TFIN22_1

Management Accounting II
mySAP ERP Financials

Date Training Center Instructors Education Website

Instructor Handbook
Course Version: 2006/Q2 Course Duration: 5 Days Material Number: 50080907 Owner: Thomas Zürker (D002135)

An SAP Compass course - use it to learn, reference it for work

Copyright
Copyright © 2006 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.

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About This Handbook
This handbook is intended to complement the instructor-led presentation of this course, and serve as a source of reference. It is not suitable for self-study.

Typographic Conventions
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About This Handbook

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Contents
Course Overview ......................................................... vii
Course Goals ...........................................................vii Course Objectives ..................................................... ix

Unit 1: Overview of the Components of Cost Object Controlling................................................................... 1
Overview of the Components of Cost Object Controlling ..........2

Unit 2: Sales-Order-Related Production Scenarios .............. 27
Sales-Order-Related Production Scenarios ....................... 28

Unit 3: Product Cost Controlling by Period........................ 45
Master Data and Preliminary Costing .............................. 47 Simultaneous Costing ................................................ 79 Period-End Closing ................................................... 92 Addendum: Repetitive Manufacturing and Material Valuation .126

Unit 4: Product Cost Controlling by Order........................ 135
Master Data and Preliminary Costing .............................137 Simultaneous Costing ...............................................166 Period-End Closing with Partially Delivered Production Orders .............................................................180 Period-End Closing with Delivered Production Orders..........207

Unit 5: Make-to-Order Production with Controlling by Sales Order ....................................................................... 237
Master Data and Preliminary Costing .............................239 Simultaneous Costing ...............................................258 Customizing ..........................................................284 Period-End Closing of Production Orders ........................294 Period-End Closing of the Sales Order ...........................305

Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) ............................................................ 345
Master Data and Preliminary Costing .............................347 Simultaneous Costing ...............................................368 Period-End Closing ..................................................386 Customizing ..........................................................399

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Contents

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Unit 7: Information System ........................................... 407
Information System ..................................................408

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Course Overview
• • • • • Objects of Cost Object Controlling: periodic product cost (such as product cost collectors), product cost by order (such as a production order or process order), sales order, project Valuated Sales Order Stock Planning functions: Preliminary costing for cost collector, production order, process order, sales order Actual functions: Simultaneous costing based on goods issues from the warehouse, purchasing, confirmations, activity allocations and deliveries Period-end closing (template allocations, overhead costs, work in process, variance calculation, Results Analysis, settlement) for product cost by period or order as well as sales-order-related production (production and service) Information System

Target Audience
This course is intended for the following audiences: • • Project team responsible for implementing Cost Object Controlling in SAP R/3 Participants with knowledge of production planning and/or controlling

Course Prerequisites
Required Knowledge
• Basic knowledge of logistical processes: discrete manufacturing (production order), repetitive manufacturing (product cost collector), process manufacturing (process order), or sales-order-related production (sales order as a cost object) • • AC040 (Business Processes in Management Accounting) AC505 (Product Cost Planning)

Course Duration Details
Unit 1: Overview of the Components of Cost Object Controlling Overview of the Components of Cost Object 100 Minutes Controlling Unit 2: Sales-Order-Related Production Scenarios Sales-Order-Related Production Scenarios 80 Minutes

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Course Overview

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Unit 3: Product Cost Controlling by Period Master Data and Preliminary Costing Exercise 1: Master Data and Preliminary Costing Simultaneous Costing Exercise 2: Simultaneous Costing Period-End Closing Exercise 3: Period-End Closing Addendum: Repetitive Manufacturing and Material Valuation Unit 4: Product Cost Controlling by Order Master Data and Preliminary Costing Exercise 4: Master Data and Preliminary Costing Exercise 5: Alternative: Master Data and Preliminary Costing Simultaneous Costing Exercise 6: Simultaneous Costing Exercise 7: Alternative: Simultaneous Costing Period-End Closing with Partially Delivered Production Orders Exercise 8: Period-End Closing with Partially Delivered Process Orders Exercise 9: Alternative: Period closing with Partially Delivered Process Orders Period-End Closing with Delivered Production Orders Exercise 10: Period-End Closing with Delivered Process Orders Exercise 11: Alternative: Period-End Closing with Delivered Process Orders

150 Minutes 35 Minutes 90 Minutes 20 Minutes 180 Minutes 40 Minutes 30 Minutes 60 Minutes 15 Minutes 15 Minutes 50 Minutes 15 Minutes 15 Minutes 90 Minutes 25 Minutes 25 Minutes 100 Minutes 30 Minutes 30 Minutes

Unit 5: Make-to-Order Production with Controlling by Sales Order 50 Minutes Master Data and Preliminary Costing 20 Minutes Exercise 12: Master Data and Preliminary Costing 80 Minutes Simultaneous Costing 30 Minutes Exercise 13: Simultaneous Costing 100 Minutes Customizing 90 Minutes Period-End Closing of Production Orders 145 Minutes Period-End Closing of the Sales Order Exercise 14: Period-End Closing of the Sales Order 40 Minutes Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) 40 Minutes Master Data and Preliminary Costing 15 Minutes Exercise 15: Master Data and Preliminary Costing 40 Minutes Simultaneous Costing 15 Minutes Exercise 16: Simultaneous Costing 40 Minutes Period-End Closing

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Results Analysis. and product cost by sales order Explain the most important terms concerning the design of a scenario in Cost Object Controlling: Controlling on product or order level.TFIN22_1 Course Overview Exercise 17: Period-End Closing Customizing Unit 7: Information System Information System Exercise 18: Information System 20 Minutes 60 Minutes 60 Minutes 15 Minutes Course Goals This course will prepare you to: • • • • Understand controlling by period and order for make-to-stock production Carry out Cost Object Controlling on the product and order levels Process scenarios of controlling by sales order for make-to-order production or service Gain knowledge of the functions. WIP calculation. All rights reserved. you will be able to: • • • • Explain how Product Cost Controlling relates to other CO components Explain how to use Product Cost Controlling Explain the differences between the following forms of product cost: product cost by order. ix . and final costing in Cost Object Controlling Carry out important transactions for allocating costs to cost objects Carry out important transactions for period-end closing such as template allocation. and integration of Cost Object Controlling Course Objectives After completing this course. product cost by period. valuated or unvaluated sales order stock Prepare the right Cost Object Controlling “design” for activity output processes and select the best cost object for it Carry out preliminary costing. and settlement Carry out important analyses in Cost Object Controlling using the information system • • • • • SAP Software Component Information The information in this course pertains to the following SAP Software Components and releases: 2006/Q2 © 2006 SAP AG. simultaneous costing. sales-order-related production with or without controlling by sales order. customizing.

2006/Q2 . All rights reserved.0 Not necessary x © 2006 SAP AG.Course Overview TFIN22_1 • ECC 6.

All rights reserved... 1 . simultaneous costing. and the differences between the order view (controlling based on lot size) and the period view (controlling by period) are discussed....2 2006/Q2 © 2006 SAP AG. Unit Objectives After completing this unit. The make-to-stock-production scenarios are especially highlighted..Unit 1 1 Overview of the Components of Cost Object Controlling Not necessary Unit Overview This unit deals with Product Cost Controlling in general and Cost Object Controlling in particular.... and Product Cost by Sales Order” Differentiate between product-level and order-level controlling Unit Contents Lesson: Overview of the Components of Cost Object Controlling . final costing” Explain the terms “Product Cost by Order. you will be able to: • • • • Describe the position and objective of “Cost Object Controlling” in the Controlling module Explain the terms “preliminary costing. Product Cost by Period.

including Cost Object Controlling. Product Cost by Period. We must determine which logistical production types are used and which main demands are made on Cost Object Controlling. and Product Cost by Sales Order” Differentiate between product-level and order-level controlling Business Example You work in a company that uses various production processes to produce goods and services. All rights reserved. 2006/Q2 . we must know what options Cost Object Controlling in the R/3 system offers to map the creation process of the goods and services of our company. You would like to learn about suitable mapping methods for these production processes in the R/3 system. simultaneous costing. With the help of external consultants. IDES has implemented the SAP R/3 System. Lesson Objectives After completing this lesson. 2 © 2006 SAP AG. final costing” Explain the terms “Product Cost by Order. you will be able to: • • • • Describe the position and objective of “Cost Object Controlling” in the Controlling module Explain the terms “preliminary costing. Therefore.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Lesson: 2 Overview of the Components of Cost Object Controlling Lesson Duration: 100 Minutes Lesson Overview You are in the cost accounting department of the IDES Group. We can identify the business processes in our plant that will utilize Cost Object Controlling.

3 . which consider quantity as well as values. CO-ABC 2006/Q2 © 2006 SAP AG. but the goal of the entire organization. to choose from. activity allocation permits the cause-based allocation of many costs in the form of activities that would normally not be assigned to products. The entry and allocation of overhead costs according to cause are supported by the following components in Overhead Cost Controlling (CO-OM = Overhead Management). How can we optimize internal processes? Optimizing business processes is not only the goal of individual divisions. process-oriented view. In recent years. You can allocate the overhead costs from organizational sub-areas to the actual cost causes.TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Architecture Figure 1: CO Components How can we reduce our overhead costs? Many companies are seeing their overhead costs increase dramatically. All rights reserved. You have a broad range of allocation methods. How high are the costs of our organizational measures? Are they within budget? Overhead orders (OPA = Order Process Accounting) gather and control costs incurred from measures taken by the organization. Are our responsibility areas really working efficiently? Cost Center Accounting (CCA) examines where overhead costs are incurred within the organization. overhead costs continue to provide little transparency. These include costs that cannot be attributed directly to products or services. While production areas often indicate great progress in controlling costs and optimizing processes. You can manage budgets for the orders and monitor their observance with the system. controlling organization-wide business processes has expanded how business functions and products are monitored. In particular. The functional view of your organization is increased by a cross-functional.

which accompanies the quantity flows in terms of a preliminary costing. networks) Determines WIP Determines variances and their settlement in Profitability Analysis 4 © 2006 SAP AG. sales orders. and billing. but also provides you with an information base for strategic decision-making processes. sales. Product cost controlling: • • • • • Valuates material movements Provides cost component splits for valuation in Profitability Analysis Allocates overhead costs from cost centers and business processes to cost objects (such as production orders. a simultaneous costing. All rights reserved. 2006/Q2 . and a final costing. stock movements. based on period and that can be valuated) enter CO. It displays any differences and can automatically create reconciliation postings if desired.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 (ABC = Activity-Based Costing) not only enables you to improve your business process performance. Figure 2: CO Architecture: Quantities and Values The diagram above illustrates the flow of quantities and values between the components of the R/3 System from the perspective of accounting. The typical quantity flows of logistics generally follow the supply chain: procurement. What costs are incurred within the organization? Cost Element Accounting (CEL = Cost Element Ledger) makes sure that only expenses and income that fulfill the criteria for costs and revenue (in terms of the operative purpose. production. The reconciliation ledger facilitates reconciliation between Controlling and Financial Accounting (FI).

TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Product Cost Controlling: Benefits Management Requirements • • Support of cost reduction concepts Support of strategic decision-making: – Which products – Where or how to produce Support of operative decision-making: – – Pricing Manufacturing efficiency Legal Requirements • Valuation of: – Raw materials – Semi-finished goods – Finished goods Work in process Reserves for imminent losses • • • 2006/Q2 © 2006 SAP AG. 5 . All rights reserved.

Unit 1: Overview of the Components of Cost Object Controlling

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With Product Cost Controlling, you have the following benefits: • Valuation of manufacturing efficiency – Set relevant standards to measure performance – Variance analyses – Reports for individual plants, product groups, products or orders Supports strategic decision-making (Primary) cost component split, cost component splits by organizational unit – Scrap costs, full integration of activity-based costing Inventory valuation Alternative valuations - according to ((commercial) law, group, profit center) – Three parallel currencies – Standard costs – Actual costs using the Actual Costing/Material Ledger (AC/ML) component Valuation of finished and semi-finished goods Standard prices provided by cost estimates Creation of alternative cost estimates for balance sheet purposes for closing activities Determination and valuation of work in process at period-end closing Period-based accrual calculation with provisions for imminent losses – – In a make-to-order environment Corresponding updates of balance sheet and profit and loss statements – – – –

• •

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Lesson: Overview of the Components of Cost Object Controlling

Benefits of Product Cost Controlling

Figure 3: Product Cost Controlling: Components (1)

Product Cost Planning refers to the costing of goods manufactured and services. This occurs without any reference to a production order (costing is carried out independent of any production order). If a quantity structure (bill of material and routing) is available in the PP (Production Planning) module of the R/3 system, you can carry out costing automatically based on the PP data. If there is no quantity structure, you can manually enter the costing items in a unit costing or ad-hoc costing. You can also use the batch input method to transfer the quantity structure from a remote system to the R/3 system.

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Unit 1: Overview of the Components of Cost Object Controlling

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Figure 4: Product Cost Controlling: Components (2)

In Cost Object Controlling, the costs incurred during the creation of a product or service are collected on a cost object (such as a production or sales order). Which cost object is used depends on your controlling requirements. Possible cost objects are sales orders, production orders, process orders, product cost collectors, and projects, among others. Cost Object Controlling allows for simultaneous costing (mapping and valuation of logistical quantity flows) and final costing (period-based accrual calculation and variance calculation). The calculated values can be settled in Financial Accounting and Profitability Analysis.

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Lesson: Overview of the Components of Cost Object Controlling

Figure 5: Product Cost Controlling: Components (3)

Actual Costing is used to calculate the actual cost of goods manufactured at the end of the period. The result may be saved in the material master as a periodic average price for the closed period. As of Release 4.5, the quantity structure is derived dynamically from the material movements in the R/3 system. The values connected with these movements are collected in the Material Ledger. Single-level settlement is available as of Release 4.0A, and as of Release 4.5 multi-level settlement, which can allocate variances over multiple procurement levels. What can Cost Object Controlling do for me? • • • • • • • What actual costs did we incur in our area during the current period? What costs were we expecting based on the quantity manufactured? Are some product groups performing significantly better than others? What is causing these variances? What are the scrap costs of our new production line? Did continuous improvements have an effect on costs? What kind of profit is brought about by a concrete sales order?

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Unit 1: Overview of the Components of Cost Object Controlling

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Cost Object Controlling

Figure 6: Preliminary Costing – How Does It Work?

Product Costing uses the data in logistics to determine the foreseen material consumption (BOM) and the activities required (routing). This data forms the quantity structure. Product costing valuates this quantity structure with the following information: • • • • • Material costs Production costs Process costs Overhead on the direct material and production costs Overhead for sales and administration costs

The results are saved as a cost component split and an itemization (optional, but recommended), and are also used by other applications.

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Lesson: Overview of the Components of Cost Object Controlling

Figure 7: Simultaneous Costing – How Does It Work?

The actual costs of the cost object result from the following processes: • • • • Goods movements in Materials Management Invoice receipts in Financial Accounting Confirmations in production (Production Planning) Reposting and allocation of overhead in Cost Accounting

You can enter material withdrawals from the warehouse, confirmations, and goods receipts in separate operations. You can use the control key of the operation to specify that a goods receipt is to be posted automatically when the operation is confirmed (normally the last operation). You can also assign consumable materials to an operation and specify that a goods issue for these materials is automatically posted with the confirmation. You can create the confirmation on the order or operation level. Confirmation on the operation level is recommended for calculation of WIP and variances later.

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Unit 1: Overview of the Components of Cost Object Controlling

TFIN22_1

Figure 8: Period-End Closing – How Does It Work?

Template allocation is a new allocation technique for activities and processes in Cost Object Controlling (and also in Profitability Analysis). Essentially, it can use all information from R/3 as a cost driver to assign overhead costs strictly according to cause. Template allocation is even possible between Overhead Cost Controlling objects. If an actual price calculation is performed in Overhead Cost Controlling, the activities and processes calculated onto cost objects can be revaluated with these actual prices. Overhead allocation is a traditional method of calculating overhead costs of cost centers onto cost objects using surcharges on direct costs.

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Lesson: Overview of the Components of Cost Object Controlling

Figure 9: Executing Period-End Closing

Work in process can either be determined on the basis of actual costs (when using full settlement) or on the basis of target costs (when using periodic settlement). Variance calculation determines the target costs of an order, and on that basis, the target/actual comparison. The scrap is calculated on the basis of the target costs. For objects that cannot deliver to the warehouse, a Results Analysis will be performed instead of a WIP and variance calculation. Settlement is the last step of period-end closing in Cost Object Controlling. The values determined are settled in other components (such as FI and CO-PA) and at the same time, the appropriate line items are created (in the Material Ledger as well).

Figure 10: Product Cost by Order

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14 © 2006 SAP AG. Figure 11: Example: Production Order Costs for goods issues. Examples are CO and PP production orders. For this.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Product Cost by Order is used when the controlling focus is on concrete quantities. confirmations and goods receipts are posted to the cost object (such as a production order). For period-end closing. 2006/Q2 . The settlement rule has the settlement type FUL. you must use a cost object that can include an output quantity. either WIP or variances will be calculated depending on the status of the cost object. All rights reserved.

work in process (WIP) is calculated on the basis of actual costs. The difference between all debits and credits of the order is the size of the WIP. All rights reserved. If the order has been delivered (DLV) or technically completed (TECO). Product Cost by Order does not realize variances until the last period of production.TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Figure 12: Relevance of Status in Product Cost by Order In the Product Cost by Order component. 15 . any existing work in process will be cancelled and the system interprets the entire remaining order balance as variances where various variance causes are examined and represented by appropriate variance categories. either WIP or variances will be calculated depending on the status of the cost object: • If the order has neither been delivered (DLV) nor technically completed (TECO). • • 2006/Q2 © 2006 SAP AG.

continuous production process. The settlement rule has the settlement type PER. Some cost objects that are normally based on lot sizes can be changed to cost by period. All rights reserved. work in process is calculated in target costs and variances simultaneously. Many cost objects only use cost by period (such as product cost collectors). 16 © 2006 SAP AG. Figure 14: Example: Product Cost Collector Costs for goods issues. but more on a successive. For period-end closing. confirmations and goods receipts are posted to the cost object (such as product cost collectors). 2006/Q2 .Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Figure 13: Product Cost by Period Product Cost by Period is used when the controlling focus is not on concrete quantities.

17 . The product cost collector is the recommended cost object for repetitive manufacturing. The system determines the target costs of the cost object based on costing that you can specify with a valuation variant in Customizing. work in process is calculated in target costs and variances simultaneously: • For repetitive manufacturing you must enter reporting point backflushes for operations. work in process and scrap are calculated at target cost. where various variance causes are examined and represented by appropriate variance categories. you must enter confirmations for the operations. All rights reserved. Based on this. Variances result from deducting work in progress and scrap at target cost from the balance. • • • 2006/Q2 © 2006 SAP AG. For production and process orders controlled by period. Variances are realized by period in Product Cost by Period.TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Figure 15: Periodicity in Product Cost by Period In Product Cost by Period.

Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Figure 16: Product Cost by Order vs by Period Some cost objects can only be controlled by order. Figure 17: Cost by Sales Order and Customer Project 18 © 2006 SAP AG. There are order-related cost objects that can be switched to cost by period in Customizing. All rights reserved. 2006/Q2 . while others can only be controlled by period.

etc. while with sales-order-related production. a sales order item is a cost object. you can combine the sales order with other cost objects. 19 .TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Sales-Order-Related Production is used when the activity output does not take place until after a sales order has been received. a service can only be mapped as sales-order-related production. If the sales order alone does not provide all functions or options for integration that you desire. All rights reserved. With make-to-stock production. Both scenarios are possible for the production and retail of goods. they are first sold. such as projects or networks. ships. items are first manufactured to stock and sold later. With “sales-order-related production with cost by sales order”. However. and then manufactured. such as: • • • Make-to-order production to customer specifications Complex products like structures. This is especially recommended for complex make-to-order production scenarios. Large-scale variant manufacturing Product Cost by Sales Order and Customer Project allow you to: • • • • • • • Calculate and analyze planned costs and actual costs by sales order item or WBS element Calculate and analyze planned revenue and actual revenue by sales order item or WBS element (depending on the operating indicator of the WBS element) Calculate the value of your stock of finished and semi-finished products Create reserves automatically Transfer data to Financial Accounting (FI) Transfer data to Profitability Analysis (CO-PA) Transfer data to Profit Center Accounting (EC-PCA) 2006/Q2 © 2006 SAP AG.

Figure 19: Cost by Customer Project For especially complex scenarios. All rights reserved.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Figure 18: Sales Order-Based Control vs. In such a scenario. Make-to-Order Production If a sales order is added to a Product Cost by Order or by Period. but the remaining scenario is not mapped too differently as it is in make-to-stock production. Instead. it can be advantageous to add a project. while the sales order is attached to a billing element of the project as a purely logistical object. 2006/Q2 . the project takes on the role of the cost object. work with the objects mapping the production does not have to change. 20 © 2006 SAP AG. you can set up Customizing so that the sales order scenario offers the sales order as an additional controlling object.

This means that each logistical object (such as a production order) is also a cost object. Figure 20: Order-Level Controlling You can define the Controlling level in Cost Object Controlling. All rights reserved.TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling You can set up Customizing so that the customer project scenario offers the project as an additional controlling object. Generally. Depending on the cost object used. Figure 21: Product-Level Controlling 2006/Q2 © 2006 SAP AG. cost by order or period can be carried out. 21 . but the remaining scenario is not represented too differently as it is in make-to-stock production or Product Cost by Sales Order. Controlling takes place on order level.

A product cost collector may exist for each product of a plant and then collects all costs. 22 © 2006 SAP AG. 2006/Q2 . All rights reserved. In this case. logistical objects (such as production orders) are not cost objects. rather the costs are posted on a separate product cost collector (decoupling scenario). on product level. that is. Logistical objects are not cost objects in this case! The following can be used as Controlling levels: • • • Production version Routing/BOM combination Product and plant As the product cost collector only allows for Controlling by period. which are posted to the logistical object of the respective product. Logistical objects can still contain production quantities. such a scenario can only be realized as Controlling by period.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 You can also specify that Controlling should take place on a higher level.

Period. • • Describe the components of CO-PC and their main tasks Explain the differences between Cost by Order. and Sales Order 2006/Q2 © 2006 SAP AG. All rights reserved.TFIN22_1 Lesson: Overview of the Components of Cost Object Controlling Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. 23 .

Product Cost by Period.Unit 1: Overview of the Components of Cost Object Controlling TFIN22_1 Lesson Summary You should now be able to: • Describe the position and objective of “Cost Object Controlling” in the Controlling module • Explain the terms “preliminary costing. 2006/Q2 . All rights reserved. final costing” • Explain the terms “Product Cost by Order. and Product Cost by Sales Order” • Differentiate between product-level and order-level controlling 24 © 2006 SAP AG. simultaneous costing.

All rights reserved.TFIN22_1 Unit Summary Unit Summary You should now be able to: • Describe the position and objective of “Cost Object Controlling” in the Controlling module • Explain the terms “preliminary costing. 25 . final costing” • Explain the terms “Product Cost by Order. Product Cost by Period. and Product Cost by Sales Order” • Differentiate between product-level and order-level controlling 2006/Q2 © 2006 SAP AG. simultaneous costing.

2006/Q2 .Unit Summary TFIN22_1 26 © 2006 SAP AG. All rights reserved.

.... Unit Objectives After completing this unit..Unit 2 25 Sales-Order-Related Production Scenarios Not necessary Unit Overview This unit contains an overview of the features of make-to-order production.. 28 2006/Q2 © 2006 SAP AG.... All rights reserved... you will be able to: • • • Describe sales order processing Describe the value flow for sales-order-related production with and without Product Cost by Sales Order Explain the value flow for scenarios with valuated and unvaluated sales order stock Unit Contents Lesson: Sales-Order-Related Production Scenarios. 27 .............

All rights reserved. 28 © 2006 SAP AG. you will be able to: • • • Describe sales order processing Describe the value flow for sales-order-related production with and without Product Cost by Sales Order Explain the value flow for scenarios with valuated and unvaluated sales order stock Business Example You work in a company that uses various production processes to produce goods and services. you also create activities for sales orders directly (products or services).Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Lesson: 26 Sales-Order-Related Production Scenarios Lesson Duration: 80 Minutes Lesson Overview Lesson Objectives After completing this lesson. You would like to learn about suitable mapping methods for these production processes in the R/3 system. In addition to manufacturing processes in stock. 2006/Q2 .

• • • The process can begin with pre-sales activities. which can be used for evaluations. The “Sales Order Management” module provides you with this integrated processing by building a series of logical processing steps upon each other. Example: In response to a Request for Quotation (RFQ). the system can determine the correct vendor and procurement conditions based on any data stored in Purchasing. 29 . For internal procurement. When the payment is received. Delivery to the customer generates a delivery document. the system can trigger a production process. Create a sales order when you receive the order from the customer. For external procurement. The relevant documents are generated when carrying out the procurement process. Billing is the point at which the turnover is set in Controlling. you create and send a quotation. All rights reserved. the amounts received are posted to Financial Accounting (FI). A procurement process will be triggered if the contents of the order are no longer in stock or cannot be in stock (such as materials or services not kept in stock). each of these process steps creates electronic documents that are linked with each other and represent a document flow. The sales process can begin with pre-sales activities and ends with customer payment for goods received and services rendered. In Sales. For billing. • • • 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Sales-Order-Related Production Scenarios Sales Order Management Figure 22: Sales Order Management Effective sales order processing ties all activities to customer demand with a series of tightly integrated processes. for example. you create a billing document. The system distinguishes between internal and external procurement. The system can check availability and create delivery proposals.

30 © 2006 SAP AG. All rights reserved. Order Management: Order Processing • • Customers place orders with a customer service representative. Sales queries help you enter and use important. Standard orders normally contain: – – – – Customer and material information Pricing conditions for each item Schedule lines and delivery information Billing information Is Costing Information Required for Individual Items? A sales order is an electronic document that records your customer's orders with reference to goods and services. 2006/Q2 . sales-related information in the sales process for possible subsequent sales order processing. Order Management: Pre-Sales Activities Pre-sales activities may include: • Mailing lists • Phone call records kept on the R/3 System • Inquiries • Quotations Is Pre-Costing Necessary? Sales cycles sometimes begin with a sales query. You can also use this pre-sales information to develop sales strategies or help build and maintain a long-term relationship with the customer. • This data can also be very useful later.Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 The document flow of the “Sales Order Management” module makes managing and evaluating the sales order process easier. such as an inquiry or request for quotation. particularly for: – – – Tracking lost sales Recording pre-sales data to help negotiate large contracts Selling to large organizations that require documentation of the entire process Any one of the activities listed above can begin the sales process.

but can be self-provided or externally procured. For external procurement. For goods and services produced in-house. Corresponding documents are generated for all processing. or create a complex order using an expanded order view. the procurement process. depending on the situation. can be mapped by a cost object: • • • without prepared quantity structures with prepared quantity structures (such as BOMs and routings) or with variant manufacturing. purchase order) Make-to-order production Shipped from an external supplier Shipped from another warehouse The customer can inquire about tangible and intangible goods: • • Tangible goods can be in stock and simply withdrawn. the system can determine the correct vendor and procurement conditions based on any data stored in Purchasing. Alternatively. 31 .TFIN22_1 Lesson: Sales-Order-Related Production Scenarios The sales order contains all pertinent information for processing the sales order and for the entire sales process. You can enter a sales order with many items in a single screen. Sales and Distribution automatically proposes appropriate existing data from relevant master records in order to minimize errors and redundant partial processes. Order Management: Procurement Alternatives Procurement Alternatives determine: • • If the product is available (availability check) How the product will be procured: – – – – – From stock By replenishment activities (production order. All rights reserved. they can be produced in-house or externally procured. Order Management: Delivery 2006/Q2 © 2006 SAP AG. Intangible goods are by nature never in stock.

and posting goods issues. Both quantity-based and value-based stocks go down.Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Delivery supports: • • • • Creating delivery documents Creating transfer orders (picking) Packing (if required) Goods issue Delivery creates a delivery document. and the stock account is credited. including rational product selection. • 32 © 2006 SAP AG. preparing shipping papers. packing. planning and monitoring shipments. Order Management: Billing Billing supports: • • • • Creating invoices for deliveries and services Creating credit and debit memos on the basis of orders cancelling business transactions Transferring billing data to financial accounting Billing creates a billing document using data from the sales order and the delivery document. All rights reserved. such as materials and quantities. you see the update to the general ledger: The expense accounted is debited. The transfer order is essential for controlling the movement of goods within your warehouse. to which certain data is transferred from the sales order. 2006/Q2 . The billing document serves several important functions: • The FI invoice document is created based on the FI billing document (result of the billing document). The delivery document is the electronic means to help you manage all the activities of delivery processing. Creating a transfer order includes copying information from the delivery document to the transfer order. When you post a goods issue. costs go up. and the revenue account is credited. When you create a billing document you see the automatic update to the general ledger: The customer's accounts receivable account is debited. The billing document serves as a source for Financial Accounting (FI) and helps you with the monitoring and management of customer payments. It is based on a simple principle: From where to where are you relocating goods within your warehouse? There is a source location and a destination location for every transfer order.

and the customer's accounts receivable account is credited. Therefore. This is of particular importance if components can also be configured for the production of the individual customer product. Make-to-Order • • • • A product and its sub-assemblies are individually manufactured for a particular customer. various customer-specific variants of a product can be managed using only one material number. the general ledger is automatically updated: The cash account is debited. if necessary When a customer's payment is posted. single-item planning can be carried out for any level of the BOM structure. the requirements and stocks of the sales order items are managed separately. Stocks can be managed in individual customer segments: Sales order stock. Starting from the sales order. Quantities produced for a particular sales order cannot then be used directly to cover another sales order requirement. engineer-to-order production). Thus. All rights reserved. In this planning segment. For make-to-order production (sales-order-related production.TFIN22_1 Lesson: Sales-Order-Related Production Scenarios Order Management: Payment • • Final step of the Sales Order Management cycle Customer Payment includes: – – Posting payments against invoices Reconciling differences. Components can be procured specially for an individual sales order. the requirement for a make-to-order material is planned using the sales order item number and thus a separate segment is created in the planning run of requirement planning. it is also possible to procure assemblies and components specifically for the sales order and manage this stock individually for the sales order. 33 . Make-to-Order: Controlling Scenarios Important Decisions • • Make-to-Order Production with or without Product Cost by Sales Order? Do you want to maintain your sales order stock valuated or unvaluated? Without Product Cost by Sales Order 2006/Q2 © 2006 SAP AG.

In such a situation. The sales order could have a purely logistical significance if: • • The sales order creates the independent requirement for you logistically The sales order is required for variant configuration 34 © 2006 SAP AG. No additional period-end closing activities have to be performed for the sales order. If the sales order is only important to you logistically. 2006/Q2 . you can also use the sales order without the cost object property.0 mean that the system handles make-to-order production in a similar way to make-to-stock production.Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Environments Production controlling focused on product groups High volume production Product cost by sales order similar to make-to-stock Examples: • • Assemble to order Make-to-order with packaging variants Use this option when your production controlling is strictly focused on products and not on the sales order itself. This procedure fits perfectly to a make-to-stock environment or make-to-order production that only requires the sales order for logistical reasons. All rights reserved. Figure 23: Value Flow Without Product Cost by Sales Order The new functions for make-to-order production introduced in Release 4. Sales Controlling is carried out by Profitability Analysis.

the estimate results are only updated on the cost object as plan values if it is a cost object. 35 . However. If you use a project in addition to the sales order (customer project production).TFIN22_1 Lesson: Sales-Order-Related Production Scenarios A sales order cost estimate is possible in both cases. In this case. a cost element itemization. the sales order is created without the cost object property. use the project as the cost object. All rights reserved. Figure 24: With Product Cost by Sales Order 2006/Q2 © 2006 SAP AG. The results of sales order costing are used for: • • • Sales and pricing decisions Planned costs (only for cost objects) Methods of Results Analysis based on the percentage of completion (only for cost objects) Sales order costing with quantity structure supports the cost component split and provides a costing structure. and an itemization.

2006/Q2 . All rights reserved. Valuated or unvaluated sales order stock 36 © 2006 SAP AG.Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Figure 25: Value Flow With Product Cost by Sales Order Product Cost by Sales Order is recommended if the following information is important for your business: • • • • How high is my profit margin for this particular sales order? How can I map special sales costs? How high is my funds commitment? Is this sales order performing well from a costing point of view? Where did late customer changes greatly affect my production costs? You can also use Results Analysis to: • • • Automatically create reserves for expected losses Manually add reserves for foreseen risk Calculate goods in transit where goods have been shipped but not yet invoiced Product cost by sales order is necessary if you want to work with unvaluated sales order stock (not recommended).

this stock is always unvaluated.0 mean that the system handles make-to-order production in a similar way to make-to-stock production.0. As of Release 4.1. you can choose whether you manage this stock as unvaluated or valuated sales order stock. This enables you to: • • • Calculate production variances of related production orders Settle these variances to Profitability Analysis Provide a cost component split for the cost of goods sold 2006/Q2 © 2006 SAP AG. 37 . All consumption from the sales order and project stock debit the consumer and reduce the accounting stock.TFIN22_1 Lesson: Sales-Order-Related Production Scenarios Figure 26: Unvaluated vs Valuated Sales Order or Project Stock The new R/3 functions for valuated sales order stock introduced in Release 4. All rights reserved. In Release 3.0 mean that the system handles make-to-order production in a similar way to make-to-stock production. All deliveries to sales order or project stock credit the delivering object and form an accounting stock.0/3. Valuated Sales Order Stock • • • • • • Combined quantity and value flow Simplified inventory determination Assembly costs shown with multi-level make-to-order production Variances can be determined for these production orders Similar to make-to-stock production Enables more controlling scenarios and the first step in logical decoupling of CO-PC and PP The new R/3 functions for valuated sales order stock (or project stock) introduced in Release 4.

Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Sales order costing can be used as the basis for stock valuation. Figure 27: Combined Quantity and Value Flow for Valuated Sales Order or Project Stock Because the inventories assigned to sales orders and projects carry costs as well as quantities. The system determines the standard price using the costing for the production order or the planned costs for the WBS element. The valuated goods movements result in debits and credits to the affected objects. 2006/Q2 . The first goods receipt prompts a valuation on the basis of one of the subsequent strategies and serves as the valuation basis from this point onwards: • • The system calculates the standard price on the basis of customer exit COPCP002 material valuation for valuated sales order stock. The costs of the materials can be determined by costing the sales order or production order. the system uses the standard price that results from the production order that delivers first. All rights reserved. If there are multiple production orders for the same sales order item. is valuated using a predefined valuation strategy sequence. The goods receipt.a material cost estimate in the Controlling module is not necessary. The system calculates the standard price using a pre-designated sales order costing. • 38 © 2006 SAP AG. This sales order costing can be based on a unit costing or on a product costing. including the stock value. The stock value can therefore be shown immediately in Financial Accounting . goods movements for these inventories generate postings in Financial Accounting.

goods issues) is made via individual customer stock – The value flow is made directly with the sales order item and all assigned orders Costs are not posted to the sales order item until order settlement or until the invoice is received for purchased goods No variance calculation on assigned production orders Cost Object Controlling by Sales Order is necessary! – • • • As individual requirements material kept in stock is withdrawn from sales order or project stock without being valuated. The value of the goods that are in sales order or project stock on a quantity basis is activated for delivery to the customer as work in process (WIP). All rights reserved. 39 . Figure 28: Separate Quantity and Value Flow for Unvaluated Sales Order or Project Stock Therefore: 2006/Q2 © 2006 SAP AG. these costs are missing in the production orders of a multi-level production process.TFIN22_1 Lesson: Sales-Order-Related Production Scenarios Unvaluated Sales Order Stock • The quantity flow is separate from the value flow The quantity flow (goods receipts.

2006/Q2 . there are theoretically. the combination “unvaluated sales order stock without Product Cost by Sales Order” is not technically possible. Both values “with valuated sales order stock” are to be favored from the accounting perspective due to the advantages mentioned above. 40 © 2006 SAP AG.Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Figure 29: Key Message for Valuated Sales Order or Project Stock With the two values of the “ Valuation of Sales Order Stock” and “Product Cost by Sales Order” criteria. four possible combinations: Figure 30: Decision Table However. All rights reserved.

41 . • • What is the difference between “with product cost by sales order” and “without Product Cost by Sales Order”? What is the difference between “valuated” and “unvaluated” sales order or project stock? 2006/Q2 © 2006 SAP AG. All rights reserved.TFIN22_1 Lesson: Sales-Order-Related Production Scenarios Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

Unit 2: Sales-Order-Related Production Scenarios TFIN22_1 Lesson Summary You should now be able to: • Describe sales order processing • Describe the value flow for sales-order-related production with and without Product Cost by Sales Order • Explain the value flow for scenarios with valuated and unvaluated sales order stock 42 © 2006 SAP AG. 2006/Q2 . All rights reserved.

43 .TFIN22_1 Unit Summary Unit Summary You should now be able to: • Describe sales order processing • Describe the value flow for sales-order-related production with and without Product Cost by Sales Order • Explain the value flow for scenarios with valuated and unvaluated sales order stock 2006/Q2 © 2006 SAP AG. All rights reserved.

2006/Q2 . All rights reserved.Unit Summary TFIN22_1 44 © 2006 SAP AG.

... 47 Exercise 1: Master Data and Preliminary Costing ............... you will be able to: • • • • • • • • • • • Create the master data for a production order and a product cost collector Explain the Customizing for a “decoupling scenario” Carry out preliminary costing for a product cost collector Carry out goods movements and confirmations for the production order Make direct postings from Financial Accounting to the product cost collector Describe the typical steps for period-end closing in make-to-stock production with Product Cost by Period Calculate work in process (WIP) at target cost and explain the associated Customizing Carry out variance analysis Describe the integration of period-end closing Describe repetitive manufacturing Assess the different strategies of material valuation Unit Contents Lesson: Master Data and Preliminary Costing.. All rights reserved.... 63 Lesson: Simultaneous Costing......... 45 .......... 79 2006/Q2 © 2006 SAP AG.......... Unit Objectives After completing this unit.............. such as “00” (and material R-F100)..........Unit 3 41 Product Cost Controlling by Period The demo process can be carried out according to the sample solution... Unit Overview This unit shows controlling by period using the example of order-related production with a product cost collector as the cost object (decoupling scenario)................... The instructor can use any group...........

.... 92 Exercise 3: Period-End Closing ..................126 46 © 2006 SAP AG........................................................... 83 Lesson: Period-End Closing.... 2006/Q2 ......... 115 Lesson: Addendum: Repetitive Manufacturing and Material Valuation.......Unit 3: Product Cost Controlling by Period TFIN22_1 Exercise 2: Simultaneous Costing .................................. All rights reserved....

In this example. All rights reserved. check in Customizing that the main planning strategy for strategy group “PP” has the value of “10”! To do so. A less popular type should instead be only produced based on lot size with production orders and only when the stock in the warehouse drops below the reorder point. To be able to better compare the cost objects. Business Example A manufacturer produces various types of pumps make-to-stock. A production order should be created in the master data while a product cost collector should serve as a cost object for Controlling by period. all production processes should be accompanied by controlling by period. Each pump has a production version for repetitive manufacturing and another production version for order-related production. 47 . Sales controlling is only carried out in Profitability Analysis (CO-PA). Choose the entry “PP”. use the menu path IMG → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Control of Sales-Order-Related Production/Product Cost by Sales Order → Selection of Requirements Type Through MRP Group → Check Strategy Groups. The main planning strategy must have the value “10”. The popular types are produced in a continuous production process and mapped in the system with repetitive manufacturing. we will take a close look at the production for production orders. you will be able to: • • • Create the master data for a production order and a product cost collector Explain the Customizing for a “decoupling scenario” Carry out preliminary costing for a product cost collector Before beginning this chapter. 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson: 42 Master Data and Preliminary Costing Lesson Duration: 150 Minutes Lesson Overview Lesson Objectives After completing this lesson.

such as process costs or material overhead. 2006/Q2 .Unit 3: Product Cost Controlling by Period TFIN22_1 Master Data Figure 31: Periodicity of Product Cost Collectors To perform product cost by period. • • Use either a cost object that allows for controlling by period. You configure the orders so that these costs are assigned to the product cost collector automatically. and Financial Accounting result in actual costs.work in process. directly to the product cost collector. or Use a product cost collector that takes on the role of the cost object. These are target costs for the production quantities that have been confirmed for the operations but not yet delivered to stock. • You post confirmations. Production variances that are calculated using the following formula: Variances = actual debit . goods issues and goods receipts with reference to the production order. 48 © 2006 SAP AG.goods receipt . You can assign other costs. All rights reserved. Postings in Materials Management. • Periodic actual costs from the cost object can be grouped as follows: • • • Costs for products for which a goods receipt in the warehouse has been listed in the current period (“delivery to stock”). Production. The logistical production objects (such as production orders) are not cost objects. Costs for work in process. All period closing activities are performed using the product cost collector.

for which the cost object is always a product cost collector. 49 . This means that the product cost collector has “two uses. it is always used. This also applies to KANBAN production methods. It is also always used as a cost object when controlling is not to take place for logistical objects (decoupling scenario). when you use production orders). All rights reserved. Process manufacturing (that is. Repetitive manufacturing. This means that you can collect actual costs on a product cost collector for: • • • • Order-related production (that is. 2006/Q2 © 2006 SAP AG. and in repetitive manufacturing when you are producing individual requirements materials.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 32: Using Product Cost Collector Product cost collectors are created independent of the production type. Mass production based on sales orders when you are using valuated sales order stocks.” For repetitive manufacturing. production with process orders).

they are used only for logistical processing. it is linked to the product cost collector automatically. You must manually create a product cost collector before you start production. In this case. Note on terminology: This course often uses the term manufacturing order. 2006/Q2 . you must make the necessary settings for the order type of the manufacturing order in Customizing for Product Cost by Order under Define Default Values for Order Types . 50 © 2006 SAP AG. costs are collected and analyzed on the product cost collector. If you neglect to create a product cost collector. All rights reserved. Production orders do not serve as cost objects. This is an umbrella term for production order and process order. it is only possible to link the manufacturing order to the product cost collector as long as no actual costs have been updated to the manufacturing order.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 33: Production Order and Product Cost Collector: Process Chain In Product Cost by Period. the costs are collected on the manufacturing order. In order to ensure that the costs of a manufacturing order are collected on a product cost collector. When the manufacturing order is created.

