Product costing and cost center

Hi,
My client is a trading organisation. In order to do product costing, at which point in sourcing we need to enter the cost center.
M.K

Hi MK,
In a trading organization, usually you do not need product costing as you are not manufacturing the product in-house.
You can value your Inventory at MAP and when you do MIGO, the MAP will get adjusted itself with different p.O.rates that you purchase.
And, even if you go for Product costing, you won't need Cost Center at any point of time for sourcing.
Regards,
Kavita

Similar Messages

Material Ledger,Revaluation Production Cost Center ,Standard Cost

Hi, I have a problem with revaluation of production cost centers.
Firstly, production cost center expenses are settled via activity types onto the production order at the end of the period. However, CKMLCP revaluate cost centers after the settlement because of using standard price. So cost centers at the end of the period have some amount.
As a result we can not find actual price for production orders.
If I use standard cost in order to consume on cost centers, material ledger revaluates again this cost centers. I dont want this condition. Because this cost center is settled to other cost object before closing.
Thanks.
Message was edited by:
Ergul Taslacioglu

Hi
Go to the following path in SPRO:
Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger -> Actual Costing -> Activate Actual Costing. Double-click on "Actiavte Actual Costing" and change the indicator from "2" to "1".

Transfer price (Internal Reveue to be allocated to Production cost Center)

Hi Sap Gurus.
My cleint using tranfer price without activiation material Ledger. The internal revenue should not reflect in Fi. For that we have created ztable and we will be able to transfer the stock between profit center and we are getting internal reveue to the sending profit sender and expenses to the receiving profit center finaally balance become a zero,(we are maintaing same gl account while doing transfer price). Now expense in receving profit center should consider as part of produt costing. how to allocate this expense to the production cost center when there is no balance.
Example
SENDING PLANT 1 MATERIAL 123456 MM PRICE (10) TP 15
RECEIVNING Plant 2 Material 123456 MM PRICE (10) TP 15
While taking STO system is posting with material master price 10, but in the production if they are using that material system should take 5 also . 10 is the cost and 5 is overhead.
help me out?

These are some few things I found out. Below is the result of a test I carried out when I tried to create a Settlement Rule for a statistical order.
Statistical order may not contain a settlement rule
Message no. KO188
Diagnosis
Order 12770, for which you are trying to create a settlement rule, is statistical.
System Response
Statistical orders cannot have a settlement rule because they cannot be settled.
Procedure
You could possibly remove the statistics indicator from the order (only if nothing has been posted to it yet).
I may be wrong but I have determined that, for production orders, you will have to use Standard Production Order Type and not a statistical order. The object class has to be production as well.
You will only be able to create a settlement rule if it is not a statistical order with the assignment category as ORD. Also, in your order type: Internal Order - Production, under general parameters, you will have to assign settlement profile 30 which is production order.
You may have to define planning profiles for co production orders, costing variant, valuation types. Maintain order types using KOT2. Example:
Order Type: PP01 Standard Production Order
Order Category: 10 PP Production Order
Number Range Interval: 1000000000--19999999999
Settlement Profile: abc
CO Partner Update: Semi-Active
Check of Classification
Next Maintain Settlement Profile: ABC Standard Production Order
Check off "To be Settled in Full
Default Allocation Structure: E.G: EB
Indicators: check off: 100% Validation. % settlement, equivalent numbers
Valid Receivers: 1 for most
Document Type: OS Order Settlement
Create Allocation etc.
Hope this gives you some pointers as to how to proceed.
Elias

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................

Allocation of cost from service cost center to production cost center

Dear sir ,
Will I use to distribute the cost from service department to production department and that cost centers also using for activity planing will get currect result in product costing ?

Hello,
Can you clarify what you want to do ?
Allocation of cost from service cost centers to production cost centers can be done with the help of Assessment / Distribution cycles and you can do a activity planning using the same costs as well. The steps for activity planning would be as under:
1. Create primary cost planning in the service and production cost centers (KP06)
2. Create activity planning in the production cost centers (KP26) without any rate
3. Run assessment / distribution cycles to transfer cost from the service cost centers to production cost centers (KSUB / KSVB), in case you are not transferring based on activity quantity then also do SKF planning in KP46
4. Run plan cost splitting in case you have more then one activity type (do config for splitting structure beforehand) (KSS4)
5. Calculate Plan price for the production cost center activity types (KSPI)
BR // SG

Please use production cost center!

