4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

+91-9556432150 info@skillstek.com

Simultaneous Costing in SAP CO (Product Costing)

Published by Pradeep on November 9, 2020

Last Updated on March 26, 2022 by Pradeep

What is Simultaneous Costing in Product Costing?

Simultaneous Costing is again an important part of Product Costing in SAP. It comes in the
process after the calculation of the standard cost.

Once we have calculated the Standard Cost, we will proceed with the process of actual costs.

Actual Cost debit/credit a product cost collector (or manufacturing order) during goods

movements and activity confirmation during a period.


What’s important in Simultaneous Costing?

https://skillstek.com/simultaneous-costing-in-sap-co/ 1/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

We have some important points under the process of Simultaneous Cost. These are majorly
related to debit and credit entries in GL, handling of P&L, and also to the management of
inventories. So let’s learn them in detail.

Goods Movement
Goods movements to and from the Production Orders result in debit or credit entries.

Debit – Simultaneous Costing

When you issue goods from inventory, you credit a General Ledger (G/L) balance sheet account.
This also automatically debit a profit and loss consumption account.

A primary Cost Element with the same number as the inventory consumption account ensures
that a parallel posting in controlling (CO) occurs at the same time as you issue components to
production order.

Then the system automatically chooses the production order or product cost collector as the cost
object.

Further, the system calculates the debit value by multiplying the standard price by the component

quantity issued from inventory.


Here is an example – Goods issue Debit Production Order


Raw Material Inventory 100 Units => Raw Material Consumption 100 units => Production
Order Raw Material Quantity 100 units

Here, you don’t need to manually enter G/L accounts during goods issues to production orders.
This is because these accounts are already mapped during integration settings (i.e OBYC
settings).

Related: Product Costing – All That you need to know

https://skillstek.com/simultaneous-costing-in-sap-co/ 2/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Credit – Simultaneous Costing

As you deliver finished goods from a production order into inventory, you debit an inventory
balance sheet account and likewise credit a profit and loss production output account.

This is because a primary cost element corresponds to the production output account.

You also credit controlling cost objects. Likewise, Since you deliver the finished goods from the
production order. Thus, the system automatically chooses the production order or product cost
collector to receive the primary credit.

Subsequently, the system calculates the credit value by multiplying the standard price by the
quantity of the finished goods delivered to inventory.

Example:-

  Production Order

Debit 1000 Raw Materials   600 Activity cost   100 Overhead Cost

Credit 1500 Finished Goods


Balance 200   Variance


The system determines the G/L account posted during the delivery of finished goods from the
production order into inventory.

Further, the total variance is actually the production order balance or the difference between total
debit and credit. Variance calculation at the period end divides the variance into categories
based on the source of the variance. This further assists in determining corrective actions during
variance analysis.

Then, at the period end, the production order receives a secondary credit equal to the variance
during settlement resulting in a zero balance.

This finally results in total product cost collector and manufacturing order costs posted to
Financials and Profitability Analysis (COPA).

Related: Key Changes in SAP Profitability Analysis 2020

Confirmations

https://skillstek.com/simultaneous-costing-in-sap-co/ 3/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Activity confirmations normally involve secondary postings within SAP CO. When you confirm
production order activities during a period, the system debit the production order or product cost
collector and credit a cost center.

Earlier in SAP ERP (ECC) financial G/L expenses account do not receive corresponding
postings during activity confirmation.

Whereas now in SAP S/4 HANA Finance as FI-CO reconciled automatically for every activity
confirmation there will be one FI document and GL postings will be there with reference to CO
document (as part of S/4HANA Management Accounting).

CO document with Activity Confirmation

FI document

Update in Universal Journal- ACDOCA

Release

https://skillstek.com/simultaneous-costing-in-sap-co/ 4/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

After you have created a production order, you need to carry out the release step before you
collect any costs on the production order.

Operation Overview –Order # 1000267

Component Overview –Order # 1000267

Report Cost

Order # 1000266- Semi-finished Good


WIP -18481.07 INR

Order # 1000267-finished Good

https://skillstek.com/simultaneous-costing-in-sap-co/ 5/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

WIP-1047.35 INR

Know Details for: SAP S/4HANA Finance 2020

Summary – Simultaneous Costing

In this blog, we looked at simultaneous costing involving goods movements and confirmations

that generate postings during a period.

We also discussed how goods movements generate primary postings and how activity

confirmations generate secondary postings in CO  and FI-CO reconciliation also in Universal
Journal.

There are lots of cost concepts in SAP Controlling. With this brief post, you should also have
understood this thing. Product Costing is an important subject in Controlling which has
simultaneous Costing as its important part.

Hence, you should learn Simultaneous Costing too.

Get Syllabus for: SAP S/4HANA Finance Training

Also Watch Video: SAP CO Assessment & Closing Activities

Categories: SAP PRODUCT COSTING

Tags: costing element in sap sap co SAP Controlling SAP Product Costing

https://skillstek.com/simultaneous-costing-in-sap-co/ 6/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Search …

https://skillstek.com/simultaneous-costing-in-sap-co/ 7/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Online Training

SAP S/4HANA Finance Training

SAP FICO Training on S/4HANA 

SAP Central Finance Training

SAP Product Costing Training

Polular Posts

Difference between SAP FICO and S/4HANA

A Career in SAP FICO

Asset Accounting in SAP FICO

SAP CO Interview Questions

Best SAP FICO Interview Questions

SAP Product Costing Interview Questions


Universal Journal in SAP

SAP HANA Migration Guide


 Categories

SAP Central Finance

SAP Controlling

SAP FICO

SAP FICO Interview Questions

SAP HANA

SAP HANA Online Courses

SAP Product Costing

SAP S/4HANA Finance

Uncategorized

Recent Posts

https://skillstek.com/simultaneous-costing-in-sap-co/ 8/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Integrated Asset Acquisition in SAP – Process Flow

SAP Management Accounting (SAP CO) – Complete Guide

Dunning in SAP FI – Definition & Procedure

Subscribe My Blog

Enter Your Email ID

SUBSCRIBE

 Related Posts

https://skillstek.com/simultaneous-costing-in-sap-co/ 9/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

SAP CONTROLLING

SAP Management Accounting (SAP CO) – Complete Guide

What is SAP Management Accounting? SAP Management Accounting on S/4HANA follows the
complete process of SAP CO along with using the advancement of S/4HANA technology. It is based
on the HANA platform, which works on Read more…

SAP CONTROLLING

SAP Controlling – A Detailed Guide on SAP CO and Its Components

https://skillstek.com/simultaneous-costing-in-sap-co/ 10/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek

Introduction to SAP Controlling – (SAP CO) SAP Controlling is one of the Functional Modules of SAP
that deals with the cost calculation, cost analysis, cost planning and overhead management of the
business. As you Read more…

SAP CONTROLLING

Calculation of Production Order in SAP and Variance using Material

Ledger
https://skillstek.com/simultaneous-costing-in-sap-co/ 11/12
4/5/22, 8:55 AM Simultaneous Costing in SAP CO (Product Costing) | Skillstek
Ledger
Manufacturing and Overhead Variance In this blog, we will discuss the product costing process,
Production Order calculation and its variance using the Material Ledger in SAP S/4 HANA Finance.
For Production orders, variance can happen Read more…

TESTIMONIALS ABOUT BLOG CENTRAL FINANCE S/4HANA FINANCE CONTACT US

SAP FICO COURSE

Copyright 2021 @ Skillstek

https://skillstek.com/simultaneous-costing-in-sap-co/ 12/12