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SAP FICO INTERVIEW QUESTIONS -Product Costing Product Costing What are the im ortant Termino!

ogies in Product Costing"# Resu!ts Ana!$sis %e$ & This 'e$ determines ho( the Wor' in Progress is ca!cu!ated Cost Com onents - The )rea' u o* the costs (hich get re*!ected in the roduct costing eg+ ,ateria! Cost- .a)our Cost- O/erhead etc Costing Sheets - This is used to ca!cu!ate the o/erhead in Contro!!ing Costing Variant - For A!! manu*actured roducts the rice contro! recommended is Standard Price+ To come u (ith this standard rice *or the *inished good materia! this materia! has to )e costed+ This is done using Costing Variant+ Further 0uestions do(n )e!o( (i!! e1 !ain this conce t )etter+ What are the con*iguration settings maintained in the costing /ariant" Costing /ariant *orms the !in' )et(een the a !ication and Customi2ingsince a!! cost estimates are carried out and sa/ed (ith re*erence to a costing /ariant+ The costing /ariant contains a!! the contro! arameters *or costing+ The con*iguration arameters are maintained *or costing t$ e- /a!uation /ariants- date contro!- and 0uantit$ structure contro!+ In costing t$ e (e s eci*$ (hich *ie!d in the materia! master shou!d )e u dated+ In /a!uation /ariant (e s eci*$ the *o!!o(ing a3 the se0uence or order the s$stem shou!d go a)out accessing rices *or the materia! master 4 !anned rice- standard ricemo/ing a/erage rice etc3+ )3 It a!so contains (hich rice shou!d )e considered *or acti/it$ rice ca!cu!ation and + c3 5o( the s$stem shou!d se!ect 6O, and routing+ 5o( does SAP go a)out costing a Product ha/ing mu!ti !e 6i!! o* materia!s (ithin it" SAP *irst costs the !o(est !e/e! roduct- arri/es at the cost and then goes and cost the ne1t highest !e/e! and *ina!!$ arri/es at the cost o* the *ina! roduct+ What does the conce t o* cost ro!! u mean in roduct costing conte1t" The ur ose o* the cost ro!! u is to inc!ude the cost o* goods manu*actured o* a!! materia!s in a mu!ti!e/e! roduction structure at the to most !e/e! o* the 6O,46i!! o* ,ateria!3 The costs are ro!!ed u automatica!!$ using the costing !e/e!s+ 73 The s$stem *irst ca!cu!ates the costs *or the materia!s (ith the !o(est costing !e/e! and assigns them to cost com onents+

83 The materia!s in the ne1t highest costing !e/e! 4such as semi*inished materia!s3 are then costed+ The costs *or the materia!s costed *irst are ro!!ed u and )ecome art o* the materia! costs o* the ne1t highest !e/e!+ What is a sett!ement ro*i!e and (h$ is it needed" A!! the costs or re/enues (hich are co!!ected in the Production order or Sa!es order *or e1am !e ha/e to )e sett!ed to a recei/er at the end o* the eriod+ This recei/er cou!d )e a 9! account.ro*ita)i!it$ ana!$sis or asset+ A!so read the 0uestion :What is a cost o).*i1ed asset.materia!.ect (hich cou!d )e a .ect $ou need to de*ine the Trans*er structure (here $ou mention (hat are the costs $ou (ant to sett!e and the target recei/er *or that+ This in*ormation $ou *it it in the sett!ement ro*i!e (hich contains /arious other arameters and this sett!ement ro*i!e is de*au!ted in the Order t$ e+ So e/er$ time a order is e1ecuted the re!e/ant sett!ement ru!e is stored and at the month end )$ running the transaction o* the sett!ement o* orders a!! the cost is assed on to the recei/er So to ut in sim !e terms# a3 <ou de*ine $our cost o).ect to the recei/er+ It is maintained in the Sett!ement ro*i!e de*ined a)o/e+ The Trans*er structure has 8 arts# a3 Source o* cost e!ements $ou (ant to sett!e )3 Target recei/er (hether it is a Pro*ita)i!it$ segment or *i1ed asset or cost center So )asica!!