Hi Experts,
I am trying to raise a vendor invoice via FB60. After giving all the inputs like vendor, Amount, GL account, cost center. I am saving the document in ECC6. I get the error as below:
Please use production cost center! could i know why i am getting this error

Hi Umesh,
I request you to check if there is any validation in place as this is not a standard message.'
You can take help of a Abaper and get it debugged and find out of the soure.
Regards,
Andy

Reporting Direct Production Cost Center Over/Under Absorption

Hi,
I am trying to find a way to report Manufacturing Cost Center Over/Under Absorption in a similar way COGS are reported in CO-PA. I mean - I would like to breakdown Direct Manufacturing Cost Center Over/Under Absorption into cost elements (just like COGS are broken down in COPA when invoice is posted).
I wonder if this is possible in SAP without Material Ledger implemented. If yes - can it be achieved by using a standard functionality or does it require an additional development?
Thank you,
K

Thanky you for your reply Ranjan,
My intention was to show Cost center over/underabsorption broken down by cost componets (activity Labour, Machine, Overhead). Currently it is shown as a balance on cost center. I would like to be able to recognize which part of Direct manufacturing CC balance refers to Labour, which to Machine and which to Overhead. Is it possible to achieve in sandard report or additional settings/development is required.
Regards,
Karol

Actual Activity allocation and Planned and actual activity comparison issue in Product Costing