Product cost collectors are linked to production orders and to the production versions in repetitive manufacturing in the same way. 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 34: Automatic Assignment of Orders to Product Cost Collectors The production order is assigned to the product cost collector by the production process. The system generates the production process automatically when the product cost collector is created. 51 . Production orders that are linked to product cost collectors receive the status PCC. All rights reserved.

You can choose from the following levels: • • • Production version Any BOM/routing combination Material per plant 52 © 2006 SAP AG. When you create the product cost collector. You specify which characteristics are updated for the production process by means of the controlling level. All rights reserved.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 35: Controlling: Level The production process has characteristics whose values are unique to that production process. 2006/Q2 . The relevant process category in Cost Object Controlling is production. you decide on which level the costs should be collected on the product cost collector. There is a separate controlling level for each plant material and process category.

These product cost collectors have a number of features. 53 . The routing is identified by the task list type and task list group. The BOM is identified by the BOM usage and the alternative BOM. planning plant. the product cost collector is created for the characteristics material. and routing. BOM/Routing should only be used if the material does not have any production versions. If you are using the controlling level BOM/Routing. and production version. production plant. production plant. 2006/Q2 © 2006 SAP AG. In repetitive manufacturing. it is not possible to create a preliminary cost estimate for a product cost collector. All rights reserved. Problems may arise if you make changes to the reporting points of the production versions. If you are using the controlling level Production Plant/Planning Plant. planning plant. the product cost collector is created for the characteristics material. For example. This affects subsequent functions. production plant. BOM.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 36: Product Cost Collector and Production Process If you are using the controlling level Production version. SAP recommends this controlling level whenever you are using production versions. you should always use this controlling level. and planning plant. the product cost collector is created for the characteristics material.

When the product cost collector is settled. As a result. It also determines which overhead structure is used to calculate overhead. and transfers these equivalence numbers into the dynamic distribution rule. external activities.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 37: Product Cost Collector: Default Values for Order Type A product cost collector is an order. 2006/Q2 . Default rule STR also ensures that the values to be settled from a product cost collector can be distributed. This is necessary. The system creates equivalence numbers based on the delivery values. For preliminary costing and simultaneous costing. All rights reserved. The order type of the product cost collector must belong to order category 05 (product cost collector). The settlement process generates the distribution rule automatically on the basis of the delivery values. enter the costing variant and valuation variant in the order type. This default rule is linked to settlement type PER (periodic). This defines the valuation procedure for materials. the system apportions the balance among the different stock in accordance with the delivery values for the period. when the product cost collector collects the costs of materials that have been assigned different valuation types (such as special batch inventories) or that are part of a valuated sales order stock. default rule STR (strategy for tracing factor determination) is specified in the table Cost-Accounting-Relevant Default Values for Order Types and Plants. and business processes. A results analysis key must be specified in all product cost collectors for which you want to calculate work in process. the settlement rule for the product cost collector receives settlement type PER. for example. For product cost collectors. 54 © 2006 SAP AG. internal activities.

the status PCC will be assigned to the production order. All rights reserved. A preliminary cost estimate can be generated for the production order but the results cannot be saved to the production order as planned values. Figure 39: Customizing: Production Order 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 38: Production Order and Production Process If a production order is assigned to a product cost collector. 55 .

Preliminary Costing Figure 40: Production Order and Product Cost Collector: Process Chain 56 © 2006 SAP AG. No results analysis key is specified in the order type because WIP is calculated on the product cost collector. The costing variant and valuation variant specified in the order type for the production order are used for the preliminary cost estimate for the production order (this cost estimate is for information purposes only). 2006/Q2 .Unit 3: Product Cost Controlling by Period TFIN22_1 Default rule PP2 (periodic) must be specified for the order type of the production order. All rights reserved. If you do not want the system to create this cost estimate. you don't need to enter the costing variant or valuation variant.

The preliminary cost estimate costs the quantity structure defined by the production process. All rights reserved. the activity quantities determined in preliminary costing can be used as default values for the confirmations. if the reporting point structure of your routing changes. 57 .TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 41: Preliminary Costing . This requires that you make the appropriate setting in Customizing in the repetitive manufacturing profile. In repetitive manufacturing. you can update the preliminary cost estimate to convert the quantities confirmed at the reporting points to the new reporting point structure. 2006/Q2 © 2006 SAP AG.Overview (1) You can create a preliminary cost estimate for a product cost collector. If you are using the controlling level “Material by Production Plant/Planning Plant”. Target costs can be calculated on the basis of preliminary costing to: • • Valuate WIP with the WIP calculation function Valuate the scrap variances in the variance calculation function In repetitive manufacturing. you cannot create a preliminary cost estimate for the product cost collector.

All rights reserved.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 42: Preliminary Costing – Overview (2) The production process quantity structure is valuated as defined in the valuation variant of the costing variant. 58 © 2006 SAP AG. The system uses the BOM of the production process. 2006/Q2 . Figure 43: Preliminary Costing: Direct Materials Costs To calculate direct materials costs. the input quantities of the materials determined by the BOM are multiplied by the prices selected through the valuation variant.

Figure 44: Preliminary Costing: Direct Costs of Production To calculate the direct costs of production. • The exact algorithm is stored in formulas for the work center. machine times and labor times by the prices selected in accordance with the valuation variant. This determines the price of the activity. All rights reserved. They can still indicate stepped costs for technical reasons (such as a tool change required above a certain order quantity). Fixed standard values (such as setup costs) are independent of the production quantity and are known as ordering costs.TFIN22_1 Lesson: Master Data and Preliminary Costing You have already specified which costing variant and valuation variant are used by the preliminary cost estimate in Customizing in Define Cost-Accounting-Relevant Default Values for Order Types ands Plants. These are known as semivariable costs. The system uses the routing of the production process. • Lot-size-dependent standard values (such as labor and machine time) are multiplied by the costing lot size and divided by the base quantity on which the standard values are based. 59 . The cost center and the activity type for each operation are in turn assigned to the work center. the system multiplies the planned setup times. which is assigned to the individual operations of the routing. 2006/Q2 © 2006 SAP AG. The standard values are specified in the operations in the routing and can be defined as either fixed or variable (lot-size-dependent) values.

The process template is determined dynamically based on the following parameters: • • • The costing sheet for the application of overhead is selected with the valuation variant. In principle. The template allocation technique allocates ABC processes and activity types of the cost centers. you can assign a template in Customizing. all information in the system can be used as the cause value (cost driver). 2006/Q2 . without manual effort). 60 © 2006 SAP AG.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 45: Preliminary Costing: Process Costs Template allocation is a new technique for allocating the costs of Overhead Cost Controlling according to cause as closely and “as comfortably as possible” (that is. All rights reserved. while a template of the “sales order” environment can only be used for sales orders. All objects of the Controlling are suitable for use as receivers. The templates are grouped in Customizing by their usage (environment). For example. especially cost objects and profitability segments of the CO-PA. With the combination of overhead key and costing sheet. The overhead key is either entered directly in the cost object or derived from the overhead group from the material master (costing view 1). a template of the “material cost estimate” environment can can only be used for product costing (and PP production orders).

orders). or internal order) should be credited under which cost element. the system uses the costing sheet specified in the “planned” valuation variant.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 46: Preliminary Costing: Overhead Costs In traditional cost accounting. 2006/Q2 © 2006 SAP AG. Credits: Here you enter which overhead cost object (cost center. 61 . overhead cost objects are credited in return (cost centers. overhead costs are passed on to cost objects with overhead surcharges. You can define both quantity-based and percentage overhead rates. process. All rights reserved. This is the costing sheet that is displayed in the product cost collector. In simultaneous costing for the product cost collector. You then define overhead rates based on the overhead keys that can be derived from overhead groups in Customizing. The costing sheet consists of three types of rows: • • • Base Rows: Here you enter cost elements. If you want to apply overhead in different ways depending on the material being manufactured. you can use overhead keys. the system uses the costing sheet specified in the “actual” valuation variant. In preliminary costing for the product cost collector. Overhead is calculated using a costing sheet. While these cost objects are debited. cost element groups and/or origin groups to which overhead should be applied. Overhead Rate Rows: Here you specify the overhead rates to be used in applying overhead to the base rows. You enter these in the material master record.

2006/Q2 . All rights reserved.Unit 3: Product Cost Controlling by Period TFIN22_1 62 © 2006 SAP AG.

TFIN22_1 Lesson: Master Data and Preliminary Costing 57 Exercise 1: Master Data and Preliminary Costing Exercise Duration: 35 Minutes Exercise Objectives After completing this exercise. and display the control data provided by the product cost collector and production process • Review the quantity structure (BOM. The product cost collector must be valid for a BOM and routing. The controlling level for the pump will be the BOM/routing level. All rights reserved. In order to do so. Task 1: To manage the cost object controlling for pump assembly R-F1##. routing) allocated to the production order • Display the Customizing settings for the product cost collector and the order type parameters for a production order Business Example The pump assembly R-F1## is a finished product with a stable manufacturing process that utilizes production orders. Continued on next page 2006/Q2 © 2006 SAP AG. and analyze the cost data of the cost collector. You want to use the concept of Product Cost by Period for cost controlling. Create a product cost collector for pump assembly R-F1## in plant 1000. You are a member of the controlling department. 63 . a product cost collector must be created. 1. It is also necessary to create a production order and review the control data transferred from the product cost collector to the production order. you will need to verify the settings for the order types and costing variants relevant for the Product Cost by Period scenario. While creating the cost collector. you create a product cost collector for the pump. enter BOM usage 1. and have decided to use product cost controller as cost object. Although all customizing has been completed. The order type is RM01. you will be able to: • Create a product cost collector and a production process • Review the cost data for a product cost collector • Analyze a preliminary cost estimate and display the customizing for the costing variant • Create a production order.

Create another session. All rights reserved. Verify the planned costing variant and the actual costing variant for the product cost collector. display the cost data. Determine the calculated costs for the assembly R-B1##. How can there be differences between these two prices? Standard: ____________ Continued on next page 64 © 2006 SAP AG. 1. What cost data was assigned to the cost collector? What order type is assigned to the cost collector? Costing sheet: Overhead key: Results Analysis key: Variance key: Order Type: Order number: Production Process: 3. 2. Display the itemization report for R-F1##. Display the preliminary cost estimate for the product cost collector. Choose Yes when asked if you want to create a preliminary cost estimate for the product cost collector. Save the product cost collector. A different costing variant is specified for the planned costs than for the actual costs.Unit 3: Product Cost Controlling by Period TFIN22_1 alternative 01. Costs: ____________ 3. 2006/Q2 . and search for a valid routing for material R-F1## in plant 1000. Display the current cost estimate for assembly R-F1##. Why is this necessary? Planned Costing Variant: Actual Costing Variant: Why is this necessary? Task 2: A preliminary cost estimate was created for your product cost collector. Compare the preliminary cost estimate calculated for the product cost collector for assembly R-F1## with the current standard cost estimate for this material. Review the results of the cost estimate and display the customizing settings for the planned costing variant and order type RM01. What are the costs of goods manufactured for 10 pieces? COGM: 2. Using the display transaction for the product cost collector.

1. Use forward scheduling and enter today's date as the start date. Display the customizing settings for the calculation of the planned material costs for the product cost collector. order type PP08. 65 . All rights reserved. using production plant 1000. Which costing variant was assigned for this simultaneous costing? _____________________________________________________________ _____________________________________________________________ 5. The planned costs were calculated using the costing variant PREM. Continued on next page 2006/Q2 © 2006 SAP AG. What price selection strategy is selected for calculating the material components? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ 8.TFIN22_1 Lesson: Master Data and Preliminary Costing 4. Which valuation variant was assigned to calculate the planned order costs for costing variant PREM? _____________________________________________________________ _____________________________________________________________ 6. What price selection strategy is selected for calculating the production costs? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ Task 3: Create a production order and analyze the connection with the production process and the product cost collector. Create a production order for 10 pieces of material R-F1##. Check the assignment of this costing variant to the order type RM01 in the default values of plant 1000. What types of costs can be updated with the costing variant? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ 7.

and review the operations that have been selected for this production order. 2006/Q2 . All rights reserved. determine which profit center has been assigned to the production order. or is it valid for R-F1## at plant 1000 in general? 5. the costing sheet and overhead key determined for the production order? Can they be changed for the production order? 3. What order status is related to the use of a product cost collector? 4.Unit 3: Product Cost Controlling by Period TFIN22_1 2. Check the control data for the production order. Is this production process unique for this BOM and routing. How were the costing variants for actuals. Locate the production process on the Control data screen. Which master record determined the profit center? 6. On the Assignment tab page. Which work center is assigned to operation 0010? What is the control key for this operation? Continued on next page 66 © 2006 SAP AG. Select Operation Overview.

and review the Customizing settings. All rights reserved. Review the material components and verify the required quantity for each component. The use of a product cost collector is dependent on the order type selected for the production order. Save the production order. Display the order type defaults for plant 1000 and order type PP08. 9. Order number ______________ 8. What are the required quantities of components R-B1## and R-B2##? Is there any planned scrap for these components? Release the production order. Is the product cost collector indicator selected? 2. will the RA Key and Costing variant for order type PP08 default to the production order? 2006/Q2 © 2006 SAP AG. 67 . 3. If a product cost collector is found for a material. Task 4: 1. What is the default rule for the CO settlement? 4. Record the order number.TFIN22_1 Lesson: Master Data and Preliminary Costing 7.

The order type is RM01. While creating the cost collector. The controlling level for the pump will be the BOM/routing level. enter BOM usage 1. 1. The product cost collector must be valid for a BOM and routing. Continued on next page 68 © 2006 SAP AG. All rights reserved. a product cost collector must be created.Unit 3: Product Cost Controlling by Period TFIN22_1 Solution 1: Master Data and Preliminary Costing Task 1: To manage the cost object controlling for pump assembly R-F1##. 2006/Q2 . Create a product cost collector for pump assembly R-F1## in plant 1000.

Select BOM/routing Enter BOM Usage 1. Using the display transaction for the product cost collector. 69 . 2. enter BOM usage 1.TFIN22_1 Lesson: Master Data and Preliminary Costing alternative 01. While creating the cost collector. Enter order type RM01. All rights reserved. alternative 01. The order type is RM01. The product cost collector must be valid for a BOM and routing. Choose Confirm (Transfer data) Save your entries. Enter your material R-F1##. Plant 1000 Select Create. Enter alternative BOM 01. Choose Yes when asked if you want to create a preliminary cost estimate for the product cost collector. Choose Yes when asked if you want to create a preliminary cost estimate for the product cost collector. task list type N. Save the product cost collector. Save the product cost collector. and search for a valid routing for material R-F1## in plant 1000. display the cost data. and search for a valid routing for material R-F1## in plant 1000. Enter task list type Routing Search for the routing group using the material R-F1##. What cost data was assigned to the cost collector? What order type is assigned to the cost collector? Costing sheet: Overhead key: Results Analysis key: Variance key: Order Type: Continued on next page 2006/Q2 © 2006 SAP AG. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Master Data → Product Cost Collector → Edit (KKF6N) Create a product cost collector for pump assembly R-F1## in plant 1000. Choose Yes when asked if you want to create a preliminary cost estimate for the product cost collector. Plant 1000.

Verify the planned costing variant and the actual costing variant for the product cost collector. Continued on next page 70 © 2006 SAP AG. In addition. since the assigned costing type initiates the update of the results of either the preliminary cost estimate or the actual costs of the product cost collector. All rights reserved. Why is this necessary? Planned Costing Variant: Actual Costing Variant: Why is this necessary? a) The costing variants are displayed on the Data tab: Planned Costing Variant: Actual Costing Variant: PREM PPP3 Caution: You must select a unique costing variant for determining both planned and actual costs.Unit 3: Product Cost Controlling by Period TFIN22_1 Order number: Production Process: a) The product cost collector is immediately displayed: The following information is displayed on the Data tab: Costing sheet: COGM Overhead key: SAP10 Results Analysis key: FERT-P Variance key: 000001 The following information is displayed on the Header tab: Order Type: RM01 Order Number: The following information is displayed on the Production Process tab: Production Process Number: 3. A different costing variant is specified for the planned costs than for the actual costs. 2006/Q2 . Different valuations may also be selected for external procurement and external activities. different material and activity prices can be selected for preliminary costing and simultaneous costing.

To display the cost for 10 pieces. Display the current cost estimate for assembly R-F1##. Determine the calculated costs for the assembly R-B1##. Compare the preliminary cost estimate calculated for the product cost collector for assembly R-F1## with the current standard cost estimate for this material. 71 . Create another session. The COGM for 10 pieces is displayed: 2. The value for 10 pieces of R-B1## is displayed in the Itemization report. Review the results of the cost estimate and display the customizing settings for the planned costing variant and order type RM01.TFIN22_1 Lesson: Master Data and Preliminary Costing Task 2: A preliminary cost estimate was created for your product cost collector. change the entry for Costs based on to User entry and enter 10 in the quantity field. How can there be differences between these two prices? Continued on next page 2006/Q2 © 2006 SAP AG. Costs: ____________ a) 3. 1. Display the itemization report for R-F1##. All rights reserved. Display the preliminary cost estimate for the product cost collector. What are the costs of goods manufactured for 10 pieces? COGM: a) The cost estimate is displayed on the tab page Header: Choose Display cost estimate.

Which costing variant was assigned for this simultaneous costing? _____________________________________________________________ Continued on next page 72 © 2006 SAP AG. Select Enter.Unit 3: Product Cost Controlling by Period TFIN22_1 Standard: ____________ a) Create another session (System → Create session). The planned costs were calculated using the costing variant PREM. Select view Costing 2. the prices of the component materials and activity prices may have changed between the time the standard cost estimate was created and the time when the cost was calculated for the product cost collector. 2006/Q2 . Select Enter. Logistics → Materials management → Material master → Material → Display → Display current (MM03) Before beginning the task. 4. In addition. The current standard is displayed under the column marked Current. choose Add to favorites. However. Select Enter. The costing variant used to calculate the standard cost estimate and the costing variant used to calculate the product cost collector may use different valuation variants. All rights reserved. even if the same valuation variants are used. Enter plant 1000. Also. Enter your material R-F1##. mixed costing could have been used to calculate the standard. Check the assignment of this costing variant to the order type RM01 in the default values of plant 1000. if more than one procurement process is available for R-F1##. the current BOM or routing (quantity structure) may be different than the quantity structure used in the standard cost estimate.

Choose Details. 7.TFIN22_1 Lesson: Master Data and Preliminary Costing _____________________________________________________________ a) Tools → Customizing → IMG → Execute Project (SPRO) Before beginning the task. Valuation Variant Preliminary Cost Estimate (190). Choose SAP Reference IMG. order type RM01. What types of costs can be updated with the costing variant? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ a) Select the Costing Type view on the Details screen. What price selection strategy is selected for calculating the material components? _____________________________________________________________ Continued on next page 2006/Q2 © 2006 SAP AG. then choose Check Costing Variants for Product Cost Collectors → Costing Variants to Determine Activity Quantities (OKKN) Select Costing Variant PREM. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Product Cost Collectors → Define Cost-Accounting-Relevant Default Values for Order Types and Plants (OKZ3) Select plant 1000. 6. 73 . All rights reserved. 5. Choose Details. The costing variant for the simultaneous costing is PPP3. choose Add to favorites. Which valuation variant was assigned to calculate the planned order costs for costing variant PREM? _____________________________________________________________ _____________________________________________________________ a) Return to IMG node Product Cost Collector. tab. Select the Misc. Display the customizing settings for the calculation of the planned material costs for the product cost collector. The costing type determined that the preliminary cost estimate for the product cost collector is updated.

The selection strategy is: 1. The selection strategy is: 1. 2006/Q2 .Unit 3: Product Cost Controlling by Period TFIN22_1 _____________________________________________________________ _____________________________________________________________ a) Select the Valuation Variant view on the Details screen. 3. Select the Activity Types/Processes tab. 4. 2. Price from purchasing info record Planned price 1 Standard price Moving average price What price selection strategy is selected for calculating the production costs? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ a) Select the Valuation Variant view on the Details screen. 2. Planned price as average of all fiscal year periods Planned price for the period Continued on next page 74 © 2006 SAP AG. 8. All rights reserved.

Only the costing variant for planned costs can be changed. they cannot be changed on the production order. Select Enter. Change the scheduling type to Forwards. 2. using production plant 1000. 4. Is this production process unique for this BOM and routing. The actual costing variants. Enter your material R-F1##. The production process is unique for this BOM and routing. (CO01) Before beginning the task. Use forward scheduling and enter today's date as the start date. This was determined when the product cost collector was created. Enter order type PP08. order type PP08. but to the product cost collector. How were the costing variants for actuals. Enter today’s date as the start date. Create a production order for 10 pieces of material R-F1##. choose Add to favorites. costs are not updated to the production order. the costing sheet and overhead key determined for the production order? Can they be changed for the production order? Answer: Select the Control data view. costing sheet and overhead key were assigned to the order via the product cost collector.TFIN22_1 Lesson: Master Data and Preliminary Costing Task 3: Create a production order and analyze the connection with the production process and the product cost collector. Enter the quantity of 10. 1. Check the control data for the production order. In this scenario. Enter production plant 1000. 3. a) Logistics → Production → Shop Floor Control → Order → Create → With Material. All rights reserved. The display of these fields is for information only. or is it valid for R-F1## at plant 1000 in general? Answer: The production process and BOM/routing are displayed on the Control data tab page. Locate the production process on the Control data screen. Continued on next page 2006/Q2 © 2006 SAP AG. What order status is related to the use of a product cost collector? Answer: Select Status. The status PCC indicates that a product cost collector is being used. 75 .

Save the production order. 6. 8. Which work center is assigned to operation 0010? What is the control key for this operation? Answer: Select Operation overview. Order number ______________ a) Select Save.Unit 3: Product Cost Controlling by Period TFIN22_1 5. Release the production order. Select Operation Overview. R-B1## → 10 PC R-B2## → 10 PC There is no planned scrap for these components. The control key is PP01. Work center R-M## is assigned to operation 0010. Which master record determined the profit center? Answer: Select the Assignment tab. a) Choose Release order . Choose Components (icon in lower area of screen). The profit center is displayed. Continued on next page 76 © 2006 SAP AG. All rights reserved. Review the material components and verify the required quantity for each component. determine which profit center has been assigned to the production order. On the Assignment tab page. 9. 7. This can be confirmed by displaying the Component detail screen using the icon on the lower left. What are the required quantities of components R-B1## and R-B2##? Is there any planned scrap for these components? a) Select operation 0010. The profit center is maintained in the material master record for R-F1##. 2006/Q2 . Record the order number. and review the operations that have been selected for this production order.

Is the product cost collector indicator selected? Answer: Yes. the RA key and costing variant for order type PP08 will not default to the production order. The settings for the product cost collector will be used.TFIN22_1 Lesson: Master Data and Preliminary Costing Task 4: 1. If a product cost collector is found for a material. will the RA Key and Costing variant for order type PP08 default to the production order? Answer: No. The use of a product cost collector is dependent on the order type selected for the production order. Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. What is the default rule for the CO settlement? Answer: The default rule for CO settlement is PP2. order type PP08. 3. periodic settlement. a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Manufacturing Orders → Define Cost-Accounting Relevant Default Values for Order Types and Plants (OKZ3) Select plant 1000. 2. the product cost collector indicator is selected. Feel free to use your own additional questions. Choose Details. and review the Customizing settings. All rights reserved. 4. 77 . Display the order type defaults for plant 1000 and order type PP08. • • What is a production process? What is a decoupling scenario and why is it a prerequisite for “Controlling at order level”? 2006/Q2 © 2006 SAP AG.

All rights reserved.Unit 3: Product Cost Controlling by Period TFIN22_1 Lesson Summary You should now be able to: • Create the master data for a production order and a product cost collector • Explain the Customizing for a “decoupling scenario” • Carry out preliminary costing for a product cost collector 78 © 2006 SAP AG. 2006/Q2 .

The popular types are produced in a continuous production process and mapped in the system with repetitive manufacturing. 2006/Q2 © 2006 SAP AG. you will be able to: • • Carry out goods movements and confirmations for the production order Make direct postings from Financial Accounting to the product cost collector Business Example A manufacturer produces various types of pumps make-to-stock. Sales controlling is only carried out in Profitability Analysis (CO-PA). 79 .TFIN22_1 Lesson: Simultaneous Costing Lesson: 73 Simultaneous Costing Lesson Duration: 90 Minutes Lesson Overview Lesson Objectives After completing this lesson. When carrying out the production. A less popular type should instead be only produced based on lot size with production orders and only when the stock in the warehouse drops below the reorder point. All rights reserved. To be able to better compare the cost objects. all production processes should be accompanied by controlling by period. we will take a close look at the production for production orders. Each pump has a production version for repetitive manufacturing and another production version for order-related production. In this example. goods issues and confirmations for the production order are carried out while direct postings from Financial Accounting directly address the product cost collector.

Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 47: Production Order and Product Cost Collector: Process Chain Figure 48: Debit of Product Cost Collector with Actual Costs 80 © 2006 SAP AG. 2006/Q2 . All rights reserved.

repostings of internal activity allocations. subcontracting. You can confirm the order header or individual operations. internal activity allocations. process cost allocation. Figure 49: Credit of Product Cost Collector by Goods Receipt 2006/Q2 © 2006 SAP AG. calculation of overhead. with reference to the production version). template allocation. in repetitive manufacturing. You can enter goods issues. In Product Cost by Period. repostings of primary costs. confirmations in Logistics that result in activity allocations. manual process allocation. You can also have activity allocations and goods issues and/or goods receipts generated automatically when you confirm. Logistical functions such as goods issues and confirmations are still performed with reference to the manufacturing order (or. direct assignment of personnel costs to cost objects using time sheets. All rights reserved. repostings of line items. confirmations. goods movements in MM. The resulting costs are updated to the product cost collector. and goods receipts independently of each other. revaluation of activities at actual prices. 81 . You make the settings that enable this in Logistics. it is recommended that you confirm operations (affects the calculation of work in process).TFIN22_1 Lesson: Simultaneous Costing The following business transactions can result in actual costs on cost objects: G/L account postings in FI.

the receipt into inventory and the credit to the product cost collector is controlled by the valuation variant for delivery. For materials whose price control is S.Unit 3: Product Cost Controlling by Period TFIN22_1 The price control of the material is specified in the material master record: • Price Control Indicator V: The material is valuated at the moving average price (unit price). 82 © 2006 SAP AG. this price is usually calculated in a standard cost estimate for the material. the postings for materials with price control indicator S can differ from those for materials with price control indicator V. All rights reserved. SAP recommends valuation at the standard price. The valuation variant for delivery determines which price field from the material master is selected to value the goods receipt. The product cost collector is credited using the primary cost element that corresponds to the plant activity account (inventory change account). receipts into stock are valuated at the standard price. For internally manufactured materials. during the period-end closing). the valuation price is selected using a predefined valuation strategy and acts like a standard price. The moving average price changes with each goods movement or when orders from Cost Object Controlling are settled. 2006/Q2 . The credit applied to the product cost collector is the quantity received into inventory multiplied by the standard price. In sales-order-related production with a valuated sales order stock. the system automatically debits the balance sheet account account and credits the inventory change account. The value of the goods receipt is determined by the valuation variant for delivery. Price Control Indicator S:The material is valuated at the standard price. In make-to-stock production. When the product cost collector is settled (for example. • • When the goods receipt is entered. For materials whose price control indicator is V.

you can enter scrap quantities. If any components are scrapped during production. During the confirmation. the components are issued manually. you will be able to: • Analyze the actual costs of material withdrawal and the related (component scrap) • Analyze the actual production costs for the confirmation of production activities • Analyze the actual cost for the receipt of the finished product • Display the Customizing settings for simultaneous costing Business Example The actual costs for a production order are posted with goods receipts and issues as well as with confirmations for operations. For the manufacturing of the pump assembly. 83 . The production floor records the progress (products made. In our case. via inventory management. All rights reserved. 2006/Q2 © 2006 SAP AG. execution times) of a production order by utilizing order confirmations. Any changes to the suggested quantities (target quantities) cause quantity variances for the variance calculation that is carried out later during the period-end closing. additional quantities are issued to the production order. During the confirmation.TFIN22_1 Lesson: Simultaneous Costing 77 Exercise 2: Simultaneous Costing Exercise Duration: 20 Minutes Exercise Objectives After completing this exercise. you can change the suggested execution times. Goods receipts can be processed either manually using Inventory Management or automatically during production confirmation. the goods receipt is automatically updated with the confirmation. This depends on the control key of the operation.

2. Enter a yield of 5 pieces and a scrap quantity of 1 piece. Enter a partial confirmation for operation 70 of the production order. Hint: Because the operation uses control key PP99.Unit 3: Product Cost Controlling by Period TFIN22_1 Task 1: Since the production order has been released to the shop floor. Save the partial confirmation. Due to material scrap that has occurred during assembly. Continued on next page 84 © 2006 SAP AG. 2006/Q2 . Display the quantity of material R-B1## that was debited to the product cost collector. All rights reserved. Display the activities that were debited to the product cost collector.Comparison report to review the actual cost information for the product cost collector of material R-F1##. The simultaneous costing is recorded on the assigned product cost collector. 1. 1. Task 2: Use the Target/Actual . 3. Enter a yield of 10 pieces. Save the confirmation. Enter the goods issue for the production order. change the withdrawal quantity of material R-B1## from 10 to 11. Will this quantity change be reported as a variance? Enter a final confirmation for operation 10 of the production order. inventory transactions and production confirmations can be posted against the order. this is a milestone confirmation with an automatic goods receipt. and increase the labor time by a factor of 10 % to reflect the additional processing time necessary because of the scrapped components. Continue past the warning regarding the activity recalculation due to the partial confirmation.

Review the customizing settings for the simultaneous costing of the costs for the product cost collector. 1. What value was used to credit the product cost collector for the goods receipt of the pump assembly? Why? Task 3: The actual costs for the activities were calculated using the costing variant PPP3. Which valuation variant is assigned to calculate the actual order costs for costing variant PPP3? Valuation variant: 3. Locate the credit to the product cost collector for the goods receipt of R-F1##. 85 .TFIN22_1 Lesson: Simultaneous Costing 2. Display the assignment of this costing variant to the order type RM01 default values for plant 1000. What price is selected for calculating the production costs? Is this the same price that was used to determine planned costs (preliminary cost estimate) for the product cost collector? Activity price selected for actual costs: Activity price selected for planned costs: 2006/Q2 © 2006 SAP AG. Was the cost collector credited for the confirmation of the assembly that was reported as scrap? 3. All rights reserved. 2.

1. Enter the production order number. The simultaneous costing is recorded on the assigned product cost collector. Yes. Select Enter. inventory transactions and production confirmations can be posted against the order. Choose To order. a quantity variance will be determined for this material component during variance calculation. Change the withdrawal quantity for R-B1## from 10 to 11. Enter the goods issue for the production order. plant 1000. change the withdrawal quantity of material R-B1## from 10 to 11. Due to material scrap that has occurred during assembly. and storage location 0001.Unit 3: Product Cost Controlling by Period TFIN22_1 Solution 2: Simultaneous Costing Task 1: Since the production order has been released to the shop floor. Continued on next page 86 © 2006 SAP AG. Enter movement type 261. choose Add to favorites. Save the material withdrawal. Will this quantity change be reported as a variance? a) Logistics → Production → Shop Floor Control → Goods Movements → Goods Issue (MB1A) Before beginning the task. 2006/Q2 . Select Enter to continue past any warning message regarding reserved quantity. All rights reserved.

TFIN22_1 Lesson: Simultaneous Costing 2. Enter a labor execution time approximately 10% greater than the default time. Confirm a yield of 5 pieces. and increase the labor time by a factor of 10 % to reflect the additional processing time necessary because of the scrapped components. Enter the order number and operation 0010. Confirm a yield of 10 pieces. this is a milestone confirmation with an automatic goods receipt. Save the confirmation. Enter the confirmation type Final confirmation. Enter a scrap quantity of 1 piece. Save the confirmation. Enter a yield of 5 pieces and a scrap quantity of 1 piece. Continue past the warning messages regarding activity time calculation. Save the partial confirmation. a) Logistics → Production → Shop Floor Control → Confirmation → Enter → For Operation → Time Ticket (CO11N) Before beginning the task. a) Favorites → Confirmation → Enter → To Operation → Time Ticket (CO11N) Enter the order number and operation 0070. Select Enter. Select Enter. Continue past the warning regarding the activity recalculation due to the partial confirmation. All rights reserved. Enter a final confirmation for operation 10 of the production order. Save the confirmation. Enter a yield of 10 pieces. choose Add to favorites. 3. 87 . Continued on next page 2006/Q2 © 2006 SAP AG. Enter the confirmation type Partial confirmation. Hint: Because the operation uses control key PP99. Enter a partial confirmation for operation 70 of the production order.

2006/Q2 . Select Show selected fields. This can be confirmed by displaying the accounting view of R-F1## and locating the price control (Standard) and the current standard price. The 1 piece that was reported as scrap is not credited to the product cost collector. What value was used to credit the product cost collector for the goods receipt of the pump assembly? Why? Answer: The standard cost estimate was used to valuate the goods receipt. Display the activities that were debited to the product cost collector. Was the cost collector credited for the confirmation of the assembly that was reported as scrap? Answer: The product cost collector was credited for the goods receipt posting of 5 pieces. 2. Locate the credit to the product cost collector for the goods receipt of R-F1##. 1. select Total Actual Quantity. All rights reserved. Select Transfer (Enter). Only materials with moving average price use a valuation variant to determine the cost object credit at time of goods receipt.Comparison report to review the actual cost information for the product cost collector of material R-F1##. Continued on next page 88 © 2006 SAP AG.Unit 3: Product Cost Controlling by Period TFIN22_1 Task 2: Use the Target/Actual . All materials that use standard price control also credit the product cost collector with the standard price. Display the quantity of material R-B1## that was debited to the product cost collector. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Information system → Reports for Product Cost by Period → Detailed Reports → For Product Cost Collectors (KKBC_PKO) Enter your material R-F1##. To display the actual quantities for the line items: Choose Change layout. Choose Execute. The activity types and materials are displayed in the Origin column. Enter plant 1000. From the Column Set. It will be calculated as scrap value when variances are calculated for the product cost collector. 3.

a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. Choose Details. Valuation Variant Production Order . 2. The costing variant for the simultaneous costing is PPP3.actual (007). then choose Check Costing Variants for Product Cost Collectors → Costing Variants for Valuation of Internal Activities (OPL1) Select Costing Variant PPP3. 89 . What price is selected for calculating the production costs? Is this the same price that was used to determine planned costs (preliminary cost estimate) for the product cost collector? Activity price selected for actual costs: Continued on next page 2006/Q2 © 2006 SAP AG. Choose Details. Review the customizing settings for the simultaneous costing of the costs for the product cost collector. Display the assignment of this costing variant to the order type RM01 default values for plant 1000. 1.TFIN22_1 Lesson: Simultaneous Costing Task 3: The actual costs for the activities were calculated using the costing variant PPP3. 3. Which valuation variant is assigned to calculate the actual order costs for costing variant PPP3? Valuation variant: a) Return to the IMG node Product Cost Collectors. order type RM01. All rights reserved. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Product Cost Collectors → Define Cost-Accounting-Relevant Default Values for Order Types and Plants (OKZ3) Select plant 1000.

Choose Details. The strategy sequence for actual costs is: 1. Plan price for the period To display the planned cost strategy. return to the IMG node and choose Check Costing Variants for Product Cost Collectors Choose Costing Variants to Determine Activity Quantities (OKKN) Select Costing Variant PREM. Select the Activity Types/Processes tab. Choose Valuation Variant. Feel free to use your own additional questions. they do not use the same price. The price selection strategy sequence is: 1. Why is it recommended to valuate at the standard price for materials manufactured in-house? 90 © 2006 SAP AG. 2006/Q2 . Select the Activity Types/Processes tab.Unit 3: Product Cost Controlling by Period TFIN22_1 Activity price selected for planned costs: a) Select the Valuation Variant view on the Details screen. 2. Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. All rights reserved. Plan price as average of all fiscal year periods Plan price for the period No.

TFIN22_1 Lesson: Simultaneous Costing Lesson Summary You should now be able to: • Carry out goods movements and confirmations for the production order • Make direct postings from Financial Accounting to the product cost collector 2006/Q2 © 2006 SAP AG. 91 . All rights reserved.

we will take a close look at the production for production orders. All rights reserved. Each pump has a production version for repetitive manufacturing and another production version for order-related production. in this scenario. In this example. Period-end closing is carried out completely on the cost object in Controlling. 92 © 2006 SAP AG. on the product cost collector. To be able to better compare the cost objects. 2006/Q2 . A less popular type should instead be only produced based on lot size with production orders and only when the stock in the warehouse drops below the reorder point. Sales controlling is only carried out in Profitability Analysis (CO-PA). all production processes should be accompanied by controlling by period. you will be able to: • • • • Describe the typical steps for period-end closing in make-to-stock production with Product Cost by Period Calculate work in process (WIP) at target cost and explain the associated Customizing Carry out variance analysis Describe the integration of period-end closing Business Example A manufacturer produces various types of pumps make-to-stock.Unit 3: Product Cost Controlling by Period TFIN22_1 Lesson: 86 Period-End Closing Lesson Duration: 180 Minutes Lesson Overview Lesson Objectives After completing this lesson. The popular types are produced in a continuous production process and mapped in the system with repetitive manufacturing.

TFIN22_1 Lesson: Period-End Closing Template Allocation. It is addressed extensively in course AC690. Variance calculation: The variance calculation function investigates the causes of the order's balance. 93 . Calculation of work in process (WIP): In Product Cost by Period. of activity types and business processes with which cost objects were debited. All rights reserved. Allocation of overhead. the work in process is calculated at target cost. at actual prices. Revaluation. This function provides answers to questions such as: Why did the production process cost more than anticipated? Settlement – – – The work in process is settled to Financial Accounting and Profit Center Accounting The order balance is settled to Financial Accounting and Profit Center Accounting (also to the Material Ledger. Overhead Figure 50: Period-End Closing for the Product Cost Collector Functions in the period-end closing process for product cost collectors: • • • • • Template allocation for automatic allocation of process costs and activity types. Revaluation. 2006/Q2 © 2006 SAP AG. if active) The variance categories are settled to Profitability Analysis • The Schedule Manager simplifies the period-end closing process.

94 © 2006 SAP AG. all information in the system can be used as the cause value (cost driver). In principle. With the combination of overhead key and costing sheet. without manual effort). In this function. The process template is determined dynamically based on the following parameters: – – – The costing sheet for the application of overhead is selected with the valuation variant. The overhead key is either entered directly in the cost object or derived from the overhead group from the material master (costing view 1). the target costs of the process are calculated on the basis of the current standard costs.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 51: Template Allocation Template allocation is a new technique for passing on the costs of the Overhead Cost Controlling to cause as closely and “as comfortably as possible” (that is. you must define a template in which you use the function ORDER_TARGET_PROCESS_QUANTITY to calculate the actual process quantity. • For the previous example. you can assign a template in Customizing. All rights reserved. 2006/Q2 . • The template allocation technique allocates ABC processes and activity types of the cost centers. All objects of the Controlling are suitable for use as receivers. especially cost objects and profitability segments of the CO-PA.

networks. sales order items (if they are being used as cost objects). You control whether revaluation at actual prices is possible in Customizing in the parameters for the actual version that depend on the fiscal year. Revaluation at actual prices is performed in the period-end closing process for the product cost collector. general cost objects) In the Project System (projects (WBS elements). 95 . network activities) • 2006/Q2 © 2006 SAP AG. production orders and process orders. as well as in the master data of the activity type. You can revaluate activities and business processes at actual prices in the following components: • In Cost Object Controlling. All rights reserved. The cost object is charged with the difference between the actual price and the price originally allocated to it. internal orders. cost object hierarchies. for all cost objects (product cost collectors. You calculate actual prices in Overhead Cost Controlling.TFIN22_1 Lesson: Period-End Closing Figure 52: Revaluation at Actual Prices (1) You can determine the actual prices for activity types and business processes at the end of the period. The actual prices are the actual costs divided by the activity and process quantities consumed.

