PRODUCT COSTING

This is used for valuation of inventories i.e. Finished goods and Work in progress PP Module MM Module FI Module CO Module | | |

Product costing

Note: SAP lab :Product costing made easy BPB publication Not covered product costing Crate a cost estimate with quantity structure Cost element with quantity structure At standard cost In the month end we get actual cost Variable will be settled to accounts How standard cost will be arrived at : Sales budget for next month Production budget Material requirement Planning | | (Make to orders (confirmed orders) (This is same men budget) + And make to stock (expected orders)) Overhead planning = Standard cost Cost sheet for the product BILFG1 Raw materials xx Raw material overheads xx Production costs xx Cost of goods manufactured (COGM) xx Administration Expenses xx Sales & Distribution exp. xx ---Cost of goods sold (COGS) xx To check with client at what level he wants to value stocks At COGM level or At COGM +Admin level Raw material standard cost For each product we find out materials required For BILFG1 We required BILRM1 BILRM2 MM Module :Material Master Accounting view moving average price BIL RM1 75 BILRM2 125 PP Module: Bill of Material (BOM) To produce BILFG1 what materials are required and how much quantity

BILRM1 1Kg BILRM2 1Kg Raw material standard cost =Quantity from BOM (PP)*Rate from Material Master (MM) (1*75)+1*125)=200 Raw material overheads Overheads like freight charges :At the time of receipt it will be added to material At the time of consumption the material cost includes freight also. Overhead like loading and unloading normal amounts change directly to P & L account clients will tell us-how much percentage can be taken on raw material cost (consumption.) 5% of raw material costs Eg: 250*5%=12.5 Production costs: Cost centers in PP Module :Work centers Dept A Dept A Issue Dept B Dept C Dept B Dept C Issue Dept D Dept D Issue finished product

Raw material

All products need not go through all the Departments Process flow for each product in PP module we call as routing. PP Module: Routing Raw material Wages Salaries Power Dept A Issue (Process flow) Dept B Dept D Issue Finished product

300000 100000 320000 ------Planned cost 720000 ===== Planned hours available Machines 100 working for 3 shifts (24 Hours ) No.of days 30 Days 100*30*24=72000 Machine hour rate 720000/72000=10 Rs (Activity type) To Produce BILFG1 Hours required 5Hrs Production cost 10*5=50

Production cost : (Hours required in Dept A * Machine hour rate)+(Hours required in Dept B* Machine hour rate )+ (Hours required in Dept D * Machine hour rate) Example : Why cant we allocate based on production BILFG1 BILFG2 Production Qty 999 Kgs 1 Kg -----1000 Hrs Req 1 999 ----1000 Cost

720000

If we allocate cost based on production BILFG1 BILFG2 720000*999/1000=719280 720000*1/1000= 720 -------720000 ====== If we allocate cost based on hours required BILFG1 BILFG2 720000*1/1000 720000*999/1000 =720 =719280 ----------720000 ========

ACTIVITY BASED COSTING Co Consultants job: 1. Creation of 2 secondary cost elements (Use Tr.code is KA06) A) RM overhead rate B) Activity allocation Give the cost element 1200000 Valid from 01.04.2008 to 31.12.9999 Enter Give the name and description Cost element category Save Cost element Enter Name and description Cost element category :Activity allocation :select 43 Interval activity allocation :1200001 :RM Overhead rate : Select 41 overhead rates

Save Creation of activity type Machine hour: Path :Accounting Controlling cost Center accounting Master data Activity typeIndividual processing create (Transaction code KL01) Activity type Valid from Enter Give the Name & Description :Machine hour Activity unit Cost center categories Active type category Allocation cost element Save Creation of cost centers: (Tr.code is KS01) Give the cost center Valid from Reference cost center Controlling area Enter Change the name to Dept G Change the description to cost center :Dept G Person responsible Other things are common Select save button Cost center Reference cost center Controlling area Enter Change the name to Dept H Change the description to cost center:Dept H Change person responsible to Mr.H :Dept H :Dept A :BIL :MrG :Dept G : 01.04.2008 to 31.12.9999 :Dept A :BIL :select H :Select * (All cost center categories) :select 1 (Manual entry , Manual allocation) :1200001 :BIL :01.04.2008 to 31.12.9999

