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Product Cost Planning Material Ledger PDF
Product Cost Planning Material Ledger PDF
SD FI
Sales & Financial
Distribution Accounting
MM CO
Materials Controlling
Mgmt.
PP AM
Product Fixed Asset
Planning Mgmt.
QM
Quality
SAP R/3 PS
Project
Mgmt. System
PM OC
Plant Maint. Office &
Comm.
HR IS
Human Industry
Resources Solutions
CO C omponents
CO EC -
Operating concern (9100 A Ltd) Profitability
PCA
PA segment
Profitability Analysis
Profitability Analysis
CO
Overhead Cost Controlling Product Cost
HR Human Materials
Materials SD Sales and
Resources
MM S&D
Management
Management Distribution
Why utilize Product Costing?
Material Master
Price Control
1 200,- 450,- 4 3 2
300,- 300,-
2 300,- If the invoice receipt is
3 100,- for 100 units, the stock
coverage
is 200 units:
Consumption all differences stock Vendor
4 450,-
400,- 3
ok
Posting Example: Moving average price 2
Stock
Stock Shortage GR/IR account
4 50.- 3 375.-
400.- 4
Posting Example: Moving average price 3
Stock Coverage
Even though all
With multiple delayed receipts between
invoice receipts: 2.- and 3.- were
Danger of Incorrect Valuation! valuated!
Characteristics of Price Control V
1 200.- 3 2
240.- 240.-
2 200.-
2 40.- 20.- 3
220.- 3
Characteristics of Price Control S
Standard Price
+ All stock postings take place at the standard price
+ Prices remain constant throughout at least one period
+ Price fluctuations do not debit/credit the cost objects (e.g. orders)
consistant controlling with the standard price as a bench mark
Valuation Period
Actual Prices?
Intermediates Standard w/ ML
Act1
Production
Production
Cost Center
Act2 orders
VAR.
VAR..
.
CO-
PA Cost F. Goods
VAR...
Object Inventory
Product Cost Flow
Plant Cost
View Sales & Mktg. View
Mfg. Cost Center
Process Order PA
Utilities
BOM Product Unit Cost (Profitability Analysis)
Salaries (Cost Component View) (SAP Value Fields)
Supplies Raw Matl 1 Cost of Goods Sold
Maintenance Raw Matl 2 Cost of Goods Mfg.
Depreciation Pkg Matl Raw Matl 1 Costs
Raw Matl 1 & 2 Costs
Training Raw Matl 2 Costs
Pkg. Matl Costs
Routing Pkg. Matl Costs
Direct (Activity Types)
Conversion Routing
Mach. Hrs.
Insur. & Taxes or Mach. Hr. Costs
Costs to Produce
Laboratory/QC lbs. Lab Tests Costs
Product testing costs
Waste Treatment Produced Mach. Setup Costs
Change Over costs
Shops & Stores Lab tests (setup costs)
General Services Setup Hrs. Fixed & Variable Cost Fixed & Variable Cost
Indirect Three Views Available:
Conversion 1. Cost Component
Total Product Cost 2. Cost Element
3. Cost Itemization
Pr oduct Costing A L td.
Pr oduct Costing A L td.
Pr oduct Costing A L td.
Pr oduct Costing A L td.
Pr oduct Cost Plannin g: Overv ie w
Production Costs
Debit Secondary cost
WIP Calculation
Settlement
What is a Product Cost Estimate?
Additive
You use additive costing to enable you to manually add costs that cannot
be calculated by the system to a material cost estimate.
Pr oduct Cost Plannin g: Overv ie w
Cost estimate
with quantity
structure
Report
Quantity
structure Material costs
Cost estimate Production costs
Costing without qty
variant structure Overhead
Start of Start of
Year 1 Year 2
Time
New Technical Ad hoc
product change
Used for:
Items Cost Values
Elements Stock Valuation
M Material 400000 Raw materials 600 000 SAR Profit & Loss
E Activity 943201 Production hours 610 000 SAR Statement
E Activity 943901 UT: Cooling Var. 612 000 SAR
G Overhead SAR
Ma terial c ost e stimates with q . s .
Material - - -
Costing Varia nt
Costing Variant
Quantities Prices
Cost of Goods
Manufactured
Costing Varia nt
Production Version
ID,
Production line,
Validity period.