00 = 117.00 is charged to the product cost collector with the revaluation at actual prices function. 9 x 13. At the end of the period. the planned cost center cost differs from the actual cost. The planned price is 10.00 being allocated to the product cost collector.00 in total. However. revaluation at actual prices is illustrated using an activity type. All rights reserved.00. this results in 90.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 53: Revaluation at Actual Prices (2) In this example. The difference of 27. the total activity-related cost at the cost center is determined to be 117. At 9 allocated hours. At the planned price. 2006/Q2 . It also applies to business processes. only 9 hours were allocated instead of the 10 that were planned in the preliminary costing.00 per hour. 96 © 2006 SAP AG. In this example. that is. this results in a target price of 13.00 per hour.

order. The overhead calculation process generates the following postings: • • Overhead costs are charged to the cost objects (product cost collectors. The Overhead Cost Object (cost center. 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing Figure 54: Actual Overhead Calculation Actual overhead calculation allocates cost objects with actual overhead. The costs are updated using the secondary cost elements specified in the credit rows in the costing sheet. 97 . Actual overhead calculation uses the costing sheet entered in the product cost collector. Overhead is allocated to cost objects using quantity-based or percentage allocation rates. process) is credited. You can simulate overhead allocation (test run). All rights reserved. or general cost objects). manufacturing orders.

The operation quantities confirmed for the manufacturing orders or production versions are valuated at the target cost of the operation provided that the quantities are not scrap and no goods receipt has been entered. If you are using a product cost collector.Unit 3: Product Cost Controlling by Period TFIN22_1 Work in Process Figure 55: Work in Process (WIP) at Target Cost Calculating the WIP means valuating the unfinished goods (work in process). All rights reserved. The difference between the work in process in the current period and the work in process in the previous period corresponds to the inventory change of unfinished goods and is transferred to financial accounting when you settle. work in process is valuated at target cost. In Product Cost by Period. In Customizing. in many cases it is appropriate to calculate the target costs using the preliminary costing for the product cost collector. you can use a valuation variant to define which cost estimate should be used to calculate the target costs for the valuation of the work in process and the scrap. 2006/Q2 . 98 © 2006 SAP AG.

To identify the costing. and Results Analysis key. Based on an alternative material cost estimate (such as a modified standard cost estimate or an actual cost estimate). The current standard cost estimate. All rights reserved. Target costs can be calculated on the basis of: • • Planned costs (that is. 99 . enter a costing variant and costing version. The only Results Analysis keys that are relevant are those used for the calculation of work in process at target cost. Results Analysis version. 2006/Q2 © 2006 SAP AG. the costs calculated in preliminary costing for the manufacturing order or for the product cost collector). • You assign a valuation variant for work in process and scrap to a combination of controlling area.TFIN22_1 Lesson: Period-End Closing Figure 56: Customizing: Work in Process at Target Cost You can specify a valuation variant to select the cost estimate for the valuation of work in process and scrap variances at target cost.

because the costs are accrued). material overhead. All rights reserved. 100 © 2006 SAP AG.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 57: Customizing: Assignment Table You assign the following cost elements to line IDs: • • All cost elements with which an order is debited and credited. 2006/Q2 . you must assign these line IDs to category “N” (not included). If you want particular cost elements to be treated separately. for example. If you want no work in process to be created for entire line IDs (for example. you must create line IDs of category “K” (costs). You can specify a percentage that cannot be capitalized separately for each line ID. These groups can be based on the structure of the cost of goods manufactured in the cost component structure (cost component split). The entry 00004+++++ includes the cost elements from 400000 to 499999. and so on. With work in process at target cost. enter them unmasked (example: 0000415000). You can mask your entries. – – For valuation-relevant costs (such as direct material costs). direct production costs. all cost elements in the costing used for the calculation of target costs for the valuation of work in process (such as all cost elements listed in the preliminary cost estimate for the product cost collector). The line IDs break down the costs incurred for the order into direct materials costs.

All rights reserved. you specify with a Results Analysis category how the Results Analysis is handled and which Results Analysis cost elements of type 31 the Results Analysis is saved under on the cost object. 101 . you must assign this line ID to category “N” (not included). because the costs are accrued). • • For valuation-relevant costs (such as direct material costs).TFIN22_1 Lesson: Period-End Closing Figure 58: Customizing: Update Table In this step. If you want no work in process to be created for an entire line ID (for example. Figure 59: Customizing: Posting Rules Table 2006/Q2 © 2006 SAP AG. you must create line IDs of category “K” (costs).

The assignment is carried out: • By Results Analysis category: In many cases it will be sufficient to generate a posting rule for the work in process with a requirement to capitalize (category WIPR). Variance Calculation Figure 60: Variance Calculation: Target Version 102 © 2006 SAP AG. it debits Unfinished Goods Inventory (WIP) (balance sheet account) and credits Changes in Unfinished Goods Inventory (WIP) (income statement account). • You assign a balance sheet account and an account of the income statement to each Results Analysis category (such as each Results Analysis cost element).Unit 3: Product Cost Controlling by Period TFIN22_1 In this step. 2006/Q2 . When the work in process is settled. a posting document is generated in FI. When the system capitalizes the work in process. All rights reserved. you specify to which G/L accounts in Financial Accounting work in process is settled. If you have specified a profit center in the product cost collector. You cannot create cost elements in CO for the G/L accounts that you specify in the posting rules. data is also transferred to Profit Center Accounting. By Results Analysis cost element.

For this version. All rights reserved. target cost versions are used mainly to control the type of variance (total variance. choose planned costs as the control costs and current standard cost estimate as the target costs. WIP and scrap variances are always deducted from the actual costs. production variance. You compare the planned costs of the period calculated on the basis of an alternative material cost estimate (such as a modified standard cost estimate) with the actual costs of the period on the basis of the yield delivered to inventory in the period. Target cost version 2 (planning variance). The total variance equals the order balance. For this version.TFIN22_1 Lesson: Period-End Closing As of Release 4. you can deduct the scrap variances from the actual costs for the calculation of control costs. 103 . Target cost version 1 (production variance). choose actual costs as the control costs and standard cost estimate as the target costs. You cannot calculate planning variances for product cost collectors. • • • In Product Cost by Period. For this version. With target cost version 2. For this version. They can also be used to valuate the scrap variances. the costs in the preliminary order cost estimate are interpreted as control costs.5. 2006/Q2 © 2006 SAP AG. The scrap variation is calculated by valuating the unplanned scrap quantities with the target costs minus the planned scrap costs. In variance calculation. or planning variance). The unplanned scrap quantity is the difference between the actual scrap quantity of the operation and its target scrap quantity. choose actual costs as the control costs and alternative material cost estimate as the target costs. The base quantity for variance calculation is the yield. Target cost version 3 (production variance of the period). The standard system uses the following target cost versions: • Target cost version 0 (total variance). choose actual costs as the control costs and planned costs as the target costs.

Mixed-price variance: If the standard price of a material was costed using multiple procurement alternatives (mixed cost estimate). Remaining input variance: Because the price for material 1 changed. the goods movement was valuated at 11 (the price control specifies that valuation is at the moving average price). but 17 minutes were confirmed. This is the mixed-price variance.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 61: Variance Calculation: Variance Categories Examples for variance categories: Input price variances: Raw material 1 was valuated at 10 in the standard cost estimate. 2006/Q2 . Input quantity variance: Machine time of 15 minutes was planned. This results in a price variance of 1. Resource-usage variance: Raw material 2 is used instead of raw material 1. 104 © 2006 SAP AG. the material overhead is higher than planned. however. The costs for both raw materials are reported as resource-usage variances. All rights reserved. When the material was withdrawn from inventory. The difference between the planned and actual material overhead expense is reported as a remaining input variance. The activity price for the machine time is 5 per minute. This results in a quantity variance of 10. a later production without variances will still have a difference to the standard price.

This is the lot size variance.TFIN22_1 Lesson: Period-End Closing Lot size variance: If another quantity was used for production than previously generated in the product costing. Output price variance: The material is transferred to inventory at a price other than the standard price (such as a moving average price). it will determine only remaining variances. The difference is determined as an output price variance. Remaining variance: If the system cannot determine the target costs. the fixed costs per piece change. Figure 62: Addendum: Assembly Scrap and Operation Scrap 2006/Q2 © 2006 SAP AG. All rights reserved. that is. the fixed costs are adjusted proportionally with another quantity. 105 .

Assembly scrap increases the planned order quantity and also the quantity of the input materials. For example.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 63: Addendum: Planned Scrap The planned scrap rate reflects the planned material requirements and the planned internal activities. If you do not want the assembly scrap to affect the input quantities of certain input materials. the system increases the planned order quantity to 156.25. Assembly scrap can be calculated by the system on the basis of the operation scrap. Component scrap refers to materials that are faulty before they enter the production process. Component scrap increases the quantity of input materials. 106 © 2006 SAP AG. 2006/Q2 . Planned component scrap is taken into account in the standard cost estimate and therefore affects the standard price. if the assembly scrap for a material is 56. All rights reserved. set the Net indicator in the BOM for these materials and enter the operation scrap in the BOM. Variances in the actuals are considered input quantity variances. and is included in the standard cost estimate of the material. Planned operation scrap is the scrap that is expected to be incurred in an operation.25% and you create a production order for the material with a planned order quantity of 100 units.

The scrap variance quantity is the difference between the target scrap quantity (planned scrap quantity converted to yield) and the actual scrap quantity (confirmed scrap quantity).2) 0.8 = 212. 2006/Q2 © 2006 SAP AG. 20% scrap = x Therefore: (850 x 0.TFIN22_1 Lesson: Period-End Closing Figure 64: Variance Calculation: Scrap Variance (1) The scrap variance is the value of the scrap variance quantity. All rights reserved.5. The following formula calculates the target scrap quantity: 850 units = 80% (yield). 107 . The scrap variance quantity is valuated at target cost less planned scrap cost.

Lot size variances are calculated in the following formula: Lot size variance = Lot size-independent target costs x (1 – Control quantity / Planned quantity).00 per unit. All rights reserved. the costs that are independent of lot size (such as the setup and teardown costs) are 40. 108 © 2006 SAP AG.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 65: Variance Calculation: Scrap Variance (2) Figure 66: Variance Calculation: Lot Size Variance Lot size variances can be calculated for all target cost versions that report variances on the output side. In this example. Lot size variances are only calculated if the planned quantity does not equal the confirmed quantity (the delivered quantity). 2006/Q2 .

The actual cost is 840.00 for setup = 840. The goods receipts are valuated at 1. All rights reserved. The costs for 10 units of finished product delivered to inventory in the period were updated to the product cost collector. The mixed cost estimate calculates a mixed price.00.00 for materials. Figure 67: Variance Calculation: Mixed-Price Variance If you want to perform mixed costing in Product Cost Planning. you must create a procurement alternative for each production version and then define a mixing ratio. 109 . The mixed-price variance results from the difference between the target credit (actual quantity x standard cost of procurement alternative) determined in the variance calculation process and the actual credit posted at the time of the goods receipt (actual quantity x standard price). This price can be written to the material master as the standard price.200.00 for internal activities.00 (quantity delivered to inventory multiplied by the standard price as calculated in the standard cost estimate).00. mixed-price variances are reported as output price variances. Mixed-price variances arise when the system updates the mixed price as the standard price in the material master and valuates the stock with it. are 10 x 40. The target costs.TFIN22_1 Lesson: Period-End Closing Example: The standard price for a finished product as calculated in the standard cost estimate is 120. The difference between the target costs and credit is the lot size variance. If you have not activated the field mixed-price variance in the variance variant.00. 2006/Q2 © 2006 SAP AG. and 1 x 40. 10x 40. however.

Variances can only be calculated on a cost object if you have stored a variance key in its master record. You can specify the variance key as a plant-based default value in Customizing for Product Cost by Period or Product Cost by Order. the scrap variance may be valuated with the valuation variant specified in target cost version 0. The variance key is then transferred into all material master records created in the plant in question. it is transferred from there into the product cost collector (in Product Cost by Order. You specify the variance key in the costing view of the material master record. Even if you calculate variances in a different target cost version (such as target cost version 1). In the variance variant. You normally use the same valuation variant for the valuation of work in process at target cost and for the valuation of scrap variances.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 68: Customizing for Variance Calculation You always enter the valuation variant for scrap in target cost version 0. 2006/Q2 . you specify which variance categories you want the system to report. You link the variance variant to the target cost version. 110 © 2006 SAP AG. it is transferred into the manufacturing order). All rights reserved.

111 . the price difference is settled to Account-Based Profitability Analysis in a similar way as to Financial Accounting. 2006/Q2 © 2006 SAP AG. If the price control indicator is set to V. settlement debits the price difference account and credits the inventory change account. settlement debits the inventory account and credits the inventory change account. The value of the total variance and the work in process can also be transferred to Profit Center Accounting. The value of the total variance is posted. The value fields are assigned to the variances for each category and cost element. The value of the total variance is also updated in the Material Ledger (if active). You can settle the variance categories to Costing-Based Profitability Analysis (CO-PA). Settlement also transfers the work in process to Financial Accounting. The only variances that are relevant for settlement to Profitability Analysis are those calculated on the basis of target cost version 0. All rights reserved. If the price difference account has a corresponding cost element.TFIN22_1 Lesson: Period-End Closing Settlement Figure 69: Settlement If the price control indicator is set to S.

the Variances indicator must be selected and settlement to a profitability segment must be allowed. In the settlement structure. These structures control settlement to costing-based Profitability Analysis. All rights reserved. 2006/Q2 .Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 70: Customizing: Settlement Profile The settlement profile for a product cost collector must allow settlement to a material. you indicate whether you want to settle with source cost elements or with settlement cost elements. The settlement profile is defaulted through the order type of the product cost collector. The settlement profile also has fields for the allocation structure and the PA transfer structure. 112 © 2006 SAP AG. If you want to settle variances to Profitability Analysis.

TFIN22_1 Lesson: Period-End Closing Figure 71: Customizing: PA Transfer Structure In the PA transfer structure. 113 . 2006/Q2 © 2006 SAP AG. The values can either be differentiated by the fixed/variable indicator or transferred as a sum (Fixed/variable indicator = 3). Values and quantities must be transferred into different value fields. you specify which variance category and cost element groups are assigned to which value fields in Profitability Analysis. All rights reserved.

Unit 3: Product Cost Controlling by Period TFIN22_1 114 © 2006 SAP AG. All rights reserved. 2006/Q2 .

TFIN22_1 Lesson: Period-End Closing 109 Exercise 3: Period-End Closing Exercise Duration: 40 Minutes Exercise Objectives After completing this exercise. and later transferred to Financial Accounting (as a sum) and Profitability Analysis (in detail). period-based variances are generated according to their causes (variance categories). Your controlling department has decided to use ABC to allocate order processing costs. WIP calculation. and cost object settlement. All rights reserved. you will be able to: • Allocate process costs to the product cost collector using the allocation template and review the customizing settings for the template • Allocate overhead costs to the product cost collector and review the customizing settings for the costing sheet • Calculate WIP at target cost for the product cost collector and explain the customizing settings • Execute variance analysis for the product cost collector and analyze the result • Analyze the target cost for unplanned scrap of the finished product • Execute settlement of the WIP balance and the variances to FI and PA Business Example At the end of the period. During the subsequent variance calculation. variance calculation. revaluation of activity and process allocation at actual price. After allocation of all actual costs of the current period to the product cost collector. saved to the order. 1. Task 1: Complete the process cost allocation for the product cost collector for material R-F1##. apply the actual process cost to the production order for version 0 of the current period. WIP must be calculated at target cost and transferred to Financial Accounting. all cost objects are processed in period-end closing. Continued on next page 2006/Q2 © 2006 SAP AG. 115 . which consists of the typical steps as follows: template allocation. Using the individual processing transaction for Business Process Cost Allocation. Indirect warehousing costs are allocated to the product cost collector using the costing sheet.

□ □ 3. All rights reserved. determine the value of the process cost allocation. Determine whether this statement is true or false. This is because the number of cost objects is less than product costs per order. is improved by using product cost collectors. which have already been posted. Check the configuration settings for the determination of the process template. The performance of period-end closing activities.Unit 3: Product Cost Controlling by Period TFIN22_1 2. □ □ True False Continued on next page 116 © 2006 SAP AG. Determine whether this statement is true or false. □ □ 2. such as revaluation of activities. 2006/Q2 . From the detailed list display. What is the total cost and quantity for process 300900? 3. True False The revaluation of activity prices can be used to support the valuation strategy of Actual activity price of previous period. Determine whether this statement is true or false. True False The revaluation of actual prices follows the allocation of process costs and overhead costs. What process template is selected for the product cost collector? Task 2: 1.

TFIN22_1 Lesson: Period-End Closing Task 3: Calculate the overhead costs for the product cost collector for R-F1##. 3. A yield of ten pumps was confirmed for operation 0010. What costing sheet is assigned to the valuation variant for actual costs. This leaves a remaining WIP quantity of 4 pieces for operation 0010. Continued on next page 2006/Q2 © 2006 SAP AG. From the product cost collector WIP display access the detailed report by selecting WIP Explanation. calculate (WIP) value for your product cost collector. determine the value of the overhead calculation. The report dynamically explodes the costing details for operation 0010. All rights reserved. Remain in the WIP explanation report. This should reflect the quantities confirmed for the previous transactions. 117 . Display the configuration settings for the determination of the overhead costing sheet. 4. Using the individual processing transaction. From the detailed list display. Using the individual processing transaction. 2. 1. using the current period and Results Analysis version 0. calculate the overhead costs for the current period to the product cost collector. 3. Change the costing display to 4 pieces to match the WIP quantity. What are the total overhead costs? What cost center has been credited for the overhead allocation? 2. 1. display the preliminary cost estimate for the product cost collector. Using a different session. a yield of 5 pieces were confirmed for operation 0070 where 1 piece was also reported as scrap. valuation variant 007? Task 4: Calculate WIP for your product cost collector. Then.

Go to the Itemization report. All rights reserved. Compare the calculated total WIP amount with the remaining balance for your production order. and display the actual costs for the product cost collector. 2006/Q2 . They should be identical to include the process and overhead costs. Are they the same value? Can you explain this? 6. Change the display variant to view the costs by operations (grouped). 118 © 2006 SAP AG. Leave the preliminary cost estimate for the product cost collector. Compare the costs of the preliminary cost estimate with the calculated WIP costs.Unit 3: Product Cost Controlling by Period TFIN22_1 5. Explode the summation rows for operation 0010. Continue to display the WIP explanation report in the other session.

Choose Execute. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Period-End Closing → Single Functions → Template Allocation → Individual Processing (CPTE) Enter your material number. What is the total cost and quantity for process 300900? Answer: Select the order number. From the detailed list display. Using the individual processing transaction for Business Process Cost Allocation. a) Post the process costs. apply the actual process cost to the production order for version 0 of the current period. 1. 2. All rights reserved. Choose Goto → Period screen The fixed and variable costs for process 300900 are displayed. 1000 0 Current month Current year Continued on next page 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing Solution 3: Period-End Closing Task 1: Complete the process cost allocation for the product cost collector for material R-F1##. Select the indicator Detail lists. determine the value of the process cost allocation. Plant Version: Period: Fiscal year: Deselect test run. 119 .

and Environment 010. The revaluation of activity prices can be used to support the valuation strategy of Actual activity price of previous period. All rights reserved. Answer: False Continued on next page 120 © 2006 SAP AG. Check the configuration settings for the determination of the process template. The revaluation of actual prices follows the allocation of process costs and overhead costs. The performance of period-end closing activities. OH key SAP10. Answer: True 3.Unit 3: Product Cost Controlling by Period TFIN22_1 3. 2006/Q2 . This is because the number of cost objects is less than product costs per order. Task 2: 1. costing sheet COGM. Answer: True 2. What process template is selected for the product cost collector? Answer: Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Basic Settings for Product Cost by Period → Templates → Assign Templates to Cost Objects (KTPF) The process template COPC-10 is assigned to Controlling area 1000. such as revaluation of activities. is improved by using product cost collectors. which have already been posted.

1000 Current month Current year Continued on next page 2006/Q2 © 2006 SAP AG. 2. Select the indicator Dialog Display. calculate the overhead costs for the current period to the product cost collector. What are the total overhead costs? What cost center has been credited for the overhead allocation? Answer: From the Basic List. All rights reserved. 121 . a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Individual Functions: Product Cost Collector → Overhead → Individual Processing (CO42) Enter your material number. The cost center 4130 is credited as the sender. Choose Execute. 1. The value of the overhead is displayed. From the detailed list display. select Next List Level. Using the individual processing transaction.TFIN22_1 Lesson: Period-End Closing Task 3: Calculate the overhead costs for the product cost collector for R-F1##. determine the value of the overhead calculation. Select the indicator Detail lists. Plant Period: Fiscal year: Deselect test run.

Select WIP Explanation. Task 4: Calculate WIP for your product cost collector. 2006/Q2 . a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period End Closing → Single Functions: Product Cost Collectors → Work in Process → Calculate (KKAS) Enter your material number. 2. Plant 1000 WIP to Period: Current month Fiscal Year: Current fiscal year Results Analysis version 0 Deselect Test Run. What costing sheet is assigned to the valuation variant for actual costs. using the current period and Results Analysis version 0. Choose Valuation Variant. Choose Execute.Unit 3: Product Cost Controlling by Period TFIN22_1 3. Continued on next page 122 © 2006 SAP AG. Display the configuration settings for the determination of the overhead costing sheet. Using the individual processing transaction. 1. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Product Cost Collectors → Check Costing Variants for Product Cost Collectors → Costing Variants for Valuation of Internal Activities (OPL1) Select Costing Variant PPP3. All rights reserved. Select the Overhead tab. a) Choose the product cost collector. The costing sheet Costs of Goods Manufactured (COGM) is assigned to this valuation variant. Choose Details. From the product cost collector WIP display access the detailed report by selecting WIP Explanation. valuation variant 007? Answer: Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. calculate (WIP) value for your product cost collector.

display the preliminary cost estimate for the product cost collector. Explode the summation rows for operation 0010.TFIN22_1 Lesson: Period-End Closing 3. Continued on next page 2006/Q2 © 2006 SAP AG. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Master Data → Product Cost Collector → Edit (KKF6N) Enter your material R-F1##. Enter your material R-F1##. a) Remain in the WIP explanation report. a) Select the Itemization report. a yield of 5 pieces were confirmed for operation 0070 where 1 piece was also reported as scrap. Using a different session. Go to the Itemization report. 4. Then. In addition. In Costs Based On select User Entry and enter 4 pieces. All rights reserved. This leaves a remaining WIP quantity of 4 pieces for operation 0010. Change the display variant to view the costs by operations (grouped). 123 . The operation subtotal is displayed. 5. A yield of ten pumps was confirmed for operation 0010. choose Select Layout. the overhead cost (which is not assigned to a specific operation) has been included in the WIP calculation. Select Operations (Grouped). The report dynamically explodes the costing details for operation 0010. They should be identical to include the process and overhead costs. Change the costing display to 4 pieces to match the WIP quantity. Select the Header tab. Select Display Cost Estimate. To review itemization by operation. This should reflect the quantities confirmed for the previous transactions. Enter plant 1000. Compare the costs of the preliminary cost estimate with the calculated WIP costs.

WIP is calculated by using the actual remaining quantity at the planned cost. Choose Execute. This leaves a remaining WIP quantity of 4 pieces. a quantity of 10 pieces was confirmed for operation 0100. Are they the same value? Can you explain this? Answer: Display the Planned/Actual Cost Report. With Product Cost by Period. Then. The balance is displayed on the bottom of the report. No.Unit 3: Product Cost Controlling by Period TFIN22_1 6. 5 pieces were confirmed and 1 additional piece was reported as scrap. and display the actual costs for the product cost collector. Continue to display the WIP explanation report in the other session. 124 © 2006 SAP AG. Enter plant 1000. All rights reserved. 2006/Q2 . For this product cost collector. Compare the calculated total WIP amount with the remaining balance for your production order. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Information system → Reports for Product Cost by Period → Detailed Reports → For Product Cost Collectors (KKBC_PKO) Enter your material R-F1##. the remaining order balance is not the same as the calculated WIP at target cost. Leave the preliminary cost estimate for the product cost collector. Time Frame: Cumulated.

TFIN22_1 Lesson: Period-End Closing Lesson Summary You should now be able to: • Describe the typical steps for period-end closing in make-to-stock production with Product Cost by Period • Calculate work in process (WIP) at target cost and explain the associated Customizing • Carry out variance analysis • Describe the integration of period-end closing 2006/Q2 © 2006 SAP AG. 125 . All rights reserved.

2006/Q2 . Sales controlling is only carried out in Profitability Analysis (CO-PA). You want to examine the representation of the production using “Repetitive Manufacturing” and the difference between “S” and “V” price-controlled material. 126 © 2006 SAP AG. All rights reserved. you will be able to: • • Describe repetitive manufacturing Assess the different strategies of material valuation Business Example A manufacturer produces various types of make-to-stock pumps. A less popular type should instead be only produced based on lot size with production orders and only when the stock in the warehouse drops below the reorder point. The popular types are produced in a continuous production process and mapped in the system with repetitive manufacturing.Unit 3: Product Cost Controlling by Period TFIN22_1 Lesson: 120 Addendum: Repetitive Manufacturing and Material Valuation Lesson Duration: 30 Minutes Lesson Overview Lesson Objectives After completing this lesson.

The planned requirements for repetitive manufacturing are normally created automatically by material requirements planning (MRP).TFIN22_1 Lesson: Addendum: Repetitive Manufacturing and Material Valuation Repetitive Manufacturing Figure 72: Repetitive Manufacturing Repetitive manufacturing refers to production planning and control without the use of production orders. The goals of repetitive manufacturing are as follows: • • Creation and revision of production quantities on a period and quantity basis (reduction in individual lot and order-specific processing) Reduction in production control and simpler backflushing tools (with the option of using the full scope of the PP functionality) 2006/Q2 © 2006 SAP AG. Production planning and control uses the planned orders for capacity planning and scheduling. All rights reserved. although they can also be created manually. 127 .

Costs are recorded on a product cost collector.Unit 3: Product Cost Controlling by Period TFIN22_1 Figure 73: Repetitive Manufacturing: Important Characteristics relevant to Cost Object Controlling Cost object controlling is carried out for the controlling level of the material. All rights reserved. Figure 74: Repetitive Manufacturing Profile Specific master data is required for Repetitive Manufacturing. This includes the repetitive manufacturing profile and the product cost collector. With repetitive manufacturing. the controlling level is normally the production version or material. The production version(s) are created in the material master record. You require a BOM and a routing. 128 © 2006 SAP AG. 2006/Q2 .

If you want to calculate work in process and scrap during period-end closing. The standard price remains valid for at least one period. 2006/Q2 © 2006 SAP AG. you must record backflush quantities at the reporting points. If the activities are to be backflushed. In addition. The total inventory value is the total inventory quantity multiplied by the standard price. All rights reserved. often up to a year or longer.Overview (1) • Valuation at Standard Price (S price) – – – – The standard price remains constant for one or more periods. The standard price is normally calculated in a standard cost estimate for the material. the activity costs posted to the cost objects of the hierarchy can be distributed to the assigned product cost collectors. 129 . if necessary). you define in the repetitive manufacturing profile whether the standard cost estimate for the material or the preliminary cost estimate for the product cost collector should be used to determine the activity quantities for the backflush. and post the activities to the relevant cost object node. you can assign the product cost collector to a cost object hierarchy. Material Valuation Addendum: Material Valuation . The period is defined in Materials Management (MM). During period-end closing. The price control field for the material is set to “S”.TFIN22_1 Lesson: Addendum: Repetitive Manufacturing and Material Valuation The repetitive manufacturing profile in the master data of the MRP view determines whether • • • Activities are backflushed Reporting points are used A goods receipt is automatically posted after the last reporting point has been confirmed If you do not want to post any activities through reporting point confirmations. you can enter an internal activity allocation in the Controlling module and specify the product cost collector for the material (and production version. The price is determined by the “Actual” valuation variant for the product cost collector.

The price control field for the material is set to “S”. The material is not revaluated when the variances for the product cost collector are settled to FI.Unit 3: Product Cost Controlling by Period TFIN22_1 Addendum: Material Valuation – Overview (2) • Valuation at the Moving Average Price (V price) For externally procured materials. the moving average price is recalculated after every goods movement and each time an order is settled. the system calculates a new statistical moving average price and transfers this statistical value to the accounting view of the material master record. Addendum: Valuation of Materials at Standard Price Advantages • • • Standard cost accounting • Analysis of the effects of changes in the production scenarios Allocation of variance categories • to costing-based Profitability Analysis (CO-PA) Disadvantages Inventories are valued consistently with planned costs Products with widely fluctuating purchase prices or frequent changes in the production process should often be valuated at actual cost Therefore: Valuation at standard price is recommended for materials manufactured in-house. – The price control field for the material is set to “V”. Valuation at the Periodic Output Price. the moving average price is recalculated after every goods receipt and invoice receipt. 130 © 2006 SAP AG. – The moving average price is the total inventory value of the material divided by the total quantity in inventory. During settlement. you can define a valuation variant for the valuation of the goods receipts. All rights reserved. – – The periodic output price is recalculated each time a period is closed. – • For internally manufactured materials. a price difference account is debited with the total variance of the product cost collector for the period. If the price control indicator is set to “S” (standard price) in the material master record. – For internally manufactured materials. 2006/Q2 .

All rights reserved. the inventory account for the material is debited with the total variance of the product cost collector for the period. the actual costs are settled to the price difference account. Variances are not rolled up through the production structure. Addendum: Valuation of Materials at Moving Average Price Advantages • Variances caused by different purchase prices of externally procured materials are included in inventory valuation. Variances arising during the production of materials are included in inventory valuation. If no goods were received into inventory during the period. The following posting is made in FI: • The inventory account is debited and the inventory change account is credited. If the inventory quantity is less than the quantity received into inventory from the order. see the documentation in Cost Object Controlling. For information on the effects of the moving average price on internally manufactured materials. • • • Therefore: Valuation at moving average price is not recommended for materials manufactured in-house.TFIN22_1 Lesson: Addendum: Repetitive Manufacturing and Material Valuation Settlement results in the following posting in FI: The price difference account is debited and the inventory change amount is credited (inventory change). updated in the accounting view of the material master record and the inventory revalued accordingly. The corresponding revaluation document is generated in FI. The moving average price is re-calculated during settlement. • Disadvantages If material movements and order settlements overlap. If the inventory quantity is equal to or greater than the quantity produced by the order. 2006/Q2 © 2006 SAP AG. 131 . It is not possible to settle variance categories to CO-PA. If the price control indicator is set to V in the material master record. the system settles the difference to the price difference account. the moving average price may be incorrect. the full order balance is posted to the inventory account.

2006/Q2 . All rights reserved. Why should materials produced in-house be controlled with S price? 132 © 2006 SAP AG.Unit 3: Product Cost Controlling by Period TFIN22_1 Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions.

TFIN22_1 Lesson: Addendum: Repetitive Manufacturing and Material Valuation Lesson Summary You should now be able to: • Describe repetitive manufacturing • Assess the different strategies of material valuation 2006/Q2 © 2006 SAP AG. 133 . All rights reserved.

All rights reserved.Unit Summary TFIN22_1 Unit Summary You should now be able to: • Create the master data for a production order and a product cost collector • Explain the Customizing for a “decoupling scenario” • Carry out preliminary costing for a product cost collector • Carry out goods movements and confirmations for the production order • Make direct postings from Financial Accounting to the product cost collector • Describe the typical steps for period-end closing in make-to-stock production with Product Cost by Period • Calculate work in process (WIP) at target cost and explain the associated Customizing • Carry out variance analysis • Describe the integration of period-end closing • Describe repetitive manufacturing • Assess the different strategies of material valuation 134 © 2006 SAP AG. 2006/Q2 .

It should be ascertained before running the demo process whether the CATT ran successfully. For the entry with batch. For raw material T-RF2xx. The instructor and participants must maintain or simply delete the resource selection conditions in recipe phase 230 before executing the demo process or the exercises. Unit Overview This unit shows controlling by order using the example of make-to-stock production based on lot size in the process industry. raise the quantity to 30. Costing 1 view behind the Joint Production button. All rights reserved. you will be able to: • • • • • • • • Describe the features of Product Cost by Order Describe the features of Cost Object Controlling for joint production Explain process manufacturing master data Perform goods movements transactions and confirmations for the process order Explain period-end closing with partially delivered production orders Explain WIP at actual cost Explain period-end closing with delivered production orders Explain the differences between the controlling methods of Product Cost by Order and Product Cost by Period 2006/Q2 © 2006 SAP AG. 135 . This is the case if the distribution rule in the T-FF120 material master. Answer “yes” to the system message regarding the adjustment of the quantities. if this was not already done by the CATT for the course. is maintained. Unit Objectives After completing this unit. Now the release can be carried out.Unit 4 129 Product Cost Controlling by Order The instructor executes the process as “Group 20” (not 00!) (and material T-FF120). you will find two entries. If the release of the process order is rejected. go to the material list of the order. For the entry without batch set the quantity to 0.

.......................................215 Exercise 11: Alternative: Period-End Closing with Delivered Process Orders ................169 Exercise 7: Alternative: Simultaneous Costing.............159 Lesson: Simultaneous Costing..........................................187 Exercise 9: Alternative: Period closing with Partially Delivered Process Orders .............................................................166 Exercise 6: Simultaneous Costing .....................................227 136 © 2006 SAP AG......207 Exercise 10: Period-End Closing with Delivered Process Orders ......... 2006/Q2 ...............................................................................137 Exercise 4: Master Data and Preliminary Costing ..................175 Lesson: Period-End Closing with Partially Delivered Production Orders 180 Exercise 8: Period-End Closing with Partially Delivered Process Orders .....................................Unit 4: Product Cost Controlling by Order TFIN22_1 Unit Contents Lesson: Master Data and Preliminary Costing....... All rights reserved......................149 Exercise 5: Alternative: Master Data and Preliminary Costing ...........199 Lesson: Period-End Closing with Delivered Production Orders ....

137 . which are to be mapped as co-products. Business Example The production type is make-to-stock. Fertilizer manufacturing also produces side products. In this scenario. Fertilizer is produced in a process manufacturing environment. Additional costs are incurred by quality control checks and waste removal. Sales Controlling is performed only in Profitability Analysis (CO-PA). you will be able to: • • • Describe the features of Product Cost by Order Describe the features of Cost Object Controlling for joint production Explain process manufacturing master data Please use the materials from group 20 for the demo process.TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson: 131 Master Data and Preliminary Costing Lesson Duration: 60 Minutes Lesson Overview • Master Data – Production orders – Process orders Preliminary Costing • Lesson Objectives After completing this lesson. Raw materials and machine time are consumed. 2006/Q2 © 2006 SAP AG. we will use a process order to demonstrate Product Cost by Order. not those from group 00!. All rights reserved. The procedures for Product Cost by Order are the same regardless of whether a manufacturer uses process orders or production orders.

Unit 4: Product Cost Controlling by Order TFIN22_1 A fertilizer manufacturer wants to measure and analyze his process costs with the SAP System. the order is debited at the standard price. Variance Analysis: After the last goods receipt. All goods issues and goods receipts associated with the joint production of the fertilizer and acid are valuated at the standard price. The manufacturer determines the variances for each item by comparing the preliminary cost estimate (planned costs for the order) with the standard cost estimate (planned costs for the material). All rights reserved. When fertilizer and acid are received in the warehouse. 2006/Q2 . The manufacturer enters the actual costs for the materials. These cost estimates use the information in the recipe. If the process order has not been delivered by the end of the period. Master Data Figure 75: Production Order 138 © 2006 SAP AG. The information in the process order is then used to calculate the planned costs for the fertilizer and acid. the manufacturer can calculate WIP for the sales order items. the manufacturer creates a planned order for 1000 kilograms. and overhead with reference to the process order. The fertilizer produced is not make-to-order. the manufacturer compares the actual cost of the order with the standard cost estimate and the preliminary cost estimate for each order item. activities. In requirements planning. The difference between the actual costs and the debit value at goods receipt is settled in stock and Profitability Analysis. • The manufacturer carries out standard cost estimates at the beginning of the fiscal year. The manufacturer then converts this order into a process order. The standard cost estimate calculates the standard price for the fertilizer.

A Phase is a self-contained work step that describes one part of the production process in detail. You can specify the following parameters in Customizing for production dependant on order type: • • Which Selection ID is used to select the routing. The master recipe contains operations and phases. You can manually assign material components and production resources to this operation. 139 . You can also work without a BOM by assigning the required components to the operations manually. In this case. Figure 76: Process Order If you are manufacturing on the basis of process orders.Process Industries. Operations consolidate several phases and are each executed on a primary resource. which you can check using the operation control key and the operation details screen. Costing relevancy is specified in the routing according to operation. and variance keys) are located in the order header on the Control data tab. It uses 2006/Q2 © 2006 SAP AG. which you can check in the BOM item details screen. Costing relevancy is specified in the BOM according to BOM item. the system uses a Master Recipe and the relevant Materials List in accordance with the parameters for the order type specified in Customizing for Production Planning . All rights reserved.TFIN22_1 Lesson: Master Data and Preliminary Costing If you use production orders. The control data for Cost Object Controlling (such as costing variants. an operation is generated automatically when you create an order. Results Analysis keys. The BOM and routing can also be selected using a production version. You can also work without a routing. Which BOM usage is used to select the BOM. the system transfers a routing and a BOM to the master data of the order header.

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the primary resource of the overall operation. Operations and phases can use secondary resources in addition to the primary resource. Resources are linked to cost centers and use their activity types. The sequence of steps in the production process is defined by the sequence of phases. For each operation or phase, you plan one or more materials required for the execution of that step. In process manufacturing only the phases and not the operations are relevant to costing. A phase contains standard values for activities. These standard values are used to determine dates, capacity requirements, and costs. The “Relevant to costing” indicator must be selected for the phase. If the materials list contains co-products, you can add additional co-products. You cannot, however, delete co-products from the materials list. To check whether a material component is relevant to costing, go from the materials list to the details screen of the material. For process manufacturing without joint production, the costs are updated to the order header.

Figure 77: Material Flow in the Process Industry

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The illustration shows the following: • Input materials (raw materials and semi-finished products) used in the manufacturing process. These materials debit the manufacturing order when they are withdrawn from inventory (goods issue posting). Intra material (material type INTR), which is temporary and exists only between production phases, within the production process. Intra materials appear in the material list as items of category “M”, but are not costed. If the process is interrupted because of a malfunction, however, an intra material may have to be put into inventory. In this case, it is valuated with a price in the material master that is selected using the valuation variant for the valuation of goods received. Remaining materials, which are produced during the manufacturing process. Remaining materials are depicted as by-products. The use of a catalyst added during the manufacturing process, but later withdrawn again. The catalyst is a Circulating Material. You can specify in the material list whether the costs for a circulating material should be taken into account. The system selects a price for the circulating material from the material master record. If the circulating material is flagged as relevant to costing, the material costs appear in the itemization twice: once with a plus sign and once with a minus sign. The balance represents the material usage costs.

• •

The production of one or more products simultaneously: If multiple products are produced during the same manufacturing process, such products are known as co-products.

Figure 78: Definition of Co-Product

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Joint production produces several products during one manufacturing process. Standard costs, planned costs, and actual costs for individual co-products (also called joint products) in the process are usually calculated using a cost apportionment structure that is specified in the material master. A co-product is a basic material produced by a joint process along with other basic materials. If a material is a co-product, you select the Co-product indicator in the MRP view or costing view of the material master record. In the materials list, all co-products (both leading co-products and non-leading co-products) are items with a negative quantity. Leading co-products are called primary products. For primary products, you also select the Co-product indicator in the BOM. Material master records can be created for process materials as well. A process material represents the production process of several co-products. An apportionment structure is specified in the material master record for the primary product or process material. From a logistical point of view, the use of process materials is not recommended. Special feature: Fixed-price co-products. You can flag a co-product in the material master as being a fixed-price co-product. For detailed information on fixed-price co-products, see the documentation for Product Cost Planning.