$ *or sett!ing the costs o* a cost o).a cost center.order. account.)usiness rocess =3 >ocument t$ e is a!so attached here ?3 A!!ocation structure and PA trans*er structure is a!so attached to the sett!ement ro*i!e e+g+ A7 The sett!ement ro*i!e created is then attached to the order t$ e+ What is Trans*er or A!!ocation structure" The trans*er structure is (hat he! s in sett!ing the cost *rom one cost o).sa!es order.ects.cost o).W6S e!ement.order items.ect : in the section Contro!!ing+ In order to sett!e the costs o* the roduction order or sa!es order a sett!ement ro*i!e is needed+ In a sett!ement ro*i!e $ou de*ine a range o* contro! arameters *or sett!ement+ <ou must de*ine the sett!ement ro*i!e )e*ore $ou can enter a sett!ement ru!e *or a sender+ The Sett!ement Pro*i!e is maintained in the Order T$ e and de*au!ts during creating o* order+ + Sett!ement ro*i!e inc!udes#73 the retention eriod *or the sett!ement documents+ 83 Va!id recei/ers 9.ro*ita)i!it$ segment.cost center.

ect a!! the costs or re/enues o* a sa!es order cou!d )e assed to Pro*ita)i!it$ Ana!$sis What do $ou mean )$ rimar$ cost com onent s !it" Primar$ cost s !it is de*ined (hen $ou create a cost com onent structure+ When $ou s(itch on this setting.roduction order a sa!es order *or eg )3 <ou co!!ect costs or re/enues *or it c3 <ou determine (here $ou (ant to ass these costs or re/enues to *or eg i* the sa!es order is the cost o).the re0uirement C!ass is attached to the re0uirement t$ e and in this re0uirement c!ass a!! con*iguration settings are maintained *or contro!!ing+ In the re0uirement c!ass (e attach the costing /ariant.the rimar$ cost *rom the cost center are ic'ed u and assigned to the /arious cost com onents+ 5o( do rimar$ costs get ic'ed u *rom cost center into the cost com onent structure" This is ossi)!e (hen $ou do a !an acti/it$ rice ca!cu!ation *rom SAP+ The rimar$ cost com onent structure is assigned to the !an /ersion @ in Contro!!ing + Is it ossi)!e to con*igure 8 cost com onent structures *or the same roduct in order to ha/e 8 di**erent /ie(s" <es it is ossi)!e+ We create another cost com onent structure and assign it to the main cost com onent structure+ This cost com onent structure is ca!!ed Au1i!iar$ cost com onent structure (hich ro/ides another /ie( o* the cost com onent structure+ 5o( do $ou go a)out con*iguring *or the sa!es order costing" The *!o( is as *o!!o(s# Sa!es order -A Re0uirement T$ e-BRe0uirement C!ass-A A!! settings *or contro!!ing In a sa!es order $ou ha/e a re0uirement t$ e +In con*iguration.(e attach the condition t$ e E%@8 (here (e (ant the sa!es order cost to )e u datedand the account assignment categor$+ In the account assignment categor$ (e de*ine (hether the sa!es order (i!! carr$ cost or not+ In case i* (e do not (ant to carr$ cost on the sa!es order (e 'ee the consum tion osting *ie!d )!an'+ We a!so de*ine here the Resu!ts Ana!$sis /ersion (hich he! s to ca!cu!ate the Resu!ts Ana!$sis *or the Sa!es order i* re0uired+ There are 8 !ants in a com an$ code+ First !ant is the manu*acturing !ant and another !ant is the se!!ing !ant+ Finished goods are manu*actured at the manu*acturing !ant and trans*erred to the se!!ing !ant+ 5o( is standard cost estimate ca!cu!ated at the se!!ing !ant gi/en the *act that the cost at )oth the !ant shou!d )e the same" The s ecia! rocurement t$ e needs to )e con*igured (hich s eci*ies in (hich !ant the s$stem is to !oo' u *or cost+ 5ere a s ecia! rocurement .

