Planned cost in REM

Question

Hii experts,
Can we have planned cost in REM? If yes, how?
regards
kapil

Answer 1

Dear Kapil,
For your Understanding
1.Target costs are the planned costs adjusted to the actual
operating rate.Target costs can be used for purposes such as:
To determine variances
To valuate work in process
To valuate unplanned scrap
2.The Target cost will be your Planned Cost which you have
used during Cost Rollup---this generally given for Raw Materials.
3.The actual Cost will be the price of the consumption that has
happened for 261 moevment materials.
4.Moving average Price of your Raw materials gets varied as
per the GR & its value,So whenever production confirmation is
done for the HALB or FERT materials,you can see the actual
cost getting varied for your RAW materials.
5.So Variance will be of +ve value if Actual Costs is greater
than Target Costs & variance will be - ve Value if Target Costs
is greated than Actual Costs.
6.So during Period end closing as per the Business
requirements varinace is calculated,then settled against some
Cost Objects.
7.For the Items which were not present in the BOM of a HALB
or FERT item during Cost rollup and later on added,for these
items you can see the Target cost will be Zero and only actual
costs field gets updated.
I hope this will be sufficient to get a better understanding.
Revert back in case of any queries.
Regards
Mangalraj