Costing vs. Qu antity S tr ucture
BILLS
RAW MATERIALS
OF
MATERIAL
PRODUCT
COST
ESTIMATE
ROUTING
Electricity SERVICE
COST CENTER
WORK CENTER /
Consumables RESOURCE
Maintenance
- Master Data
+ Materials
+ Cost Centers
+ Activity Types
+ Cost Elements
Cost Centers
Validity period
Category
Functional area
Activity Types
Validity period
Activity unit
Allocation cost element
Costing Str ucture
Company
General
Service
C .Center
Production
C. Center
Product
Projects Cost
COGS Estimate
Profitability Segment
Costing Str ucture
Activity Type
Activity Pr ic e Calculatio n
Cost center:
Planned costs: 84,000
R&TCost center
1PDH01 Plan activity qty: 100 h
1
Activity Price
: Calculation
Apportionment of cost center costs
to activity types according to
particular criteria
Costing Str ucture
Planning 3 Cost Splitting
1203000 Product
1. Assign CC 1203004 to Splitting
Utilities (Common) Structure U4 Steam service Cost Estimate
2. Perform cost splitting
2
1203000 Product
Di
22000057 - TEG
st ina
O
rib
rig
ut
io E
Steam service
94 ca ty
Ro via 54 n
n
..
lC
lo vi
39 tio
1203004
Al cti
A
1UTSTF Steam - fixed
g
in
5
ut
1UTSTV Steam var.
.. 943954 UT: Steam fix
Product
22000058 - LLDPE
Valuation
Purchase price
Activity Type Price x Quantity
Overhead
Used for:
ID Cost Values
Component Fixed & Variable Stock Valuation
Cost Centers
Utilities Utilities
Variable
Personnel Exp. Internal Production Personnel Exp.
Activity
Allocation
Fix
Depreciation Depreciation
Production
Structure of primary Structure of Structure of
costs manufacturing primary
costs costs
Pr oduct Costing: Ov erview
Standard price
Only one validated standard price per product per period,
The price represents most desired (or most likely) costs
Only one price per product over the year (recommended)
Determined during costing runs - standard cost estimate is
populated in appropriate valuation views
Includes variable and fix cost elements
Base for variances calculation; which is then posted to FI and CO-
PA
Used for stock valuation of finished goods and semi-finished
products
Stored in material master data (accounting view) in Legal, Group
and Profit Center valuation views after releasing the cost estimate
Pric e u pdate
Future price
Future standard price
Stored in material master data (accounting & costing view) in Legal,
Group and Profit Center valuation views after marking the cost
estimate.
Previous price
Replaced standard price by current one due to releasing the cost
estimate
Stored in material master data (accounting & costing view).
Pr ic e u pdate
Material Master Data
Analysis of Costing Results
Standard Price
Future Current Previous
10
Stock Revaluation
Pric e u pdate procedures
Costing run
You can use the costing run to process mass data. It enables you
to cost, mark, and release more than one material at the same
time.
Every processing step involved in costing with quantity structure is
performed by the costing run, from the same screen.
Partial selection
of materials
Selection
of
all materials BOM explosion
$ $
Execute costing run
$ $ $ $
$ $ $
Marking and releasing costing run results
Materials
(price update)
Pr oduct Costing: Ov erview
Production Costs
Debit Secondary cost
WIP Calculation
Settlement
Cost Ob ject C ontrollin g: Ov erv iew
Functions
Funkcje Product Cost by Order Product Cost by Period
Type of settlement
FULL PERIODIC
rule
Hierarchy of
Impossible Possible
Cost Objects
Cost Ob ject C ontrollin g: Ov erv iew
Product Costing
- SPC1 SPC3 costing run, verification, save
- Organizational measures: marking and releasing
- Cost estimate marking
- Cost estimate release
Master & control data definition
- Material Master Data, BOMs and Routings
- Product Cost Collectors incl. PREM costing
Production postings (backflush)
- Various analysis available
Company
General
Common
Services
Overhead Product
Projects Variances Cost
Variances Collector
Profitability Segment
Pr oduct Costing: Ov erview
Create
Prepare Cost Object Product Cost Collector
Preliminary costing
Ob jects i n C ost Object Controllin g
Production Version
ID,
Production line,
Validity period.