i1ed costing is re0uired (hen $ou ha/e di**erent sources o* su !$ *or urchasing the materia!+ .ets sa$ *or a roduct there e1ists three roduction /ersions+ E1 !ain the rocess ho( $ou (ou!d go a)out creating a mi1ed cost estimate" The rocess o* creating a .i1ed costing is re0uired (hen di**erent rocesses are used to manu*acture the same materia!+ .RP /ie( o* the Finished good materia! master record in !ant 8+ When $ou cost the *inished good at !ant 8.i1ing ratios and (h$ are the$ re0uired to )e maintained )e*ore creation o* cost estimate" .the s$stem (i!! trans*er the standard cost estimate *rom !ant 7 to !ant 8 What is mi1ed costing in SAP" 9i/e an e1am !e to e1 !ain+ .et us ta'e an e1am !e#There is a *inished good C$!ene (hich can )e manu*actured )$ = di**erent rocesses+ The *irst rocess uses an o!d machine and !a)our+ The rocessing time is D hrs to manu*acture+ The second rocess uses a semi-automatic machine and !a)our+ The rocessing time is E hrs to manu*acture+ The third rocess uses a *u!!$ automatic machine and the rocessing time is F hrs+ Thus cost o* manu*acture *or the = rocesses is di**erent+ 6$ using .i1ed cost estimate (ou!d )e as *o!!o(s#73 Create rocurement a!ternati/es *or each o* the roduction /ersion+ 83 >e*ine .i1ing ratios *or the rocurement a!ternati/es =3 Se!ect the con*igured 0uantit$ structure t$ e and e1ecute a materia! cost estimate )ased on the costing /ersion+ What is .'e$ s eci*$ing !ant 7 4manu*acturing !ant3 shou!d )e con*igured+ This s ecia! rocurement t$ e must )e entered in the costing /ie( or the .i1ing ratios are (eighting *actors assigned to the rocurement a!ternati/es+ This (eighting *actor is o)tained *rom the !anning de artment )ased on the usage o* the rocurement a!ternati/es during the !anning $ear+ For e+g+ Procurement a!ternati/e 7 4 roduction /ersion 73 ?@G (i!! )e manu*actured .i1ed costing $ou can create a mi1ed rice *or the /a!uation o* this *inished good+ What con*iguration needs to done *or using .i1ed costing" Quantit$ Structure t$ e *or mi1ed costing must )e con*igured+ 5ere (e s eci*$ the time de endenc$ o* the structure t$ e + The *o!!o(ing o tions e1ist a3 <ou ha/e no time de endenc$+ )3 It is )ased on *isca! $ear c3 It is )ased on eriod This 0uantit$ structure t$ e is then assigned to the costing /ersion+ .

roducts the net rea!i2a)!e /a!ue method a !ies+ Is it ossi)!e to use Standard SAP Co.roduct+ 5o( do $ou ca!cu!ate the cost *or a 6$.roduct in SAP" A 6$.roduct *unctiona!it$ in .i1ed costs 7E=F@J7@@ H 7E=+F There are Resu!t ana!$sis categories in WIP 4Wor' in Process3+ What do $ou mean )$ the resu!t ana!$sis categor$ Reser/es *or unrea!i2ed costs" I* $ou are ca!cu!ating the (or' in rocess at actua! costs.ateria! *or a 6$.(hi!e *or )$.roduct through transaction code .ateria!+ 6$.roduct 4 rimar$ roduct or )$. a!! the rimar$ roducts are re resented as an item (ith negati/e 0uantit$+ A rimar$ roduct is a!so indicated as a co.R87 Price change+ 5o( do $ou de*ine a Co-Product in SAP" A Co.the s$stem (i!! create reser/es *or unrea!i2ed costs i* the credit *or the roduction order )ased on goods recei ts is greater than the de)it o* the order (ith actua! costs incurred+ The Resu!t ana!$sis categor$ RUCR 4Reser/es *or unrea!i2ed cost3 (ou!d need to )e maintained+ Norma!!$ this is not maintained in most o* the com anies+ Which is the Resu!t ana!$sis categor$ (hich is norma!!$ maintained *or the WIP 4Wor' in Process3 ca!cu!ation" The Resu!t ana!