Cost center category :select 9( Allocation cost center) Save Create of cost center group (Tr code is KSH1) Give the cost center group :BILPROD Enter Description :BIL Production cost center group Select insert cost center button Select cost center Dept G Save Define overhead keys: Path :SPRO-Controlling Product cost controlling Product cost planning basic settings for material costing - overheads-Define overhead keys Select new entries Overhead key Description Save Press enter to save in your request Define overhead groups Same path Select new entries button Valuation area Overhead group Overhead key Name of overhead group Save Press enter to save in your request Note: Overhead rate will be given to overhead key Overhead key will be assigned to overhead group Overhead group will be specified in material master :BILP :BIL1 :BIL1 :BIL over head group :BIL1 :BIL Overhead key

Define calculation basis Path :SPRO-Controlling- Product cost controlling Product cost planning-Basic setting for material costing Over head costing sheet components Define calculation bases Select new entries button Base Name Base Name Save Press enter to save in your request Select D1 double click on details folder Controlling area Enter Select new entries button From cost element To cost element Save Select back arrow two times Select base D2 Production cost Double click on details folder Controlling area Enter Select new entries button From cost element To cost element From cost element To cost element From cost element To cost element Save :400100 :400299 Personnel & Manufacturing group :400500 :400599 Depreciation a/c :1200001 Activity allocation :1200001 :BIL :400000 :400099 RM consumption :BIL :D1 (Text filed) :Raw materials :D2 :Production cost

Define percentage overhead rates: Same path Select new entries button Overhead rate Name Dependency Save Press enter to save in your request Select D3 Double click on details folder Ignore the warning message press enter Select new entries button :D3 :RM overhead rate :Select D010 Overhead type/Overhead key

Valid from

To

Controlling area Overhead type Overhead key Percentage BIL BIL Select 2 BIL1 5 (Planned overhead rate) RM key 1 (Actual overhead rate) BIL1 10

01.04.2008 31.03.2009 01.04.2008 31.03.2009

Select save button or Ctrl+S Press enter to save in your request Define Credits Same path Select new entries button Credit Name Save Press enter to save in your request Select Controlling area Enter Select new entries button :D4 :BIL Double click on details folder :D4 :BIL RM credit key

Valid to Cost element Fixed percentage Cost center Save

:31.03.2009 :1200000 RM overhead rate :100% :Dept H (Allocation cost center)

Actual over head rate 10% Credit key D4 -1100000 Cost Dept.

1. RM1 Purchase/Receipt (Freight including) Inventory RM local DR 600000 To GR/IR clearing RM local 600000 2. Loading & Unloading charges Loading & Unloading charges Dr To Bank 3. RM 2 Purchase Inventory RM local DR 300000 To GR/IR clearing RM local 300000 4. Loading & Unloading charges for RM 2 Lodging & unloading charges DR To Bank 3000 3000 7000 Dept H 7000

1. RM Consumption for production Order 1-RM1 and RM2 RM consumption local DR RM Consumption local DR To Inventory RM local To Inventories RM local 40000 Order 1 20000 Order 1 40000 20000

2. RM consumption for production order 2 RM-1 and RM2 RM consumption local DR RM Consumption local DR To inventory RM local To Inventory RM local In the month end RM material consumption Lodging & Unloading charges 100000 10000 10000 Order 2 30000 Order 2 10000 30000

% on consumption

10% actual overhead rate Cost center Dept H (Allocation cost center)

Loading & Unloading for RM1 7000 DR Loading & Unloading for RM2 3000 DR

Order 1 Order 2

6000 DR 4000CR

H Value will be zero Order 1 60000 6000 ----66000 ===== Order2 40000 4000 ----44000 =====

RM Consumption RM overhead rate (Actual 10%)

Indirectly we are allocating cost center Dept H values to production orders based on the consumption values. Define costing sheets: Path :Up to overhead the path is same- Define costing sheets Select new entries button Costing sheet Description Save Press enter to save in your request Select Select new entries button Row 10 20 Base D1 400000-400099 D3 From To Row Credit Row Base :10 :10 :D4 :30 :D2 Overhead Description Raw materials RM Overhead rate :BIL Double click on costing sheet rows folder :BIL :BIL Costing Sheet