Friends,
I have tried to explain the issue i am facing currently under Product Costing......
1.Cost Component Structure
10 – Material
20 – Labour
30 – Diesel
40 – Electricity
2.KP26 – Planned under Fixed Price
Labour – 2.0 HR
Diesel – 1.0 HR
Electricity – 5.0 HR
3. When I run CK11N system collecting correct rates for all activities (Costing Lot Size- 1)
Like;
1              E              LAB10    994310                  2.00        2.00        AED        1.0          HR Labour Cost New
2              E              DIE20    994320                  5.00        5.00        AED        1.0          HR Diesel Cost New
3              E              ELE30    994330                  1.00        1.00        AED        1.0          HR Electricity Cost
4              M            1100000042                          5.00        0.00        AED        1              PC RAW MATERIAL BAKERY CONSUMED
5              G            994201                                0.00        0.00        AED                        Depriciation Cost
6              G            994202                                0.00        0.00        AED                        Sales & Distribution Cost
                                                                          13.00                    AED
4.When I do process order Cost analysis for the produced goods it shows me different figures as my
BOM – RM is 1100000042 1 Quantity
Routing – All activity time is 1 Hr
40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042            5.00
40015                    COST OF GOODS MANUFACTURED              1005/4400000071            13.00-
994310                  Labour Cost New                                              CBAKYPDDXB/LAB10      1.33
994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20      3.33
994330                  Electricity Cost                                                CBAKYPDDXB/ELE30      0.67
                                                                                                                                          2.67- AED
Note :- As per my understanding it should be
    Labour Cost New                                            2.00
                Diesel Cost New                                              5.00
                Electricity Cost                                                1.00
5.Now after Process Order confirmation
40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042            5.00
40015                    COST OF GOODS MANUFACTURED              1005/4400000071            00.00
994310                  Labour Cost New                                              CBAKYPDDXB/LAB10      4.00
994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20      5.00
994330                  Electricity Cost                                                CBAKYPDDXB/ELE30      2.00
                                                                                                                                          16.00
6.For Month end actual Activity calculation and load the activaty actual rates on product
I have configured the system in below manner
1 Work center = Mapped to 1 Production Cost center
Three Different Activities mapped to Secondary Cost Element with 43 Category
For Electrictity Activity assesment from Primary to secondary 1 more cost element created with
      Category 42 Like; 994215-Electricity Cost All
One Actual Assessment has been configured to allocate Electricity cost from Primary Cost element to
      Product/Order
7.Assessment Cycle Details
Controlling Area      1000 Controlling Area
Cycle                ZELE01                  Status    Reviewed
Start Date 01.01.2014 To 31.10.2014
Text                  Elec. Cost Allocation to PROD
IND- Interactive
Assessment CEle       994215      Electricity Cost All
Sender
Cost Center    CBAKYDXBAD
Cost Element 40204
Receiver
Cost Center    CBAKYPDDXB
Tracing Factor
Var.portion type – Actual Activity
Selaction Criteria
Activity Type - ELE30
Receivers Tracing Factor
Cost Ctr Factor per        100
CBAKYPDDXB 100
8.I have received the actuall electricity bill for 1100 AED and the same has accocated through KSU5
After Cycle run when I follow below procedure
KSS2 Actual cost splitting
CBAKYPDDXB                    Production Dxb                LAB01                    183.33
CBAKYPDDXB                    Production Dxb                DIE02                    183.33
CBAKYPDDXB                    Production Dxb                ELE03                    183.33
CBAKYPDDXB                    Production Dxb                DIE20                    183.33
CBAKYPDDXB                    Production Dxb                ELE30                    183.33
CBAKYPDDXB                    Production Dxb                LAB10                    183.35
                                                                                                                1100.00
Issue – System Split Electricity cost between all the activities assigned to Workcentres Cost Centre.
But I want to post that cost only to ELE30 Activity and not for all
When I RUN KSSI for actual Price determination system shows
OTy        Object                                  Name                  AUn                Act Qty      Total price    Price (Fixed)              PUnit
ATY        CBAKYPDDXB/DIE20        Production Dxb      HR                  5.0          366.66                  366.66                    10
ATY        CBAKYPDDXB/ELE30        Production Dxb      HR                  2.0          916.65                  916.65                    10
ATY        CBAKYPDDXB/LAB10        Production Dxb      HR                  2.0          916.75                916.75                    10
                                                                                                                                                      2200.06
2200.06 is almost double than 1100.00 which is actual electricity cost and the same is actually determined for all the activities.
After revaluation of the process order system posting below values
40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042                            5.00        5.00
40015                    COST OF GOODS MANUFACTURED              1005/4400000071                            13.00-    13.00-
994310                  Labour Cost New                                            CBAKYPDDXB/LAB10                      1.33        183.35
994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20                      3.33        183.33
994330                  Electricity Cost                                                CBAKYPDDXB/ELE30                      0.67        183.33
                                                                                                                                                          2.67-      542.01
Production Variance is posted as 542.01….
I strongly believe there is some issue in configuration for activity allocation….
Main issue is
Point No. 4 – Different Figures in Process Order Cost Analysis
Point No. 7 – Assessment cycle run
Point No. 8 – KSS2 and KSII for Actual cost Allocation and Production variance…
Friends… I have tried to explain maximum please help me to understand the concept or missing configuration/Process.
Thanks
Sagar Chinchkar