$sis categor$ WIPR .Procurement a!ternati/e 8 4 roduction /ersion 83 =FG (i!! )e manu*actured Procurement a!ternati/e = 4 roduction /ersion =3 8FG (i!! )e manu*actured This G (i!! )e maintained as mi1ing ratios+ Thus (hen s$stem ca!cu!ates the mi1ed cost estimate.roduct in the 6O.roduct in SAP" The cost *or the 6$.roduct in SAP is de*ined as an item (ith a negati/e 0uantit$ in the 6i!! o* .roduct reduces the cost o* the main roduct+ There is no 6i!! o* .s$stem (i!! *irst cost each o* the roduction /ersion and then mu!ti !$ each o* the costs (ith the (eighting *actors+ Thus 8?@ 4cost o* rod+ Vers 73 C ?@ H DI@@ 87@ 4cost o* rod+ Vers 83 C =F H E=F@ 7I@ 4cost o* rod /ers =3 C 8F H ?@@@ . o* the !eading co roduct+ For rimar$ roducts the costs are ca!cu!ated using the a ortionment method.roduct3 is indicated )$ a tic' in the costing /ie( o* the materia! master+ In the 6O.roduct is the net rea!i2a)!e /a!ue+ This is manua!!$ maintained in the s$stem *or the )$.Wor' in rocess (ith re0uirement to ca ita!i2e costs is norma!!$ maintained *or WIP ca!cu!ation 5o( do $ou de*ine a 6$.

ects (hich co!!ect roduction costs *or manu*actured roduct+ Product cost co!!ector is a sing!e order created *or a materia!+ A!! the costs during the month *or that materia! is de)ited to sing!e roduct cost co!!ector+ No costing )$ !ot si2e is re0uired in case o* roduct cost co!!ector+ The !atter is (here there are man$ roduction orders *or a sing!e materia! during the month+ Costs are co!!ected on each o* this roduction order+ Costing )$ !ot si2e is the main re0uirement in case o* roduction orders+ What is the meaning o* re!iminar$ cost estimate *or roduct cost .roduct *unctiona!it$ in re etiti/e manu*acturing 5o( do $ou got a)out de*ining CO-Product *unctiona!it$ in Re etiti/e manu*acturing" In the Re etiti/e manu*acturing $ou need to use the Costing 6O. *or the other co.Re etiti/e manu*acturing" No+ It is not ossi)!e to use the Standard Co. code to assign read the ne1t 0uestion+ In the a)o/e scenario ho( do $ou 'no( (hich cost e!ement is )eing ca!!ed *or" In this case $ou need to the use simu!ation mode O.+ This co. code is a/ai!a)!e+ <ou get an error (hi!e e1ecuting a cost estimate.roduct+ <ou get an error (hi!e e1ecuting a cost estimate (hich sa$sK Item no 7 4(hich is a ra( materia!3 is not assigned to the cost com onent structure" What cou!d )e the ossi)!e cause o* error in this scenario" The consum tion 9.(hich sa$sK Item no+ 7 4(hich is a ra( materia!3 is not assigned to the cost com onent structure" In this case e/er$thing is er*ect!$ con*igured.(hat cou!d )e the ossi)!e error in this scenario" In the materia! master o* the ra( materia! the /a!uation c!ass u dated in the accounting /ie( (i!! )e incorrect+ Is it ossi)!e to ca!cu!ate standard cost estimate *or a ast date" No+ It is not ossi)!e to ca!cu!ate standard cost estimate *or a ast date+ What is the di**erence )et(een a roduct cost co!!ector and roduction order" 6oth o* these are cost o).roduct+ Through arithmetica! ca!cu!ation $ou need to maintain the 0uantities in the costing 6O. code *or the materia! master is not assigned to the cost com onent structure+ To *ind out ho( $ou can 'no( (hich 9.roduct (i!! )e sho(n as a negati/e item in the !eading co..W6 in . and enter the materia! code !ant and the mo/ement t$ e 8I7 4issue against roduction order3+ <ou (i!! see the account modi*ier V6R and against (hich the 9.