Description Row Description From To row Save

:Product cost :40 :Cost goods manufacturer :10 :30

Assign costing sheet to plant : Path :SPRO-Controlling Product cost controlling Product cost planning Material cost estimate with quantity structure- Define costing variants (TR code is OKKN) Select position button Cost variant :Select PPC1 standard cost estimate (Materials) Enter Select PPC1 Select details button Select valuation variant button Select create beside valuation variant /plant Select new entries button In plant Save Press enter to save in your request Select back arrow Select valuation variant Select details button Select overhead tab Give the costing sheet Save Define cost component structure: To know the break up of standard product cost What is raw material cost? What is RM overhead cost ? What is production cost ? :BIL costing sheet both in the places :001 with plant BILP :BILP

Path :SPRO-Controlling Product cost Controlling Product cost planning Basic settings for material costing Define cost component structure . (OKTZ) Select cost component structure Select component structure Select new entries button Cost competent structure Chart of Accounts From cost element To cost element Cost component Save Ignore the warning message press enter Press enter to save in your request Select back arrow Double click on cost components with attributes folder Select cost component structure 01 with cost component 80 Material over head Double click on assignment:Cost component cost element Interval folder Select new entries button Cost component structure Chat of Accounts From cost element Cost component Save Press enter to save in your request Double click on cost components with attributes folder Select cost component structure Select new entries button Cost component structure Chat of Accounts From cost element To cost element :01 :BIL :400100 :400299 :01 with lost component 50 production machine Double click on assignment cost component cost element interval folder :01 :BIL :1200000 RM overhead :80 Material overhead :01 :BIL :400000 :400099 :select 10 RM :01

Double click on cost components with attributes folder :01 with cost component 10 raw materials Double click on assignment:Cost component cost element interval folder

Cost component One more Cost component structure Chat of Accounts From cost center To cost center Cost component One more Cost component structure Chat of Accounts From cost element Cost component Save

:select 50 production machine

:01 :BIL :400500 :400599 :50

:01 :BIL :1200001 :50

Double click on cost component structure folder For cost component structure 01 select active check box Save For cost component structure assignment structure 02 also for cost component Note: The above procedure is to be followed to 02 also PP CONSULTANT JOB: Define MRP controller Path :SPRO-Production material requirements Planning Master data-Define MRP controllers Select new entries button Plant :BILP MRP controller :Mr.A Save Press enter to save in your request

Notes: Define floats (Scheduling margin key) Floats Buffer days or grace days

Production order creation Production order release Production start date Production end date

2 days grace days 08.12.2008 10.12.2008 10.12.2008 12.12.2008 11.12.2008 13.12.2008 15.12.2008 17.12.2008

Path :SPRO-Production Material requirements planning Planning Scheduling and capacity parameters Define floats (Scheduling margin key) Select new entries button Plant Margin key Opening period Float before production Float after production Release period Save Press enter to save in your request Define production scheduler Path :SPRO-Production-Shop floor control- Master data-Define production scheduler Select new entries button Plant :BILP Production scheduler :B Description :Mr.B Save Press enter to save in your request Determine person responsible for work center Path :SPRO-Production Basic data Work center General data Determination person responsible Select new entries button Plant :BILP Responsible person : Mr.C Person responsible for work center :Mr.C Save Press enter to save in your request CO END USER AREA: Planning cost center wise (KP06) :BILP :BIL :2 days :2 days :2 days :2 days

Version From period To period Fiscal year Give the cost center Cost element

:0 :9 (December) :9 (December) :2008 :Dept G :400100 Salaries A/c

Select page down button or next page button Select from based radio button Select overview screen button (F5) For 400100 Plant fixed cost Save Planning for machine hours Path :Accounting Controlling Cost center accounting Planning-Activity output /PricesChange (KP26) Version From period To period Fiscal year Cost center Activity type :0 :9 :9 :2008 :Dept G :BIL :720000

Select next page or page down button

Select form based radio button Select overview screen button Plant activity Save :72000

calculation of Machine hour rate Path :Up to planning the path is same Allocations Price calculation (KSPI) Select cost center group radio button Cost center group select :BILPROD Execute Select save button Ignore the message press enter