Dear Rajneesh,
I have made the changes as suggested....
It seems now my Order Cost analysis and Product cost analysis are showing the same figures.
I have also maintained cost center splitting structure for ELE30 Activity allocation.
Structure Z1
Splitting structure for AT
Assignment 10
Electricity Cost
100
Allocation for ELE
Cost Element
994215
Activity Type
ELE30
Splitting Rule
100
Allocation for ELE
12
Activity quantity
Version 0
In my case actual activity confirmed is 3.1 for 2 orders in period 5
Order 1 - QTY 2
Order 2 - QTY 1.1
Total actual Electricity exp is 1150 in period 5
followed procedure to post actual activity on product is mentioned below
KSS2 Actual cost splitting - Result as expected 1150 for ELE30
KSII Actual price determination - Result as expected 3.1 actual confirmed QTY for ELE30 with actual price
       QTY 3.1         Tot Price 3,709.68        Planned(FIX) 3,709.68     Per Units 10
       (System is doing 1150/3.1*10=3709.68)
    3.CON2 Actual revaluation of orders
      Here while reevaluating the Process Orders system calculation is different
Order 1 - QTY 2 -   558.00
Order 2 - QTY 1.1 - 407.56
Total -                    965.57
     4. After CON2 system is changing the value of other activities like
     LAB10 - Actual confirmed Value 10 to 0
     DIE20 - Actual confirmed Value 10 to 0
Which should not be the case....
                                                                                                              PL     Act     Var
40002
RAW MATERIAL BAKERY CONSUMED
1005/1100000042
10.00
15.00
50.00
40015
COST OF GOODS MANUFACTURED
1005/4400000074
26.00-
26.00-
994201
Depriciation Cost
WMBDDEP01
1.00
0.00
100.00-
994202
Sales & Distribution Cost
WMBDS&A01
1.00
0.00
100.00-
994310
Labour Cost New
CBAKYPDDXB/LAB10
4.00
0.00
100.00-
994320
Diesel Cost New
CBAKYPDDXB/DIE20
10.00
0.00
100.00-
994330
Electricity Cost
CBAKYPDDXB/ELE30
2.00
408.06
20,303.00
If we want to just post Electricity cost based on actual Electricity expenses and Labor and Diesel are based on planned activity rates.
What setting is required in current system.....
Million thanks in advance....
Regards
Sagar Chinchkar

S_ALR_87013643 Cost Center Report - Range Orders

Hi,
I am executing T Code S_ALR_87013643, which is based on Cost Center, Cost Element and Order. I am restricting the selection for 1 Production cost center and 1 Production Order.
The cost center section of the report is displaying costs against the particular cost center. However, If I see the credit given to the cost center, the credit values include all production orders against the cost center.
If I see the Order section of the report, I am able to see the debit and credit only to the extent of the relevant production order.
So the credit in the Cost center and the debit in the Production Order does not match.
Please let me know if I need to do something to arrive at the correct display in the report for better analysis..

Hi gay
Why don't you display the costcent report and product order report one by one?
BR
Thomas

Separate gl account for cost center for movement type 201

HI Guys,
I have a the following problem:
There are three main functional areas i.g
Production - (Cost Center 10001)
Sales - (Cost Center 10002)
Admin - (Cost Center 10003)
In obyc we use 5 types of valuation classes like three sets different for production, Sales and Admin
Production
P-Electrical (GL Account 50001)
P-Tools (GL Account 50002)
P-Oil Lubes (GL Account 50003)
P-Bearing (GL Account 50004)
P-Belts (GL Account 50005)
Sales
S-Electrical (GL Account 60001)
S-Tools (GL Account 60002)
S-Oil Lubes (GL Account 60003)
S-Bearing (GL Account 60004)
S-Belts (GL Account 60005)
Admin
A-Electrical (GL Account 70001)
A-Tools (GL Account 70002)
A-Oil Lubes (GL Account 70003)
A-Bearing (GL Account 70004)
A-Belts (GL Account 70005)
I want use 5 series gl when I use Production valuation classes, 6 series when I use Sales valuation classes and 7 series when I use Admin valuation classes in VBR general modification but system allows me to use standard valuation classes.
please how I can get this problem get solved that the concerned GL accounts must be hit for proper allocation of expenses by areas.
Thanks
Ahmed

Hi
I think i have to rephrase the question .
When you do a goods issue via migo and movement type 201 the user should not be allowed to input the GL account as it should be automatically determined through valn class setting in GBB-VBR.
But in my case the system is also giving the GL account field as available to user for input .This is wrong .
How to make this field suppress / greyed out is the problem ?