Figure 79: Definition of By-Products

Remaining materials are depicted as by-products. A by-product is manufactured automatically during the production of another product. You enter a by-product with a negative quantity in the materials list of a primary product or process material. For by-products, you do not select the Co-product indicator in the material master record or in the BOM.

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If the by-product is flagged as relevant to costing, the costs of the co-products are subtracted from the manufacturing costs using the net realizable-value method. For example, the manufacturing cost of the primary product or the other co-products amounts to the total cost of the production process less the costs for the by-products. In Product Cost Planning, the manufacturing costs of a by-product can be calculated in two ways: • • Using a price from the material master The by-product can be manufactured using an alternative production structure, and a corresponding cost estimate for the by-product already exists. In this case, the cost components of the cost component split of the by-product are subtracted.

In the actuals, the order header is credited when a by-product is placed into the inventory. This reduces the total cost of the production process.

Figure 80: Process Order with Co-Products

In most cases, co-products are manufactured on the basis of process orders. However, joint production can also be carried out on the basis of production orders. This example uses process orders. The system recognizes joint production from the material master record. For each co-product (including the primary product), the system generates an order item and turns on the MultItems indicator. The planned quantities and the quantities received into inventory of the products manufactured are updated to the order item.

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The following events take place in Cost Object Controlling: • The planned costs of the manufacturing order are calculated using the quantity structure specified in the manufacturing order. These costs are distributed to the co-products using the apportionment structure. The actual costs are collected on the header of the manufacturing order. At the end of the period, the actual costs on the order header are distributed to the order items using the apportionment structure. Work in process and variances are determined at the level of the order item. The order items are then settled.

You maintain the apportionment structure in the material master or in the process order.

Preliminary Costing

Figure 81: Process Order with Co-Products: Process Chain

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Figure 82: Preliminary Costing: Overview

The system valuates the planned quantities of the material components using the materials list. The system determines the planned activity quantities using the master recipe. To valuate the planned material components, activities, and business processes, the system uses the planned valuation variant specified in the default values for the order type/plant. Overhead costs are calculated using the costing sheet specified in the “planned” valuation variant. If template allocation is being used, the template is selected using the costing sheet and the overhead key. The planned costs are updated to the manufacturing order.

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Figure 83: Result of Preliminary Cost Estimate for Joint Production

A preliminary cost estimate is normally generated for the process order when it is saved or released, in accordance with the Customizing settings in the default values for the order type and plant. The order costs are calculated for the order header and distributed to the co-products on the basis of equivalence numbers. The equivalence numbers are specified in an apportionment structure. When a process order is created, the system automatically generates the following: • On the basis of the apportionment structure, the system generates a settlement rule which settles the total order cost to the co-products (the order items). The costs are settled to the order items both in the preliminary cost estimate and in the actuals. The system generates a settlement rule for each item, in accordance with the default rule. These settlement rules control the settlement of the items to the respective material.

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Figure 84: Co-Products: Cost Apportionment Method

An apportionment structure is used to apportion the costs to the primary products and co-products. The apportionment structure is specified in the production version or in the material master record of the leading co-product. It can also be specified directly in the process order. In Product Cost Planning, costs are assigned to the co-products by cost component so that the cost component split can also be used in the costing-based Profitability Analysis (CO-PA) for valuation purposes. In the preliminary cost estimate for the process order, the planned costs are distributed (settled) to the co-products. Use a source structure for maintaining different equivalence numbers depending on the posted cost elements. You assign cost element intervals to the items of the source structure. For settlement, you can assign different equivalence numbers to each source assignment. Example: You can distribute the material costs to the co-products at a ratio of 3:2 but the overhead costs at 1:1.

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enter the costing variant and valuation variant in the order type. For preliminary costing and simultaneous costing. In this case. That is. This ensures that settlement type FUL (full settlement) is specified in the settlement rule for process orders of the relevant order type. All rights reserved. A Results Analysis key must be specified for all manufacturing orders for which you want to determine work in process (WIP). which was defined for WIP calculation at actual cost. This defines the valuation procedure for materials. do not select the “Product cost collector” indicator. and business processes. 2006/Q2 . internal activities.Unit 4: Product Cost Controlling by Order TFIN22_1 Figure 85: Process Order Customizing Process orders are orders of order type 40 (process order). collect the costs directly on the process order. external activities. specify the default rule PP1 (Production Material Full Settlement) in the “Cost-Accounting-Relevant Default Values for Order Types and Plants” table. variances are not determined until the order has the status delivered or technically completed. The default values for the order type/plant are transferred to the process order when it is created. The same procedure is used with production orders. Process orders are usually analyzed by lot size. It also determines which overhead structure is used to calculate overhead. 148 © 2006 SAP AG. If you want to analyze product costs by lot. Use a Results Analysis key. To do this.

Some of the production processes in your company yield co-products in addition to the intended manufactured product. T-FF1## in plant 1100. What co-product has been assigned to T-FF1##? What is the apportionment of costs for T-FF1## and this co-product? Continued on next page 2006/Q2 © 2006 SAP AG. Accounting procedures for joint production are only available when the Product Cost by Order method is utilized. has been identified as a co-product.TFIN22_1 Lesson: Master Data and Preliminary Costing 143 Exercise 4: Master Data and Preliminary Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise. Before you create a process order. verify the material master. Therefore. you will be able to: • Display the joint production master data for a co-product • Create a process order and explain the control data of the process order • Display the settlement parameters for a joint production order • Explain the settlement rule for the settlement type FULL • Analyze preliminary costing for a joint production Business Example Some products manufactured by your company are to be handled using the Product Cost by Order controlling method. Task 1: Engineering has provided you with a master recipe for fertilizer that includes co-products. From the costing view of the material master record. You have been asked to calculate the costs of the joint production. you decide to use the process order for Product Cost by Order control. verify that the leading co-product. and supports cost analysis at the production or process order level. 149 . All rights reserved. Favorites → Material Master → Material → Display → Display current (MM03) 1. 2. This allows controlling to focus on the total manufactured quantity of the order. The production process and the materials are supplied by plant 1100.

150 © 2006 SAP AG. 2006/Q2 . Display the Material list and check whether the co-product indicator is active for material T-FF3##. Logistics → Production . plant 1100. All rights reserved. will this material be managed as a co-product or by-product? Is the indicator selected? If not. If this indicator is not selected.Process → Process Order → Process Order → Create → With Material. Which settlement type is entered? What are the consequences of this for settlement? Settlement type: Consequences: Continued on next page 2. production version 0001. Which receivers are entered? Why? Receivers: Why?: 4. Then save the recipe. Select Enter. Go to the resource selection criteria by clicking on the symbol behind the resource name. and analyze the master data of the process order. T-FF1## T-FF3## Check the master recipe for material T-FF1##. Enter production plant 1100 and order type PI01. choose Add to favorites. If you see that a classification has been entered for the resource in operation 200 (shown by a check mark in the Classification column): Go to the detail screen for operation 200 by double-clicking the operation number. display the settlement rule. Task 2: Create a process order for the production of the fertilizer. From the process order header. Create a process order for 1000 liters of material T-FF1##. 1. will the material be managed as a co-product or by-product? 3.Unit 4: Product Cost Controlling by Order TFIN22_1 Co-product Material Costs Production Costs Other Costs 3. (COR1) Before continuing. Use forwards scheduling and enter today’s date as the start date. Select the entry REAK_00 and delete it.

When prompted by the system. Here. Will the planned costs be calculated automatically when the order is saved? Determine whether this statement is true or false.: Continued on next page 2006/Q2 © 2006 SAP AG. True False Release the process order. examine the error message closely. Display the Control data for the process order. Which costing sheet was assigned to the process order? How was the costing sheet determined? Costing sheet: Determined by: 7. Which order number is given? If prompted to. What costing variants are entered for the preliminary costing and simultaneous costing? How were the costing variants determined? Planned costing variant: Actual costing variant: Determined by: 6. the second entry (with batch) to 30 KAI. 10. Now you can release the process order. If material T-RF2## requires batch determination. □ □ 9. assign the batch numbers A## to T-FF3# and B## to T-FF3## Process order no. Save the process order. branch to the Material List. All rights reserved. have the quantities calculated again. Which overhead key is assigned to the process order? How is the overhead key determined? Overhead key: Determined by: 8. If you receive an error message stating that release is not possible. change the requirement quantity for the first entry (without batch) to 0 KAI.TFIN22_1 Lesson: Master Data and Preliminary Costing 5. 151 .

but only for order item 2.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 3: Generate an Order Costs Report in the information system of Product Cost by Order. T-FF3##. All rights reserved. 2006/Q2 . 2. The total planned costs for T-RF1## are displayed. Total planned costs: Execute the report again. Choose Execute. Is this consistent with the apportionment of material costs defined in the settlement rule of the process order? Determine whether this statement is true or false. Examine the calculated costs generated for the process order and check the apportionment of the planned costs for the co-products. □ □ True False 152 © 2006 SAP AG. What apportionment to co-product T-FF3## was posted for component T-RF1##? Apportionment to T-FF3##: 3. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information system → Reports for Product Cost by Order → Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items ## On/Off Select Layouts and select layout 1SAP02 (cost trend). 1. Enter your order number.

2. Select Enter. Select Enter.TFIN22_1 Lesson: Master Data and Preliminary Costing Solution 4: Master Data and Preliminary Costing Task 1: Engineering has provided you with a master recipe for fertilizer that includes co-products. Select apportionment structure 0001. Favorites → Material Master → Material → Display → Display current (MM03) 1. The Co-product indicator is selected. T-FF1## in plant 1100. select Joint production. Select Enter. 153 . Enter plant 1100. Before you create a process order. and select Equivalence Numbers. From the costing view of the material master record. Select view Costing 1. verify the material master. The equivalence numbers are displayed on the Equivalence numbers dialog box. Hint: If the display of the equivalence numbers only shows equivalence values for materials. T-FF1## T-FF3## Continued on next page 2006/Q2 © 2006 SAP AG. All rights reserved. The production process and the materials are supplied by plant 1100. use the scroll bar on the right hand side of the dialogue box to see the other equivalence numbers. has been identified as a co-product. verify that the leading co-product. a) Enter T-FF1## . What co-product has been assigned to T-FF1##? What is the apportionment of costs for T-FF1## and this co-product? Co-product Material Costs Production Costs Other Costs a) b) From the Costing 1 view.

Process → Process Order → Process Order → Create → With Material. Logistics → Production .Process → Master Data → Master Recipes → Recipe and Material List → Change Material T-FF1##. Use forwards scheduling and enter today’s date as the start date. Go to the resource selection criteria by clicking on the symbol behind the resource name. Logistics → Production . plant 1100. and analyze the master data of the process order. Enter production plant 1100. Then save the recipe. Select Enter. Then save the recipe. Enter production plant 1100 and order type PI01.Unit 4: Product Cost Controlling by Order TFIN22_1 3. Create a process order for 1000 liters of material T-FF1##. a) Check the master recipe. Check the master recipe for material T-FF1##. Select the entry REAK_00 and delete it. Enter material T-FF1##. If you see that a classification has been entered for the resource in operation 200 (shown by a check mark in the Classification column): Go to the detail screen for operation 200 by double-clicking the operation number. Task 2: Create a process order for the production of the fertilizer. 2006/Q2 . Enter today’s date as the start date. Select Enter. Select the entry REAK_00 and delete it. 1. (COR1) Before continuing. a) Create a process order for 1000 liters of material T-FF1##. Go to the resource selection criteria by clicking on the symbol behind the resource name. Enter process order type PI01. production version 0001. Change the scheduling type to Forwards. Enter the quantity of 1000. Continued on next page 154 © 2006 SAP AG. Use forwards scheduling and enter today’s date as the start date. Plant 1100. Production version 0001 If you see that a classification has been entered for the resource in operation 200 (shown by a check mark in the Classification column): Go to the detail screen for operation 200 by double-clicking the operation number. choose Add to favorites. All rights reserved.

will this material be managed as a co-product or by-product? Choose Goto → Materials List. Which receivers are entered? Why? Receivers: Why?: a) From the process order header. will the material be managed as a co-product or by-product? a) Display the Material list and check whether the co-product indicator is active for material T-FF3##. What costing variants are entered for the preliminary costing and simultaneous costing? How were the costing variants determined? Planned costing variant: Continued on next page 2006/Q2 © 2006 SAP AG. The co-product indicator is selected for T-FF3##. If this indicator is not selected. will this material be managed as a co-product or by-product? Is the indicator selected? If not. All rights reserved. This means that you can only calculate variances and settle the order when the status is either “delivered (final)” or “technically complete”. 4. Which settlement type is entered? What are the consequences of this for settlement? Settlement type: Consequences: a) The settlement type is FUL = full settlement. settlement type FUL is used for the controlling method Product Cost by Order. the material will be managed as a by-product. This is due to the apportionment rule found in the material master for T-FF1##. Double-click item 0040. Display the Control data for the process order. From the process order header. Display the Material list and check whether the co-product indicator is active for material T-FF3##. 3. Which receivers are entered? Goto → Header Header → Settlement Rule Both T-FF1## and T-FF3## are entered as receivers. 155 . If this is not selected. 5. As a rule. display the settlement rule. If this indicator is not selected.TFIN22_1 Lesson: Master Data and Preliminary Costing 2. display the settlement rule.

Will the planned costs be calculated automatically when the order is saved? Answer: True The planned costs are calculated automatically when the order is saved. The costing sheet was determined by the valuation variant assigned to the costing variant. If material T-RF2## requires batch determination. Which costing sheet was assigned to the process order? How was the costing sheet determined? Costing sheet: Determined by: a) Costing sheet: COGM The name of the costing sheet is provided on the Control data tab page... 8. of settlement rules in settlement profile must be . If you receive an error message stating that release is not possible.. 3! 6. All rights reserved. examine the error message closely. Planned costing variant: PPP1 Actual costing variant: PPP2 This was determined by the order type/plant default values. assigned to the material T-FF1## in the costing view of the material master. This is determined by the planned cost calculation setting: Determine planned costs when saving... Select the Control data view.. Here. 7.. 2006/Q2 .Unit 4: Product Cost Controlling by Order TFIN22_1 Actual costing variant: Determined by: a) Exit the settlement rule by selecting the green arrow to go back.. Release the process order.. Maximum no. change Continued on next page 156 © 2006 SAP AG.. 9. Which overhead key is assigned to the process order? How is the overhead key determined? Overhead key: Determined by: a) Overhead key: SAP11 The overhead key is determined from the overhead group... branch to the Material List..

the second entry (with batch) to 30 KAI. Continued on next page 2006/Q2 © 2006 SAP AG. Save the process order. When prompted by the system. Which order number is given? If prompted to. Total planned costs: a) The total planned costs for T-RF1## are displayed. a) Release the process order. have the quantities calculated again.TFIN22_1 Lesson: Master Data and Preliminary Costing the requirement quantity for the first entry (without batch) to 0 KAI. branch to the Material List. change the requirement quantity for the first entry (without batch) to 0 KGW. 157 . 1. Goto → Logs → On Release If material T-RF2## requires batch determination. Which order number is given? If prompted to. 10. have the quantities calculated again. When prompted by the system. Now you can release the process order. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information system → Reports for Product Cost by Order → Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items ## On/Off Select Layouts and select layout 1SAP02 (cost trend). Now you can release the process order. Task 3: Generate an Order Costs Report in the information system of Product Cost by Order. Examine the calculated costs generated for the process order and check the apportionment of the planned costs for the co-products. All rights reserved. assign the batch numbers A## to T-FF3# and B## to T-FF3## Select Save. Select Release.: a) Save the process order. The total planned costs for T-RF1## are displayed. examine the error message closely. Choose Execute. assign the batch numbers A## to T-FF3# and B## to T-FF3## Process order no. Here. If you receive an error message stating that release is not possible. the second entry (with batch) to 30 KGW. The total planned costs for T-RF1## are displayed. Enter your order number.

All rights reserved.Unit 4: Product Cost Controlling by Order TFIN22_1 2. this is consistent with the apportionment structure found in the settlement rule for the process order. 2006/Q2 . What apportionment to co-product T-FF3## was posted for component T-RF1##? Apportionment to T-FF3##: a) The total planned costs for T-RF1## are displayed. but only for order item 2. T-FF3##. Execute the report again. 3. 158 © 2006 SAP AG. Is this consistent with the apportionment of material costs defined in the settlement rule of the process order? Answer: True Yes.

All rights reserved. you will be able to: • Create a production order and analyze the control data of the production order • Explain the settlement parameters of a production order • Explain the settlement rule for the settlement type FULL • Analyze preliminary costing for a production order Business Example Engineering has requested that a prototype be manufactured for pump R-F1##. Task 1: You already have a BOM for the new pump to be built as a prototype. Logistics → Production → Shop Floor Control → Order → Create → With Material (CO01) 1. display the settlement rule. and enter today's date as the start date. What functions does the control key PP98 perform? From the production order header. 6. To which operation are the material components assigned? Change the control key assigned to operation 70 from PP97 to PP98. Create a production order for 10 pieces of material R-F1## in plant 1000. 159 . 2006/Q2 © 2006 SAP AG. the prototype process is best suited to the Product Cost by Order method in order to provide better cost analysis for this prototype. The production process is supplied by plant 1000.TFIN22_1 Lesson: Master Data and Preliminary Costing 153 Exercise 5: Alternative: Master Data and Preliminary Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise. Which receivers are entered? Which settlement type is entered? What are the consequences of this for settlement? Continued on next page 2. and analyze the master data used by cost object controlling. Although a product cost collector exists for this pump. 5. 3. Use order type PP01 and forward scheduling. 4. Create a production order for the production of the pump. Select Component overview and set the backflush flag for each component.

2. The planned variance is _____________. What costing variants are entered for the preliminary costing and simultaneous costing? How were the costing variants determined? Which costing sheet was assigned to the process order? How was the costing sheet determined? Which overhead key is assigned to the process order? How is the overhead key determined? 8. Release the production order. 10. Save the production order. Will the planned costs be calculated automatically when the order is saved? Determine whether this statement is true or false. □ □ True False 11. review the calculation of the planned costs for the production order and verify the planned distribution of costs for the co-products. Display the Control data for the production order. 1. Record the order number. 12. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. Determine the total planned credit for R-F1##. Is there a planned variance for this order? If there is a planned variance record the amount. 2006/Q2 . Task 2: Using the Order Cost report from the Product Cost by Order information system. All rights reserved. 160 © 2006 SAP AG. Choose Select layout and select layout 1SAP02 (cost trend). Choose Execute.Unit 4: Product Cost Controlling by Order TFIN22_1 7. The total planned credit for R-F1## is _________________. 9.

Select Component overview and set the backflush flag for each component. The material components are assigned to the first operation. All rights reserved. Enter production plant 1000. Continued on next page 2006/Q2 © 2006 SAP AG. Set the backflush indicator for each component. Choose the first operation and select the Components for operation button at the bottom of the screen. Enter today’s date as the start date. Enter order type PP01. 3. 161 .TFIN22_1 Lesson: Master Data and Preliminary Costing Solution 5: Alternative: Master Data and Preliminary Costing Task 1: You already have a BOM for the new pump to be built as a prototype. Change the scheduling type to Forwards. Select Enter. To which operation are the material components assigned? a) Select Operation overview. Expand the columns with the column heading ‘B…’ to determine which column is the backflush indicator. Create a production order for the production of the pump. a) Select Component overview. Enter the quantity of 10. The production process is supplied by plant 1000. and enter today's date as the start date. Create a production order for 10 pieces of material R-F1## in plant 1000. a) Enter your material R-F1##. Use order type PP01 and forward scheduling. and analyze the master data used by cost object controlling. Logistics → Production → Shop Floor Control → Order → Create → With Material (CO01) 1. 2.

2006/Q2 .Unit 4: Product Cost Controlling by Order TFIN22_1 4. Which settlement type is entered? What are the consequences of this for settlement? a) The settlement type is FUL = full settlement. place you cursor on the PP98 control key assigned to operation 70 and choose the drop down icon or function key F4. capacity requirements. Costing variant for planned costs: PPP1 Costing variant for actual costs: PPP2 This was determined by the order type/plant default values. As a rule. Continued on next page 162 © 2006 SAP AG. settlement type FUL is used for the controlling method Product Cost by Order. Once the change is made. print. This means that you can only calculate variances and settle the order when the status is either delivered (final) or technically complete. Replace the control key for operation 0070 with control key PP98. print confirmation. print time tickets. and is a milestone confirmation for this operation. display the settlement rule. What costing variants are entered for the preliminary costing and simultaneous costing? How were the costing variants determined? a) Exit the settlement rule by selecting the green arrow to go back. Automatic goods receipt will not be performed. Change the control key assigned to operation 70 from PP97 to PP98. costing. 7. From the production order header. All rights reserved. Display the Control data for the production order. Which receivers are entered? a) Goto→ Header Header → Settlement Rule Material R-F1## is entered as the receiver. 6. Control Key PP98 performs scheduling. What functions does the control key PP98 perform? a) Return to Operation overview. Select the Control data view. Choose Continue. 5.

Continued on next page 2006/Q2 © 2006 SAP AG. review the calculation of the planned costs for the production order and verify the planned distribution of costs for the co-products. All rights reserved. Record the order number. This is determined by the planned cost calculation setting: Determine planned costs when saving. Which overhead key is assigned to the process order? How is the overhead key determined? a) Overhead key: SAP10 The overhead key is determined from the overhead group assigned to the material R-F1## in the costing view of the material master. 11. 1. Choose Execute. 12. a) a) Select Release. Save the production order. Which costing sheet was assigned to the process order? How was the costing sheet determined? a) Costing sheet: COGM The name of the costing sheet is provided on the Control data tab page. 9. Choose Select layout and select layout 1SAP02 (cost trend). The costing sheet was determined by the valuation variant assigned to the costing variant. Task 2: Using the Order Cost report from the Product Cost by Order information system. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. a) The total planned credit for R-F1## is _________________. Determine the total planned credit for R-F1##.TFIN22_1 Lesson: Master Data and Preliminary Costing 8. The total planned credit for R-F1## is _________________. 163 . Will the planned costs be calculated automatically when the order is saved? Answer: True The planned costs are calculated automatically when the order is saved. 10. Release the production order. Select Save.

Is there a planned variance for this order? If there is a planned variance record the amount.Unit 4: Product Cost Controlling by Order TFIN22_1 2. All rights reserved. The planned variance is _____________. 2006/Q2 . 164 © 2006 SAP AG. a) The planned variance is _____________.

165 .TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson Summary You should now be able to: • Describe the features of Product Cost by Order • Describe the features of Cost Object Controlling for joint production • Explain process manufacturing master data 2006/Q2 © 2006 SAP AG. All rights reserved.

166 © 2006 SAP AG.Unit 4: Product Cost Controlling by Order TFIN22_1 Lesson: 160 Simultaneous Costing Lesson Duration: 50 Minutes Lesson Overview Lesson Objectives After completing this lesson. Raw materials and machine time are consumed. The procedures for Product Cost by Order are the same regardless of whether a manufacturer uses process orders or production orders. activities. Sales Controlling is performed only in Profitability Analysis (CO-PA). which are to be mapped as co-products. the order is debited at the standard price. and overhead with reference to the process order. In this scenario. 2006/Q2 . Fertilizer manufacturing also produces side products. • The manufacturer enters the actual costs for the materials. When fertilizer and acid are received in the warehouse. Additional costs are incurred by quality control checks and waste removal. A fertilizer manufacturer wants to measure and analyze his process costs with the SAP System. you will be able to: • Perform goods movements transactions and confirmations for the process order Business Example The production type is make-to-stock. we will use a process order to demonstrate Product Cost by Order. All rights reserved. The fertilizer produced is not make-to-order. Fertilizer is produced in a process manufacturing environment.

All rights reserved. 167 .TFIN22_1 Lesson: Simultaneous Costing Figure 86: Process Order: Process Chain Figure 87: Process Order: Simultaneous Costing 2006/Q2 © 2006 SAP AG.

the goods receipt can be posted automatically when the confirmation is entered. All rights reserved.Unit 4: Product Cost Controlling by Order TFIN22_1 Process orders usually are charged with actual costs through confirmations in Logistics. 168 © 2006 SAP AG. You specify which operations are milestones in the routing with the control key of the operation. This occurs automatically in confirmations. the order item is credited accordingly. Rework function in the period-end closing process. The cost objects are charged with secondary costs. When the confirmation is entered. When a goods receipt for a co-product is posted. you must confirm the milestones in the specified sequence. Actual costs are charged to the order header as they are incurred. the cost objects are charged automatically (material backflushes. 2006/Q2 . • • A cost object can be charged by internal activity allocations. Note on logistical processing: If you are using milestone confirmations. you must perform the Preliminary Settlement for Co-Products. A cost object can be charged through material withdrawals. Operations that are not milestones are automatically confirmed when the milestone is confirmed. goods issues) with primary costs. To see the actual costs for each co-product. In addition.

TFIN22_1 Lesson: Simultaneous Costing 163 Exercise 6: Simultaneous Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise. Change the default amount to 15 minutes. To continue past the warning messages regarding the deficit quantity. Enter a final confirmation for operation/phase 230 of the process order. Task 1: When the process order has been released to the shop floor. several goods receipts and goods issues need to be posted and confirmation entered for the process order. 3. Book a goods receipt for 400 liters of artificial manure (T-FF1##) and 3 liters of sulphuric acid (T-FF3##) with movement type 101. Continued on next page 2006/Q2 © 2006 SAP AG. Enter a partial confirmation for 400 liters for operation/phase 330 of the process order. you will be able to: • Analyze the actual costs for the process order and order items Business Example In preparation. stock issues and receipts and production confirmations can be posted for the order. Hint: Select Next Screen to continue past the classification screen for the batch specifications for both materials (T-FF1## and T-FF3##). 169 . 1. Simultaneous costing will occur on the process order. Enter 1 g/ccm for the density and 90% for the active ingredient content. 2. Enter a yield of 1000 liters and save the confirmation. select Enter. All rights reserved.

To display the actual costs for the sulphuric acid T-FF3##. T-FF1##: 3. use the cost report and enter the process order number. open the actual costs report for all order items. T-FF3##: 2. Enter your order number. 2006/Q2 . Next. 1. order item 1. Display the cost report and determine the value used to credit the process order for the goods receipt for the sulphuric acid T-FF3##. Answer: 170 © 2006 SAP AG. and execute the report. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Select Layout and select layout 1SAP02 (cost trend). Determine the value used to credit the process order for the goods receipt for the fertilizer T-FF1##. To display the actual costs for all items in the order. Use the cost trend layout to execute the report again. Order balance: 4. Determine whether actual costs are distributed to T-FF1##. enter order item 2. Execute the actual cost report again and display the costs for the fertilizer.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: Use the actual cost report to review the posted amounts for the goods movements and confirmations. change the Settings to Order Items On/Off. Record the order balance. All rights reserved.

Confirm a yield of 1000 liters. 2.Process → Process Order → Confirmation → Enter for Phase → Time ticket (COR6N) Before continuing. Save the confirmation. Enter the confirmation type Final confirmation. Continued on next page 2006/Q2 © 2006 SAP AG. All rights reserved. a) Logistics → Production . 1. Enter the confirmation type Partial confirmation. Select Enter. 171 . a) Favorites → Confirmation → Enter for Phase → Time Ticket (COR6N) Enter the process order number and operation 330. stock issues and receipts and production confirmations can be posted for the order. Change the default amount to 15 minutes. Confirm a yield of 400 liters. Simultaneous costing will occur on the process order.TFIN22_1 Lesson: Simultaneous Costing Solution 6: Simultaneous Costing Task 1: When the process order has been released to the shop floor. Save the confirmation. Enter a yield of 1000 liters and save the confirmation. Enter the process order number and operation 230. Enter a final confirmation for operation/phase 230 of the process order. choose Add to favorites. Enter a partial confirmation for 400 liters for operation/phase 330 of the process order. Select Enter.

Process → Process order → Environment → Material Movement → Post Material to Stock (MB31) Before continuing. and change the goods receipt quantity for T-FF3## to 3 liters. Task 2: Use the actual cost report to review the posted amounts for the goods movements and confirmations. and execute the report. Choose Adopt. Next. 1. Enter your order number. Enter the movement type 101. Display the cost report and determine the value used to credit the process order for the goods receipt for the sulphuric acid T-FF3##. Enter 1 g/ccm for the density and 90% for the active ingredient content. 2006/Q2 . To display the actual costs for the sulphuric acid T-FF3##. enter order item 2. Enter the process order number. To continue past the warning messages regarding the deficit quantity. All rights reserved. plant 1100. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Select Layout and select layout 1SAP02 (cost trend). Choose To Order. select Enter. Hint: Select Next Screen to continue past the classification screen for the batch specifications for both materials (T-FF1## and T-FF3##). Select Enter. Continued on next page 172 © 2006 SAP AG. change the Settings to Order Items On/Off. Change the goods receipt quantity for T-FF1## from 1000 to 400 liters. use the cost report and enter the process order number. Book a goods receipt for 400 liters of artificial manure (T-FF1##) and 3 liters of sulphuric acid (T-FF3##) with movement type 101. choose Add to favorites. and storage location 0001. a) Logistics → Production . Save the goods receipt. Remarks of ignore characteristic classification.Unit 4: Product Cost Controlling by Order TFIN22_1 3.

Determine the value used to credit the process order for the goods receipt for the sulphuric acid T-FF3##. Order balance: a) Enter order item *. Answer: a) Choose Select Layout. 2. There are no actual costs listed for the activities. Record the order balance. Determine the value used to credit the process order for the goods receipt for the fertilizer T-FF1##. order item 1. Determine whether actual costs are distributed to T-FF1##. 3. overheads. 4. All rights reserved. Execute the actual cost report again and display the costs for the fertilizer. 2006/Q2 © 2006 SAP AG. The value for the credit is displayed as goods receipt. Record the order balance. Choose Execute. Choose order item 1. open the actual costs report for all order items. Use the cost trend layout to execute the report again. The value for the credit is displayed as goods receipt. 173 . To display the actual costs for all items in the order. or materials.TFIN22_1 Lesson: Simultaneous Costing T-FF3##: a) To display the actual costs for the sulphuric acid T-FF3##. Choose Execute. enter order item 2 and execute the report. Choose Layout 1SAP02. These costs have not yet been distributed to the co-products. Choose Execute. Enter order item 2. T-FF1##: a) Enter order item 1.

All rights reserved. 2006/Q2 .Unit 4: Product Cost Controlling by Order TFIN22_1 174 © 2006 SAP AG.

Task 2: Use the actual cost report to review the posted amounts for the goods movements and confirmations. 2. Use movement type 101 to post a goods receipt for the 5 pumps. 1. 175 . Simultaneous costing is carried out for the production order. you will be able to: • Enter goods movements and confirmations for the production order • Analyze the actual costs for the production order Business Example While the production process is proceeding. Will this confirmation cause a goods movement for components? Enter a partial confirmation of 5 units for operation 70 of the production order. several goods receipts. 1. Save the confirmation. Enter a final confirmation for operation 10 of the production order. What actual costs have been posted for the production order? Continued on next page 2006/Q2 © 2006 SAP AG. Choose Execute. Task 1: When the production order has been released. 3. goods issues and order confirmations must be posted for the production order. All rights reserved. Select Layouts and select layout 1SAP02 (cost trend). 4. Enter a yield of 10 units and increase the number of components used for component R-B1##. inventory transactions and confirmations of production activities can be posted for the production order. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number.TFIN22_1 Lesson: Simultaneous Costing 169 Exercise 7: Alternative: Simultaneous Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise.

Unit 4: Product Cost Controlling by Order TFIN22_1 Goods Issues _______________ Confirmations _______________ Goods Receipts _______________ 176 © 2006 SAP AG. All rights reserved. 2006/Q2 .

TFIN22_1 Lesson: Simultaneous Costing Solution 7: Alternative: Simultaneous Costing Task 1: When the production order has been released. 1. 2. Enter the confirmation type Partial confirmation. Enter a partial confirmation of 5 units for operation 70 of the production order. there is a goods movement because the indicator was set in the order and. 3. Will this confirmation cause a goods movement for components? a) Select the Goods movements overview and increase the quantity for component R-B1## by 1 unit. Continued on next page 2006/Q2 © 2006 SAP AG. as a result of the components assigned to operation 10. a goods issue posting will be performed when the confirmation is saved. Save the confirmation. Yes. Simultaneous costing is carried out for the production order. Enter a yield of 10 units and increase the number of components used for component R-B1##. a) Logistics → Production →Shop Floor Control → Confirmation → Enter → For Operation → Time Ticket (CO11N) Enter the production order number and operation 10. Enter a final confirmation for operation 10 of the production order. Save the confirmation. a) Favorites → Production Order → Confirmation → Enter → For Operation → Time Ticket (CO11N) Enter your order number and operation 70. Select Enter. inventory transactions and confirmations of production activities can be posted for the production order. All rights reserved. Enter the confirmation type Final confirmation. Confirm a yield of 10 units. Select Enter. Confirm a yield of 5 units. 177 . Save the confirmation.

Choose To Order. select Enter. Task 2: Use the actual cost report to review the posted amounts for the goods movements and confirmations. Save the goods receipt.Unit 4: Product Cost Controlling by Order TFIN22_1 4. Choose Execute. plant 1000. All rights reserved. Select Layouts and select layout 1SAP02 (cost trend). Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. Use movement type 101 to post a goods receipt for the 5 pumps. Change the goods receipt quantity for R-F1## to 5 units. a) Logistics → Production → Shop Floor Control → Goods Movements → Goods Receipt. (MB31) Enter movement type 101. and storage location 0001. 2006/Q2 . To continue past the warning messages regarding the deficit quantity. 1. Select Enter. Enter the production order number. What actual costs have been posted for the production order? Goods Issues _______________ Confirmations _______________ Goods Receipts _______________ a) Goods Issues _______________ Confirmations _______________ Goods Receipts _______________ 178 © 2006 SAP AG.

All rights reserved.TFIN22_1 Lesson: Simultaneous Costing Lesson Summary You should now be able to: • Perform goods movements transactions and confirmations for the process order 2006/Q2 © 2006 SAP AG. 179 .

The fertilizer produced is not make-to-order. If the process order has not been delivered by the end of the period. you will be able to: • • Explain period-end closing with partially delivered production orders Explain WIP at actual cost Business Example The production type is make-to-stock. the manufacturer can calculate WIP for the sales order items. Raw materials and machine time are consumed. In this scenario. Fertilizer is produced in a process manufacturing environment. Fertilizer manufacturing also produces side products. A fertilizer manufacturer wants to measure and analyze his process costs with the SAP System. 180 © 2006 SAP AG. Additional costs are incurred by quality control checks and waste removal. The procedures for Product Cost by Order are the same regardless of whether a manufacturer uses process orders or production orders. All rights reserved. which are to be mapped as co-products. we will use a process order to demonstrate Product Cost by Order. 2006/Q2 . Sales Controlling is performed only in Profitability Analysis (CO-PA).Unit 4: Product Cost Controlling by Order TFIN22_1 Lesson: 174 Period-End Closing with Partially Delivered Production Orders Lesson Duration: 90 Minutes Lesson Overview Lesson Objectives After completing this lesson.

181 .5. Once the period costs have been allocated to the order header. 2006/Q2 © 2006 SAP AG. All rights reserved. the costs are calculated from the order header to the order items. variance calculation. WIP calculation.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Preliminary Settlement of Co-Products Figure 88: Process Order: Process Chain In Release 4. and settlement are then performed at the order item level. the period-end closing activities for co-product orders were enhanced to enable integrated cost controlling for individual co-products.

– The order balance is settled to FI.Unit 4: Product Cost Controlling by Order TFIN22_1 Figure 89: Period-End Closing with Co-Products Functions in the period-end closing of Product Cost by Order: • • • • • • • Template allocation Revaluation of activity types and business processes at actual prices Allocation of overhead Preliminary settlement of co-products. The Schedule Manager supports efficient execution of the period-end closing process. – • 182 © 2006 SAP AG. rework Calculation of work in process (WIP): In Product Cost by Order. 2006/Q2 . – The variance categories are settled to Profitability Analysis (CO-PA). All rights reserved. Actual Costing/Material Ledger (CO-PC-ACT) and EC-PCA. It is addressed extensively in course AC690. the system evaluates the work in process at actual cost Variance calculation Settlement Work in process is settled to Financial Accounting (FI) and Profit Center Accounting (EC-PCA).

2006/Q2 © 2006 SAP AG. you must enter equivalence numbers for calculation in the settlement rule of the order header. All rights reserved. You make the necessary settings in Customizing for Product Cost by Order to ensure that: • • Settlement to an order item is allowed (you make this setting in the settlement profile) Either proportional settlement (indicator Equivalence Number) or percentage settlement (indicator %-Settlement) is allowed (you make this setting in the settlement profile) The allocation structure contains all cost elements with which the order header can be debited • Actual costs must be settled in the order items before you can calculate WIP and variances or settle the order. When it settles the actual costs.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Figure 90: Preliminary Settlement of Co-Products In period-end closing. 183 . In some cases it may also use the source structure. The costs are settled for the co-products using the original cost elements. In this case you cannot use a source structure. Rework function. the actual costs collected on the order header are calculated to the individual order items. To settle the actual costs. This charges each co-product with its share of the actual costs. the system uses the equivalence numbers defined in the apportionment structure. If you have not specified an apportionment structure in the material master record or in the production version. use the Preliminary Settlement for Co-Products.

The WIP is valuated using the actual costs posted to the order item less the credits from goods receipts.Unit 4: Product Cost Controlling by Order TFIN22_1 Work in Process Figure 91: WIP Calculation for Co-Products Work in process (WIP) for co-products is always valuated at actual cost. no work in process can be determined for it. From the materials list. Valuating WIP at target cost requires that the order item has a settlement rule with settlement type FUL (full settlement). If a manufacturing order including co-products uses settlement type PER (default rule PP2). 184 © 2006 SAP AG. access the detail view and look at the indicator Delivery Completed (final delivery). you cannot form any work in process because only periodic manufacturing orders can be assigned to a cost object hierarchy. the WIP calculation function cancels any WIP from the previous period. To see whether particular order items have been delivered. 2006/Q2 . All rights reserved. When the order has the status DLV and TECO. If you are using a cost object hierarchy with co-products. The manufacturing order receives the status DLV only when all order items have been delivered. access the material list from the process order. The system continues to calculate work in process for the co-products until the header of the manufacturing order has the status DLV (delivered) or TECO (technically completed). Settlement type FUL is derived from default rule PP1 (Production Material Full Settlement) which is specified in the order type. The calculation of work in process depends on the status of the manufacturing order.

2006/Q2 © 2006 SAP AG. it is transferred to Financial Accounting (FI). the system debits Unfinished Goods Inventory and credits Unfinished Goods Inventory Change. 185 .TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Figure 92: Settlement of Work in Process When you settle the work in process. • • If the debit of the order item is greater than the credit. If the debit of the order item is less than the credit. the system debits Expense for Reserves for Unrealized Costs and credits Reserves for Unrealized Costs. All rights reserved. This expense posting corresponds to a value adjustment for finished products that have already been capitalized in FI.

All rights reserved.Unit 4: Product Cost Controlling by Order TFIN22_1 186 © 2006 SAP AG. 2006/Q2 .

Allocate the overhead rates for the current period to the process order. 1. it is necessary to calculate the actual WIP value and settle the amounts for information purposes to Financial Accounting. you will be able to: • Analyze the actual costs for the process order and order items • Allocate process costs and overhead costs to the process order • Distribute the actual costs from the process order to the order items (co-products) • Use actual costs to calculate WIP for the co-products • Review the settings for the WIP calculation • Settle the WIP to Financial Accounting Business Example Because the process order is not completed by the end of the period. You have been asked to perform the period-end closing tasks for your process order. Task 1: Use the single functions to allocate process costs and overhead rates to your process order. process costs and overhead rates must be allocated to the order prior to the WIP calculation. Use the Template Allocation to allocate the process costs to the process order for version 0 of the current period. 187 . 2. Continued on next page 2006/Q2 © 2006 SAP AG. Because this is a joint production order. All rights reserved.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 181 Exercise 8: Period-End Closing with Partially Delivered Process Orders Exercise Duration: 25 Minutes Exercise Objectives After completing this exercise. This is necessary to support the calculation of WIP for the individual order items. you will need to distribute the actual costs from the order header to the order items. In addition.