MM END USER AREA Creation of material master A) Raw material 2 B) Finished product 1 Give the material Industry sector Material type Select basic data1 Plant Storage location Enter Give the description :Raw material 2 Base unit of measurement :KG Material group Division Select purchasing tab Purchasing group Valuation class Price control Moving price Save One more material Industry section Material type :BILFG1 :Mechanical engineering :Finished product :BIL :BIL1 RM Local :select V moving :150 Select accounting 1 tab :BILC :BS :BILRM2 :Mechanical Engineering :Raw material :Select purchasing Select general plant data /storage /Accounting :BILP :Hyderabad (MM01)

Press select view button Select organization levels button

Press select view button Select basic data1, MRP1, MRP2,MRP3, Work scheduling, general plant data /storage1, accounting , Costing 1

Select organizational levels button /enter Enter Plant Storage location Enter Description Division Select MRP1 tab MRP type MRP controller Lot size Select MRP 2 tab In house production :0 days Schedule margin key :select BIL Select MPR 3 tab Ignore the warning message press enter Availability check :select KP (no check ) Select work scheduling tab Production scheduler :B Select accounting tab Valuation class Price control Standard price Select costing one tab Overhead group Save Note :BOM=Bill of Material PP END USER AREA Creation of Bill of Material Path :Logistics Production Master data Bills of material Bill of material Material BOM Create (CS01) :select BIL1 :BIL2 Finished products :S (Standard price) :300 :select PD (MRP) :A :select EX lot for lot order quantity :Finished product 1 :BS Base unit measurement :KG :BILP :Hyderabad

Give the material Plant BOM usage Enter For item Give the component Quantity Item Give the plant Quantity Save Creation of work center

:BILFG1 :BILP :select 1 production :10 :BILRM1 :1 :20 :BILRM2 :1

Path :Up to mater data the path is same Work centers then work centers-create (CR01) Plant Work center Work center category Select basic data button Give the description Person responsible Usage Standard value key Select costing tab Start date Cost center Activity unit Formula key Save Creation of routings :01.04.2008 :Dept G :H (Hour) :SAP002 (Production machine time) :Dept G :Mr.C :009 :SAP1 Normal production :BILP :Dept G :select 0001 Machine

Under standard value maintenance

For machine activity :Give activity type BIL

Path :Up to master data the path is same Routings Routings Standard routings Create (Tr code is CA01) Give the material Plant Enter Usage Status Select operation button For operation 10 give the work center Control key Double click on operation Machine standard value Unit Save Note: Routing is process flow as a department wise CO END USER AREA Creation of cost estimate with quantity structure: Path :Accounting Controlling Product cost controlling Product cost planning-Material costing cost estimate with quantity structure Create (Tr code is CK11N) Give the material Plant Costing variant Enter Costing date from institution use todays date Costing date to Quantity structure date Valuation date Enter Cost sheet Raw materials :31.12.9999 :08.12.2008 :08.12.2008 :Todays date Note :In live environment next month first day date, this is planning date, In training :BILFG1 :BILP :select PPC1 (standard cost estimate for material ) :Dept G :select PP01 in hour production :10 :5 :H (Hour) :select 1 production ;select 4 (released (general)) :BILFG1 :BILP

BIL RM1 BILRM2

1 Kg 1Kg

75 150

225 11 50 ----286

RM overhead cost -5% Production costs 5*10 Machine hours 5 Hrs Machine hour rate 10Rs

From the menu select Costs >Display cost components Select save button or Ctrl+S Enter Marking and releasing Display material master Path :Logistics Materials management Material master-Material Display Display current (MM03) Material :BILFG1 Press select views button Select costing 2 view Enter Plant :BILP Enter A) Marking and releasing Display material master 1. Making updates future price in live environment on 21st February create estimate for March and store in the System. 2. Realizing updates current price on 1st of March release stock valuation will be at the new rate from 1st of March B) Marking and releasing : Path :Accounting Controlling Product cost controlling Product cost planning material costing Price update (CK24) Posting period Fiscal year Company code Plant Material Select test run check box :9 :2008 :BIL :BILP :BILFG1

Select marking allowance button Select company code Costing variant Save Select back arrow Deselect test run check box Execute Select material Select costing to tab Select back arrow two times Select release button Execute Select material Select costing to tab :BILFG1 :BILFG1 :BIL :select PPC1 (Standard cost estimate for materials)