Cost center catogery

why we are giving cost center catogory at the time of cost center creation. what are the impact will come due to assigning cost center category. now we have give Categary T for all cost center. now we anted to create cost center for each and every department to see indivudial expenses. for that what categary i have to give from the following and what is the use to give catergory
9     Allocation
A     Administration
G     Logistics
L     Management
M     Material
P     Production
S     Service
T     Sales

Hi Laxmi,
The master data of an activity type includes one or more cost center categories. The activity type may be used only by cost centers of the appropriate categories (for all those cost centers with that Cost Center Category)
For example, you created two Cost Centers A and B. In A's master data, Cost Center category is "P"(Production) and B's master data, Cost Center Category is "M"( Maintenance).
Now, you are creating the master data for Activity Type "labour Hr". In that master data, you need to mention the Cost Center Category. If you give "P" there, that means that Activity Type can be linked (planning in KP26) to Cost Center "A" only....
We define categories in Customizing. For each category, we can define default values for the "Lock" and "Record quantity" indicators, for transfer to cost center master data. We need to maintain these indicators only if the entry diverges from the default cost center category.
In addition, we may use the categories for reports and evaluations.
Examples
Production cost center
Service cost center
Administration cost center
Pls revert back for further explanation...
Srikanth Munnaluri
Edited by: Srikanth Munnaluri on Feb 25, 2009 6:46 PM

Production cost in SAP

Hi,
i have calculated the standard price of product in SAP. but at the end my production cost seems very high and i don't understand why
this is what i did:
first i upload the budget in the system in KP06 for the full year
i upload the quantities of activities in KP26 for the full year also
then i run the assessment cycle to bring the budget at the level of the "production cost center"
then i splitted the budget per activity in KSS4, to get the budget of each activity/cost center.
i calculated the price of activities in KSPI.
then i run CK40N, to calculate the standard price of the different product.
but my problem is that:
why when i make the sum of all the production cost for all the product, i don't find again the initial budget i put in the system?
thanks for your comments

Hi SAPXPT,
Try transaction RKACSHOW, see note 28145. RKACSHOW shows all the tables that are updated on an order.
Regards,Declan

Cost Center overlapping

Hi,
We have created one Cost Center AAA under production group. Before post the documents we have deleted AAA cost center. It is showing Red Mark symbol in OKEON(Cost Center Standard Heirarchy). After we have created AAA(same code deleted cost center) cost center under Research Group. When we save the cost center master data, it is showing under Production group and Research group in activation mode of OKEON(CCH). We have posted some documents to this cost center.
Now we want to create the new group under CCH. But the system showing the below error
Inserting of the object (Cost Center Group: HOLDINGS) is not possible
     Message no. OH021
Diagnosis
     Inserting object (Cost Center Group: HOLDINGS) is not possible. The
     object contains values/intervals that would lead to overlaps with
     already existing values/intervals.
Procedure
     If you still want to insert the object, you have to make sure that the
     join of sets of the values/intervals is unique. Before you insert,
     change object HOLDINGS or the object you are processing.

Holding CC group not created. When we open the OKEON in Extras option and select the Ambiguity check. The following message showing.
Values occuring more than once:
Overlapping area>Included in Group>Row>Description
ATR - ATR>RODUCTION> <003> > Production Cost center Group
                  RESEARCH > <001> >Research Cost center Group

Material Issue to cost center which are not allocated to ML

Dear Experts,
We have a senario, Material issue to the cost center and through activity type the cost updated in production order, Client wants when reu CKMLCP the same should be updated in ML, and also revaluate actual activity price and updated in cost center.
Please help to solve the issue.
Thank you

Hi Nuki
I hope this material is not price control = 3/S (standard) and also the cost center is not productive type.
If you consume material with standard price to production cost center it will start a looping in activity calculation and at month end there will balance in this cost center.
Well I hope I helped you.
Regards

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.

Assessment Cost Center ??

hi all,
In controlling what is the meaning of assessment cost center... Mainly in internal activity allocation why the need of this cost element arises ?? (we include the secondary cost expence in Internal activity allocation)... at thye time of distribution why the need of this assessment cost element seperately ???
thank you...
Padmini

Assessment functionality is used for transferring cost from one cost center to another cost center, say service cost center to production cost center. Also for transferring the cost one is not interested in having the break up of cost transferred i.e. individual cost element wise transfer is not required and the same can be combined while transferring.
Assessment cost elements also helps in having identification of own and apportioned cost on the cost center.
Hope this helps.
Regards
Rakesh Pawaskar

Product costing and cost center

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