuated, do you at all need to calculate WIP for prod orders? I dont think so
Ajay M

Target costs on Product cost collectors

Hi,
we have a problem with target costs on product cost collector.
For the product cost collectors which are existing from long time, it is not updating target costs as soon as backflushing(Goods issue and goods receipt at same time) is done.
For the product cost collectors which are created newly it is updating target costs as soon as backflushing is done.
so we would like to know exactly at what point of time target costs will be updated on product cost collector.
Thanks,
Santosh Malisetti.

Hi Rich,
After researching little bit we found that its a standard functionality for product collector's not to update target costs until we do the variance caluculation. But there is one special case. When a new product collector is created it will update the target costs when backflushing(GI and GR ) is done, but this will happen during first month only. once this product cost collector has participated in variance calculation process, it will not update the target costs when backflushing is done,
until it participates in variance calculation again.
Thanks,
Santosh

How we calculate product cost without taken activity type

Respected sir,
pls tell me without taking activity type costing can we calculate product cost? is it possible through Overhead costing to calculate product cost?
or if we taken quantity base costing how we calculate each product cost?
please help me.......
Than'x
Dhananjay

Hi
Without Activity type you cannot calculate Operation cost. It is not good practice. Why you want to do like this. Please explain.
I think Over head cost can be calculated without operation cost.
Regards
J. Saravan

Logistics cost to be added in product cost

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