*!atrate assem)!$ scra in the .RP 7 /ie( o* the materia! master record+ This assem)!$ scra is re*!ected in a!! the su)ordinate com onents+ The s$stem increases the 0uantit$ to )e roduced )$ the ca!cu!ated scra 0uantit$+ This increases )oth the materia!s consumed and the acti/ities consumed and conse0uent!$ the cost+ 5o( are scra costs sho(s in the standard cost estimate" Scra costs are assigned to the re!e/ant cost com onent and can )e sho(n se arate!$ *or a materia! in the costed mu!ti!e/e! 6O.the 0uantities and acti/ities used must )e increased )$ the s$stem so that the re0uired !ot si2e can )e roduced+ To increase the !ot si2e o* an assem)!$ $ou can enter a ercentage.co!!ector" Pre!iminar$ costing in the roduct cost )$ eriod com onent ca!cu!ates the costs *or the roduct cost co!!ector+ In re etiti/e manu*acturing $ou can create cost estimate *or s eci*ic roduction /ersion+ Wh$ is re!iminar$ cost estimate re0uired" The re!iminar$ cost estimate is re0uired *or the *o!!o(ing#Con*irm the actua! acti/it$ 0uantities+ Va!uate (or' in rocess Ca!cu!ate roduction /ariances in /ariance ca!cu!ation Va!uate the un !anned scra in /ariance ca!cu!ation Is it ossi)!e to u date the resu!ts o* the standard cost estimate to other *ie!ds such as commercia! rice.ta1 rice *ie!ds in the accounting /ie(" <es+ It is ossi)!e to u date the standard cost estimate to other *ie!ds such as commercia! rice etc+ in accounting /ie(+ 5o( do $ou con*igure that the resu!ts o* the standard cost estimate are u dated in other *ie!ds other than the standard rice" The rice u date in the materia! master is de*ined in Costing t$ e+ This costing t$ e is attached to the costing /ariant+ What do $ou mean )$ Assem)!$ scra and ho( is it maintained in SAP" Assem)!$ scra is scra that is e1 ected to occur during the roduction o* a materia! (hich is used as an assem)!$+ I* a certain amount o* scra a!(a$s occurs during the roduction o* an assem)!$.+ 5o( are scra /ariances ca!cu!ated" Scra /ariance are ca!cu!ated )$ /a!uating the scra 0uantities (ith the amount o* the actua! costs !ess the !anned scra costs+ What do $ou mean )$ Com onent scra and ho( is it maintained in SAP" Com onent scra is the scra o* a materia! that is e1 ected to occur during roduction+ When an assem)!$ is roduced (ith this com onentthe s$stem has to increase the com onent 0uantit$ to ena)!e to reach .