Use transaction Individual Processing to calculate the WIP value of your process order. The settlement receivers should list the order items (co-products) as the receivers for each individual sending cost element. Task 3: Calculate work in process for your process order. 3. 4. Compare the calculated total WIP amount with the remaining balance for your process. The individual cost elements that debited the process order are listed as the senders. All rights reserved. choose Add to favorites. Next. However this calculation can be performed only if the actual costs from the process order header are distributed to the co-products (order items).Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: If using joint production. 1. Use the individual processing to distribute the actual costs to the co-products for your process order for the current period. Return to the cost report. Record the order balance. Review the posted actual costs that were changed by the distribution to the co-products. Is the value split according to the apportionment defined in the process order? Display the cost accounting document from the list of accounting documents. it is possible to calculate WIP and variances for each co-product separately. Select the Detail list for the actual settlement and display the senders. the co-products T-FF1## and T-FF3##. 2. Expand the document detail and note that each actual line item posted to the order was settled to the two individual process order items. Remain in the Preliminary Settlement Results screen. 2. 2006/Q2 . Execute the report. Are they the same value? (circle one) Yes or No Continued on next page 188 © 2006 SAP AG. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Preliminary Settlement for Co-Products. 1. Rework → Individual Processing (CO8B) Before continuing. Create another session and display the cost report. Use Results Analysis version 0 for the current period. Enter * for the order item. access the receivers.

189 . This determines the percentage of the remaining costs that should be allocated to each category. 896000 – 899999) Actual costs FK: ____________ (600000 – 654999. True False Record the WIP for T-FF1## and T-FF3##. Access the WIP report and record the WIP value for each cost element for T-FF1##. Display the actual report for T-FF1##. 672111 (WIP direct costs): 672121 (WIP overhead): 672131 (WIP production costs): 6. Is it a requirement to value WIP using only actual costs when joint production is used? Determine whether this statement is true or false. All rights reserved. The system allocates the remaining order balance to the WIP categories by dividing the total costs by the actual costs per category. 820000 – 894999. Results Analysis version 0: EK (direct costs): FK (production costs): GK (overhead costs): 7. □ □ 4. T-FF1##: T-FF3##: 5. What are the subtotals of actual costs for the following WIP categories? What is the WIP balance for each of these categories? Actual costs EK: ____________ (400000 – 499999. What cost elements are assigned to the following WIP categories for Controlling area 1000. Continued on next page 2006/Q2 © 2006 SAP AG. 656000 – 699999) Actual costs GK: ____________ (655100 – 655199) Total Actual costs: Order balance: To display the WIP balances. change to Work in Process layout 1SAP03.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 3. Review the settings for the WIP categories.

3. note that each order item is a sender. Use the individual processing transaction to settle the calculated WIP costs for your process order to financial accounting for the current period. Display the accounting documents for the posting to FI. All rights reserved. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Settlement → Individual Processing (KO88) Before continuing. In the Actual Settlement Detail List. 2006/Q2 .Unit 4: Product Cost Controlling by Order TFIN22_1 Example: Actual costs EK 8000 80% of Total Actual costs FK 2000 20% of Total Total costs 10000 100% Remaining order balance after partial delivery: 4000 Calculated WIP for each order category: WIP category EK 3200 WIP category FK 800 Task 4: Once the WIP has been calculated. Why is there no Controlling document listed? Answer: 190 © 2006 SAP AG. the WIP balance must be posted to Financial Accounting for period-end closing. This is accomplished using the settlement transaction. select Add to Favorites 1. 2.

2. Enter your order number. Continued on next page 2006/Q2 © 2006 SAP AG. Choose Execute. Choose Execute. Enter your order number. Period: current month Fiscal year: Current fiscal year Deselect Test run. Version: 0 Period: current month Fiscal year: Current fiscal year Deselect Test Run.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Solution 8: Period-End Closing with Partially Delivered Process Orders Task 1: Use the single functions to allocate process costs and overhead rates to your process order. 1. All rights reserved. 191 . choose Add to favorites. Allocate the overhead rates for the current period to the process order. choose Add to favorites. Select Detail Lists. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Template Allocation → Individual Processing (CPTA) Before continuing. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Overhead → Individual Processing (CPTA) Before continuing. Use the Template Allocation to allocate the process costs to the process order for version 0 of the current period.

All rights reserved. However this calculation can be performed only if the actual costs from the process order header are distributed to the co-products (order items). Select Sender. Select the order number. Remain in the Preliminary Settlement Results screen. Settlement period: Current month Posting period: Current month Fiscal year: Current fiscal year Deselect Test Run. the value is split according to the apportionment structure. Use the individual processing to distribute the actual costs to the co-products for your process order for the current period. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Preliminary Settlement for Co-Products. 1. it is possible to calculate WIP and variances for each co-product separately. The order items are displayed and listed by assignment. Select the green arrow twice to return to the Detail list. Choose Execute. access the receivers. The individual cost elements that debited the process order are displayed. Continued on next page 192 © 2006 SAP AG. Select the Detail list for the actual settlement and display the senders. Rework → Individual Processing (CO8B) Before continuing.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: If using joint production. 2. The order number and order items are displayed. Choose Receiver. Yes. 2006/Q2 . The settlement receivers should list the order items (co-products) as the receivers for each individual sending cost element. The individual cost elements that debited the process order are listed as the senders. a) Enter your order number. choose Add to favorites. Next. Is the value split according to the apportionment defined in the process order? a) Select Detail Lists.

a) Select the green arrow twice to return to the detail list. Enter your order number and order item 1. Return to the cost report. The individual order items now have actual costs.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 3. All rights reserved. Display the cost accounting document from the list of accounting documents. Choose Execute. Review the posted actual costs that were changed by the distribution to the co-products. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Select Layouts and select layout 1SAP02 (cost trend). 4. Select Accounting documents. 193 . Continued on next page 2006/Q2 © 2006 SAP AG. Choose Controlling document. the co-products T-FF1## and T-FF3##. Expand the document detail and note that each actual line item posted to the order was settled to the two individual process order items. Expand the document line.

2006/Q2 . Choose Execute. Yes. Create another session and display the cost report. Are they the same value? (circle one) Yes or No a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Enter your order number. 3. 1. Use transaction Individual Processing to calculate the WIP value of your process order. Record the order balance. Enter * for the order item. Use Results Analysis version 0 for the current period. select Add to Favorites. Enter order item *. Enter your order number. WIP to period: current month Fiscal year: Current fiscal year Results Analysis version 0 Deselect Test Run Choose Execute. All rights reserved. Continued on next page 194 © 2006 SAP AG. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Work in Process → Individual Processing → Calculate (KKAX) Before continuing. the calculated WIP and the actual order balance are the same value. Execute the report. 2. Is it a requirement to value WIP using only actual costs when joint production is used? Answer: True It is a requirement to valuate WIP using only actual costs when joint production is used. Compare the calculated total WIP amount with the remaining balance for your process.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 3: Calculate work in process for your process order.

195 . Review the settings for the WIP categories. Display the actual report for T-FF1##. From the WIP object list.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 4. What cost elements are assigned to the following WIP categories for Controlling area 1000. Results Analysis version 0: EK (direct costs): FK (production costs): GK (overhead costs): a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. 820000 – 894999. T-FF1##: T-FF3##: a) The WIP for each item is listed in the Work in Process List. Access the WIP report and record the WIP value for each cost element for T-FF1##. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Work in Process → Define Assignment (OKGB) EK(direct costs): 400000 – 499999. 896000 . All rights reserved. What are the subtotals of actual costs for the following WIP categories? What is the WIP balance for each of these categories? Actual costs EK: ____________ (400000 – 499999. 672111 (WIP direct costs): 672121 (WIP overhead): 672131 (WIP production costs): a) Analyze the WIP amounts in the WIP report for T-FF1##.899999 FK(Production Costs): 600000 – 654999. choose Goto → WIP Report 6. List 5. 896000 – 899999) Actual costs FK: ____________ Continued on next page 2006/Q2 © 2006 SAP AG. 820000 – 894999. 656000 – 699999 OH (Overhead Costs): 655100 – 655199 7. Record the WIP for T-FF1## and T-FF3##.

Unit 4: Product Cost Controlling by Order TFIN22_1 (600000 – 654999. This determines the percentage of the remaining costs that should be allocated to each category. 656000 – 699999) Actual costs GK: ____________ (655100 – 655199) Total Actual costs: Order balance: To display the WIP balances. All rights reserved. The system allocates the remaining order balance to the WIP categories by dividing the total costs by the actual costs per category. Example: Actual costs EK 8000 80% of Total Actual costs FK 2000 20% of Total Total costs 10000 100% Remaining order balance after partial delivery: 4000 Calculated WIP for each order category: WIP category EK 3200 Continued on next page 196 © 2006 SAP AG. 2006/Q2 . change to Work in Process layout 1SAP03.

this is then assigned to WIP categories as follows: WIP category EK 3200 = 80 % of total WIP category FK 800 = 20 % of total Continued on next page 2006/Q2 © 2006 SAP AG. 820000 – 894999. 197 . Choose Execute. All rights reserved. Select Select Layout and select layout 1SAP03 (Work in Process).TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders WIP category FK 800 a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Enter your order number. Example: Actual costs EK 8000 = 80 % of total Actual costs FK 2000 = 20 % of total Total costs: 10000 = 100% If the remaining order balance after partial delivery remains 4000. 656000 – 699999) Actual costs GK: ____________ (655100 – 655199) Total actual costs: ____________ Order balance: ____________ To display the WIP balances. Enter order item 1. Actual costs EK: ____________ (400000 – 499999. 896000 – 899999) Actual costs FK: ____________ (600000 – 654999. The system allocates the remaining order balance to the WIP categories by dividing the total costs by the actual costs per category. change to Work in Process layout 1SAP03. This determines the percentage of the remaining costs that should be allocated to each category.

Select Accounting documents. Choose Execute. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Settlement → Individual Processing (KO88) Before continuing. This is accomplished using the settlement transaction. Select one of the process order items. 2006/Q2 . 2. Why is there no Controlling document listed? Answer: a) The WIP accrual to FI does not credit the process order. The WIP balances are stored in RA cost elements. Display the accounting documents for the posting to FI. Settlement period: Current month Posting period: Current month Fiscal year: Current fiscal year Deselect Test run. In the Actual Settlement Detail List. From the list of accounting documents. This can be verified by displaying the sender and receiver for the settlement. which will not update the controlling object. select Add to Favorites 1. choose Accounting document. note that each order item is a sender. This is the WIP accrual posting in FI. a) Enter your order number. Choose Detail lists. the WIP balance must be posted to Financial Accounting for period-end closing. choose Goto → Detail list of RA data for FI. If necessary. All rights reserved. Use the individual processing transaction to settle the calculated WIP costs for your process order to financial accounting for the current period.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 4: Once the WIP has been calculated. a) 3. 893000 Work in Process 793000 WIP 198 © 2006 SAP AG.

apply the actual process cost to the production order for version 0 of the current period. using Results Analysis version 0 for the current period. Task 3: The calculation of work in process is necessary to determine the current order balance for the production order for R-F1##. Task 1: Complete the process and overhead cost allocation for the production order. apply the overhead costs to the production order for the current period. calculate WIP during period-end closing and activate it. Task 2: 1. To display profit according to the correct period. 1. you will be able to: • Carry out period-end closing activities • Calculate WIP at actual cost • Settle WIP in Financial Accounting and Profit Center Accounting Business Example Your order has not been completed by period end.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 193 Exercise 9: Alternative: Period closing with Partially Delivered Process Orders Exercise Duration: 25 Minutes Exercise Objectives After completing this exercise. All rights reserved. calculate the work in process (WIP) value of your production order. 199 . Continued on next page 2006/Q2 © 2006 SAP AG. Return to the cost report. Using the individual processing transaction for Overhead Calculation. 1. Using the individual processing transaction. and review the affect of the Template and Overhead transaction. Execute the report again. 2. Using the individual processing transaction for Business Process Cost Allocation.

2006/Q2 . EK FK OH 6. What are the subtotals of actual costs for the following WIP categories? Task 4: Once the WIP has been calculated. What cost elements are assigned to the following WIP categories for Controlling area 1000. This is accomplished using the settlement transaction. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Settlement→ Individual Processing (KO88) 1. Display the actual report for R-F1##. Review the settings for the WIP categories. Compare the calculated total WIP amount with the remaining balance for your production order. 4. 2. Results Analysis version 0: Display the configuration of the WIP update. Execute the report. Create another session and display the cost report for your production order. Why is there no Controlling document listed? 200 © 2006 SAP AG. Display the accounting documents for the posting to FI. What cost elements are assigned to the line item ID’s? Controlling Area 1000 1000 1000 Results Analysis version: 0 0 0 Results Analysis Key FERT FERT PROD Line ID Cost Element 3. settle the calculated WIP for your production order to financial accounting for the current period. Using the individual processing transaction. All rights reserved. Enter your order number. Record the order balance. 5. the WIP balance must be posted to Financial Accounting for period-end closing.Unit 4: Product Cost Controlling by Order TFIN22_1 2. Are they the same value? Access the WIP report and record the WIP value for each cost element for R-F1##.

201 . a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Template Allocation → Individual Processing (CPTA) Include the transaction in your list of favorites. Select Detail Lists. Using the individual processing transaction for Overhead Calculation. Period: Current month Fiscal Year: Current fiscal year Deselect test run. 2. Choose Execute. apply the actual process cost to the production order for version 0 of the current period. Enter your order number. Version: 0 Period: Current month Fiscal Year: Current fiscal year Deselect Test Run. Using the individual processing transaction for Business Process Cost Allocation. 1. Continued on next page 2006/Q2 © 2006 SAP AG. apply the overhead costs to the production order for the current period.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Solution 9: Alternative: Period closing with Partially Delivered Process Orders Task 1: Complete the process and overhead cost allocation for the production order. Choose Execute. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Overhead → Individual Processing (CPTE) Include the transaction in your list of favorites. All rights reserved. Enter your order number.

Choose Execute. Enter your order number. WIP to period: Current month Fiscal Year: Current fiscal year Results Analysis version 0 Deselect Test Run. Compare the calculated total WIP amount with the remaining balance for your production order. using Results Analysis version 0 for the current period. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. Execute the report. and review the affect of the Template and Overhead transaction.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: 1. Return to the cost report. 2006/Q2 . 1. All rights reserved. Task 3: The calculation of work in process is necessary to determine the current order balance for the production order for R-F1##. Using the individual processing transaction. calculate the work in process (WIP) value of your production order. Are they the same value? Continued on next page 202 © 2006 SAP AG. Record the order balance. Choose Select layout and select layout 1SAP02 (Cost Trend). Create another session and display the cost report for your production order. Choose Execute. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Work in Process → Individual Processing → Calculate (KKAX) Before beginning the task. Enter your order number. Execute the report again. choose Add to favorites.

Create another session and display the cost report for your production order. Enter your order number. Compare the calculated total WIP amount with the remaining balance for your production order. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Work in Process→ Define Assignment (OKGB) EK (direct costs): 400000 – 499999. Review the settings for the WIP categories. 3. Access the WIP report and record the WIP value for each cost element for R-F1##. Yes. Results Analysis version 0: a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. What cost elements are assigned to the following WIP categories for Controlling area 1000. 656000 – 699999 OH(Overhead Costs): 655100 – 655199 5. 203 . the calculated WIP and the actual order balance are the same value. 820000 – 894999. choose Goto→ WIP report 4. All rights reserved. What cost elements are assigned to the line item ID’s? Continued on next page 2006/Q2 © 2006 SAP AG. Display the configuration of the WIP update. a) From the WIP object list. Are they the same value? a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders 2. Choose Execute. Record the order balance. Execute the report. 896000 899999 FK(Production Costs): 600000 – 654999.

Unit 4: Product Cost Controlling by Order TFIN22_1 Controlling Area 1000 1000 1000 a) Results Analysis version: 0 0 0 Results Analysis Key FERT FERT PROD Line ID Cost Element 672111 672131 672121 EK FK OH Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. 896000 – 899999) Actual costs FK: ____________ (600000 – 654999. Choose Execute. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Work in Process → Define Update (OKGA) 6. Actual costs EK: ____________ (400000 – 499999. All rights reserved. 820000 – 894999. Select Select Layout and select layout 1SAP03 (Work in Process). Display the actual report for R-F1##. What are the subtotals of actual costs for the following WIP categories? a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. 2006/Q2 . 656000 – 699999) Actual costs GK: ____________ (655100 – 655199) Continued on next page 204 © 2006 SAP AG.

All rights reserved. From the list of accounting documents. the WIP balance must be posted to Financial Accounting for period-end closing. 893000 Work in Process 793000 WIP 2006/Q2 © 2006 SAP AG. Select Detail Lists. a) Enter your order number. Using the individual processing transaction. Select Accounting documents. The WIP balances are stored in RA cost elements. 2. Why is there no Controlling document listed? a) The WIP accrual to FI does not credit the process order. which will not update the controlling object. Settlement period: Current period Posting period: Current period Fiscal Year: Current fiscal year Deselect test run. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Settlement→ Individual Processing (KO88) 1. Choose Execute. This can be verified by displaying the sender and receiver for the settlement. choose Accounting document. settle the calculated WIP for your production order to financial accounting for the current period. This is the WIP accrual posting in FI.TFIN22_1 Lesson: Period-End Closing with Partially Delivered Production Orders Task 4: Once the WIP has been calculated. 205 . Display the accounting documents for the posting to FI. This is accomplished using the settlement transaction.

Unit 4: Product Cost Controlling by Order TFIN22_1 Lesson Summary You should now be able to: • Explain period-end closing with partially delivered production orders • Explain WIP at actual cost 206 © 2006 SAP AG. All rights reserved. 2006/Q2 .

we will use a process order to demonstrate Product Cost by Order. The difference between the actual costs of the order item and the debit value at goods receipt are the variances that are examined exactly in terms of resources in the variance analysis and are settled in the inventory and Profitability Analysis. • After the last goods receipt into the inventory. 2006/Q2 © 2006 SAP AG. Sales Controlling is performed only in Profitability Analysis (CO-PA). Fertilizer is produced in a process manufacturing environment. The fertilizer produced is not make-to-order. Additional costs are incurred by quality control checks and waste removal. A fertilizer manufacturer wants to measure and analyze his process costs with the SAP System. you will be able to: • • Explain period-end closing with delivered production orders Explain the differences between the controlling methods of Product Cost by Order and Product Cost by Period Business Example The production type is make-to-stock. Fertilizer manufacturing also produces side products. The procedures for Product Cost by Order are the same regardless of whether a manufacturer uses process orders or production orders. All rights reserved. Raw materials and machine time are consumed. but separated by variance category to the costing-based Profitability Analysis. the manufacturer compares the actual cost of the order with the standard cost estimate and the preliminary cost estimate for each order item.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders Lesson: 201 Period-End Closing with Delivered Production Orders Lesson Duration: 100 Minutes Lesson Overview Lesson Objectives After completing this lesson. which are to be mapped as co-products. In this scenario. The variances are settled to FI as a sum. 207 .

Unit 4: Product Cost Controlling by Order TFIN22_1 Variance Calculation and Settlement Figure 93: Process Order: Process Chain Figure 94: Variance Calculation for Co-Products In the case of manufacturing orders that have co-products and whose order item has settlement type FUL. All rights reserved. 2006/Q2 . variances can only be calculated when all order items have been delivered (that is. when the delivery completed indicator is set for all 208 © 2006 SAP AG.

The accrual data is also updated in the Material Ledger (if active). You should therefore use a variance key for which the Scrap indicator is not selected. The order balance is reduced to zero by transferring to FI the difference between the cost of the order and the value of the delivery to stock. For manufacturing orders without co-products for whose order item the settlement type is FUL.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders order items and the status DLV is set for the order). You can transfer the variances separately by variance category and cost element to value fields in CO-PA. • • 2006/Q2 © 2006 SAP AG. For manufacturing orders that have co-products for whose order item the settlement type is PER. The total variance is transferred to profitability segments in Profitability Analysis (CO-PA). No scrap variances can be calculated for co-products. the order balance is always interpreted as a variance (regardless of the status). For manufacturing orders without co-products that have the settlement type PER. 209 . The assigned profit center is also updated. variances can only be calculated after the status DLV has been set for the order. the system debits Price Differences and credits Finished Goods Inventory Change. If the price control indicator is set to S. Figure 95: Settlement of Co-Products The following takes place when the order has been delivered and settled: • • Work in process (WIP) posted in a previous period is cancelled. All rights reserved. No work in process is calculated for these manufacturing orders. variances and work in process are calculated using the target cost calculation.

210 © 2006 SAP AG. All rights reserved. The manufacturing order type uses the default rule PP2 (periodic settlement). This is specified in Customizing in the “Cost-Accounting-Relevant Default Values for Order Types and Plants” table. the order type of the manufacturing order will use the default rule PP2 (periodic). however it is not recommended by SAP. 2006/Q2 . • If Product Cost by Period is used with a product cost collector.Unit 4: Product Cost Controlling by Order TFIN22_1 Controlling View Comparison Comparison of Product Cost Collector Controlling and Production Order Controlling • The difference is in the usage of: – – Product cost collectors and Production orders Figure 96: Comparison Between Full Settlement and Periodic Settlement Every production order can use one of the two costing methods: Product Cost by Order or Product Cost by Period. The “Product Cost Collector” indicator is not selected. the WIP settlement must be carried out in every period. the order type of the manufacturing order will use the default rule PP1 (full settlement). If Product Cost by Order is used. • • If you automatically post the determined WIP to Financial Accounting with the settlement. the product cost collector order type will use the default rule STR. If Product Cost by Period is used without the product cost collector. The “Product cost collector” indicator is set there as well. This Controlling method is possible. The “Product Cost Collector” indicator is not selected.

or Partial delivery. the work in process and the variances are calculated based on the status of the order. If the order has the status Released. If the order has the 2006/Q2 © 2006 SAP AG. WIP and variances are shown for each period at the same time. Partially released. 211 . All rights reserved. Figure 98: Status-Based Final Costing in Product Cost by Order with Full Settlement If full settlement is used.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders Figure 97: Final Costing in Product Cost by Period When using periodic settlement. work in progress is calculated.

Product cost collectors can be used in the following production environments: • • • In repetitive manufacturing: mandatory use of product cost collectors In order-related production: optional In process manufacturing: optional The definition of the controlling process to be used is determined by the selection of an order type and the settings stored for it in Customizing. Cost Object Controlling using Product Cost Collectors Advantages: • • Disadvantages: It is not obvious whether the costs are assigned to the production order according to the cause. 2006/Q2 . Even if you use a product cost collection. the remaining WIP balance from the previous period will be cancelled. • 212 © 2006 SAP AG. you do not need to change the logistical processes. or if the BOM and routing are not stable. and Variances will be calculated. • • Lean cost management • Controlling concentrates itself more on the product or production as a process. best suited for complex production environments and orders with high set-up costs and varying lot sizes. When using Full settlement. • Variances are recognized in the period in which they occur. Not recommended if the production involves significant set-up costs. if there is a large variability in lot size. and less on the • logical type of production.Unit 4: Product Cost Controlling by Order TFIN22_1 status Delivered or Technically Complete. variances cannot be analyzed until the production order is completed. Product Cost by Order Using PP Production Orders Advantages: • • Large degree of responsibility on the level of the production order. The reduced number of cost objects improves the period-end closing process. Not available if WIP and variance analysis is required at the co-product level or when using collective orders. A WIP balance and variances calculation cannot occur at the same time in the same period. Disadvantages: • Many cost objects must be process for the period-end closing. All rights reserved. Full settlement provides production order level variance analysis.

Products that are always produced with their own BOMs and routings are best suited for product cost collectors. Key Message To measure the efficiency of your production environment. Whenever applicable. then choose to control that product at the production order level. even for the same material. a particular product does not fit the Product Cost by Period situation. If you only evaluate your products after period-end closing by summarizing all of the production orders to product level. thereby reducing the number of cost objects to be managed. Production environments can use both Controlling methods in parallel. collect costs at the required level. select Product Cost by Period.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders Production orders can be used as cost objects in the following production environments: • • • In order-related manufacturing: optional In process manufacturing: optional Co-product manufacturing using either production or process orders. the Product Cost by Period method would be recommended. If however. Do not collect data that you do not need. 213 . and improving processing time for period-end closing. whenever WIP and Variance calculation at the co-product level is necessary: mandatory. Products that either require high numbers of engineering change or have high setup costs for varying production quantities as well as co-products are best suited for Product Cost by Order on the production order level. All rights reserved. 2006/Q2 © 2006 SAP AG.

2006/Q2 . All rights reserved.Unit 4: Product Cost Controlling by Order TFIN22_1 214 © 2006 SAP AG.

This will cause additional postings of actual costs to the order.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 209 Exercise 10: Period-End Closing with Delivered Process Orders Exercise Duration: 30 Minutes Exercise Objectives After completing this exercise. The remaining 600 liters have been manufactured. since the order uses the full settlement rule (FUL). variances can now be calculated and transferred to Profitability Analysis. Post a goods receipt for the remaining delivery of 600 liters of fertilizer (T-FF1##) and the remaining sulphuric acid (T-FF3##) with movement type 101. When entering the confirmation. Task 1: Post the final confirmation and the goods receipt for your process order. 2. In addition. T-FF1## and T-FF3##. Create the final confirmation for the process order. select the Final confirmation indicator. and settled to Financial Accounting. Continue past the warning messages regarding batch numbers. The process order has now been completed. Continued on next page 2006/Q2 © 2006 SAP AG. 1. Save the confirmation. so the remaining WIP balances need to be cancelled using WIP calculation. Change the duration to reflect the additional hour. Select Next Screen to continue past the classification screen for the batch specifications for both materials. Final confirmation of the process order and posting final delivery of the co-products are prerequisite for the period-end closing activities. you will be able to: • Cancel the WIP at the completion of the order • Execute variance analysis for the process order and analyze the result • Settle WIP (amount = zero) and variance amounts to Financial Accounting and Profitability Analysis • Analyze the accounting documents created during settlement • Check the settings for the variance settlement to Profitability Analysis Business Example The process order had not been settled by the close of the previous period. So that WIP balances were generated for the order items and transferred to Financial Accounting. 215 . The last phase required an additional processing time of 1 hour. All rights reserved.

The remaining balance on the process order will be considered production variance. WIP must be calculated again in order to cancel the remaining WIP balance. 3. Remain in the variance analysis detailed list display to answer the following question. Execute the individual processing of all actual costs to the co-products of your process order. Use Results Analysis version 0 for the current period. The WIP balance should be zero. How was the additional cost of the additional 1 hour of production time distributed? Task 3: Since the order has the status final delivery. Why are the actual costs for cost element 620000 (cost center 4250. Rework → Individual Processing(CO8B) 1. 2006/Q2 . activity type 1420) higher than the planned costs? Answer: Task 2: Again it is necessary to execute the distribution of actual costs for co-products prior to calculating either the WIP or variances for period-end. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Variances → Individual Processing (KKS2) 1. Favorites → Preliminary Settlement for Co-Products. Since the settlement type for the order is FUL. Return to the Plan/Actual Comparison report and review the consequences of the distribution. execute variance analysis for your process order. 1. 2. Continued on next page 216 © 2006 SAP AG. Using the individual processing transaction. Task 4: The production order should now have the status Delivery completed and Finally confirmed. Choose the layout 1SAP03 to display the WIP balance. 2. Display the cost report for the order.Unit 4: Product Cost Controlling by Order TFIN22_1 3. Preliminary settlement of an order is normally executed only once per period. Compare the calculated total WIP amount with the remaining balance for your process order. Reverse the previous preliminary settlement for the process order. Calculate the variances for all target cost versions for the current period. variance calculation can be executed. Use transaction Individual Processing to calculate the WIP value of your process order. All rights reserved.

Access the settlement of the variances by selecting the receiver line for the material T-FF1##. To which value field was the variance settled? In Customizing.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 2. the WIP balance will be cancelled in FI. 2006/Q2 © 2006 SAP AG. Favorites → Single Functions → Settlement → Individual Processing (KO88) 1. What caused the variance for cost element 620000? Display the cost element report for item 2. and select the entry for Accounting document. Select the accounting documents. In addition. Select cost elements for item 1 and display the variance report. Return to the list of accounting documents. 2. All rights reserved. The senders for production variances and the cancellation of WIP are listed on separate screens. Do both products indicate a variance for the processing duration? Task 5: After variances have been calculated. Use the current period and year. The system displays a list of the variance amounts for PA by variance categories and for FI by material. For which cost elements were postings made? 3. Check settlement to the value fields according to variance category. the variance categories can be settled to PA and the process order variance can be settled to FI. 4. Display the detail list for the settlement. 217 . display the assignment of the value field for the resource usage variance category using PA transfer structure E1. Execute settlement for the process order. and access the Profitability Analysis document.

Confirm a yield of 600 liters.Unit 4: Product Cost Controlling by Order TFIN22_1 Solution 10: Period-End Closing with Delivered Process Orders Task 1: Post the final confirmation and the goods receipt for your process order. Confirm a duration of 1 additional hour. The remaining 600 liters have been manufactured. a) Favorites → Process Order → Confirmation → Enter for Phase → Time Ticket (COR6) Enter the process order number and operation 330. 1. All rights reserved. select the Final confirmation indicator. When entering the confirmation. Create the final confirmation for the process order. This will cause additional postings of actual costs to the order. Continued on next page 218 © 2006 SAP AG. 2006/Q2 . The last phase required an additional processing time of 1 hour. Save the confirmation. Enter the confirmation type Final confirmation. Select Enter. Save the confirmation. Change the duration to reflect the additional hour.

Enter the process order number. Select Enter. plant 1100. Select Enter (twice) to continue past each warning message regarding the batch number. Enter your order number. Select Next Screen to continue past the classification screen for the batch specifications for both materials. and storage location 0001. 3. Continued on next page 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 2. Confirm the remaining quantities for T-FF1## and T-FF3##. a) Favorites → Process order → Environment → Material Movement → Post Material to Stock. Choose Execute. Display the cost report for the order. All rights reserved. (MB31) Enter movement type 101. T-FF1## and T-FF3##. Save the goods receipt. activity type 1420) higher than the planned costs? Answer: a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Select the Layouts icon and select layout 1SAP02 (cost trend). Why are the actual costs for cost element 620000 (cost center 4250. Post a goods receipt for the remaining delivery of 600 liters of fertilizer (T-FF1##) and the remaining sulphuric acid (T-FF3##) with movement type 101. The actual costs are higher than the planned costs due to the additional 1 hour of production that was confirmed for operation 330. Continue past the warning messages regarding batch numbers. Select Next Screen to continue past the classification screen for the batch specifications for both materials (T-FF1## and T-FF3##). 219 . Choose To Order.

Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: Again it is necessary to execute the distribution of actual costs for co-products prior to calculating either the WIP or variances for period-end. All rights reserved. Settlement period: Current month Posting period: Current month Fiscal Year: Current fiscal year Deselect Test Run. Rework → Individual Processing(CO8B) 1. Reverse the previous preliminary settlement for the process order. Choose Execute. Continued on next page 220 © 2006 SAP AG. 2006/Q2 . a) Enter your order number. Favorites → Preliminary Settlement for Co-Products. Settlement period: Current month Posting period: Current month Fiscal Year: Current fiscal year Deselect Test Run. Preliminary settlement of an order is normally executed only once per period. Execute the individual processing of all actual costs to the co-products of your process order. a) Enter your order number. Preliminary Settlement → Reverse 2.

Task 3: Since the order has the status final delivery. a) Favorites → Work in Process → Individual Processing → Calculate (KKAX) Enter your order number. The costs of the additional production hour were split according to the apportionment structure for equivalence numbers 5:3. From the right hand side of the dialogue box choose the Cost Element field. choose Change Layout. How was the additional cost of the additional 1 hour of production time distributed? a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. Move the field Cost Element so that it is the second field in the display list. 1.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 3. All rights reserved. Continued on next page 2006/Q2 © 2006 SAP AG. Choose Execute. WIP to period: Current month Fiscal Year: Current fiscal year Results Analysis version 0 Deselect Test Run. To see the cost elements. WIP must be calculated again in order to cancel the remaining WIP balance. 221 . Enter order item * . Use transaction Individual Processing to calculate the WIP value of your process order. Return to the Plan/Actual Comparison report and review the consequences of the distribution. Choose Execute. Choose Show Selected Fields icon. Use Results Analysis version 0 for the current period. Notice the credit entries listed by order item for each cost element.

execute variance analysis for your process order. Using the individual processing transaction. Since the settlement type for the order is FUL. The generated WIP balance should be zero. Remain in the variance analysis detailed list display to answer the following question. To confirm the WIP balance. Task 4: The production order should now have the status Delivery completed and Finally confirmed. Enter order item * . However. The WIP balance should be zero. a) Enter your order number. Select Detail list. there is still an order balance resulting from the variance generated by the confirmation of operation 330. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Settings → Order Items → On/Off Enter your order number. Calculate the variances for all target cost versions for the current period. Compare the calculated total WIP amount with the remaining balance for your process order. Period: Current month Fiscal Year: Current fiscal year Choose All target cost versions. All rights reserved. 2006/Q2 . variance calculation can be executed. Choose Execute. The remaining balance on the process order will be considered production variance. Continued on next page 222 © 2006 SAP AG. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Variances → Individual Processing (KKS2) 1.Unit 4: Product Cost Controlling by Order TFIN22_1 2. Choose the layout 1SAP03 to display the WIP balance. Choose Execute. Deselect Test Run. select the Layouts icon and select layout 1SAP02 (cost trend).

The system displays a list of the variance amounts for PA by variance categories and for FI by material. Select cost elements for item 1 and display the variance report. All rights reserved. Choose Cost Elements. The senders for production variances and the cancellation of WIP are listed on separate screens. Access the settlement of the variances by selecting the receiver line for the material T-FF1##. a) Enter your order number. 223 . Continued on next page 2006/Q2 © 2006 SAP AG. Favorites → Single Functions → Settlement → Individual Processing (KO88) 1. The cost element variance report is displayed. Choose Execute. Task 5: After variances have been calculated. Use the current period and year. The cost element variance report is displayed. Display the detail list for the settlement. The variance for cost element 620000 was caused by the additional production hour that was confirmed for operation 330. the variance categories can be settled to PA and the process order variance can be settled to FI. Display the cost element report for T-FF3##. Choose Cost Elements. Settlement period: Current month Posting period: Current month Fiscal Year: Current fiscal year Deselect Test Run. Execute settlement for the process order. Do both products indicate a variance for the processing duration? a) Select the order item. Select the second order item. What caused the variance for cost element 620000? Display the cost element report for item 2. In addition. the WIP balance will be cancelled in FI. 2. Yes.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 2. both products indicate a variance for the processing duration.

Check settlement to the value fields according to variance category.Unit 4: Product Cost Controlling by Order TFIN22_1 Select the accounting documents. All rights reserved. 895000 Factory output of production 231500 Expenses from Price Differences 893000 Work in Process 793000 WIP 3. Use the Next page icon in the PA document until the value field for the variance is visible. For which cost elements were postings made? a) Choose Detail lists. Continued on next page 224 © 2006 SAP AG. 2006/Q2 . Choose Receiver. If necessary. and access the Profitability Analysis document. To which value field was the variance settled? a) Select Profitability Analysis. and select the entry for Accounting document. Select the Value fields tab. Select the entry for Accounting document. Use the green arrow back and return to the detail list. choose Goto → Detail list of settled values Select the first order item. The variance amounts for PA are listed by variance categories. Return to the list of accounting documents. and the variance amount for FI is listed by material. Select Accounting documents.

Select Value fields. Confirm the dialogue box for the Operating Concern IDEA. 2006/Q2 © 2006 SAP AG. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Settlement → Create PA Transfer Structure(KEI1) Select PA transfer structure E1. The value field VV330 is displayed. All rights reserved. Select Assignment 40 (resource usage variance). display the assignment of the value field for the resource usage variance category using PA transfer structure E1. 225 .TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 4. In Customizing. a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. Select Assignment lines.

2006/Q2 . All rights reserved.Unit 4: Product Cost Controlling by Order TFIN22_1 226 © 2006 SAP AG.

TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 221 Exercise 11: Alternative: Period-End Closing with Delivered Process Orders Exercise Duration: 30 Minutes Exercise Objectives After completing this exercise. you will be able to: • Cancel the WIP at the completion of the order • Execute variance analysis for the production order and analyze the result. When entering the confirmation. In addition. 227 . since the order uses the full settlement rule (FUL). Task 1: Post the final confirmation and the goods receipt for your production order. variances can now be calculated and transferred to Profitability Analysis. What are the material and labor variances? 2. Final confirmation of the production confirmation and the posting of the final delivery of the pumps are prerequisite for the period-end closing activities. Create the final confirmation for the production order. The last phase required an additional processing time of 1 hour. Change the duration to reflect the additional hour. The remaining 5 pieces have been manufactured. Use movement type 101 to post a goods receipt for the 5 pumps. so the remaining WIP balances need to be cancelled using WIP calculation. All rights reserved. and settled to Financial Accounting. Save the confirmation. • Settle WIP (amount = zero) and variance amounts to Financial Accounting and Profitability Analysis • Analyze the accounting documents created during settlement • Review the Customizing settings for the PA transfer structure Business Example The production order had not been settled by the close of the previous period. The production order has now been completed. So that WIP balances were generated for the order items and transferred to Financial Accounting. 1. select the Final confirmation indicator. This will cause additional postings of actual costs to the order. 3. Display the cost report for the order. Continued on next page 2006/Q2 © 2006 SAP AG.

What caused the variance for cost element 620000? 2. Execute settlement for the production order. 3. Task 3: The production now has the status Delivery completed and Final confirmation. 228 © 2006 SAP AG. All rights reserved. Check settlement to the value fields according to variance category. Display the detail list for the settlement. Use the current period and year. Remain in the variance analysis detailed list display to answer the following question. 2. WIP must be calculated again in order to cancel the remaining WIP balance. Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Variances → Individual Processing (KKS2) 1. 1. 2. Since the settlement type for the order is FUL. 4. Select Cost Elements and display the variance report. using Results Analysis version 0 for the current period. Task 4: After variances have been calculated.Unit 4: Product Cost Controlling by Order TFIN22_1 Task 2: Since the order has the status final delivery. display the assignment of the value field for the resource usage variance category using PA transfer structure E1. Using the individual processing transaction. The remaining balance includes balances from production variance. 2006/Q2 . Calculate the variances for all target cost versions for the current period. execute variance analysis for your production order. calculate the work in process (WIP) value of your production order. The senders for production variances and the cancellation of WIP are listed on separate screens. the variance categories can be settled to PA and the production order variance can be settled to FI. Return to the list of accounting documents. In addition. Compare the calculated total WIP amount with the remaining balance for your production order. To which value field was the variance settled? In Customizing. Favorites → Single Functions → Settlement → Individual Processing (KO88) 1. The WIP balance should be zero. and access the Profitability Analysis document. variance calculation can be executed. the WIP balance will be cancelled in FI. Using the individual processing transaction.

Use movement type 101 to post a goods receipt for the 5 pumps. 2. Change the duration to reflect the additional hour. select the Final confirmation indicator. and storage location 0001. plant 1000. When entering the confirmation. Choose To Order. Select Enter. All rights reserved. a) Favorites → Confirmation → Enter → For Operation → Time Ticket (CO11N) Enter your order number and operation 70. Confirm a yield of 5 pieces. 1. This will cause additional postings of actual costs to the order. Save the goods receipt. Confirm the remaining quantities for R-F1##. Enter the confirmation type Final confirmation.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders Solution 11: Alternative: Period-End Closing with Delivered Process Orders Task 1: Post the final confirmation and the goods receipt for your production order. 229 . Save the confirmation. Save the confirmation. a) Favorites → Production → Production Control → Goods Movements → Goods Receipt (MB31) (MB31) Enter movement type 101. Confirm a duration of 1 additional hour. The remaining 5 pieces have been manufactured. The last phase required an additional processing time of 1 hour. Enter the production order number. Continued on next page 2006/Q2 © 2006 SAP AG. Create the final confirmation for the production order. Select Enter.

All rights reserved. using Results Analysis version 0 for the current period. 2006/Q2 . The labor variance is __________ caused by the additional 1 hour of duration that was confirmed at operation 70. Choose Execute.Unit 4: Product Cost Controlling by Order TFIN22_1 3. Task 2: Since the order has the status final delivery. Choose Select layout and select layout 1SAP02 (Cost Trend). WIP to period: Current month Fiscal Year: Current fiscal year Results Analysis version 0 Deselect Test Run. What are the material and labor variances? a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. a) Favorites → Work in Process → Individual Processing → Calculate (KKAX) Enter your order number. 1. Choose Execute. WIP must be calculated again in order to cancel the remaining WIP balance. calculate the work in process (WIP) value of your production order. The material variance is ______________ caused by the good issue of 1 additional goods issue R-B1##. Using the individual processing transaction. Display the cost report for the order. Continued on next page 230 © 2006 SAP AG.

Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Single Functions → Variances → Individual Processing (KKS2) 1. Continued on next page 2006/Q2 © 2006 SAP AG. The remaining balance includes balances from production variance. Calculate the variances for all target cost versions for the current period. Deselect Test Run. Select Select Layout and select layout 1SAP03 (Work in Process). All rights reserved. Select Detail list. Choose Execute. Choose Execute. a) Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders (KKBC_ORD) Enter your order number. variance calculation can be executed. Remain in the variance analysis detailed list display to answer the following question. Using the individual processing transaction. a) Enter your order number. However.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 2. Since the settlement type for the order is FUL. The generated WIP balance should be zero. Period: Current month Fiscal Year: Current fiscal year Choose All target cost versions. execute variance analysis for your production order. Task 3: The production now has the status Delivery completed and Final confirmation. Compare the calculated total WIP amount with the remaining balance for your production order. there is still an order balance resulting from the variances generated by the material and labor variance from the production confirmations. 231 . The WIP balance should be zero.

The variance for cost element 620000 was caused by the additional production hour that was confirmed for operation 70. Select Cost Elements and display the variance report.Unit 4: Product Cost Controlling by Order TFIN22_1 2. Settlement period: Current month Posting period: Current month Fiscal Year: Current fiscal year Deselect Test Run. the variance categories can be settled to PA and the production order variance can be settled to FI. The cost element variance report is displayed. Choose Execute. 2006/Q2 . All rights reserved. In addition. Execute settlement for the production order. the WIP balance will be cancelled in FI. What caused the variance for cost element 620000? a) Select the order. Favorites → Single Functions → Settlement → Individual Processing (KO88) 1. a) Enter your order number. Continued on next page 232 © 2006 SAP AG. Task 4: After variances have been calculated. Use the current period and year. Choose Cost Elements.

All rights reserved. Continued on next page 2006/Q2 © 2006 SAP AG. The variance amounts for PA are listed by variance categories. To which value field was the variance settled? a) Select Profitability Analysis. Select the Value fields tab.TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders 2. For which cost elements were postings made? Choose Receiver. Use the Next page icon in the PA document until the value field for the variance is visible. Access the settlement of the variances by selecting the receiver line for the material R-F1##. 233 . Select Accounting documents. Select the entry for Accounting document. Check settlement to the value fields according to variance category. The senders for production variances and the cancellation of WIP are listed on separate screens. Return to the list of accounting documents. 895000 Factory output of production 231500 Expense price differences 893000 Work in Process 793000 WIP 3. Select the accounting documents. Display the detail list for the settlement. Use the green arrow back and return to the detail list. The system displays a list of variance amounts for PA by Variance category and for FI by material. and the variance amount for FI is listed by material. a) Choose Detail lists. and select the entry for Accounting document. and access the Profitability Analysis document.

Unit 4: Product Cost Controlling by Order TFIN22_1 4. Select Assignment lines. 2006/Q2 . Select Assignment 40 (Resource usage variance). The value field VV330 is displayed. In Customizing. a) Favorites → Tools → Customizing → IMG → Execute Project (SPRO) Choose SAP Reference IMG. 234 © 2006 SAP AG. display the assignment of the value field for the resource usage variance category using PA transfer structure E1. Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-End Closing → Settlement → Create PA Transfer Structure (KEI1) Select PA transfer structure E1. Select Value fields. All rights reserved.

235 .TFIN22_1 Lesson: Period-End Closing with Delivered Production Orders Lesson Summary You should now be able to: • Explain period-end closing with delivered production orders • Explain the differences between the controlling methods of Product Cost by Order and Product Cost by Period 2006/Q2 © 2006 SAP AG. All rights reserved.

All rights reserved. 2006/Q2 .Unit Summary TFIN22_1 Unit Summary You should now be able to: • Describe the features of Product Cost by Order • Describe the features of Cost Object Controlling for joint production • Explain process manufacturing master data • Perform goods movements transactions and confirmations for the process order • Explain period-end closing with partially delivered production orders • Explain WIP at actual cost • Explain period-end closing with delivered production orders • Explain the differences between the controlling methods of Product Cost by Order and Product Cost by Period 236 © 2006 SAP AG.

Unit 5 231 Make-to-Order Production with Controlling by Sales Order The demo process can be carried out according to the sample solution. you will be able to: • • • • • • • • • • • • • • Use a sales order as a cost object Conduct preliminary costing for a sales order Analyze the control data of the sales order item Understand the quantity and value flow in make-to-order production with sales order controlling using discrete manufacturing Create a purchase order and post the goods receipt Explain goods movements on the valuated sales order stock Analyze the relevant accounting and controlling documents Give an overview of the sales order period-end closing Explain requirements types and how requirements classes are determined Explain entries in the requirements class and the account assignment category Create statistical cost elements for balance sheet accounts Execute period-end closing for partially delivered production orders Execute period-end closing for fully delivered production orders Explain the integration aspects of production order settlement 2006/Q2 © 2006 SAP AG. Unit Objectives After completing this unit. The instructor can use any group. 237 . Some procurement levels are displayed by a production order based on lot size before the finished product is delivered to the customer and billed. such as “00” (and material R-F100). All rights reserved. Unit Overview This unit shows controlling by sales order in a scenario with multi-level procurement of individual required materials.

...258 Exercise 13: Simultaneous Costing ........269 Lesson: Customizing .........Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 • • • • Explain the typical activities for period-end closing of a sales order with sales order controlling Understand the difference between the revenue-based and cost-based valuation methods in Results Analysis Understand when stock or reserves are formed and cancelled during Results Analysis Explain where the values of the sales order are settled Unit Contents Lesson: Master Data and Preliminary Costing......................331 238 © 2006 SAP AG.........................................239 Exercise 12: Master Data and Preliminary Costing ... 2006/Q2 .........................................................284 Lesson: Period-End Closing of Production Orders .................................. All rights reserved.......................................294 Lesson: Period-End Closing of the Sales Order ..........................305 Exercise 14: Period-End Closing of the Sales Order .251 Lesson: Simultaneous Costing........................

239 . This product is not in stock. The main strategy must have or contain the value “ZE”. A semi-finished product is specially manufactured. All rights reserved. you will be able to: • • • Use a sales order as a cost object Conduct preliminary costing for a sales order Analyze the control data of the sales order item Before beginning this unit. Business Example A customer has ordered a product (pump R-F1##) from you. but is manufactured made-to-order. a raw material specially purchased. which must first be acquired in a multi-level procurement process. Choose menu path IMG → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Control of Sales-Order-Related Production/Product Cost by Sales Order → Selection of Requirements Types Through MRP Group → Check Strategy Groups Select the entry “PP”. The final product consists of components.TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson: 233 Master Data and Preliminary Costing Lesson Duration: 50 Minutes Lesson Overview Lesson Objectives After completing this lesson. 2006/Q2 © 2006 SAP AG. confirm in Customizing that the main planning strategy of the “PP” strategy group has the value “ZE”.

2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Master Data Figure 99: Make-to-Order Production with Product Cost by Sales Order Product Cost by Sales Order is recommended if the following information is essential to your business: • • • • How high is my profit margin with this special sales order? How can I map special sales costs? How high is my funds commitment? Is this sales order performing well from a costing point of view? Where did late customer changes affect my production costs heavily? In this scenario you have the ability to: • • • Assign special direct costs of sales and distribution to the sales document item Allocate process costs to the sales document item Allocate sales overhead to the sales document item You can also use Results Analysis to: • • • Create reserves for expected losses automatically Add reserves for foreseeable risks manually Calculate Goods in Transit when goods have already been shipped but not yet invoiced 240 © 2006 SAP AG. All rights reserved.

Confirmations of the various steps and processes document the production progress and serve to fine-tune control. There can be wait times between the different operative processes. and yields counted at the end of a period at the latest. In discrete manufacturing. and operations can be assigned to different work centers. Costs are calculated on the basis of orders and individual lots. All rights reserved.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 100: Discrete Manufacturing Frequent changes to the product to be manufactured are characteristic of discrete manufacturing. a product is manufactured for a particular time period at a particular rate. component materials are staged with specific reference to the individual production lots. production involves several operative processes. In discrete manufacturing. 2006/Q2 © 2006 SAP AG. products are changed less frequently and are not manufactured in individual lots. Semi-finished products are frequently placed in interim storage prior to further processing. which can often be very complex. 241 . The products are typically manufactured in individually defined lots with shifting work center sequences. The sequence of work centers is determined in routings. In repetitive manufacturing. Instead.

2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 101: Product Cost by Sales Order Product Cost by Sales Order (in short: Sales Order Controlling) is recommended for complex scenarios in make-to-order production in the following situations: • • • Manufacturing in-house with reference to a sales order Purchasing products with reference to a sales order and reselling them to your customers Providing services with reference to a sales order Sales Order Controlling allows you to: • • • • • • • Calculate and analyze planned costs and actual costs by sales order item Calculate and analyze planned revenues and actual revenues by sales order item Calculate the value of your inventory of finished and semi-finished products Create reserves automatically Transfer data to Financial Accounting (FI) Transfer data to Profitability Analysis (CO-PA) Transfer data to Profit Center Accounting (EC-PCA) 242 © 2006 SAP AG. All rights reserved.

Figure 103: Controlling by Sales Order Controlling vs. 243 . Make-to-Order Production The slide shows the relationship between Controlling by Sales Order. Controlling by Order and Controlling by Period.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 102: Additional Key Feature of Sales Order Controlling You can create a production order for a sales order if. for example. a product is manufactured using BOMs and routings. 2006/Q2 © 2006 SAP AG. All rights reserved.

but only with material utilization for. such as in plant engineering (engineer-to-order). This also applies when product costing is post processed with unit costing. 2006/Q2 . The costs and revenues of such products must be planned and monitored in detail. 244 © 2006 SAP AG. a production order or collective order. The costs of a sales order or a WBS element are not generated with the goods receipt for an order or a production order. If you decide to use unit costing. Preliminary Costing Figure 104: Sales Order Controlling: Planning Options You can plan sales order costs with product costing or unit costing. You can pre-define the costing method in Customizing or at the beginning of the costing. Different methods are available for complex make-to-order production: • • Tracking costs directly on the sales order item (make-to-order) or Using projects for complex production. routing). the system will not save a cost component split.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Complex make-to-order production could involve order-specific changes or complete product redesign. for example. depending on whether you are using a logistical quantity structure (BOM. The inventories assigned to sales orders or projects are valuated in both cases. as is the case for unvaluated inventories. In such cases. All rights reserved. Costing results are updated as plan values to the sales order item. the system cannot transfer a cost component split to CO-PA.

TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 105: Product Cost Planning Sales Order Costing details (e.g. Figure 106: Product Cost Planning Sales Order: Overhead Overheads for sales and administration are calculated using the pricing procedure of the requirement class. The cost object displays only the cost of goods sold on cost element levels. 245 . unit costing) are contained in sales order costing. 2006/Q2 © 2006 SAP AG. All rights reserved. Overheads for materials and production costs are calculated using the pricing procedure of the valuation variant of the costing variant.

into the sales order cost estimate for the finished good. This costing can be used to value the inventory for these sub-assemblies. which are already calculated for the sub-assemblies. 2006/Q2 . With the following menu path you can cost a sub-assembly: Accounting → Controlling → Cost Object Controlling → Product Cost by Sales Order → Master Data/Planning → Create You can only use this function with valuated sales order stock. All rights reserved. 246 © 2006 SAP AG.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 107: Costing Sales Order BOM (1) You can cost the sub-assemblies before the sales order BOM is complete. Figure 108: Costing Sales Order BOM (2) You can transfer the planned costs. This improves performance significantly.

2006/Q2 © 2006 SAP AG. You can maintain this indicator in the following places: • • In the material master record at the Customizing point in IMG: Production → Basic Data → Bill of Material → Item Data under Define Explosion Types (to define explosion types for BOM items). requirement quantities of the dependent material are listed individually. The setting for the explosion type overrides that in the material master record. the requirement quantities of the dependent material are listed collectively. In “Collective Requirements”. a separate order with exact lot sizes is created (that is. orders created for different sales orders cannot be grouped together). All rights reserved. For each in-house component with individual requirements. 247 .TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 109: Exploding Requirements An indicator determines whether the following requirements are allowed for the dependent requirements of the material: • • In “Individual requirements”. The individual/collective requirement indicator also applies to all lower level BOM components.

All rights reserved. Figure 111: Pricing Procedure 248 © 2006 SAP AG. scaled calculations). This takes into consideration diverse specifics (such as article-specific or customer-specific surcharges and discounts.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 110: Plan Revenue Pricing is carried out in the module “Sales and Distribution (Sales Order Management)”. 2006/Q2 . and generates the sales price in a price determination schema. The price determination schema operates on the basis of so-called “Conditions”. based on pre-defined prices and costing results.

For example. The sales order costing refers to the to the sales order item. You can mark a condition types as follows: • • • Mandatory condition Manually entered condition For statistical purposes only Figure 112: Transferring Costing Data to Pricing The definition of the condition type per requirement class allows you to determine different condition types for the different items of a SD order (= sales order). while forwarding the value of the sales order pricing of another item in the same document only for statistical purposes.TFIN22_1 Lesson: Master Data and Preliminary Costing The pricing procedure lists all condition types permitted in pricing. 2006/Q2 © 2006 SAP AG. All rights reserved. You determine how the system is to use conditions by specifying requirements for each condition. If you do not store a condition type in the requirements class. the condition type is valid for all sales document items of the sales document. 249 . The pricing procedure can contain any number of subtotals between gross and net price. The reference level provides a method with which to specify a different basis for the condition type calculation and for grouping conditions for subtotals. the condition type is determined via the sales document type. In this case. you could carry out pricing for one item on the basis of a pricing procedure. The sequence in which the system accesses conditions in the business document is also determined here.

which you can compare with the price. network or service (statistical processing)”): • • Preliminary costing of the production order or Planned costs of the sales order costing 250 © 2006 SAP AG. EK02: If you choose this condition type. All rights reserved. the result of the sales order costing is purely a statistical value. • Figure 113: Assembly Type 2 As of release 4. The value can be used as the basis for price calculation.5. the result of the sales order cost estimate is first dispalyed on the pricing screen for the item.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 In the standard version of the SD system. you can use the requirement class to control which preliminary costing is to be taken over by the SD condition of the sales order item in assembly type 2 (“production order. two condition types are provided for the cost transfer of order items: • EK01: If you choose this condition type. 2006/Q2 .

Verify the existing master data for control of these individually required materials. Task 1: Start by creating a sales order for the finished good R-F1##. After you have confirmed that all master data and customizing data is correct. you will be able to: • Use a sales order as a cost object • Conduct preliminary costing for a sales order • Analyze the control data of the sales order item Business Example The finished product R-F1## is produced in plant 1000. 1. Check the following control data of the sales order item. R-F1## is produced with individually required materials. create a sales order for material R-F1##. Create a sales order for the material R-F1##: Enter the following data: Order type: Sales Organization: Distribution Channel: Division: Sold-to party: Purchase order number: Material: Order Quantity: Choose: Accept the proposed delivery date. 251 . What item category does the item have? Continued on next page OR (standard order) 1000 10 00 1171 44## R-F1## 10 pieces Enter 2006/Q2 © 2006 SAP AG. All rights reserved.TFIN22_1 Lesson: Master Data and Preliminary Costing 245 Exercise 12: Master Data and Preliminary Costing Exercise Duration: 20 Minutes Exercise Objectives After completing this exercise. 2.

Save your sales order and note the sales order number. Which assemblies will be produced specifically for the sales order requirement? ________________________________________________________ 2. Answer the following questions by checking the material master settings for the individual/collective requirements indicator for the BOM components. 2006/Q2 . 3. _________________________________________________________ Figure 114: BOM for Product R-F1## 252 © 2006 SAP AG. _________________________________________________________ Task 2: Check the BOM (listed below) for R-F1##. 1. Which materials will be issued from anonymous stock? _________________________________________________________ Change the individual/collective requirements indicator for material R-T4## so that this component will be purchased specifically for the sales order.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 _________________________________________________________ What Results Analysis key and costing sheet were transferred to the sales order? How were the defaults for the costing sheet and Results Analysis key calculated for the sales order item? _________________________________________________________ What requirements type was determined for the sales order item? _________________________________________________________ 3. All rights reserved.

a) b) 2. 1. All rights reserved. 253 . Create a sales order for the material R-F1##: Enter the following data: Order type: Sales Organization: Distribution Channel: Division: Sold-to party: Purchase order number: Material: Order Quantity: Choose: Accept the proposed delivery date. Menu path: Logistics → Sales and Distribution → Sales → Order → Create Accept the delivery date proposal by selecting Delivery Proposal. What item category does the item have? _________________________________________________________ What Results Analysis key and costing sheet were transferred to the sales order? How were the defaults for the costing sheet and Results Analysis key calculated for the sales order item? _________________________________________________________ What requirements type was determined for the sales order item? OR (standard order) 1000 10 00 1171 44## R-F1## 10 pieces Enter Continued on next page 2006/Q2 © 2006 SAP AG. Check the following control data of the sales order item.TFIN22_1 Lesson: Master Data and Preliminary Costing Solution 12: Master Data and Preliminary Costing Task 1: Start by creating a sales order for the finished good R-F1##.

Which assemblies will be produced specifically for the sales order requirement? Continued on next page 254 © 2006 SAP AG. select the following menu path: Goto → Item → Account assignment Results Analysis key: SDOR1 Costing sheet: COGS1 c) What requirements type was determined for the sales order item? (In the Sales overview. Save your sales order and note the sales order number. Answer the following questions by checking the material master settings for the individual/collective requirements indicator for the BOM components. select the Procurement tab.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 _________________________________________________________ a) What item category does the item have? (Sales tab) TAN (Standard item)_________________________________________ b) What Results Analysis key and costing sheet were transferred to the sales order? How were the defaults for the costing sheet and Results Analysis key calculated for the sales order item? To check the Results Analysis key and the costing sheet. which are assigned through the requirements class. All rights reserved. _________________________________________________________ a) _________________________________________________________ Task 2: Check the BOM (listed below) for R-F1##.) ZZ2 (Make-to-Order Production with Sales Order Controlling) 3. 2006/Q2 . 1.

Select Enter. 255 . R-B4##). R-B2##. 3. Change the individual/collective requirements indicator for material R-T4## so that this component will be purchased specifically for the sales order. determine the entry for individual/collective requirements for each sub-assembly. Select MRP 4 in the dialog box.TFIN22_1 Lesson: Master Data and Preliminary Costing ________________________________________________________ a) Menu path: Logistics → Production → Master Data → Material Master → Material → Display → Display Current Material number Select Enter. _________________________________________________________ Continued on next page 2006/Q2 © 2006 SAP AG. In the dialog box. This determines that these sub-assemblies will be issued from anonymous stock to the production order for R-F1##. R-B2## and R-B4##. R-B3##. enter the following: Plant : Choose 1000 Enter From the MRP4 view in the material master. (Material: R-B1##. As the indicator for R-B3## is not selected. 2. All rights reserved. the setting of the next highest assembly level is used. Which materials will be issued from anonymous stock? _________________________________________________________ a) The collective requirements indicator is selected for R-B1##.

256 © 2006 SAP AG. 2006/Q2 . All rights reserved. R-T4## will then follow the same control set for R-B3##. MRP will generate a purchase requisition for R-T4## to cover the individual requirement for R-F1##.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 115: BOM for Product R-F1## a) Ensure that the individual/collective requirements indicator for the material R-T4## is not selected (or set to 1).

All rights reserved. 257 .TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson Summary You should now be able to: • Use a sales order as a cost object • Conduct preliminary costing for a sales order • Analyze the control data of the sales order item 2006/Q2 © 2006 SAP AG.

A semi-finished product is specially manufactured. you will be able to: • • • • • Understand the quantity and value flow in make-to-order production with sales order controlling using discrete manufacturing Create a purchase order and post the goods receipt Explain goods movements on the valuated sales order stock Analyze the relevant accounting and controlling documents Give an overview of the sales order period-end closing Business Example A customer has ordered a product (pump R-F100) from you. but is manufactured make-to-order. All rights reserved. 258 © 2006 SAP AG. which must first be acquired in a multi-level procurement process.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Lesson: 252 Simultaneous Costing Lesson Duration: 80 Minutes Lesson Overview Lesson Objectives After completing this lesson. 2006/Q2 . a raw material specially purchased. The final product consists of components. This product is not in stock.

259 . use unit costing.TFIN22_1 Lesson: Simultaneous Costing Valuated Sales Order Stock Figure 116: Example: Valuated Sales Order Stock Figure 117: Sales Order Controlling: Planning If a logistical quantity structure (BOM. otherwise. 2006/Q2 © 2006 SAP AG. All rights reserved. routing) is present. you can calculate the planned costs of the sales order using product costing.

The example used in the course creates 2 production orders and 1 purchase order. the independent and dependent requirements are calculated for the sales order. 2006/Q2 . All rights reserved. preliminary costings can be optionally run on the production orders. In addition.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 118: Material Requirements Planning With multi-level MRP (Material Requirement Planning). 260 © 2006 SAP AG. Using the valuated sales order stock causes all goods movements from or to this stock to correspondingly debit or credit the consumer or supplier.

they are posted to the price difference account. Financial Accounting generates the usual posting record for goods receipts. (such as during the invoice receipt). If price differences occur after later consumption. the sales order and project stock can be displayed in the sales order report as “Funds commitment”. 261 . If the inventory account is controlled as a statistical cost element (type 90). With the valuation class in the material master (Accounting View 1).TFIN22_1 Lesson: Simultaneous Costing Figure 119: Goods Receipt/Invoice Receipt for Raw Material The goods receipt for the ordered material forms the stock. but with special accounts for the sales order or project stock where applicable. All rights reserved. 2006/Q2 © 2006 SAP AG. you can specify whether other accounts should be used for customer or project stock than for make-to-stock inventory.

the goods issue of the individual requirements raw material debits the production order with a consumption posting. 2006/Q2 . Figure 121: Goods Receipt Semi-Finished Material 262 © 2006 SAP AG. The stock is reduced correspondingly. All rights reserved. Financial Accounting generates the usual posting record for goods issues.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 120: Goods Issue Raw Material For valuated sales order stock. but with special accounts for the sales order or project stock where applicable.

2006/Q2 © 2006 SAP AG. All rights reserved. if the price control indicator is set to “V” the production order is debited with the current moving average price. the production order is debited with the standard price. Goods issued for a collective requirements component of the finished product also debits the product order. The sales order/project stock is reduced accordingly. however.TFIN22_1 Lesson: Simultaneous Costing During goods issue of the semi-finished product. In this case. Figure 122: Goods Issue: Components of Finished Goods The goods issue for the semi-finished individual requirements product debits the production order with the value in the sales order stock. the production order is credited and a new sales order/project stock formed. the valuation is determined by the material master. 263 . If the price control indicator of the material is set to “S”.

Figure 124: Delivery to Customer 264 © 2006 SAP AG. that is the value in the sales order costing.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 123: Goods Receipt Finished Good During goods issue of the finished product in sales order/project stock. 2006/Q2 . All rights reserved. The value is determined by the valuation strategy. the production order is credited and a new sales order/project stock formed.

You can activate the costs that indicate relevant options by means of settlement to Financial Accounting. Results Analysis is recommended when costs do not yet have any respective revenues and a period-based accrual of income is therefore to occur.TFIN22_1 Lesson: Simultaneous Costing The sales order item is debited at the time of delivery of the product to the customer. Results Analysis and Settlement (Overview) Figure 125: Results Analysis/Settlement (1) You can use Results Analysis to calculate the stock of “work in process”. 265 . The cost of sales is transferred to Financial Accounting with the goods issue posting. The sales order/project stock is reduced accordingly. Figure 126: Invoices 2006/Q2 © 2006 SAP AG. All rights reserved.

“Technically completed” informs the system that no further costs are expected. Invoicing (billing) posts the actual revenues to the sales order. “Final billing” informs the system that no further revenues are expected. In Sales and Distribution. All rights reserved. the system does not create further stock and reserves and cancels existing stock and reserves on the costs and revenues side. you create an invoice (billing document) on the basis of a reference document. change the status of the sales order item. 266 © 2006 SAP AG. 2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Billing invoices the customer for the goods and services delivered for a sales order. The price can be calculated in the following ways: • • Using pricing on the basis of conditions (such as material or customer) or On the basis of the incurred costs if you want to use resource-related billing When you generate a billing document. The billing type determines the following: • • Which pricing procedure is used for account determination for Financial Accounting Whether the invoices are passed immediately to Financial Accounting Figure 127: Results Analysis/Settlement (2) If you no longer wish to map stock or reserves. In this case. the system proposes a billing type depending on the sample document.

All rights reserved. Figure 129: Settlement of Price Differences to the Sales Order Item 2006/Q2 © 2006 SAP AG. 267 . you can calculate variances on the level of production orders and settle them to Profitability Analysis (CO-PA).TFIN22_1 Lesson: Simultaneous Costing Figure 128: Settlement of Variances to Profitability Analysis As manufacturing orders contain the full actual costs of manufacturing a material.

make sure that variance categories are not settled from production order to CO-PA. you can define the price difference account as a cost element and post the value to the sales order item when settlement to FI takes place. In this case. 2006/Q2 . 268 © 2006 SAP AG. All rights reserved. it might make sense to collect the total production costs including price differences on the level of the sales order item. In this case.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 In complex MTO-scenarios.

TFIN22_1 Lesson: Simultaneous Costing 263 Exercise 13: Simultaneous Costing Exercise Duration: 30 Minutes Exercise Objectives After completing this exercise. To do so. you will be able to: • Understand the quantity and value flow in make-to-order production with sales order controlling using discrete manufacturing • Create a purchase order and post the goods receipt • Explain goods movements on the valuated sales order stock • Analyze the relevant accounting and controlling documents Business Example The finished product R-F1## is produced specifically for the customer in plant 1000. 2006/Q2 © 2006 SAP AG. Use the purchasing organization 1000. Continued on next page 2. plant 1000 and view the planning results. At the end of the exercise. purchasing group 010 and company code 1000. Task 2: Display the stock/requirements list for R-T4##. vendor 1000. goods receipts. Task 1: 1. The price is 25 EUR. A purchase requisition was created to cover the sales order requirement. Save your purchase order and record the purchase order number. 1. and select Enter. You will then create production orders and a purchase order and complete the necessary postings (goods issues. You will execute material planning requirements for the sales order and analyze the arising planned orders and purchase requisitions. 269 . Menu path: Logistics→ Production → MRP → Evaluations → Stock/Requirements List Enter material R-T4##. Perform material requirements planning for the sales order. confirmations) required to produce product R-F1##. All rights reserved. plant 1000. you will create a partial delivery to the customer. Convert the purchase requisition into a purchase order. proceed by selecting New purchase order. If the pop-up PO of today already exists appears. choose single-planning for the sales order.

1. Process the goods receipt: Menu path: Logistics → Materials Management → Inventory Management → Goods Movement → Goods Receipt → For Purchase Order → PO Number Known Now enter the following data: Purchase Order: Choose your purchase order number Enter Set the OK indicator for the purchase order item. process goods receipt for the material R-T4## and review the valuated special stock report. plant 1000.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 ________________________________________________________ 3. and select Enter. Display the assignments for the production order. Menu path: Logistics→ Production → MRP → Evaluations → Stock/Requirements List Enter material R-B3##. Go to the information system for Sales Order Controlling and display the funds commitment report for your sales order. 270 © 2006 SAP AG. Select: Save 2. All rights reserved. Convert this planned order to a production order. The list displays the planned order created to fulfill the dependent requirement of your sales order. 1. Is the production order assigned to the sales order? ___________________________________________________ Continued on next page 2. plant 1000 and view the planning results. Check whether the commitment for the purchase order was updated on the corresponding sales order item. Task 3: From inventory management. determine if the material R-T4## is shown as valuated special stock. 2006/Q2 . In the valuated special stock report. Task 4: Display the stock/requirements list for R-B3##.

confirm a quantity of 10 and increase the proposed activity quantity to 2 hours. All rights reserved. 1. What is the settlement receiver? ___________________________________________________ ___________________________________________________ 4. Save the final confirmation. Does the operation create an accounting document? ______________________________________________________ ______________________________________________________ ______________________________________________________ 2. Enter the production confirmation (time-ticket based) for the last operation. Display the assignments for the production order. 5. Branch to the information system and check the actual costs for the production order. plant 1000. 271 . Release the production order. _______________________________________________________ Task 5: Proceed with the manufacturing of material R-B3##.TFIN22_1 Lesson: Simultaneous Costing ___________________________________________________ 3. Issue material R-T4## to the production order for R-B3##. Continued on next page 2006/Q2 © 2006 SAP AG. Was the production order credited for the goods receipt of R-B3##? How was the value of the goods receipt determined? ______________________________________________________ ______________________________________________________ ______________________________________________________ 3. Save the production order and note the production order number. Return to the production control menu. storage location 0001. Use movement type 261.

1. 2. Menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List Enter material R-F1##. Confirm a quantity of 5 and save the partial confirmation. 2. _______________________________________________________ Task 7: Proceed with the manufacturing of material R-F1##. 1000 Today's date + 10 Your sales order number Continued on next page 272 © 2006 SAP AG. Create a delivery for the 5 pumps. Is the goods receipt for the production confirmation of 5 pieces displayed as sales order stock? What is the total stock quantity and stock value for the valuated sales order stock of R-F1##? 3. plant 1000. All rights reserved. Task 8: 5 of the ordered 10 pumps are now available for delivery. 1. 1. plant 1000. Go back to the stock overview for material R-F1##. Issue the material for the production order for R-F1##. a planned order was created for R-F1##. and select Enter. Enter the following data: Shipping point: Delivery date: Order: Note the delivery number.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Task 6: Return to the stock/requirements list for R-F1##. Release and save the production order. and storage location 0001. Use movement type 261. When MRP was executed for your sales order. Enter a partial confirmation of only 5 pieces for the production order for R-F1##. 2006/Q2 . Write down the production order number. Return to the production control menu. Convert this planned order to a production order.

2006/Q2 © 2006 SAP AG. Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue. You can save your data by selecting Enter. 273 . you must create a transfer order. plant 1000. All rights reserved. 2.TFIN22_1 Lesson: Simultaneous Costing ______________________________________________________ Hint: If you cannot enter a picking quantity. or select “Save: yes”when prompted. operation “In the background” and “Adopt pick quantity” 2. This is done as follows: Choose Subsequent Functions → Create Transfer Order. Enter: Warehouse number 010.

Enter the vendor and purchasing organization. vendor 1000. To do so. select Proceed without stopping. plant 1000. select the purchase requisition. 2006/Q2 . a) Menu path: Logistics → Production → MRP → Planning → Single-Item. enter a price of 25 EUR. Sales Order Enter your sales order number and item 10. and select Enter. plant 1000 and view the planning results. Convert the purchase requisition into a purchase order. Select Enter twice. Use the purchasing organization 1000. If the pop-up PO of today already exists appears. and then Continue. 1. If the pop-up PO of today already exists appears. If necessary.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Solution 13: Simultaneous Costing Task 1: 1. If the window Next Stopping Point appears. purchasing group 010 and company code 1000. ________________________________________________________ a) ________________________________________________________ Continued on next page 274 © 2006 SAP AG. From the selection screen. Task 2: Display the stock/requirements list for R-T4##. and press Adopt. Menu path: Logistics→ Production → MRP → Evaluations → Stock/Requirements List Enter material R-T4##. A purchase requisition was created to cover the sales order requirement. Exit the transaction. 2. proceed by selecting New purchase order. Save your purchase order and record the purchase order number. and select Enter. proceed by selecting New purchase order. a) This is how you turn the purchase requisition into a purchase order: double-click the purchase requisition and choose Purchase Order (Convert Purchase Requisition into Purchase Order). The price is 25 EUR. Perform material requirements planning for the sales order. choose single-planning for the sales order. All rights reserved.

Yes. Go to the information system for Sales Order Controlling and display the funds commitment report for your sales order. Continued on next page 2006/Q2 © 2006 SAP AG. process goods receipt for the material R-T4## and review the valuated special stock report. the commitment was updated on the sales order item. 1. Process the goods receipt: Menu path: Logistics → Materials Management → Inventory Management → Goods Movement → Goods Receipt → For Purchase Order → PO Number Known Now enter the following data: Purchase Order: Choose your purchase order number Enter Set the OK indicator for the purchase order item. All rights reserved. 275 . Your sales order number 10 Execute Task 3: From inventory management. a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order→ Detailed Reports → For Sales Order Enter the following data: Sales order: Item: Choose: Go to the Funds commitment layout. Check whether the commitment for the purchase order was updated on the corresponding sales order item.TFIN22_1 Lesson: Simultaneous Costing 3.

determine if the material R-T4## is shown as valuated special stock. a) 2. Is the production order assigned to the sales order? ___________________________________________________ Continued on next page 276 © 2006 SAP AG. R-T4## is displayed as valuated sales order stock. All rights reserved. The list displays the planned order created to fulfill the dependent requirement of your sales order. plant 1000 and view the planning results. 1. In the valuated special stock report.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Select: Save a) Menu path: Logistics → Materials Management → Inventory Management → Goods Movement → Goods Receipt → For Purchase Order → PO Number Known Enter your purchase order number and set the OK indicator for the purchase order item. Menu path: Logistics→ Production → MRP → Evaluations → Stock/Requirements List Enter material R-B3##. Task 4: Display the stock/requirements list for R-B3##. 2. and select Enter. plant 1000. a) Menu path: Logistics → Materials Management → Inventory Management → Environment → Stock → Valuated Special Stock Enter the data as follows: Material: Choose R-T4## Execute Yes. Convert this planned order to a production order. and select Prod. To realize the planned order: Double-click the planned order. 2006/Q2 .ord (Convert planned order to production order) Display the assignments for the production order.

Release the production order. a) To release the production order: Select the following in the production order header: Functions → Release. 5. 1. Save the production order and note the production order number. _______________________________________________________ a) (Select Refresh in the stock/requirements list to generate the production order number). Issue material R-T4## to the production order for R-B3##. Use movement type 261. All rights reserved. plant 1000. Task 5: Proceed with the manufacturing of material R-B3##. 277 . Does the operation create an accounting document? ______________________________________________________ ______________________________________________________ Continued on next page 2006/Q2 © 2006 SAP AG. What is the settlement receiver? ___________________________________________________ ___________________________________________________ a) Menu path: Header → Settlement Rule Settlement Rule: 100 % to material 4.TFIN22_1 Lesson: Simultaneous Costing ___________________________________________________ a) Select the Assignment tab. 3. storage location 0001. Display the assignments for the production order. The production order is assigned to the sales order item for material R-F1##.

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______________________________________________________ a) Menu path: Logistics → Materials Management → Inventory Management → Goods Movement → Goods Issue [MB1P] Enter movement type 261, plant 1000, storage location 0001. Select To Order and enter your production order number for R-B3## in the dialog box that appears. Select Continue and save the goods issue document. Yes, an accounting document is created. To display the accounting document: Menu path: Goods issue → Display Enter the material document number. Select Enter. Select Accounting Documents. 2. Return to the production control menu. Enter the production confirmation (time-ticket based) for the last operation, confirm a quantity of 10 and increase the proposed activity quantity to 2 hours. Save the final confirmation. a) Menu path: Logistics → Production → Shop Floor Control → Confirmation → Enter → For Operation → Time Ticket Enter the following data: Order: Operation: Confirmation type: Choose: Your production order number 0060 Final confirmation Enter

Increase the proposed activity quantity to 2 hours and save the confirmation. 3. Branch to the information system and check the actual costs for the production order. Was the production order credited for the goods receipt of R-B3##? How was the value of the goods receipt determined? ______________________________________________________ ______________________________________________________

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______________________________________________________ a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Information System → Reports for Product Cost by Order→ Detailed Reports → For Orders KKBC_ORD Enter the following data: Order: Choose: Your production order number Execute

Select the Plan/Actual Comparison layout. Yes, the production order was credited for the goods receipt of R-B3##. The value was determined from the sales order costing for R-B3##. This can be verified by displaying the cost estimate for the sales order item.

Task 6:
Return to the stock/requirements list for R-F1##. When MRP was executed for your sales order, a planned order was created for R-F1##. Menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List Enter material R-F1##, plant 1000, and select Enter. 1. Convert this planned order to a production order. a) 2. To realize the planned order: Double-click the planned order, and select Prod.ord (Convert planned order to production order)

Release and save the production order. Write down the production order number. _______________________________________________________ a) To release the production order: Select the following in the production order header: Functions → Release. Save (Select Refresh in the stock/requirements list to generate the production order number).

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Task 7:
Proceed with the manufacturing of material R-F1##. 1. Issue the material for the production order for R-F1##. Use movement type 261, plant 1000, and storage location 0001. a) Logistics → Materials Management → Inventory Management → Goods Movement → Goods Issue Enter movement type 261, plant 1000, storage location 0001. Select To Order and enter your production order number for R-F1## in the dialog box that appears. Select Continue and save the goods issue document. (To view all materials, select Page Down on your keyboard). 2. Return to the production control menu. Enter a partial confirmation of only 5 pieces for the production order for R-F1##. Confirm a quantity of 5 and save the partial confirmation. a) Menu path: Logistics → Production → Shop Floor Control → Confirmation → Enter → For Order Enter the order number, then select Enter. Enter a quantity of 5 and check the partial confirmation. Save the confirmation. 3. Go back to the stock overview for material R-F1##. Is the goods receipt for the production confirmation of 5 pieces displayed as sales order stock? What is the total stock quantity and stock value for the valuated sales order stock of R-F1##? a) Menu path: Logistics → Materials Management → Inventory Management → Environment → Stock → Valuated Special Stock Enter the data as follows: Material: Sales Document: Sales Document Item: Choose: R-F1## Your sales order number 0010 Execute

Yes, the 5 pieces of R-F1## are displayed as sales order stock.

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Task 8:
5 of the ordered 10 pumps are now available for delivery. 1. Create a delivery for the 5 pumps. Enter the following data: Shipping point: Delivery date: Order: Note the delivery number. ______________________________________________________ Hint: If you cannot enter a picking quantity, you must create a transfer order. This is done as follows: Choose Subsequent Functions → Create Transfer Order. Enter: Warehouse number 010, plant 1000, operation “In the background” and “Adopt pick quantity” 2. You can save your data by selecting Enter, or select “Save: yes”when prompted. a) Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Outbound Delivery Enter the following data: Shipping point: Selection date: Order: Choose: Proceed with the steps for picking. Select the Picking tab. Enter the following data: 1000 Today's date + 10 Your sales order number Enter 1000 Today's date + 10 Your sales order number

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Storage location: Pick quantity: Delivery quantity: Post the goods issue. Note the delivery number.

0002 5 5

______________________________________________________ Hint: If you cannot enter a picking quantity, you must create a transfer order. This is done as follows: Choose Subsequent Functions → Create Transfer Order. Enter: Warehouse number 010, plant 1000, operation “In the background” and “Adopt pick quantity” 2. You can save your data with the return key, select “Save: yes”when prompted. 2. Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue. a) From delivery processing, select: Delivery → Display, then Environment→ Document Flow. Select the line GD goods issues, then display Environment → Document. Select Accounting Documents. Accounting documents were created for the goods issue. The value is based on the inventory costing, which was determined by the sales order costing.

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Lesson Summary
You should now be able to: • Understand the quantity and value flow in make-to-order production with sales order controlling using discrete manufacturing • Create a purchase order and post the goods receipt • Explain goods movements on the valuated sales order stock • Analyze the relevant accounting and controlling documents • Give an overview of the sales order period-end closing

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Lesson:
277

Customizing
Lesson Duration: 100 Minutes

Lesson Overview

Lesson Objectives
After completing this lesson, you will be able to: • • • Explain requirements types and how requirements classes are determined Explain entries in the requirements class and the account assignment category Create statistical cost elements for balance sheet accounts

Business Example
A customer has ordered a product (pump R-F100) from you. This product is not in stock, but is manufactured make-to-order. The final product consists of components, which must first be acquired in a multi-level procurement process. A semi-finished product is specially manufactured, a raw material specially purchased. The appropriate settings must be made in Customizing.

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Customizing the Scenario

Figure 130: Sales Document Structure

A sales document consists of a header and as many items as necessary. The items contain important information for processing the sales process, such as conditions, texts, partners. Each item contains one or more schedule lines. The first schedule line contains the requested delivery date. If the order quantity cannot be confirmed for the requested delivery date, the system proposes delivery dates and confirmed quantities in the following lines.

Figure 131: Item Categories

Each item is controlled by an item category. Using the item category, the system can process the same material for diverse sales document types differently.

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Figure 132: Item Category Determination

The item category is derived by Customizing from the sales document type and the item category group in the material master record (view “Basic Data” and “Sales 2”).

Figure 133: Requirements Class Determination (1)

Mapping the scenario of the sales order production is controlled mainly by means of the requirements class , which is found by requirements type. The requirements type can be derived in two ways, as derived from the table “Check Control of requirements type Determination”.

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From material master data only: 1. 2. 3. With this method, the system attempts to find a requirements type using the strategy group in the material master. If the strategy group has not been maintained, the system will determine the requirements type using the MRP group. If the MRP group has not been defined either, the system uses the material type to access the relevant control tables.