Ob jects i n C ost Object Controllin g
Operation 10 Material X
Phase A
Material Y
Operation 20
Resource
Requirements
Preliminary costing
Product Costing
- SPC1 SPC3 costing run, verification, save
- Organizational measures: marking and releasing
- Cost estimate marking
- Cost estimate release
Master & control data definition
- Material Master Data, BOMs and Routings
- Product Cost Collectors with Preliminary costing (PREM)
Production postings (backflush)
- Various analysis available
Ethylene 2.000
EDC 0.500
Materials 4.000
Overheads 1.500
Total 8.000
Simultaneous costing actual costs
Product Costing
- SPC1 SPC3 costing run, verification, save
- Organizational measures: marking and releasing
- Cost estimate marking
- Cost estimate release
Master & control data definition
- Material Master Data, BOMs and Routings
- Product Cost Collectors with Preliminary costing (PREM)
Production postings (backflush)
- Various analysis available
Individual
Individual order confirmation
confirmation
Collective
Collective confirmation
confirmation
Operations
Milestone
Milestone confirmation
confirmation
Progress confirmation
Order confirmation
Components
Confirmation with reference
Components
Order quantity = 10 PC
Operation 30
Component XY
Required qty = 20 PC Warehouse
10 PC of Component XY
to be back flushed
Fi nal Conf irmat ion & Techni cal Com plet ion
Operations
Operations Operations
Operations
Components
Components Components
Components
PRTs
PRTs PRTs
PRTs
Costs
Costs 100 20 Costs
Costs 100 20
50 50
CO Production Order
Step 6 Goods Receipt from Order into Warehouse
- Actual Postings
Status PARTIALLY DELIVERED
Order CO
Production Material
FI Output
462001
430004 + 5.000,- 462001 - 5.000,-
943201 + 7.500,-
5.000,- 400000 + 1.100,-
Finished
Products
119430
WIP
Calculation
Month End Closing
Variance
Calculation
Settlement
Period and year-end closing
Period-end closing:
Functions
Funkcje Product Cost by Order Product Cost by Period
Type of settlement
FULL PERIODIC
rule
Hierarchy of
Impossible Possible
Cost Objects
Period and year-end closing
CO Production Order
Step 7 Work-in-Process Calculation
- Period-end closing
Status RESULTS ANALYSIS CARRIED OUT
Order
Material
WIP Report:
Work-in-Process
13.600 - 5.000 = 8.600
Period and year-end closing
CO Production Order
Step 8 Settlement
of - Period-end closing
Status RESULTS ANALYSIS CARRIED OUT
Work In Order CO
Progress Material
FI (WIP)
462201 430004 + 5.000,- 462001 - 5.000,-
943201 + 7.500,-
8.600,- 400000 + 1.100,-
Work In
Progress
(WIP)
119460
WIP is being updated on the
order as statistical value for
8.600,- information purposes.
Period and year-end closing
Order
Material
Order
Material
Work In Order CO
Progress
FI Material
(WIP)
119460 430004 + 5.000,- 462001 - 5.000,-
943201 + 7.500,- 462001 - 7.000,-
6.600,- 400000 + 1.100,-
400000 + 5.000,-
Work In
Progress
(WIP)
462201
As WIP is reported as
6.600,- cumulative value.
Period and year-end closing
Variance: Integration
CO-
Standard Cost Estimate Product Cost Collector PC
Material CATALYST
Materials Labour Depreciation Quantity prod.: 10 pcs
600 1.100 300
Actual Costs
Materials 800
Labour 1.200
Material Master 400
Depreciation Target Cost Ver. 0
Accounting View 2.400
Standard Price Price 150
200
10pcs * 200 Goods Receipt - 2.000 Quantity 50
Variance 400 Structure 200
Accounting
FI Price difference
Stock
2.000 400 Profitability CO-
Analysis PA
MM Stock
Settlement Variance 400
Period and year-end closing
Variance PA Assignment
Cost Element Group Value Field
Category lines
+
Period and year-end closing
CO-
PC
Product cost collector
Material: MEG
Period accounting
Quantity: 10 pieces Cost of goods sold
CO-
PC Revenue
Revenue
Actual costs Sales deductions
Sales deductions
Manufacturing costs by
Overheads plus Variances Actual costs 2.400,- standard price
(Contribution margin I)
+/- Change in Stock Goods receipt -2.000,- Variances
= Result of a period
= Result of a period
Variances/WIP 400,-
PrCtr 1
% %
Overheads
Period and year-end closing
Period-end closing
Process costs
Periodic
costs Revaluation
Overheads
Calculations Work-in-Process
and
analysis Scrap
Variances
Postings Settlement
FI/CO
Period and year-end closing
CO-
PC
Product cost collector
Material: MEG
Period accounting
Quantity: 10 pieces Cost of goods sold
CO-
PC Revenue
Revenue
Actual costs Sales deductions
Sales deductions
Manufacturing costs by
Overheads plus Variances Actual costs 2.400,- standard price
(Contribution margin I)
+/- Change in Stock Goods receipt -2.000,- Variances
= Result of a period
= Result of a period
Variances/WIP 400,-
PrCtr 1
Variance PA Assignment
Cost Element Group Value Field
Category lines
+
Ma terial L edger: Ov ervie w
1. Actual Costing.
During the period, valuation of all goods movements is done
with the preliminary valuation price which is normally the
standard price. All variances from the preliminary valuation are
maintained in the ML. At period end, revaluation of ending
inventory can be performed with the determined actual price.