the costing !ot si2e is reduced )$ this ercentage+ I* the o eration scra is maintained in the 6O.Procurement t$ e 5 & Origin t$ e C & Automatic )atch /a!uation Va!uation t$ e descri)es the characteristic o* indi/idua! stoc'+ e+g+ EI9EN Inhouse roduction 4SAP standard3 ." I* the o eration scra is maintained on!$ in the routing.the re0uired !ot si2e+ The com onent scra can )e entered in the 6O.+ What are the im !ications i* the o eration scra is maintained in the routing and i* it maintained in the 6O.the !anned in ut 4not the out ut 0uantit$3 is increased and an$ assem)!$ scra is reduced+ What is the meaning o* additi/e costs in SAP and (h$ is it re0uired" Additi/e costs are used to add costs manua!!$ to a materia! cost estimate (hen it cannot )e ca!cu!ated )$ the s$stem+ E1am !es o* such costs are *reight charges.. item or in the .insurance costs and stoc' trans*er costs+ What is the con*iguration re0uired *or additi/e costs" To inc!ude additi/e costs in the materia! cost estimate $ou need to set the indicator :Inc!+ additi/e costsK *or each /a!uation strateg$ in the /a!uation /ariant+ Further $ou a!so need to set in the costing /ariant to inc!ude additi/e costs+ 5o( do $ou con*igure s !it /a!uation" The con*iguration ste s in/o!/ed in s !it /a!uation#73 Acti/ate s !it /a!uation & Con*igure (hether s !it /a!uation is a!!o(ed *or the com an$ code+ 83 >etermine the /a!uation categories and /a!uation t$ es that are a!!o(ed *or a!! /a!uation areas+ =3 A!!ocate the /a!uation t$ es to the /a!uation categories ?3 >etermine the !oca! /a!uation categories *or each /a!uation area and acti/ate the categories to )e used in $our /a!uation area+ What is /a!uation categor$ and /a!uation t$ e in s !it /a!uation" In s !it /a!uation the materia! stoc' is di/ided according to /a!uation categor$ and /a!uation t$ e+ Va!uation categor$ determines ho( the artia! stoc's are di/ided according to (hich criteria+ The *o!!o(ing /a!uation categories are reset in the standard SAP RJ= s$stem & 6 .RP ? /ie( o* the materia! master What do $ou mean )$ O eration scra and ho( is it maintained in SAP" O eration scra is a scra that is e1 ected to occur during roduction+ O eration scra is used to reduce the !anned in ut 0uantities in *o!!o( u o erations and to ca!cu!ate the recise amount o* assem)!$ scra + O eration scra can )e maintained in G in the routing and in the 6O.

the s$stem creates the /a!uation header record+ 8+ Then create the materia! *or a /a!uation t$ e+ Ca!! u the same materia! in creation mode again+ >ue to the *act that a /a!uation header record e1ists.the s$stem re0uires $ou to enter a /a!uation t$ e *or the /a!uation categor$+ =+ Re eat Ste t(o *or e/er$ /a!uation t$ e !anned+ When a standard cost estimate is run *or a *inished good does SAP ca!cu!ate cost estimate *or its com onents such as ra( and ac'ing materia!" <es+ SAP ca!cu!ates the cost estimate e/en *or ra( and ac'ing materia! and stores it in the standard rice *ie!d *or in*ormation ur oses 5o( do $ou re/ent the s$stem *rom ca!cu!ating the cost estimate *or ra( and ac'ing materia! (hen $ou run a standard cost estimate *or the *inished goods" To re/ent the s$stem *rom ca!cu!ating cost estimates *or ra( and ac'ing materia!.FRE.enter V 4mo/ing a/erage rice3+ When $ou sa/e.aintain .> E1terna! rocurement 4SAP standard3 Va!uation t$ es are assigned to /a!uation categories+ What are the ste s in/o!/ed )e*ore $ou run a cost estimate *or a s !it /a!uated materia!" The *o!!o(ing are the ste s#73 Create rocurement a!ternati/es )ased on the /a!uation t$ es *or the materia!+ 83 .$ou need to se!ect the :No costingK chec')o1in the costing /ie( o* the materia! master+ 5o( is it ossi)!e to a !$ 8 di**erent o/erhead rates *or 8 di**erent *inished goods" It is ossi)!e through o/erhead grou s+ <ou con*igure 8 o/erhead 'e$s+ >e*ine rates *or each o* this o/erhead 'e$+ These t(o o/erhead 'e$s is then assigned to the t(o o/erhead grou s+ These o/erhead grou s are attached in the costing /ie( o* the *inished goods materia! .i1ing ratios *or the rocurement a!ternati/es 5o( do $ou create a materia! master (ith s !it /a!uation" To create a s !it /a!uated materia! master roceed as *o!!o(s#7+ First create a /a!uation header record *or the materia!+ U date the Va!uation categor$ *ie!d on the accounting screenL !ea/e the Va!uation t$ e *ie!d )!an'+ In the Price contro! *ie!d.

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