ACTUAL COSTING CO consultant Job Check costing variants for Manufacturing orders (PP) Path :SPRO-Controlling Product cost controlling -Cost object controlling product cost by order Manufacturing orders Check costing variants for manufacturing orders(PP) (Tr.code is 0PL1) Select costing variant PPP1 Production order plan Select details button Select valuation variant button Select create button beside valuation variant /plant Select new entries button In plant Save Press enter to save in your request Select back arrow Select valuation variant :006 with plant BILP :BILP

Select details button Select overhead tab Give the costing sheet Save Select back arrow Select costing variant PPP2 production Order Actual Select details button Select valuation variant button Select create beside valuation variant/plant Select new entries button In plant Save Press enter to save in your request Select back arrow Select valuation variant 007 with plant :BILP Select details button Select overhead tab Costing sheet Save Define goods received valuation for order delivery: Same path Select new entries button Valuation area :BILP Valuation variant :007 production order -Actual Save Press enter to save in your request Work in process customization Creation of 5 secondary cost elements (Tr code is KA06) Give the cost element Valid from Enter Name & Description Cost element category :Order /Project result analysis :select 31 (order /project results analysis) :1100000 :01.04.2008 to 31.12.9999 :select BIL costing sheet :BILP :BIL costing sheet

Save Cost element Reference cost element Controlling area Enter & Save Cost element Reference cost element Controlling area Enter & Save Cost element Reference cost element Controlling area Enter & Save Cost element Reference cost element Controlling area Enter Save Define results analysis keys Path :SPRO-Controlling Product cost controlling Cost object controlling Product cost by order Period end closing Work in process Define results-Analysis keys (Tr code is OKG1) Result analysis key :FERT WIP calculation for production orders Define results analysis versions(Tr code OKG9) Same path Select new entries button Select controlling area :BIL Technical result analysis cost element :select 1100000 Save Press enter to save in your request Define valuation method (Actual cost) ( Tr code is OKGC) Same path :1100004 :1100000 :BIL :1100003 :1100000 :BIL :1100002 :1100000 :BIL :1100001 :1100000 :BIL

Select new entries button Select actual cost button Controlling area Result analysis key Enter & Save Press enter to save in your request Define line Ids Same path Purchase of to get the break up of WIP (Work In Progress)value Select line ID EL (Revenues) EK FK Direct cost Production cost :BIL :FERT Result analysis version :0

ABR settled cost for controlling area 1000 Select copy as button (F6) Change the controlling area to BIL for all line IDs Enter & Save Press enter to save in your request Define Assignment (OKGB) Same path Select line ID EL that is revenues for controlling area Select copy as button Change the controlling area to BIL Change masked cost element to 00003+++++ (5 times plus)(300000 to 399999) Enter & Save Press enter to save in your request Select line ID :EK Direct cost for controlling area 1000 Select copy as button Change the controlling area to BIL Change mass cost element to 00004000++ Enter and save Select line ID FK that is production cost for controlling area 1000 :1000

Select copy as button Change the controlling area to BIL Production cost elements: 400100 -400199 Personnel 400200-400299 Manufacturing 400500-400599 Depreciation 1200001 Activity allocation

00004001++ 00004002++ 00004005++ 00012+++++

Change master key cost element to 00004001 Enter & Save Notes: for define assignment line ID brak up of WIP Dept A Issue RM RM over head Production costs 100000 200000 Calculate internally WIP by using secondary cost elements and transfer to financial accounting require the break up of WIP by using line IDs and account assignments to line IDs. Select line ID FK production cost for controlling area BIL Select copy as button Change the mass cost element to 00004002++ Enter & Save Select 2FK line IDs for controlling area BIL Select copy as button Change masked cost element from first line ID 00004005++ Change to 00012+++++ Enter & save Select bank arrow Select line ID ABR Settled cost for controlling area 1000 Select copy as button Change the controlling area to BIL Change mass cost element to 0001000001 :(settlement cost element) Enter & save Dept B work in progress ept C

Define update; (Tr.code is OKGA) Same path Select new entries button Controlling area Version Result analysis key Line ID Category Controlling area Version Result analysis key Line ID Category WIP Revenues Controlling area Version Line ID Category WIP creation Reserves creation :BIL :0 :FERT :select EL revenues :select N (costs not to be included) :BIL :0 :FERT :Select EK (Direct cost) :select K cost :1100001 :1100002 :BIL :0 :FK production cost :select K cost :1100003 :1100004