Figure 134: Requirements Class Determination (2)

From a combination of data from the material master record and the sales document: 1. The system attempts to derive the requirements type from the MRP type in the material master record and the item category in the sales document. If no requirements type is found here, the system attempts to find a requirements type with the aid of the item category and the MRP area type. If this is not possible, the system finally tries to find a requirements type with the item category only. If this last attempt fails, the system declares the transaction as not relevant for the availability check or transfer of requirements.

2. 3.

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Figure 135: Customizing: Requirements Class (1)

To be able to collect costs on a sales order item, you must select a requirements class that specifies an account assignment category that allows costs and revenues to be collected on sales order items. Collecting costs and revenues on sales order items is recommended in complex make-to-order production. In the standard system, the corresponding account assignment category is “E” (make-to-order production with controlling by sales order).

Figure 136: Account Assignment Category E

In the standard system, account assignment category “E” determines that you want to work with controlling by sales order and separate sales order stock. On the other hand, if you are working with a valuated sales order stock and do not want to use the sales order item (item in an inquiry, quotation, or sales order) as carrying costs and revenues, leave the Consumption posting field in the account assignment category blank. This is especially recommended for mass production

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on the basis of sales orders. In the standard system, the corresponding account assignment category is “M” (make-to-order production without controlling by sales order). In some cases, you do want to assign materials from make-to-stock production to a sales order item, which carries costs and revenues. This is recommended for spare parts for a make-to-order product of the sales order stock, for example. In this case, enter “E” in the Consumption posting field (settlement through sales order). In the standard system, the corresponding account assignment category is “B”.

Figure 137: Customizing: Requirements Class (2)

The “Valuation” indicator determines how the respective sales order stock is to be valuated. The valuation procedure for dependent requirements of individual requirements products is oriented by the independent requirements.

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Customizing Funds Commitment

Figure 138: Valuation of Sales Order Stock

The valuation in special stock uses a pre-defined strategy sequence, which is carried out at the time of the first goods receipt in the special stock, and produces results, which cannot be changed. • The system calculates the valuation price on the basis of Customer Exit COPCP002. If this is not activated, the system generates the valuation price using a marked sales order cost estimate. This sales order cost estimate can be based on a unit cost estimate or on a product cost estimate or a mixture of the two. Otherwise the system determines the valuation price using the production order cost estimate or the planned costs for the WBS element. If there are multiple production orders for the same sales order item, the system uses the standard price that results from the production order that delivers first. If no price has been found, the system uses the standard price from the material master record for the valuation. The standard price in the material master record may have been calculated in different ways, such as in a standard cost estimate.

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Figure 139: Customizing: Requirements Class (3)

If you only want to valuate the valuated sales order stock at the standard price of the non-allocated warehouse stock, you must set the indicator “Without val. strategy”.

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Facilitated Discussion

Discussion Questions
Use the following questions to engage the participants in the discussion. Feel free to use your own additional questions. • • • What does the account assignment category control? What does the requirements class control? Which prerequisites must be fulfilled to create a balance sheet account as a statistical cost element?

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Lesson Summary
You should now be able to: • Explain requirements types and how requirements classes are determined • Explain entries in the requirements class and the account assignment category • Create statistical cost elements for balance sheet accounts

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you want to execute period-end closing for your production orders. you will be able to: • • • Execute period-end closing for partially delivered production orders Execute period-end closing for fully delivered production orders Explain the integration aspects of production order settlement Business Example A customer has ordered a product (pump R-F100) from your company. The final product consists of components. which must first be acquired in a multi-level procurement process. 294 © 2006 SAP AG.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Lesson: 286 Period-End Closing of Production Orders Lesson Duration: 90 Minutes Lesson Overview Lesson Objectives After completing this lesson. but is manufactured make-to-order. A semi-finished product is specially manufactured. All rights reserved. whereas the other one does not. This product is not in stock. After you have completed most of the production. 2006/Q2 . The order for the semi-finished product already has the “Delivery Completed” status. a raw material specially purchased.

Results Analysis and settlement. 2006/Q2 © 2006 SAP AG. the period-end closing process includes WIP calculation and variance calculation for production orders. you can subsequently execute period-end closing for the sales order: Template allocation. there is no period-end closing for sales orders in sales-order-related production without sales order controlling. When you are using sales order controlling. In particular. overhead calculation. the period-end closing process for production orders assigned to a sales order is identical to the period-end closing process for make-to-stock production. All rights reserved. In contrast. 295 .TFIN22_1 Lesson: Period-End Closing of Production Orders Overview Figure 140: Period-End Closing For valuated sales order stock.

In principle. • The template allocation technique allocates ABC processes and activity types of the cost centers. • 296 © 2006 SAP AG. All objects of the Controlling are suitable for use as receivers. When using activity-based costing. Traditionally. without manual effort). overhead) from the cost centers to the cost objects. The overhead key is either entered directly in the cost object or derived from the overhead group from the material master (costing view 1). all information in the system can be used as the cause value (cost driver). you can assign a template in Customizing. especially cost objects and profitability segments of the CO-PA. yet also “as comfortably as possible” (that is. All rights reserved. Overhead Figure 141: Process costs This is a simplified rule for general cost allocation for production: Direct costs from other modules (such as Financial Accounting) are assigned directly to cost objects. Revaluation.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Template Allocation. where they are passed on to the cost items. The process template is determined dynamically based on the following parameters: – – – The costing sheet for the application of overhead is selected with the valuation variant. overhead costs are first assigned from the cost centers. and overhead costs are assigned to cost centers according to cause. primarily using the template allocation technique. With the combination of overhead key and costing sheet. overhead costs are then allocated through various methods (activity allocation. 2006/Q2 . Template allocation is a new technique for passing on Overhead Cost Controlling costs (activity types and processes) according to cause if possible.

internal orders). Figure 143: Overhead Costs vs Process Costs 2006/Q2 © 2006 SAP AG. You can define overheads in a costing sheet. The system calculates the amount as a percentage overhead onto certain consumption cost elements or as an amount dependent on a specific consumption quantity. which you then assign to the cost object.TFIN22_1 Lesson: Period-End Closing of Production Orders Figure 142: Overhead Cost Allocation using Surcharges Another method with which to allocate overhead is provided when overhead is applied to cost objects. which then credit overhead cost objects (cost centers. All rights reserved. 297 .

298 © 2006 SAP AG. the system calculates WIP. Otherwise. 2006/Q2 . which can hardly be analyzed without referring to Customizing. template allocation of processes and activity types offers informative and transparent overhead allocation without requiring much manual effort when executing period-end closing. All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Instead of applying overhead to cost objects. Course AC420 provides further information on template allocation with processes and activity types. period-end closing orients itself to the cost object status. If the cost object does not have the status “Delivery Completed” or “Technically Completed”. Work in Process Figure 144: WIP Calculation in Product Controlling by Order When controlling by order. the system calculates variances.

299 . If no goods receipt has been posted by period-end closing. the work in process is that part of the order that has not yet been delivered to stock. the work in process is the difference between actual costs and the value of the good receipt. the work in process is the actual costs to date. 2006/Q2 © 2006 SAP AG. The system updates the financial accounts with the work in process when the order is settled. All rights reserved.TFIN22_1 Lesson: Period-End Closing of Production Orders Figure 145: WIP (Work in Process) If you control your product cost by order. If a part of the order has been delivered to stock.

2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Variance Calculation Figure 146: Variance Calculation Variance calculation is an analysis tool for closer examination of problematic variances. All rights reserved. Product order variances result from either: • • Too many or too few costs debited Too many or too few costs allocated Figure 147: Variance Categories 300 © 2006 SAP AG.

This results in a quantity variance of 10 EUR. the moving average price is used for the valuation). (The standard price was selected in accordance with the valuation strategy). variance calculation requires information 2006/Q2 © 2006 SAP AG. 301 . All rights reserved. the difference is reported as an output price variance. This variance category can only apply to materials processed with a moving average price. However. • • • • • Figure 148: Integration of Variances Variances relevant to settlement are calculated based on the cost estimate used for valuating the delivery to stock. Consequently. (Since. The difference between planned and actual material overheads is reported as an input variance. However. The activity price for machine time is 5 EUR per minute. Remaining variance: If the system cannot calculate any target costs. the goods movement was valuated with 11 EUR when the material was issued from stock. Input variance: As the material price for raw material 1 changed. it will report only remaining variances. material overhead is higher than planned. This results in a price variance of 1 EUR. in accordance with price control. the delivery of semi-finished products in the collective order is valuated using production order costing. Resource-usage variance: Raw material 2 was used instead of raw material 1 The costs for both raw material 1 and raw material 2 are reported as resource-usage variances. Output price variance: If delivery to stock is made at a price that is not the standard price (such as the average moving price).TFIN22_1 Lesson: Period-End Closing of Production Orders The system calculates variances on the basis of pre-defined variance categories: • Input price variance: Raw material 1 was entered in the standard cost estimate at EUR 10. If collective orders exist for a sales order. 17 minutes were confirmed. Input quantity variance: Machine time of 15 minutes was planned.

Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 whether the valuation is based on a sales order costing. Variance calculation is not intended for sales order items. You can determine additional target cost versions for these variances for the information system. Provided the material is below the moving average price control. the variances appear only on production order levels. 2006/Q2 . 302 © 2006 SAP AG. All rights reserved. production order costing or standard costing of the material.

303 . Feel free to use your own additional questions. All rights reserved. • • • When and how is WIP calculated for a production order (with sales order controlling)? When and how is WIP calculated for a production order (with sales order controlling)? Which values are settled where? 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing of Production Orders Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion.

All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Lesson Summary You should now be able to: • Execute period-end closing for partially delivered production orders • Execute period-end closing for fully delivered production orders • Explain the integration aspects of production order settlement 304 © 2006 SAP AG. 2006/Q2 .

you will be able to: • • • • Explain the typical activities for period-end closing of a sales order with sales order controlling Understand the difference between the revenue-based and cost-based valuation methods in Results Analysis Understand when stock or reserves are formed and cancelled during Results Analysis Explain where the values of the sales order are settled Business Example The pump was produced specifically for the customer and delivered. Depending on when period-end closing is executed. different values are calculated for the sales order during the period-based accrual of income (Results Analysis). stock and provisions to Financial Accounting and Profit Center Accounting. Delivery is billed. 305 . These results are then settled: period-based costs and revenues of the sale to Profitability Analysis.TFIN22_1 Lesson: Period-End Closing of the Sales Order Lesson: 296 Period-End Closing of the Sales Order Lesson Duration: 145 Minutes Lesson Overview Lesson Objectives After completing this lesson. All rights reserved. 2006/Q2 © 2006 SAP AG.

2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Results Analysis: Principle Figure 149: Integration of Results Analysis (1) Results Analysis can calculate the following values among others: • • • • • Inventory values Reserves for unrealized costs Reserves for imminent loss Reserves for complaints and provisions Cost of sale Figure 150: Integration of Results Analysis (2) 306 © 2006 SAP AG. All rights reserved.

2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing of the Sales Order The results of Results Analysis are then settled to FI. CO-PA and PCA. You can also settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA): • • • • • Inventory values Reserves for unrealized costs Reserves for imminent loss Reserves for complaints and provisions The costs of sale if you are using an unevaluated sales order stock and using the cost-of-sales accounting method in Financial Accounting. You can settle the following with Profitability Analysis (CO-PA): • • Cost of Sale or Calculated Revenue Reserves for imminent loss and complaints Figure 151: General Approach (1) The starting point for calculating accrual values is the calculation of a “percentage of completion” for the cost object. 307 . All rights reserved.

Figure 153: General Approach (3) Stock and reserves are calculated in terms of the costs and revenue depending on the constellation of data. 2006/Q2 . All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 152: General Approach (2) The period-based costs and revenues of the sale are calculated from the percentage of completion. 308 © 2006 SAP AG. If these values are settled to Profitability Analysis. the profit generated here will differ from the profit generated in FI and PCA.

All rights reserved.TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 154: General Approach (4) Then. stock and reserves are transferred to FI and PCA so that the profit generated there is the same as the profit in CO-PA. Figure 155: Method-Based Results Analysis 2006/Q2 © 2006 SAP AG. 309 .

use a Results Analysis method that can be used to create work in process. • • If you do not want to capitalize unrealized profits. legal regulations and the applied valuation rules differ widely between different countries. Some methods of creating work in process and creating revenue in excess of billings also allow automatic creation of reserves for unrealized costs or reserves for imminent losses. but also alone between the HGB (German Commercial Code) and IAS/IFRS (International Accounting Standards/International Financial Reporting Standards). 2006/Q2 . If you want to capitalize unrealized profits. Decision Criteria • • • Different legal regulations in different countries determine whether unrealized profits can or cannot be capitalized. 310 © 2006 SAP AG. Example: Revenue-Based Method Figure 156: 01: Revenue-based evaluation method As example of Results Analysis work method. such as between North America and Germany. Which Results Analysis method you choose depends on your business requirements. For automatic creation of reserves for unrealized costs or reserves for imminent losses plan costs are necessary. two examples will be given which use the same figures but have different methods for generating accrual values: revenue-based and cost-based methods. use a Results Analysis method that can be used to create stock from which yield (revenue in excess of billings) can be generated. The Results Analysis method contains the rule for calculating Results Analysis data. When should the stock and reserves be cancelled? Particularly regarding capitalizing unrealized profits. which can be transferred parallel to Financial Accounting (but using different accounts).Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 The system can carry out Results Analysis for cost objects automatically. All rights reserved. Different business objectives as well as different reporting rules for different business transactions mean that several methods can be used simultaneously. This situation demands different Results Analysis methods.

000 and costs of 2. This method provides you with the following capabilities: • • • • You can create reserves for unrealized costs You can create reserves for imminent losses You can use milestone billing You can report intermediate profits Figure 157: Example: Revenue-Based Results Analysis (1) Example: You have planned revenue of 3. the system calculates the following data: Revenue: 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing of the Sales Order The revenue-based method derives the percentage of completion (POC) from the relationship between actual and planned revenue. During Results Analysis. You have actual costs of 1.000 for your sales order. the calculated cost of sales is zero as long as your actual revenue for the period is zero. The work in process then equals the actual costs of the period. This means that actual revenue is assessed period-based correctly. The corresponding stock and provisions are mapped: • • If the actual costs are greater than the costs relevant to profit. the system creates work in process If the actual costs are less than the costs relevant to profit. All rights reserved. Profit-relevant costs are calculated by multiplying planned costs by the percentage of completion (POC): (K(pa) = C(p) x R(a) / R(p)). 311 .000 but no revenue. the system creates reserves for unrealized costs If you are using the revenue-based method with profit realization.

the system calculates the following data: Revenue: Cost of sales: Costs to be capitalized in stock (WIP): Settlement settles revenue and cost of sales to CO-PA. You then settle the capitalized costs to FI and EC-PCA. Figure 158: Example: Revenue-Based Results Analysis (2) You have actual costs of 1.000 in losses are generated on the profit and loss account. As in CO-PA. All rights reserved. actual amounts of 1. the following posting is created: WIP against inventory chane account 200. 2006/Q2 . FI and PCA generate a profit of 400. 312 © 2006 SAP AG. and actual costs of 1. As the inventory change account is settled to the profit and loss account. FI and PCA do not generate any profit. On the basis of posting rules (which must be maintained in Customizing). which consequently generates a profit of 400.000. settlement generates the following posting: WIP account against inventory change account of 1.200. As the inventory change account is settled to the profit and loss account.000 in losses are generated on the profit and loss account.200 plus 200 inventory change in profit. As in CO-PA.000 and actual revenue of 1.000 in profit and 1. During Results Analysis. You then settle the capitalized costs to FI and PCA.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Cost of sales: Costs to be capitalized in stock (WIP): No line items are generated for CO-PA by settlement. actual revenue of 1. At settlement.

TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 159: Example: Revenue-Based Results Analysis (3) You have actual costs of 1. During Results Analysis. FI and PCA indicate a profit of 1.000. You then settle the reserves to FI and PCA. actual revenue of 3.800 plus the inventory change of 200 is indicated in losses by the profit and loss account. Example: Cost-Based Method Figure 160: 03: Cost-Based POC Method 2006/Q2 © 2006 SAP AG.000 is indicated in profit and actual costs of 1. As the inventory change account is settled to the profit and loss account.000. As in CO-PA. All rights reserved. which consequently generates a profit of 1.000. the system calculates the following data: Revenue: Cost of sales: Reserves for unrealized costs: Settlement settles revenue and cost of sales to CO-PA.800 and actual revenue of 3. 313 .

You have actual costs of 1. if the actual revenue is less than the profit-relevant revenue. which consequently generates a profit of 500.500 Settlement settles revenue and cost of sales to CO-PA.500 Revenue in excess of billings: 1.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 The cost-based POC method derives the percentage of completion from the relationship between actual and planned revenue. You then settle the capitalized costs to FI and EC-PCA. but no revenue has been received.000 Revenue affecting net income: 1. This means that actual costs are assessed period-based correctly. On the basis of posting rules (which must be maintained in Customizing).000 for your sales order. 2006/Q2 . All rights reserved. The corresponding stock and reserves are created: • • if the actual revenue is greater than the profit-relevant revenue. the system creates revenue surplus.000 and costs of 2. During Results Analysis. Profit-relevant revenue is calculated by multiplying the planned revenue by the percentage of completion (POC): (R(pa) = R(p) x C(a) / C(p).000 but no revenue. the system calculates the following data: • • • Costs affecting net income of the sale (cost of sale): 1. the system creates revenue in excess of billings. Figure 161: Example: Cost-Based POC Method (1) Example: You have planned revenue of 3. settlement generates the following posting: inventory account against inventory 314 © 2006 SAP AG. The POC method differs from revenue-based Results Analysis particularly when actual costs have been incurred.

As the inventory change account is settled to the profit and loss account. You then settle the capitalized costs to FI and EC-PCA. actual revenue of 1. As in CO-PA.000 and actual revenue of 1. Figure 162: Example: Cost-Based POC Method (2) You have actual costs of 1. actual amounts of 1. profit has already been capitalized. All rights reserved.500. 315 . During Results Analysis. As the inventory change account is settled to the profit and loss account. settlement generates the following posting: inventory account against inventory change account 300. Although no revenues have been received.000 in losses are generated on the profit and loss account.200 plus 300 inventory change in profit.TFIN22_1 Lesson: Period-End Closing of the Sales Order change account 1.500.500 in profit and 1. On the basis of posting rules (which must be maintained in Customizing). 2006/Q2 © 2006 SAP AG. the system calculates the following data: Costs affecting net income of the sale (cost of sale): Revenue affecting net income: Revenue in excess of billings: Settlement settles revenue and cost of sales to CO-PA. FI and PCA generate a profit of 500. FI and PCA generate a profit of 500. which consequently generates a profit of 500. As in CO-PA. and actual costs of 1.000 in losses are generated on the profit and loss account.

and actual costs of 1. 316 © 2006 SAP AG.000. As in CO-PA. 2006/Q2 . FI and PCA generate a profit of 900. actual revenue of 3.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 163: Example: Cost-Based POC Method (3) You have actual costs of 1. During Results Analysis. On the basis of posting rules (which must be maintained in Customizing). which consequently generates a profit of 900.800 plus 300 inventory change in losses are generated on the profit and loss account. As the inventory change account is settled to the profit and loss account.000 in profit.800 and actual revenue of 3. the system calculates the following data: Costs affecting net income of the sale (cost of sale): Revenue affecting net income: Revenue surplus: Settlement settles revenue and cost of sales to CO-PA. You then settle the capitalized costs to FI and EC-PCA. All rights reserved. settlement generates the following posting: inventory change account against inventory account 300.

When you bill. The connection between the cost of sales and revenue is as follows: – As soon as revenue has been received. 317 . nor proportional to the quantity sold. the calculated cost of sales is zero as long as your actual revenue is zero. 2006/Q2 © 2006 SAP AG. Hint: • • • You cannot create reserves. All rights reserved. as with the revenue-based method. the calculated cost of sales is equal to the actual costs. The work in process is canceled as soon as actual revenues are received.TFIN22_1 Lesson: Period-End Closing of the Sales Order Method without Planned Costs and Partial Billing Figure 164: Method without Planned Costs and Partial Billing “Inventory determination without planned costs and partial billing” provides a further example. This method is not suitable for milestone billing because such billings result in final cancellation of work in process. the actual costs are fully considered cost of sales. it is no longer possible to activate work in process. The work in process is equal to the actual costs during this time. This method provides you with the following advantage: You do not require plan values. The cost portion in stock is canceled when it achieves status TECO. If the actual revenue is not zero. If you use this method. This means that the cost of sales is neither proportional to the actual revenues. as with the quantity-based method.

You can determine how accurately the system generates accrual values in Customizing. Simply choose one of the 17 pre-defined methods in “Non-expert mode”. 2006/Q2 . A company will normally run different types of processing – and therefore use different methods of Results Analysis – simultaneously. Further options are available in expert mode. which are represented by different statuses and lead to different results in Results Analysis.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Customizing for Results Analysis Figure 165: Method-Based Customizing Which Results Analysis method you choose depends on your business requirements. The Results Analysis method contains the rule for calculating Results Analysis data. the sales order item goes through several stages. In make-to-order production. All rights reserved. In the standard system there are three relevant system statuses: • • • REL (released) FNBL (final billing) TECO (technically completed) In Customizing for Sales Order Controlling under Period-End Closing → Results Analysis enter: • • • At which status Results Analysis can be performed At which status the work in process is canceled (optional) At which status the work in process and reserves are canceled (optional) 318 © 2006 SAP AG.

which you assign in Customizing. Results Analysis calculates separate values for each line ID. you must define posting rules in Customizing so that G/L accounts can be assigned to these secondary cost elements. 2006/Q2 © 2006 SAP AG. 319 . this method can result in one line ID showing work in process while another line ID shows reserves. All rights reserved. Figure 167: Results Analysis at Group Level When you select the line identification level. Under certain conditions. To be able to pass the WIP and reserves to Financial Accounting.TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 166: WIP and Provisions: Allocation to Cost Elements Results Analysis saves the Results Analysis data for the sales order item under secondary cost elements.

the system calculates work in process. If a method of apportionment cannot be used. All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 168: Results Analysis at Totals Level If you select valuation at the totals level. reserves for complaints and commissions. 2006/Q2 . The standard setting for apportionment is: • • • • Capitalized Costs/Work in Process: Cumulative Actual Costs Reserves for unrealized costs: difference between planned costs and cumulative actual costs Reserves for costs of complaints and commissions: Difference between planned costs and cumulative actual costs Provisions for imminent loss: Display of credit for inventory which cannot be capitalized and inventory with the option to capitalize. the system looks for an alternative method of apportionment. and reserves for imminent loss for each order. These values are then distributed to line IDs according to a method of apportionment specified in the valuation method. reserves for unrealized costs. The system searches in the following order: • • • • Apportionment numbers (according to the number defined under “Update for Results Analysis”) Cumulative Actual Costs Planned costs Apportionment numbers with apportionment numbers per line ID = 1 320 © 2006 SAP AG.

321 .TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 169: Apportionment of WIP Based on Actual Costs Settlement Figure 170: Settlement 2006/Q2 © 2006 SAP AG. All rights reserved.

You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA): • • • • • Inventory Values Provisions for Unrealized Costs Provisions for Imminent Loss Provisions for Complaints and Commissions The costs of sale if you are using an unevaluated sales order stock and using the cost-of-sales accounting method in Financial Accounting. 322 © 2006 SAP AG. You can settle the following with Profitability Analysis (CO-PA): • • Cost of Sale or Calculated Revenue Reserves for imminent loss and complaints During settlement to Profitability Analysis.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 171: Integration of Settlement The results of Results Analysis are then settled to FI. CO-PA and PCA. All rights reserved. the generated line item of the CO-PA can be valuated with the cost component split of the sales order cost estimate or with the cost component split of a standard cost estimate. 2006/Q2 .

All rights reserved. a posting to FI in accordance with the posting rules will be made. 323 . you can specify in the settlement profile that the sales order must not be settled. If you do settle.TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 172: Maintain Settlement Rule If CO-PA is active. 2006/Q2 © 2006 SAP AG. Figure 173: Settlement Profile If CO-PA is inactive. the settlement rule is automatically generated for the profitability segment when the sales order item is generated.

Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Figure 174: Customizing the Settlement Structure To use the settlement structure. you link the cost element group to the settlement structure with a settlement assignment. In Customizing. 2006/Q2 . All rights reserved. such as repairs or maintenance To reduce data volume by consolidating several debit cost elements under one settlement cost element 324 © 2006 SAP AG. you must first create cost element groups that aggregate the primary and secondary cost elements used for debit postings to your orders. For each settlement assignment. You might use settlement cost elements: • • To identify costs allocated from orders to receiver and to describe their purpose. you stipulate by receiver type whether the settlement will use the original posted cost elements or a designated settlement cost element.

the Results Analysis data (valuated actual revenue. ensure that every debit cost element is represented in the settlement structure and can only be assigned to one settlement cost element. you must define a PA transfer structure. the PA transfer structure must contain all Results Analysis cost elements under which data used in Profitability Analysis is posted. All rights reserved. The PA transfer structure consists of one or more items called PA settlement assignments. Once you have carried out Results Analysis. and reserves for imminent loss) is settled to the profitability segment. 325 . cost of sales. In this case.TFIN22_1 Lesson: Period-End Closing of the Sales Order Figure 175: PA Transfer Structure If you want to settle costs and revenue of a sales order item to a profitability segment. Figure 176: Valuation using Material Cost Estimate 2006/Q2 © 2006 SAP AG. the posted actual costs and actual revenue of the sales order item will be settled to the profitability segment. which assigns costs and revenue to the value fields in Profitability Analysis. When defining the PA transfer structure. If you do not carry out Results Analysis. The PA transfer structure must contain all cost elements under which costs and revenue can be posted on the sales order item.

the product sold. Alternatively. or any other characteristic in your operating concern. This must be done for each relevant cost component split. you determine which cost estimates the system should read in Product Cost Accounting in order to valuate the data in CO-PA. 2006/Q2 . you can valuate documents by reading the cost of goods manufactured in the material cost estimates from Product Cost Planning. Once you have done this. Which costing key is used for a particular document can depend on when the document is valuated in CO-PA. These include cost estimates with and without quantity structures. All rights reserved. The following steps in Customizing are necessary to set up valuation using material cost estimates in your system: • When you maintain costing keys. you can use these material cost estimates to valuate the data in CO-PA. You do this by defining costing keys. the material type of that product. you can use the flexible assignment function to assign costing keys to any characteristics in your operating concern for valuation. 326 © 2006 SAP AG. In Profitability Analysis (CO-PA). you can assign these costing keys to a product or material type.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 In Profitability Analysis (CO-PA). You then need to use value field assignment to determine for each operating concern and at each point of valuation how the cost components in the cost component split are to be assigned to the value fields in CO-PA. • • Figure 177: Define Keys for Accessing Material Cost Estimate Product Cost Planning is used to determine the planned cost of goods manufactured for a product. the record type.

you can determine the costing keys using your own “strategy” for the flexible assignment of costing keys. As in characteristic derivation in CO-PA. 2006/Q2 © 2006 SAP AG. All rights reserved. You do this by defining costing keys. Figure 178: Assign Value Fields The steps “Assign costing keys to products” or “Assign costing keys to material types” let you assign costing keys to individual products or material types.TFIN22_1 Lesson: Period-End Closing of the Sales Order With this function. The product-dependent or material-dependent access of material cost estimates in Product Cost Accounting is not flexible enough for parallel use of make-to-stock and make-to-order scenarios. Use this strategy to determine the costing keys. you determine which cost estimates from Product Cost Planning should be used to value actual or planning data in CO-PA. Normally you need at least 2 costing keys. 327 . You use one costing key to valuate a make-to-stock process with a standard cost estimate and another to value a make-to-order process with a sales order cost estimate. you can also work with table lookups or your own customer enhancements when setting up the strategy. To meet this or other requirements. generally using user-defined assignment tables. A costing key is a set of access parameters which are used in valuation to determine which data in Product Cost Planning should be read.

All rights reserved. In our scenario we will look up the requirement type of the sales order item to determine the process. You can transfer the contents of individual table fields to target fields of the type USERTEMP. Note that you need to maintain separate value field assignments for each point of valuation in Profitability Analysis (CO-PA).relationship) to the same value field for each cost estimate. You can separate cost elements into fixed and variable components before tranferring them to CO-PA. Figure 179: Assign Value Fields Here you can assign the components of a cost component structure from Product Cost Controlling to the value fields of your operating concern. The USERTEMP fields that have been filled by a table lookup can then be used in a subsequent strategy step as source fields for an assignment rule. the values of different cost components within the same cost estimate are aggregated and then entered in one CO-PA value field. If you valuate using multiple material cost estimates simultaneously. We specify an user-defined assignment table to assign the requirement type to a costing key. 328 © 2006 SAP AG. You can assign as many cost component as you wish (n:1 . • User-Defined Assignment Tables As with the pre-defined assignment tables for products and material types. The values from these cost components are then added together in the value field. record type and plan version. 2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 You can use the following methods to define a strategy: • Table Lookup A table lookup allows you to access individual data records in any SAP table. these user-defined assignment tables let you assign costing keys separately for each point of valuation.

329 . All rights reserved. value fields that already contain data from a previous cost estimate are not overwritten by a later cost estimate.TFIN22_1 Lesson: Period-End Closing of the Sales Order However. 2006/Q2 © 2006 SAP AG. you should assign value fields in Customizing so that the values of different cost estimates are entered in different sets of value fields. You can assign up to six different value fields from your operating concern to each cost component in the cost component structure. These assignments are indicated by the value fields entered in the columns Field name 1 through Field name 6. Consequently.

All rights reserved. 2006/Q2 .Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 330 © 2006 SAP AG.

different values are calculated for the sales order during the period-based accrual of income (Results Analysis). Task: 1. no billing document has yet been created for the delivery. Delivery is billed. you will be able to: • Explain the typical activities for period-end closing of a sales order with sales order controlling • Understand the difference between the revenue-based and cost-based valuation methods in Results Analysis • Understand when stock or reserves are formed and cancelled during Results Analysis • Explain where the values of the sales order are settled Business Example The pump was produced specifically for the customer and delivered. All rights reserved. stock and provisions to Financial Accounting and Profit Center Accounting. Calculate the overhead for the sales order item. a delivery for 5 pieces has been completed. 331 . To simulate different phases of the process. At this point.TFIN22_1 Lesson: Period-End Closing of the Sales Order 321 Exercise 14: Period-End Closing of the Sales Order Exercise Duration: 40 Minutes Exercise Objectives After completing this exercise. How was the costing sheet transferred into the sales order item? _______________________________________________________________ _______________________________________________________________ 2. you proceed with production and delivery of the order from the previous section and post the period-end closing activities (especially the Results Analysis transaction) more than once. These results are then settled: period-based costs and revenues of the sale to Profitability Analysis. However. Carry out Results Analysis using the revenue-based valuation method (Results Analysis version 0) and using the cost-based valuation method (Results Analysis version 1). Depending on when period-end closing is executed. Analyze Continued on next page 2006/Q2 © 2006 SAP AG.

Continued on next page 332 © 2006 SAP AG. 6. Report the remaining five pieces. Is any WIP remaining? Have reserves been calculated? _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ 5. Complete the delivery for the remaining 5 pumps in your sales order item. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Repeat the same procedure with the cost-based method. From the document flow. 3. Create a billing document for the delivery. Display the logs to obtain additional information on Results Analysis calculation and the configuration of the Results Analysis key SDOR1. Now that billing has been completed for the 5 pieces. 4. Create the billing document for the partial delivery of five items from the previous section. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Display the logs to obtain additional information on Results Analysis calculation and the configuration of the Results Analysis key SDOR1. but this time use Results Analysis version 1. carry out Results Analysis again using Results Analysis version 0. Create the delivery document and post the goods issue. From the document flow. Return to the Shop Floor Control menu and create the final confirmation for your production order R-F1##. 2006/Q2 . display the billing document and check the Financial Accounting document and the Cost Accounting document. display the billing document and check the Financial Accounting document and the Cost Accounting document. Make a note of the delivery number. Why did the results of these two methods differ? Save the results of the Results Analysis. All rights reserved. ___________________________________________________________ 7.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 the different results and compare them to the actual/planned comparison for the sales order.

Now that billing is complete. 333 . Calculate the overhead for the sales order item. execute Results Analysis using version 0. Save the Results Analysis data. How large is the sales order balance now? ___________________________________________________________ 2006/Q2 © 2006 SAP AG. Is any WIP remaining? Have reserves been calculated? ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ 10. No further costs are expected for the sales order item. In the sales order.TFIN22_1 Lesson: Period-End Closing of the Sales Order 8. set the status of the sales order item to Technically completed. ___________________________________________________________ ___________________________________________________________ 12. What effect should this have on Results Analysis? ___________________________________________________________ ___________________________________________________________ 11. From the display you can select receiver. 13. Carry out sales order settlement. Select detailed lists to display the settled amounts. Carry out Results Analysis with Results Analysis version 0. All rights reserved. sender or accounting documents to review the corresponding data. Go to the make-to-order reports and show the order profit for the sales order. 9. Check if there are still reserves for unrealized costs.

no billing document has yet been created for the delivery. However. Carry out Results Analysis using the revenue-based valuation method (Results Analysis version 0) and using the cost-based valuation method (Results Analysis version 1).Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Solution 14: Period-End Closing of the Sales Order Task: 1. How was the costing sheet transferred into the sales order item? _______________________________________________________________ _______________________________________________________________ a) Enter the following data: Sales document: Item: Period: Fiscal year: Background processing: Test run: Detail lists Dialog display: Choose: Your sales order number (previous section) 10 Current period Current fiscal year Deselect Deselect Deselect Select Execute The costing sheet is assigned to the sales order item through the requirements class. 2006/Q2 . Calculate the overhead for the sales order item. All rights reserved. 2. Why did the results of these two methods differ? Save the results of the Results Analysis. Analyze the different results and compare them to the actual/planned comparison for the sales order. a delivery for 5 pieces has been completed. At this point. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Continued on next page 334 © 2006 SAP AG.

TFIN22_1 Lesson: Period-End Closing of the Sales Order Repeat the same procedure with the cost-based method. but this time use Results Analysis version 1. All rights reserved. Continued on next page 2006/Q2 © 2006 SAP AG. 335 . _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Display the logs to obtain additional information on Results Analysis calculation and the configuration of the Results Analysis key SDOR1.

All rights reserved. The Results Analysis version 1 is a cost-based method. The overhead allocation is considered cost of sales (COS). 2006/Q2 . which include both product and overhead costs. At this point. the calculated revenue is determined by multiplying the POC with the planned revenue. All of the actual costs. are considered COS. The results are different because Results Analysis version 0 is a revenue-based method. the percentage of completion (POC) is 0%.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 Display the logs to obtain additional information on Results Analysis calculation and the configuration of the Results Analysis key SDOR1. or stock from which revenue can be generated. Display the logs to obtain additional information on Results Analysis calculation and the configuration of the Results Analysis key SDOR1. Continued on next page 336 © 2006 SAP AG. no actual revenue has been realized using RA version 0. therefore. 3. Using this basis for determining the POC. Create the billing document for the partial delivery of five items from the previous section. using Results Analysis version 1. a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Results Analysis → Execute → Individual Processing Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Full log: Choose: Your sales order number 10 Current period Current fiscal year 0 Select Execute In a different R/3 mode. and Results Analysis version 1 is a cost-based method. All of the actual costs for the product are considered WIP. repeat the same procedure for the cost-based method.

4. which means that the POC = R(a)/R(p). C(c) > C(a). 337 . At this point. All actual costs for both the product and overhead are considered COS. C(c) are then determined.C(a) = C(r)). Continued on next page 2006/Q2 © 2006 SAP AG. a) Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Billing document Enter the following data: Documents Choose: Your delivery number (previous section) Save From the document flow. display the billing document and check the Financial Accounting document and the Cost Accounting document. display the billing document and check the Financial Accounting document and the Cost Accounting document. All rights reserved. Reserves for unrealized costs are created if the calculated costs exceed the actual costs.TFIN22_1 Lesson: Period-End Closing of the Sales Order From the document flow. so there is no WIP. (C(c) . Now that billing has been completed for the 5 pieces. carry out Results Analysis again using Results Analysis version 0. Is any WIP remaining? Have reserves been calculated? _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ a) Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Full log: Choose: Your sales order number 10 Current period Current fiscal year 0 Select Execute Billing has been completed for 5 pieces.

2006/Q2 . a) Menu path: Logistics → Production → Shop Floor Control → Confirmation → Enter → For Order Enter the following data: Order: Your production order number for material R-F1## Enter Choose: Select Final Conf. Create a billing document for the delivery. Complete the delivery for the remaining 5 pumps in your sales order item. and save the production order confirmation. ___________________________________________________________ a) Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Outbound Delivery Enter the following data: Shipping point: Selection date: Order: Choose: Enter 5 for the pick quantity Post goods issue with Post goods issue. Make a note of the delivery number. Report the remaining five pieces. 1000 Today's date + 10 Your sales order number Enter Continued on next page 338 © 2006 SAP AG. ___________________________________________________________ 7. 6. Return to the Shop Floor Control menu and create the final confirmation for your production order R-F1##. Create the delivery document and post the goods issue. All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 5. Make a note of the delivery number.

a) Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Billing document Enter the following data: Documents Choose: Your delivery number Save From the document flow. display the billing document and check the Financial Accounting document and the Cost Accounting document. 8. All rights reserved. Is any WIP remaining? Have reserves been calculated? ___________________________________________________________ ___________________________________________________________ Continued on next page 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Period-End Closing of the Sales Order From the document flow. Your sales order number (previous section) 10 Current period Current fiscal year Deselect Deselect Deselect Select Execute Now that billing is complete. execute Results Analysis using version 0. 339 . Calculate the overhead for the sales order item. a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Overhead Enter the following data: Sales document: Item: Period: Fiscal year: Background processing: Test run: Detail lists Dialog display: Choose: 9. display the billing document and check the Financial Accounting document and the Cost Accounting document.

set the status of the sales order item to Technically completed. reserves may remain if actual costs are less than calculated costs. Carry out Results Analysis with Results Analysis version 0. Continued on next page 340 © 2006 SAP AG. Check if there are still reserves for unrealized costs. No further deliveries are expected. 2006/Q2 . However. All rights reserved.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 ___________________________________________________________ a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Results Analysis → Execute → Individual Processing Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Full log: Choose: Your sales order number 10 Current period Current fiscal year 0 Select Execute There is no WIP remaining as WIP is cancelled after final billing. 11. Choose the Technically Completed pushbutton and save your sales order. In the sales order. Save the Results Analysis data. 10. What effect should this have on Results Analysis? ___________________________________________________________ ___________________________________________________________ a) Menu path: Logistics → Sales and Distribution → Sales → Order → Change Select Enter. No further costs are expected for the sales order item. Select the sales item. then Goto → Item → Status Select the status icon Change.

TFIN22_1 Lesson: Period-End Closing of the Sales Order ___________________________________________________________ ___________________________________________________________ a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Results Analysis → Execute → Individual Processing Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Full log: Choose: Your sales order number 10 Current period Current fiscal year 0 Select Execute Save the results of the Results Analysis. 341 . Continued on next page 2006/Q2 © 2006 SAP AG. All rights reserved.

All rights reserved. Go to the make-to-order reports and show the order profit for the sales order. From the display you can select receiver. Carry out sales order settlement.Unit 5: Make-to-Order Production with Controlling by Sales Order TFIN22_1 12. a) Menu path: Accounting → Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions→ Settlement Enter the following data: Sales order: Item: Period: Fiscal year: Background processing: Test run: Detail lists Choose: Your sales order number 10 Current period Current fiscal year Deselect Deselect Select Execute 13. 2006/Q2 . 342 © 2006 SAP AG. sender or accounting documents to review the corresponding data. How large is the sales order balance now? ___________________________________________________________ a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order→ Detailed Reports → For Sales Order Change the layout by adding the item “Result” as a new column. Select detailed lists to display the settled amounts.

343 .TFIN22_1 Lesson: Period-End Closing of the Sales Order Lesson Summary You should now be able to: • Explain the typical activities for period-end closing of a sales order with sales order controlling • Understand the difference between the revenue-based and cost-based valuation methods in Results Analysis • Understand when stock or reserves are formed and cancelled during Results Analysis • Explain where the values of the sales order are settled 2006/Q2 © 2006 SAP AG. All rights reserved.

