Professional Documents
Culture Documents
Information System
Product Costing Information System
Order-Related Production Information System
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Process Chain
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below:
to see the data used during this demo. Then select the first of the processes listed
Material cost estimates can be created at various times during a fiscal year.
The purpose of the costing varies according to the time at which it is performed. The standard
system contains costing variants:
The following process chain shows how multiple materials can be costed in a single costing run.
This demo uses costing variant PPC1.
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Process Chain
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Following the SAP philosophy, you should not change the standard cost estimate during this
period. The cost estimate results remain constant and do not take into account price fluctuations
and changes to the production structure during the planning period.
Material Valuation
The value of material stocks are adjusted at year-end closing according to the lowest value
principle. This method valuates the existing inventories as conservatively as possible using the
recognition-of-loss principle. A valuation price can be calculated in the following ways in the
Materials Management (MM) Module:
Determination of lowest value according to current market prices
Determination of lowest value according to movement rate
Determination of lowest value according to range of coverage
If the current market price is higher than the procurement price, a profit is expected. However, this
profit can only be reflected in the balance sheet if it is actually realized. The material continues to
be valuated with the procurement price.
If the current market price is lower than the procurement price, the planned loss must go into the
balance sheet. The material is valuated with the market price.
Materials can also be checked for movement rate and range of coverage from the R/3 System. If
the movement rate is low or the range of coverage is high, the value of the material is adjusted
because it is assumed that the material is no longer needed in the future.
You can transfer the results of the inventory cost estimate into the accounting view of the material
master record as the commercial price or tax-based price.