Revenues analysis key :FERT

Select page down button One more controlling area :BIL Version Result analysis key Line ID Category Save Press enter to save in your request Creation of two GL Masters: WIP entry :0 :FERT :ABR settled cost :select A (Settled cost )

Work in process

DR

BS P&L

To Increase /Decrease in WIP FS00 Give the GL Account no. Company code Select with template button :200123 :BIL

CA(Current assets, Loans & Advances) Credit INC/DEC in stocks

Give the GL A/c No.200121 INV RM local Company code Enter Change short text to and GL A/c long text to work in process Other fields are common Save GL A/c No.300201 Company code :BIL Select with template button Give the GL A/c no.300200 Increase /Decrease stocks FG Company code Enter Change short text and GL A/c loge text to INC/DEC stocks WIP (Work in Progress) Save Define posting result for setting work in process Path :Up to period end closing the path is same Work in process Define posting results for setting work in process (OKG8) Select new entries button Controlling area Company code :BIL :BIL :BIL :BIL

Result analysis version :select 0 Result analysis category :WIPR (Work in Process with requirement to Capitalized) P & L A/c Balance sheet :300201 :200123

Save Press enter to save in your request Define results analysis version (OKG9) Same path Select controlling area select details button Select transfer to Financial accounting check box Save Ignore the warning message press enter Press enter to save in your request :BIL

RM issue overhead production costs Dept A

Dept B

Dept D

FG not received Settle to accounts by using secondary costs elements break up WIP (BY using line IDs) Define variance keys: Path :Up to period end closing the path is same Variance calculation :Define variance keys (OKV1) Select variance key 00001 Production order Select copy as button Change the variance key to BIL1 Change the name also variance key for BIL Enter & Save Define default variance keys for plants (OKVW) Same path Select position button Give the plant :BILP Enter For plant :BILP Assign variance key :BIL1 Save Press enter to save in your request Define target cost version: (OKV6) Notes:

Budgeted cost =Budgeted production Qty

Standard price

Standard cost =Standard quantity * Standard price Target cost =Actual production qty * Actual cost =Actual Production * Path :Same path Select controlling area 1000 with target cost version 0 Select copy as button Change the controlling area to BIL Change the description to target cost version for BIL Enter & Save Press enter to save in your request Assign variance key in Material master Path :Logistics Material management-Material master Material Change Immediately (MM02) Give the material no.BILFG1 Press select views button Select costing 1 view Enter Give the plant :BILP Enter Variance key :select BIL1 Save Creation of cost element group (KAH1) Give the cost element group :BILPRODN Enter Description :Production cost element for BIL Select Edit-Cost element -Select insert cost element button 400100 400299 Personnel & Manufacturing 400500 400599 Depreciation 1200001 Activity allocation Save standard price

actual price

Create allocation structure: Path :SPRO-Controlling Product cost controlling- Cost object controlling Product cost by order-Period end closing Settlement create allocation structure Select new entries button Allocation structure Text Save Press enter to save in your request Select :B2 :B2 :BIL Production differences allocation structure

Double click on assignments folder Select new entries button Assignment 01 02 03 Save Select assignment 01 Double click on source folder From cost element To cost element :400000 :400099 Text Direct costs(Raw materials) Material overheads Production costs

Double click settlement cost elements folder Select new entries button Receiver category Save Double click on assignments folder Select assignment 02 Material overheads Double click on source folder From cost element :1200000 RM overhead rate Double click on settlement cost elements folder :select G/L, GL account Select by cost element check box

Select new entries button Receiver category Save Double click on assignment folder Select assignment 03 production cost Double click on source folder Give the cost element group :BILPRODN save Double click on settlements cost elements folder Select new entries button Receiver category Save Create settlement profile: Same path Select new entries button Settlement profile Description :BIL :BIL production order differences settlement profile :select G/L Select by cost element check box :select G/L , GL Account Select by cost element check box

Select to be settled in full radio button Allocation structure :B2 Default object type :select G/L Select % settlement check box Select equivalence number check box Select amount settlement check box Under valid receivers for GL account :Select settlement required Document type Residence time Save Press enter to save in your request Define CO.No.range interval for the business transactions :SA :12 months Maximum no.of distribution rules :999