This is not mandatory. Actual prices can be calculated for
statistical purposes only.
2. Parallel currencies and/or valuations of material stocks.
All goods movements in the ledger can be maintained in 3
currencies. The values are translated into other currencies
using the historical exchange rates. Prerequisite for usage of
transfer pricing functionality.
Benefits of the Material Ledger
Production
Level
External Procurement
Level
External Procurement
Level
Multi - Level Settlement
Production
Level
Production
Level Multi
-Level
External Procurement
Level
External Procurement
Level
Multi - Level Settlement
Parallel Valuations
(Transfer Prices)
Parallel Currencies Group
Translation at historic rates Legal
(up to three) Profit Center
ML Ov erview Pa ra lle l C urre ncie s
Material Ledger
(Valuation Area / Plant)
10 Local currency
30 Group currency
Material
Master
Price Control
Moving average price Standard Price
(V Price) (S Price)
Changed after every receipt Stable for long period
Recommended for raw and Recommended for finished
externally procured and semi-finished
materials. products.
Pr ic e c ontrol
Standard Price
Multiple currencies/valuations
Price control
ML can record up to 3 different
S V
V currencies / valuations. This is a
requirement for transfer price
Price determination
2 Standard Moving
Transaction based price price
3 Standard
Standard Cannot be Actual Costing
Single-/ multilevel activated
price determination price
Unit periodic manually Revaluation of stock at actual
price price
Pr ic e d etermin ation contro l
3 S
Internal
Cost centers
orders
Orders
Level 3
Activity
types
S
Internal 3
Cost centers
orders
Orders
Level 2
Activity
types
2 V
External Level 1
Procurement
Actual Values Ov erview
S
Internal
Cost centers
orders
Orders
Level 2
Activity
types
S
Internal
Cost centers
orders
Orders
Level 1
Activity
types
External
Procurement
Price differences
Stock transfers
(standard price in another plant)
External procurement
s e (purchase order or invoice value)
r i h
..a ug
. ro
th Internal production
(order settlement)
Actual Values Ov erview
S
462001 464018
Internal Pr. . Inven.. Price diff.
.
Cost centers
orders
Orders
Activity
types
S 462001 464018
Internal
Cost centers . . .
Pr. Inven. Price diff.
orders
Orders
Activity
types
V
External
Procurement
S
119490 464017
Internal End. Inven.. Price diff.
.
Cost centers
orders
Orders
Activity
types
S 119430 464017
Internal
Cost centers . . .
End Inven. Price diff.
orders
Orders
Activity
types
V Price
differences
are not
External applicable
Procurement
S
119490 464017
Internal End. Inven.. Price diff.
.
Cost centers
orders
Orders
Activity
types
S 119490 464017
Internal
Cost centers . . .
End Inven. Price diff.
orders
Orders
Activity
types
V Price
differences
are not
External applicable
Procurement
Material consumption
Price difference (464017) ML accrual (119610)
(400002)
10 CL 10.5 325 CL 10.5
20
Pe rio d En d Overvie w Periodic Un it
Pr ic e
+ Periodic
unit
- price
Variances
Summarized Object
Object
Analysis List Comparisons
Detailed
Reports
Report Sele ction
The Report Tree can be used to select Reports in the Information System. The Report
Tree is the central collection point and hierarchical outline of all Reports in an
application component.
The standard Report Tree supplied by SAP should not be changed. A personalized Report
tree can be created to which standard Reports as well as one's own creations can be
assigned.
Report
Summarized Object
Object
Analysis List Comparisons
Detailed
Reports
In fo rma tio n S ys tem Ove rv ie w
In fo rma tio n S ys tem Ove rv ie w
Material
Ledger
Reports
Object Detailed
List Reports
Displaying
Documents
In fo rma tio n S ys tem Ove rv ie w
Materials
to be Product Cost
costed Planning
Reports
Summarized Object
Object
Analysis List Comparisons
Detailed
Reports
Report Sele ction
The Report Tree can be used to select Reports in the Information System. The Report
Tree is the central collection point and hierarchical outline of all Reports in an
application component.
The standard Report Tree supplied by SAP should not be changed. A personalized Report
tree can be created to which standard Reports as well as one's own creations can be
assigned.
In fo rma tio n S ys tem Ove rv ie w
In fo rma tio n S ys tem Ove rv ie w
Material
Ledger
Reports
Object Detailed
List Reports
Displaying
Documents
Report Outp ut Types
Variable output areas
Graphical report-output HTML-header
Navigation by drag and drop and
context menu
For executing existing reports and queries For creating new queries
Organizational management
standard reports menu path
Organizational management
standard reports
Ma te rial L edger R eport ing
Structure Display/Maintenance
Existing Positions