RKL -Actual Activity Allocation KZPI- Actual overhead (Periodic) User transactions code :KANK Give the controlling area Select maintain groups button Double click on RKL Double click on KZPI Select Co. No. range interval for BIL check box From the menu select Edit Assign element group Save Ignore the warning message press enter Define exchange rate for type P (Standard truncation for cost planning for INR to EURO (Transactions code OB08) Select new entries button Exchange rate type :P Valid from :01.12.2008 From currency :INR To currency :EUR Direct quotation :0.02 Save Press enter to save in your request FI Consultant job BILRM2 receipt Purchase order | GR | IV Opening stock :BIL

Inventory RM local To Stock taking

DR GBB

BSX BSA

Current liability & provision

Production order differences are to be settled to accounts Production order differences manufacturing DR PRD To INC/DEC in stocks FG GBB AUA

Creation of 2 GL masters (FS00) Give the GL A/c No.400201 Company code :BIL Select with template button Give the GL A/c No. :400200 Conversion charges Company code :BIL Change short text and GL account long text to production order differences Select create /bank/Interest tab Field status group change to G014 MM adjustment account Save GL A/c No. Company code :100599 :BIL

Select with template button Give the GL A/c No.100500 VAT payable Company code Enter Select type /Description tab Chang short text and GL account long text to Stock taking Select create /bank /interest tab Change the field status group G049 (manufacturing cost accounts) Save Give the GL account no.300200 INC/DEC stock in FG Company code :BIL Select edit cost element button Valid from :01.04.2008 to 31.12.9999 Enter Cost element category Save :select 22 external settlement :BIL

Assignment of account for automatic postings (OBYC) (See the material ) Double click on transaction PRD Cost (Price) differences Give the Chart of Accounts :BIL

Enter Save Give A/c No.400201 production order differences Save Press enter to save in your request Select back arrow Double click on GBB offsetting entry for inventory posting Valuation modifier Valuation class Account no. Valuation modifier Valuation class Account Save Press enter to save in your request PP CONSULTANTS AREA Define order type Dependent parameters Path :SPRO-Production Shop floor control-Master data Order-Define order type dependent parameters. (Tr code is OPL8) Select plant :1000 with order type PP01 :X :BIL1 :100599 stock taking account :X :BILL :300200 General modification :BSA opening stock taking

General modification :AUA production

Select copy as button Change the pant to BILP Enter and Save Press enter to save in your request Define scheduling parameters for production orders Path :Up to Shop floor control the path is same- Operations-Scheduling Define scheduling parameters for production orders (Tr code is OPU3) Select plant Select copy as button :1000 with order type PP01

Change the plant to BILP Enter and save Press enter to save in your request Define confirmation parameters Path :Up to shop floor control the path is same Operations-Confirmation-Define confirmation parameters (OPK4) Select plant 1000 with order type PP01 Select copy as button Change the plant to BILP Enter and Save Press enter to save in your request Define checking control Path :Up to shop floor control the path is same Operations Availability check define checking control (OPJK) Select business function Select copy as button Change the plant to BILP Enter Change the plant to BILP Enter and save Press enter to save in your request END USER AREA Creation of production order: Path :Logistics Production-Shop floor control-Order Create with material (Tr code is CO01) Give the material :BILFG1 Production plant Planning plant Order type Enter Give the total Qty under quantities :10 :BILP :BILP :select PP01 Production order :1 & 2 for order type PP01 for plant 1000

Start date & end date :Todays date Select cost order button (Ctrl+F7) From the menu select Goto Costs Analysis Select back arrow Select release order button (Ctrl+F1) Save From the menu select order display note the order no.60003225 Enter Select assignment tab Not to the reservation no.66076 Raw material receipt by way of opening stock Path :Logistics Materials management Inventory management goods movement Goods receipt Other (Tr code is MBIC) Give the movement type Plant storage location Enter Give the material no. Quantity Select save button or Ctrl+S From the menu select other goods receipts display Enter Select accounting documents button 200121 100599 Inventory RM LCL 15000 BILRM2 Stock taking 15000 BILRM2 100*150 BIL1 BSX GBB BSA BIL1 :BILRM2 :100 kgs :561 :BILP :HYD

Raw material issue to production order:(Tr code is MB1A) Select to reservation button Give the reservation no.66076 Enter

BIL RM1 BIL RM2 Save From the menu select goods issue display Enter Select accounting documents button Select accounting document no. 200121 400000 200121 400000 Inventory RM local 1125 BILRM1BSX BIL1

Qty :15 :15

RM consumption local 1125 BILRM1 GBB VBR BIL1 Quantity consumed * Avg rate ( 15 *75) Inventory RM local 2250 BILRM2 BSX BIL1 RM consumption local 2250 Qty consumed * Avg. rate (15*150) GBB VBR BILRM2 BIL1

Actual overhead calculation Path :Accounting Controlling Product cost controlling Cost object controlling product cost by order Period end closing single functions Overhead Individual processing (Tr code is KGI2) Give the order no. Period Fiscal year Select text check box Select dialog display check box Execute Select back arrow Deselect text run check box Execute :60003225 :9 :2008

Work in process calculation Path :up to single functions the path is same Work in process Individual processing Calculate (Tr code is KKAX) Give the over no. WIP period :60003225 :9

Fiscal year

:2008

Result analysis version :select 0 Select test run check box Execute Select back arrow Deselect test run check box Execute Settlement of work in process to accounts (31.12.2008 (month end date) Path :Up to single functions the path is same Settlement of individual processing (Tr code is K088) Give the order no. Settlement period Fiscal year :60003225 :9 :2008

Deselect text run check box Select check transaction date check box Execute Select detail lists button Select accounting documents button Select accounting document no. 300201 200123 INC/DEC in stock WIP 3713 P &L Account Work in Process 3713 Balance Sheet

(Actual RM +Actual RM overheads)

To view work in process report Path :Accounting Controlling Product cost controlling Cost object controlling Product cost by order Information system Reports for product cost by order Object list Order selection (Tr code is S_ALR_87013127) Plant Material number From period To Period Execute Select report call button :BILP :BILFG1 :01 2008 :9 2008

Confirmation of production order Path :Logistics Production shop floor control Confirmation Enter-For operation time ticket (Tr code is Co11N) Give the order no. Operation /Activity Confirmation type Yield to confirm Fro activity 2 to confirm Unit Save Production receipt Path :Logistics Material management Inventory management Goods movement Goods receipt for order (Tr code is MB31) Give document date Posting date Give the movement type Order Plant Storage location Enter Ignore the warning message press enter Select save button or Ctrl+S From the menu select goods receipt display Document no.5000011861 Enter Select accounting documents button Select accounting document no. 200122 300200 Inventory FG 2860 BILFG1 BSX BIL2 GBB AUF BIL2 :31.12.2008 :31.12.2008 :101 (Goods receipt for order into ware house) :60003225 :BILP :HYD :60003225 :10 kg :select final confirmation :10 kg :60 Qty :H (Hour)

INC/DEC in stocks FG 2860 BILFG1 Qty produced * standard rate 10*286 To make production order technically complete (TECO)

Path :Logistics Production shop floor control Order Change (Tr code is CO02) Give the order no.60003225 Enter From the menu select functions Restrict processing Technically complete Save Calculation of variances Path :Accounting Controlling-Product cost controlling Cost object controlling Product cost by order - period ending closing single functions- Variances Individual processing (Tr code is KKS2) Give the order no.60003225 Select execute button Select back arrow Deselect text run check box Execute Double click on variance amount Open one more session for order display (CO03) Give the order no.60003225 Enter From the menu select go to cost analysis Calculation of work in process (KKAX) Path :Upto single functions same path Work in Progress Individual processingCalculate Work in process for Dec Production for Dec To calculate WIP once again work in process will be reserved and variances will be settled to accounts Give the order no. WIP to Period Fiscal year :60003225 :9 :2008

Result analysis version:0 Deselect text run check box

Execute Settlement of work in process to accounts :KO88 Give the order no. Settlement period Fiscal year :60003225 :9 :2008

Deselect test run check box Select check transaction date check box Execute Select details list button Select accounting documents button Select accounting document no. GBB AUA 300200 400201 300201 200123 INC/DEC in stocks FG 853 BILFG1 BIL2 Production order diff 853 period INC/DEC in stock WIP 3713 P & L debit work in process 3713 Balance sheet credit