All rights reserved.Unit Summary TFIN22_1 Unit Summary You should now be able to: • Use a sales order as a cost object • Conduct preliminary costing for a sales order • Analyze the control data of the sales order item • Understand the quantity and value flow in make-to-order production with sales order controlling using discrete manufacturing • Create a purchase order and post the goods receipt • Explain goods movements on the valuated sales order stock • Analyze the relevant accounting and controlling documents • Give an overview of the sales order period-end closing • Explain requirements types and how requirements classes are determined • Explain entries in the requirements class and the account assignment category • Create statistical cost elements for balance sheet accounts • Execute period-end closing for partially delivered production orders • Execute period-end closing for fully delivered production orders • Explain the integration aspects of production order settlement • Explain the typical activities for period-end closing of a sales order with sales order controlling • Understand the difference between the revenue-based and cost-based valuation methods in Results Analysis • Understand when stock or reserves are formed and cancelled during Results Analysis • Explain where the values of the sales order are settled 344 © 2006 SAP AG. 2006/Q2 .

345 . All rights reserved.Unit 6 335 Controlling by Sales Order Without Production (Service) (optional unit) The example takes place in controlling area S300. you will be able to: • • • • • • • • • • • • • Explain the quantity and value flows in Controlling by sales order for a service Explain unit costing for sales orders Understand when to use resource-related billing Explain the necessary settings in Customizing Debit the sales order with direct activity allocations and with actual costs using the time sheet Use resource-related billing Understand network confirmations Understand Execution Services Explain the Results Analysis for the sales order Describe the settlement of the sales order Explain Customizing for the requirements class Describe Results Analysis methods Explain Customizing for resource-related billing (DIP profile) 2006/Q2 © 2006 SAP AG. Unit Objectives After completing this unit. The demo process follows the sample solution to the exercise of this unit. Unit Overview This unit shows controlling by sales order in a service scenario that works without logistical quantity structures and is not integrated with production logistics.

...............................................389 Lesson: Customizing .. All rights reserved..347 Exercise 15: Master Data and Preliminary Costing .................................377 Lesson: Period-End Closing...Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Unit Contents Lesson: Master Data and Preliminary Costing..........363 Lesson: Simultaneous Costing.........................................368 Exercise 16: Simultaneous Costing .............. 2006/Q2 .......................399 346 © 2006 SAP AG.....................................................................................................386 Exercise 17: Period-End Closing .............

consulting. Business Example A customer would like to utilize your consulting services for a few days. the conception. and training. the total package will be more complex. Alternative: A customer places an order with you for a professional installation of newly acquired turbines. As this is a simple on-site assembly. All rights reserved. a sales order could be the suitable cost object. you would use a project in addition to the sales order. If the customer also wants the turbines themselves. As this is a simply structured service.TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson: 337 Master Data and Preliminary Costing Lesson Duration: 40 Minutes Lesson Overview • • Controlling services or assembly with a sales order Resource-related billing Lesson Objectives After completing this lesson. As the tasks are provided by different departments of your company but should be subject to a common and consistent Controlling. you decided to use a sales order as the cost object. 347 . 2006/Q2 © 2006 SAP AG. you will be able to: • • • • Explain the quantity and value flows in Controlling by sales order for a service Explain unit costing for sales orders Understand when to use resource-related billing Explain the necessary settings in Customizing Change the Controlling Area to S300 before beginning with the example.

Figure 181: Scenarios: Master Data and Combinations 348 © 2006 SAP AG. With the account assignment category in Customizing. make-to-order production assumes that the customer places an order before we become active (first the sales process.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Master Data Figure 180: Sales Order In standard cases. All rights reserved. then the service creation process). 2006/Q2 . you can define which cost objects you want to use for the account assignment of costs and any revenue.

additional cost objects can be added to the scenario. responsibility areas and assignments (profit center. material) that can also be used for automatic planning (cost estimate). 2006/Q2 © 2006 SAP AG. the project is the leading object. the sales order item serves as the sole account assignment object for costs and revenue. Costs and revenue are assigned to accounts on the project. external activities. The typical account assignment category is “E”. The network is generally settled to the sales order item. PS Cash Management. availability control. This is useful if typical abilities of he project are required in the Cost Object Controlling scenario: such as budgeting. A project is automatically created for this network (derived from a standard network and a standard project). That means. Scheduling and capacity monitoring are also possible. The network contributes a logistical quantity structure (such as internal activities. other cost objects and combinations of multiple cost objects are available for sales-order-related and engineer-to-order production. In this scenario. employee assignment. All rights reserved. If this is not the case. without having to consider other alternatives for procurement and representation. Easy Cost Planning. This is called assembly processing. – • – The account assignment category D requires you to use unvaluated sales order stock. – For 2. the sales order item is not controlled as a cost object but assigned to a billing element of the project. a project is created in addition to the sales order. 349 . division of the endeavor into various subprojects that can represent various tasks. The typical account assignment categories are “G”. Revenue is also assigned to the sales order item using billing. such as when BOMs and routings are to be processed or a detailed planning is to take place. The costs can be assigned to the sales order item as well as network operations. the following options are available: • 1 and 2 represents processes of make-to-order production For 1. “D” and “Q”. As per the graphic above. This option is useful if you already know that a network and a certain project with a certain structure will be required when the sales order item is created. a network is automatically immediately created using the sales order. a network was added. The typical account assignment categories are “D” and “Q” (with KZVBR = P). For 4.TFIN22_1 Lesson: Master Data and Preliminary Costing In addition to the sales order. which is useful when the provided functions of the sales order item suffice for representing the Cost Object Controlling scenario. – For 3. company code). The typical account assignment category is “E”. 3 and 4 represents processes of customer project production.

Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 182: Project Controlling: Project Maintenance with Project Builder You can use Project Builder to create or change objects of the project (project definition. All rights reserved.4). or with graphics (hierarchy graphics. documents. activities. including all subordinate objects (WBS elements. WBS elements. you can copy an operative project or standard project. standard work breakdown structures. and standard networks in an existing project structure (5). material components). components) (6). 350 © 2006 SAP AG. You can work with detailed screens. activity elements. You can use operative project structures (work breakdown structures. standard networks) as a template. PS texts. activities. 2006/Q2 . network structure graphics) (1 . documents. networks) or standard structures (standard work breakdown structures. in addition to manually creating project structures (7). milestones. PS texts. When you create projects. lists. You can include work breakdown structures. milestones.

All rights reserved. and outgoing payments are often planned with activities that are assigned to WBS elements. description. 351 . Dates. costs. The focus is on the planning. and monitoring of costs. control. basis dates. analysis. and the budget.TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 183: Work Breakdown Structures: Functions Work breakdown structures are the basis for further planning steps in the project. 2006/Q2 © 2006 SAP AG.

Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 184: Cost Project I/00##: Project Structure Use operative indicators to set the properties of a WBS element and to specify which tasks the WBS element takes on in the project execution. Classify WBS elements as billing elements on which you want to post revenue. 352 © 2006 SAP AG. The WBS element I/00##-1 is also a billing element. The “Statistical” indicator determines whether a WBS element is only used for statistical purposes or whether it can be debited with real costs. Classify WBS elements as account assignment elements on which you want to post actual costs. • • • Classify WBS elements as planning elements on which you want to manually plan costs. In the example of the graphic above. All rights reserved. Subordinate WBS elements starting with level 3 are purely account assignment elements. you can plan up to level 2 of the project hierarchy. The Sales Order as a Cost Object A single sales order is enough for the previous example. 2006/Q2 .

TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 185: Sales Order Controlling for Services This example shows the creation of a service such as a consultation or assembly carried out with the customer. Starting from the costing result of the sales order or project. As the sales order item is controlled as a cost object. the costs of the service are collected directly on the sales order item. 353 . The sales order is settled to Profitability Analysis (CO-PA). The sales price is found based on the actual expense in resource-related billing. The revenues are calculated in SD pricing on the basis of the billed line items. a sales price is derived using the price determination schema of the SD. a sales price is derived using the price determination schema of the SD. The following process is represented in our example: • • • Costs are charged to the order through goods issues. The sales order can be billed and customer or activity-specific or condition records can be taken into account. etc. Resource-related billing is run. You can choose various forms of billing: • • • Starting from a standard price. All rights reserved. posting internal activities. travel expense reporting. Option: Resource-Related Billing 2006/Q2 © 2006 SAP AG.

This is also where you determine which data the system copies to the billing request after you have finished working with the overview screen. If necessary. If you do not want to bill a customer for a dynamic item. the data is reaggregated based on the assigned materials.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 186: Resource-Related Billing The billing can be carried out based on planned revenue (with or without a billing plan) or based on the actual costs with a resource-related billing which generates so-called “dynamic items” from the cost information (for example. You can use this screen for example. costs for material and personnel). you can enter your reason (for example. 354 © 2006 SAP AG. You follow the same procedure as above when creating a quotation from a service order. You generate the billing request from this overview screen. you will be shown an overview screen containing relevant information that you can modify that enables you to determine what the billing request should look like. to simulate prices or save the information itself. There are two aggregation levels: Level 1: The system aggregates the data records for the overview screen into dynamic items. All rights reserved. 2006/Q2 . warranty) in the overview screen for dynamic items as an apportionment reason. The reason will only be used for internal purposes such as calculating profits. Before a billing request is created. Level 2: The system generates a billing request using the data from the dynamic items. Aggregation depends on the settings in the profile of the “dynamic item processor”.

AD010005 (create user-defined sources).TFIN22_1 Lesson: Master Data and Preliminary Costing Figure 187: Dynamic Item Processor The dynamic item processor is a tool that the system uses to summarize data on dynamic items during resource-related quotation creation and billing (for example. AD010002 (delimit selection and/or filter data that is determined). AD010006 (Menu exit: Change DI value). You can use the DIP profile for creating quotations and billing (both resource-related and flat-rate). Further entries are made according to use . You have the following user exits at your disposal: AD010001 (change object list and hierarchy). 2006/Q2 © 2006 SAP AG. You will find the customizing settings for quotation creation and billing in the IMG under Plant Maintenance and Customer Service → Maintenance and Service Processing → Basic Settings Basic Settings → Quotation Creation and Billing for Service Orders. AD010003 (create user-defined DI characteristics). Assignment to the DIP profile is performed in the service order header or in the sales order item. V46H0001 (Enter additional item data and insert a partner for the item). All rights reserved. You control the creation of dynamic items in Customizing with the profile of the “dynamic item processor” (DIP profile). line items that arise through the posting of goods movements. 355 . completion confirmations or surcharges). You can enter the default profile when making customizing settings for service order types or sales document item types.

you can refer to these and copy the relevant items into the unit cost estimate. overhead. post the resulting costs directly to the sales order item. 356 © 2006 SAP AG. you create a sales order and chose the option of planning the endeavor on the sales order using a unit cost estimate. purchasing costs. All rights reserved. You use them like spreadsheets to make costing decisions and to access information on material costs. and process costs. For existing cost estimates.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Preliminary Costing Figure 188: Sales Order Processing: Preliminary Costing In our example. In the subsequent execution of the task. Figure 189: Planning Options with Unit Costing You can plan the costs of a service with a unit cost estimate. internal activity prices. 2006/Q2 .

sub-totals.TFIN22_1 Lesson: Master Data and Preliminary Costing Within unit costing you can calculate totals.0. As the information in the cost estimate becomes out of date. 2006/Q2 © 2006 SAP AG. Figure 190: Item Categories in Unit Costing (1) To support the full integration between unit costing and product costing. If the unit costing includes a material item with a cost estimate. you can explode its cost estimate. you can use the “revaluation” function to determine the most current material or activity prices for the items in the cost estimate. The item category P (process manual) is used if you want to include business processes in a unit costing manually without using a template. All rights reserved. the new item categories F (external service) and L (subcontracting) are available in unit costing as of Release 4. if you enter a base-planning object as an item. and formulas for mathematical operations. 357 . you can explode this cost estimate to display the items that make up the material cost. Likewise.

The item category Y (customer exit) can be activated as enhancement KKEK0001. Easy Cost Planning “Easy Cost Planning (ECP)” is availably in addition to the unit cost estimate for projects: Figure 192: Easy Cost Planning (ECP) 358 © 2006 SAP AG.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 191: Item Categories in Unit Costing (2) The item category X is created automatically when using a template to calculate process quantities. All rights reserved. if customers require their own calculation logic. 2006/Q2 .

In this case. In Customizing for Easy Cost Planning. Figure 193: Planning Variants for Easy Cost Planning 2006/Q2 © 2006 SAP AG. 359 . or actions of costing items (above. “Work in hours”). with the quantity of an internal activity). values. You can define planning variants for entering costing items and use variables (characteristics) in doing so. The resources planned with Easy Cost Planning can also serve as the basis for later actual postings if entered with the “Execution Services” commitments and actual costs. you can also enter several alternative CO plan versions for Easy Cost Planning. All rights reserved.6C.00. For this. Changes to the order start dates and revaluation causes the costs to be redistributed. values are given (above. Easy Cost Planning can serve as a simple preliminary costing for projects that can be replaced in a later phase of the project by an automatic costing. As of SAP R/3 Enterprise Extension 2. The planned costs are in the periods of the order start dates of the WBS elements. The characteristic values of the planning variants are linked with quantities. each time you run Easy Cost Planning. such as by the costing of quantity structures like networks or operations. Easy Cost Planning for the project is called from the Project Builder and costing items are created for the WBS planning elements. Easy Cost Planning is available to you as a simple tool for planning costs on WBS elements. you can decide which of the alternative CO plan versions you to run the cost planning in. 100) for characteristics (above. Costs are planned with Easy Cost Planning using the original cost elements.TFIN22_1 Lesson: Master Data and Preliminary Costing As of Release 4. you can specify which plan data the CO plan version should be updated in.

if active. The characteristics are also available for calculations like functions of the ABC.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Easy Cost Planning is realized technically with a template that is embedded in a planning variant. the resources are stored in the template that are later planned or allocated. This kind of planning variant (costing model) is created in three steps in Customizing: • • • You can define characteristics that are available as variables in the template An entry screen is created in HTML format for the characteristics that can be edited and modified Finally. Operations are linked by relationships to set a casual and temporal order. The quantities entered or calculated are valuated with prices or rates. If you plan dates and resources in the operations of the network. the system automatically determines the corresponding planned costs. When Easy Cost Planning is run. 360 © 2006 SAP AG. 2006/Q2 . The system then plans the resources according to the template. the user is asked for the value of the characteristics. Figure 194: Cost Estimate with Network The network primarily contains operations that describe work and project steps. All rights reserved.

The planned and actual costs of each operation are shown on the respective operation. All rights reserved.TFIN22_1 Lesson: Master Data and Preliminary Costing The planned costs are determined for the following objects: • • • • Activity inputs for internal processing operations (internal activity) Primary costs for external processing and service operations (external activity) Primary costs for cost activities Primary costs for material components. Activity elements are treated as operations for the costing. the costs of the operations would only be analyzed in total at the level of the network header. 361 . 2006/Q2 © 2006 SAP AG. Figure 195: Planned Costs Work Breakdown Structure with Network Caution: The previous example is based on an activity-assigned network. If the network were header assigned.

the values are put into periods according to the invoicing plan. Cost Activity: If an invoicing plan has been maintained. The valuation is done with the price according to the valuation variant. the values are put into periods according to the invoicing plan. If there is no distribution key. the operation value is distributed to periods according to the distribution key in the operation. or price from the material master according to the valuation variant. If there is no invoicing plan. 362 © 2006 SAP AG. External Processing and Service Operations: If an invoicing plan has been maintained.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 196: Network Costing:Summary Internal Processing Operation: If no distribution key has been maintained in the operation or work center. the costs are distributed equally over the earliest dates of the operation. If no invoicing plan is present. the system determines the prices from the purchasing info record or the operation value. Otherwise. In this case. Otherwise. the values are put into the period of the latest operation start date. the costs are distributed equally over the earliest dates of the operation. Material Components: If an invoicing plan is present. 2006/Q2 . the values are taken from the unit cost estimate. the periods and values are taken from the invoicing plan. purchasing info record. The invoicing plan has priority for the values. the period is that of the requirement date of the material. the system can determine the most current date. Depending on the strategy. All rights reserved.

Create a sales order for the consulting item: Enter the following data: Order type: Sales Organization: Distribution Channel: Division: Choose: Enter the following data: ZSP1 (SP: Service order) S300 S3 S3 Enter Continued on next page 2006/Q2 © 2006 SAP AG. As this is a simply structured service. Hint: Use controlling area S300 for this exercise. you offer these consulting services. You create a sales order for this service and can use unit costing to calculate your costs for the sales order. All rights reserved. 363 .TFIN22_1 Lesson: Master Data and Preliminary Costing 353 Exercise 15: Master Data and Preliminary Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise. In plant S300. Task: Start by creating a sales order for and estimating the cost of the consulting task. you will be able to: • Carry out quantity and value flows in Controlling by Sales Order for a service • Create a unit cost estimate for a sales order • Carry out resource-related billing • Analyze the necessary settings in Customizing Business Example A customer would like to utilize your consulting services for a few days. you decided to use a sales order as the cost object. 1.

You do not include any other costs. If required. and 60 hours for consulting CONS1N. Make a note of the sales order number displayed in the status bar when you save your data. enter the following data: Costing variant: Not available in T36. 2006/Q2 . Save the sales order. also not for Controlling Area S300. All rights reserved. You estimate 20 hours for senior management (MANG2).Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Sold-to party: Material: Order Quantity: Choose: 2. 3221 ISP-CONSLT 10 days Enter Create a unit cost estimate to determine the consulting costs. Choose: Save 3. Base planning object: Choose: Consulting Enter PCO4 Adjust the proposal. choose: Unit Costing Menu path: Extras → Costing In the dialog box. ______________________________________________________ 364 © 2006 SAP AG.

enter the following data: Costing variant: Not available in T36. If required. Base planning object: Choose: Consulting Enter Continued on next page PCO4 3221 ISP-CONSLT 10 days Enter ZSP1 (SP: Service order) S300 S3 S3 Enter 2006/Q2 © 2006 SAP AG. 365 . 1. All rights reserved. choose: Unit Costing Menu path: Extras → Costing In the dialog box. Create a sales order for the consulting item: Enter the following data: Order type: Sales Organization: Distribution Channel: Division: Choose: Enter the following data: Sold-to party: Material: Order Quantity: Choose: a) 2. Menu path: Logistics → Sales and Distribution → Sales → Order → Create Create a unit cost estimate to determine the consulting costs.TFIN22_1 Lesson: Master Data and Preliminary Costing Solution 15: Master Data and Preliminary Costing Task: Start by creating a sales order for and estimating the cost of the consulting task. also not for Controlling Area S300.

______________________________________________________ a) Choose: Save 366 © 2006 SAP AG. and 60 hours for consulting CONS1N. 2006/Q2 . Make a note of the sales order number displayed in the status bar when you save your data. You do not include any other costs. enter the following data: Costing variant: Base planning object: Choose: PCO4 Consulting Enter Adjust the proposal. Save the sales order. All rights reserved. You do not include any other costs. Menu path: Extras → Costing In the dialog box. You estimate 20 hours for senior management (MANG2).Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Adjust the proposal. Choose: Save a) Create a unit cost estimate to determine the consulting costs. Choose: Save 3. and 60 hours for consulting CONS1N. You estimate 20 hours for senior management (MANG2).

367 . All rights reserved.TFIN22_1 Lesson: Master Data and Preliminary Costing Lesson Summary You should now be able to: • Explain the quantity and value flows in Controlling by sales order for a service • Explain unit costing for sales orders • Understand when to use resource-related billing • Explain the necessary settings in Customizing 2006/Q2 © 2006 SAP AG.

368 © 2006 SAP AG. All rights reserved. As this is a simply structured service. and any material consumption that has taken place. receipts that have been brought back. 2006/Q2 . After your consultant has returned.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Lesson: 358 Simultaneous Costing Lesson Duration: 40 Minutes Lesson Overview Lesson Objectives After completing this lesson. you decided to use a sales order as the cost object. enter these services. you will be able to: • • • • Debit the sales order with direct activity allocations and with actual costs using the time sheet Use resource-related billing Understand network confirmations Understand Execution Services Business Example A customer would like to utilize your consulting services for a few days.

If you use routings. You can also post the activities with a direct activity allocation.TFIN22_1 Lesson: Simultaneous Costing Allocation of Resource Usage for the Service Figure 197: Goods Issue for Material Needed for the Service You post the goods issue for the material needed for the service. 2006/Q2 © 2006 SAP AG. 369 . All rights reserved. you can enter confirmations for the operations. Figure 198: Allocating Internal Activities You can use the Cross-Application Time Sheet (CATS) for the allocation of the internal activities of your employees. The sales order item is debited with the cost of the material.

approved) data to the various applications.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 199: CATS – Cross-Application Time Sheet CATS is an integrated function for entering actual times that are important in the HCM. 2006/Q2 . 370 © 2006 SAP AG. Reports transfer the released (and. CO. You can use data entry profile to set the layouts. This entry of hours is posted on the production order as an internal activity allocation when transferred (to CO). Note on PP production orders: You can use CATS to enter hours for the “Production order” receiver object (Order field). The actual times can be important for various applications at the same time. PS. or MM-SRV areas. if necessary. You cannot use CATS to enter confirmations for yields and scrap quantities for production orders. PM. All rights reserved. This causes multiple transfers to various applications. SM.

CS) Operations with the pool of confirmations (for PS. PM. All rights reserved. CS) Objects that the employee is currently processing (with the CATS database) Objects with user exits Addition Options with a Project 2006/Q2 © 2006 SAP AG. and entry section): • • Depending on the employee group (with the data entry profile) user-defined (using TableControl) Worklist for employees by: • • • • Operations to which the employee is assigned with the work center or distribution of work to employees (for PS.TFIN22_1 Lesson: Simultaneous Costing Figure 200: Time Sheet: Data Entry View Time recording is carried out for one of more employees. Flexible screen arrangement (for the initial screen. PM. worklist. 371 .

MM: SD: PP: PM: CO: FI: AM: HCM: Purchasing: Purchase order. you can enter and evaluate other data in addition to costs and revenue. you must release the project. Inventory Management: Goods issue of reservations Sales order billing Confirmation of assigned production orders Confirmation of assigned PM orders Internal activity allocation. assigned CO orders Deposits. 2006/Q2 . To enter actual data. payments Settlement to assets Task recording for employees and update as an order confirmation or as an internal activity allocation (Note: The CATS can also be used without HCM) 372 © 2006 SAP AG. for example. Business transactions update this actual data on the project from the various areas of the SAP system.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 201: Aspects of Realization for a Project If you use a project to realize an endeavor. goods receipt of materials and services. All rights reserved.

cost activities For activity allocation: planning of activity inputs For confirmation: internal processing operations 2006/Q2 © 2006 SAP AG. These are. for example: • For purchase requisitions. purchase orders. This causes the resulting actual costs to be posted directly to the WBS element or to the network or operation. the connection to the WBS element or operation is made using account assignment. 373 . revenue planning. The account assignments correspond to the cost planning transactions. goods receipts: external and service operations.TFIN22_1 Lesson: Simultaneous Costing Figure 202: Integrating Costs using Account Assignment For the business transactions displayed above. material components that are directly procured • • • • For material withdrawals: stock items or primary cost planning For invoice postings: primary cost planning. All rights reserved.

6C. service items. The following postings are possible: • • • • • • Internal activity allocation (for internal activities) Direct process allocation (for processes) Reservation (for material items) Goods issue (for material components) Purchase requisition (for material items. external activity items.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Figure 203: Execution Services As of Release 4. All rights reserved. service items. variable items) Purchase order (for material items. you can use Execution Services to enter commitments and actual costs for items that you have planned with Easy Cost Planning. 2006/Q2 . variable items) 374 © 2006 SAP AG. external activity items.

In the information system. In the information system for structures.TFIN22_1 Lesson: Simultaneous Costing Figure 204: Integrating Costs Through Assignment For the business transactions displayed above. 2006/Q2 © 2006 SAP AG. 375 . All rights reserved. This causes the resulting actual costs to remain on the order or network until they are settled. you can evaluate and interactively process the assigned orders in addition to WBS elements and operations. you can evaluation all assigned funds (planned costs. the connection to the WBS element is made using an assignment. commitment and actual costs) with the assigned WBS element.

Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 376 © 2006 SAP AG. All rights reserved. 2006/Q2 .

In plant S300. you will be able to: • Debit the sales order with goods issue postings • Debit the sales order with activity allocations with and without the time sheet • Carry out a resource-related billing Business Example A customer would like to be consulted by you for a few days. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → CATS Classic – CAT3 Enter the following data: Data Entry Profile: Personnel Number: Press button ISP_SD (or CO2) 515991## (if unavailable: Enter Times (F5) 9910751) Continued on next page 2006/Q2 © 2006 SAP AG. In addition. Task: Actual Postings 1. Remember to release your entries before saving. As this is a simply structured service. you can use the activity allocation and the Cross-Application Time Sheet (CATS) to post the actual consulting time required for the sales order item. you decided to use a sales order as the cost object. You create a sales order for this service and can use unit costing to calculate your costs for the sales order. Employee 515991## will enter their time for activity CONS1N in the Cross-Application Time Sheet. Hint: Use controlling area S300 for this exercise. Record their time in the Cross-Application Time Sheet. All rights reserved. 377 . you offer these consulting services.TFIN22_1 Lesson: Simultaneous Costing 365 Exercise 16: Simultaneous Costing Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise.

2006/Q2 .Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Enter the following data: Sales order: Sales order item: Quantity: Your sales order number 10 5 hours each day for the last three days Confirm your entries Choose: Release view Select the indicator next to the line with your time entries. Continue with the next subtask. Menu path: Edit → Select All Choose: Approve Save your entries. Select: Release Choose: Save 2. Use the CATS to approve the time entered. Menu path: Continued on next page 378 © 2006 SAP AG. Transfer the CATS to Accounting. so that it can be transferred to Financial Accounting. Execute If no entries have to be approved. 3. The approval screen is displayed. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time Sheet → Approval → Approve Working Times Select the posting date Up to today. If there are entries that require approval: Select your personnel number from the general hierarchy display. Customizing is set so that no times in the CATS required approval. Enter your Personnel number. All rights reserved. Select the time entries using your personnel number 515991## as a reference.

In Extras → Set Controlling Area. 515991## Execute Enter an activity allocation for the activity MANG2 for your sales order. 379 . All rights reserved. Use the screen variant Sales Order/Cost Object. 5. to process this activity allocation. set the controlling area to S300. Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order.TFIN22_1 Lesson: Simultaneous Costing Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → Transfer → Accounting Enter the following data: Personnel number: Choose: 4. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order → Detailed Reports → For Sales Order → Layouts: Plan/Actual Comparison Enter the following data: Sales order: Item: Choose: Your sales order number 10 Execute 2006/Q2 © 2006 SAP AG. 4 hours have been consumed from the sender cost center S-3310.

Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Solution 16: Simultaneous Costing Task: Actual Postings 1. Remember to release your entries before saving. Record their time in the Cross-Application Time Sheet. 2006/Q2 . Select: Release Continued on next page 380 © 2006 SAP AG. Employee 515991## will enter their time for activity CONS1N in the Cross-Application Time Sheet. All rights reserved. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → CATS Classic – CAT3 Enter the following data: Data Entry Profile: Personnel Number: Press button Enter the following data: Sales order: Sales order item: Quantity: Your sales order number 10 5 hours each day for the last three days ISP_SD (or CO2) 515991## (if unavailable: Enter Times (F5) 9910751) Confirm your entries Choose: Release view Select the indicator next to the line with your time entries.

Select: Release Select: Save 2. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → Time Data → Enter Enter the following data: Data Entry Profile: Personnel Number: Press button Enter the following data: Sales order: Sales order item: Quantity: Your sales order number 10 5 hours each day for the last three days ISP_SD (or CO2) 515991## Enter times (F5) Confirm your entries Choose: Release view Select the indicator next to the line with your time entries.TFIN22_1 Lesson: Simultaneous Costing Choose: Save a) Confirm the internal activity by recording the consulting time in the Cross-Application Time Sheet . All rights reserved. so that it can be transferred to Financial Accounting. Continued on next page 2006/Q2 © 2006 SAP AG. Use the CATS to approve the time entered. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time Sheet → Approval → Approve Working Times Select the posting date Up to today. Remember to release your entries before saving. Select the time entries using your personnel number 515991## as a reference. Enter your Personnel number. 381 .

Transfer the CATS to Accounting. a) Use the CATS to approve the time entered. Continue with the next subtask. Enter your Personnel number. All rights reserved. 3. Customizing is set so that no times in the CATS required approval. Menu path: Edit → Select All Choose: Approve Save your entries. Execute If no entries have to be approved. Menu path: Edit → Select All Choose: Approve Save your entries. Continue with the next subtask. so that it can be transferred to Financial Accounting. The approval screen is displayed. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time Sheet → Approval → Approve Working Times Select the posting date Up to today. 2006/Q2 . If there are entries that require approval: Select your personnel number from the general hierarchy display. Select the time entries using your personnel number 515991## as a reference. If there are entries that require approval: Select your personnel number from the general hierarchy display. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → Transfer → Accounting Continued on next page 382 © 2006 SAP AG.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Execute If no entries have to be approved. The approval screen is displayed. Customizing is set so that no times in the CATS required approval.

to process this activity allocation. a) Enter an activity allocation for your sales order.TFIN22_1 Lesson: Simultaneous Costing Enter the following data: Personnel number: Choose: a) 515991## Execute Transfer the CATS to Accounting. set the controlling area to S300. set the controlling area to S300. 4 hours have been consumed from the sender cost center S-3310. Enter an activity allocation for the activity MANG2 for your sales order. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Actual postings → Time sheet → Transfer → Accounting Enter the following data: Personnel number: Choose: 515991## Execute 4. In Extras → Set Controlling Area. All rights reserved. Accounting → Controlling → Product Cost Controlling→ Cost Object Controlling → Product Cost by Sales Order → Actual postings → Activity and Business Process Allocation → Enter In Extras → Set Controlling Area. Document Date: Posting Date: Screen Variant: Quantity: Sending Cost Center: Activity Type: RecSaleOrd (Receiver sales order): Save Continued on next page Today’s date Today’s date Sales order/cost object 4 hours S-3310 MANG2 your sales order number and item number 2006/Q2 © 2006 SAP AG. Use the screen variant Sales Order/Cost Object. 383 .

All rights reserved. Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order → Detailed Reports → For Sales Order → Layouts: Plan/Actual Comparison Enter the following data: Sales order: Item: Choose: Your sales order number 10 Execute 384 © 2006 SAP AG. 2006/Q2 . Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order → Detailed Reports → For Sales Order → Layouts: Plan/Actual Comparison Enter the following data: Sales order: Item: Choose: a) Your sales order number 10 Execute Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 5. Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order.

TFIN22_1 Lesson: Simultaneous Costing Lesson Summary You should now be able to: • Debit the sales order with direct activity allocations and with actual costs using the time sheet • Use resource-related billing • Understand network confirmations • Understand Execution Services 2006/Q2 © 2006 SAP AG. All rights reserved. 385 .

you will be able to: • • Explain the Results Analysis for the sales order Describe the settlement of the sales order Business Example A customer would like to utilize your consulting services for a few days. stock and reserves to Financial Accounting and Profit Center Accounting. As this is a simply structured service. 2006/Q2 . 386 © 2006 SAP AG. Period-based revenues and the cost of sales are settled to Profitability Analysis.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Lesson: 374 Period-End Closing Lesson Duration: 40 Minutes Lesson Overview Lesson Objectives After completing this lesson. Different results can be obtained from the Results Analysis depending on the time and data collection. you decide to use a sales order as the cost object. After the service has been performed. we can post a resource-related Billing and then a period-end closing on the sales order. All rights reserved.

For sales orders. The revenues and costs of the sale are settled to Profitability Analysis. You can set exactly how it works in Customizing. All rights reserved. Figure 206: BiIling with Resource-Related Billing 2006/Q2 © 2006 SAP AG. the Results Analysis is carried out for each sales order item.TFIN22_1 Lesson: Period-End Closing Results Analysis and Settlement Figure 205: Results Analysis/Settlement (1) You can use the Results Analysis to calculate the costs and revenue of the cost object based on the period by various methods and to form stock and reserves if required. 387 . where as stock and reserves are settled to Financial Accounting and Profit Center Accounting. For projects. it is carried out on the billing elements for the entire project hierarchy including assigned objects.

388 © 2006 SAP AG. Only debit memos and credit memos can be entered. 2006/Q2 . create a debit memo (billing request) based on the CO line items. For this reason you can normally cancel all stock and reserves on the revenue side.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 If you wish to conduce resource-related billing. All rights reserved. Figure 207: Results Analysis/Settlement (2) If a sales order is given the status “Final billing”. no more revenue is expected for that sales order item. The same is valid for the status “technically completed” on the cost side.

TFIN22_1 Lesson: Period-End Closing 377 Exercise 17: Period-End Closing Exercise Duration: 20 Minutes Exercise Objectives After completing this exercise. Continued on next page 2006/Q2 © 2006 SAP AG. 2. Carry out Results Analysis and review the results. Write down the COS and revenue in excess of billings. Different results can be obtained from the Results Analysis depending on the time and data constellation. you will be able to: • Carry out Results Analysis for the sales order • Settle the sales order Business Example A customer would like to utilize your consulting servicse for a few days. you decided to use a sales order as the cost object. As this is a simply structured service. After the service has been performed. we can post a resource-based billing and then a period-end closing on the sales order. Hint: Use controlling area S300 for this exercise. All rights reserved. To view the settled amounts. select Detail Lists. Task 1: Period-End Closing Before Billing 1. stock and reserves to Financial Accounting and Profit Center Accounting. Period-based revenues and the cost of sales are settled to Profitability Analysis. Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Choose: Your sales order number 10 Current period Current fiscal year 0 Execute Save the results of the Results Analysis. Note that the amounts settled to PA reflect the COS and revenue calculated by Results Analysis. Carry out sales order settlement. 389 .

Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Billing document Choose: Save Continued on next page 390 © 2006 SAP AG. Create a billing document based on the debit memo request.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Background Processing: Test run: Detail lists Check transaction data: Choose: Your sales order number 10 Current period Current fiscal year 0 Deselect Deselect Select Deselect Execute Task 2: Resource-Related Billing 1. Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Resource-Related Billing document Enter the following data: Sales document: Sales order item: Choose: Your sales order number 10 Save billing request Confirm the prompt and save the billing request. 2. Note that the invoice value matches the revenue in excess of billing calculated during Results Analysis. Create a debit memo request for the consulting activities. 2006/Q2 . All rights reserved.

Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Choose: Your sales order number 10 Current period current fiscal year 0 Execute Save the results of the Results Analysis. the revenue in excess of billings should be zero.TFIN22_1 Lesson: Period-End Closing 3. Since all costs have been billed. Display the settled amounts by double clicking on the sender. review the logs. 2. Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order. 391 . Task 3: Period-End Closing after Billing 1. Carry out Results Analysis again. All rights reserved. Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Background Processing: Test run: Detail lists Check transaction data: Choose: Your sales order number 10 Current period Current fiscal year 0 Deselect Deselect Select Deselect Execute 2006/Q2 © 2006 SAP AG. Carry out sales order settlement. Check whether the revenues for the invoices were updated on the corresponding sales order item. and analyze the results.

2006/Q2 . Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Choose: Your sales order number 10 Current period Current fiscal year 0 Execute Continued on next page 392 © 2006 SAP AG. Carry out Results Analysis and review the results.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Solution 17: Period-End Closing Task 1: Period-End Closing Before Billing 1. Write down the COS and revenue in excess of billings. All rights reserved.

a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Results Analysis → Execute → Individual Processing Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Choose: Your sales order number 10 Current period Current fiscal year 0 Execute Save the results of the Results Analysis. billing has not been executed for this sales item. This material was derived from the configuration of the DIP profile.TFIN22_1 Lesson: Period-End Closing Save the results of the Results Analysis. The COS value reflects the cost of the consulting activity that has been posted to the sales order. The sales price is established for this material. you can see the revenue not yet billed. All rights reserved. Note that the amounts settled to PA reflect the COS and revenue calculated by Results Analysis. The WIP value reflects the revenue that can be generated based on the sales price of ISP-CONS1N. Choose: Save Note the debit for material ISP-CONS1N. Enter the following data: Sales order: Item: Period: Fiscal year: Your sales order number 10 Current period Current fiscal year Continued on next page 2006/Q2 © 2006 SAP AG. In the revenue overview. To view the settled amounts. based on the cost element assigned to the activity CONS1N. At this point. 2. select Detail Lists. No other actual costs have been posted to the sales order. Carry out sales order settlement. 393 .

select Detail Lists. All rights reserved.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 RA version: Background Processing: Test run: Detail lists Check transaction data: Choose: a) Menu path: 0 Deselect Deselect Select Deselect Execute Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Settlement b) To view the settled amounts. 2006/Q2 . Create a debit memo request for the consulting activities. Receiver or Accounting docs to review the settlement values. and choose either Sender. Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Resource-Related Billing document Enter the following data: Sales document: Sales order item: Choose: Your sales order number 10 Save billing request Continued on next page 394 © 2006 SAP AG. Task 2: Resource-Related Billing 1. Select the settlement line. The settlement values are displayed.

395 . Note that the invoice value matches the revenue in excess of billing calculated during Results Analysis. Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Billing document Choose: Save a) Create a billing document based on the debit memo request.TFIN22_1 Lesson: Period-End Closing Confirm the prompt and save the billing request. Note that the invoice value matches the revenue in excess of billing calculated during Results Analysis. Create a billing document based on the debit memo request. Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Resource-Related Billing document Enter the following data: Sales document: Sales order item: Choose: Your sales order number 10 Save billing request Confirm the prompt and save the billing request. 2. a) Create a debit memo request for the consulting activities. All rights reserved. Menu path: Logistics → Sales and Distribution → Sales → Order → Subsequent functions → Billing document Choose: Save Continued on next page 2006/Q2 © 2006 SAP AG.

Since all costs have been billed. and analyze the results. Task 3: Period-End Closing after Billing 1. Check whether the revenues for the invoices were updated on the corresponding sales order item. 2006/Q2 . Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Choose: Your sales order number 10 Current period current fiscal year 0 Execute Continued on next page 396 © 2006 SAP AG. Carry out Results Analysis again. the revenue in excess of billings should be zero.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 3. a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order → Detailed Reports → For Sales Order Enter the following data: Sales order: Item: Choose: Your sales order number 10 Execute The revenue has been updated to the sales order item. Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order. review the logs. All rights reserved.

and choose either Sender. Display the settled amounts by double clicking on the sender. Zero also remains to be billed in the Revenue Overview. Enter the following data: Sales order: Item: Period: Fiscal year: RA version: Background Processing: Test run: Detail lists Check transaction data: Choose: a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Settlement To view the settled amounts. Carry out sales order settlement. All rights reserved. Your sales order number 10 Current period Current fiscal year 0 Deselect Deselect Select Deselect Execute 2006/Q2 © 2006 SAP AG. Receiver or Accounting docs to review the settlement values.TFIN22_1 Lesson: Period-End Closing Save the results of the Results Analysis. Select the settlement line. Note that the WIP value in the cost overview is zero. 397 . select Detail Lists. The settlement values are displayed. a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Period-End Closing → Single Functions → Results Analysis → Execute → Individual Processing b) 2.

All rights reserved.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Lesson Summary You should now be able to: • Explain the Results Analysis for the sales order • Describe the settlement of the sales order 398 © 2006 SAP AG. 2006/Q2 .

All rights reserved. As this is a simply structured service. you will be able to: • • • Explain Customizing for the requirements class Describe Results Analysis methods Explain Customizing for resource-related billing (DIP profile) Business Example A customer would like to utilize your constulting services for a few days. you decided to use a sales order as the cost object.TFIN22_1 Lesson: Customizing Lesson: 387 Customizing Lesson Duration: 60 Minutes Lesson Overview Lesson Objectives After completing this lesson. 399 . you must be sure that the scenario takes place within the boundaries that you have planned. 2006/Q2 © 2006 SAP AG. In Customizing.

2006/Q2 . but no separate sales order stock is kept. The account assignment category defines the scenario. All rights reserved. 400 © 2006 SAP AG. Figure 209: Account Assignment Category B The account assignment category “B” specifies that consumption postings are posted directly on the sales order item.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Account Assignment Category. Results Analysis and DIP profile Figure 208: Customizing: Requirements Class You can use the requirements type determination in Customizing to find the requirements class.

Those that have not yet been billed are costs in stock (WIP). The revenues are calculated in SD pricing on the basis of the billed line items. 401 . the cost of sales is derived from the resource-related billing. the following applies: All line items of cost postings that have already been billed are cost of sales. All rights reserved.TFIN22_1 Lesson: Customizing Figure 210: Results Analysis: Method-Based Customizing If you use method “14”. Figure 211: Customizing: DIP Profile 2006/Q2 © 2006 SAP AG. For this.

You can also select the characteristic values from which “dynamic items” should be determined (that is. 402 © 2006 SAP AG. The selection criteria here are also entered in the form of sets. Selection is performed using the sets to be determined for this purpose.Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 The DIP profile (the profile of the “dynamic item processor”) takes on the control of the resource-related billing. the actual costs of line items or totals records. Characteristics relevant to the determination of “dynamic items” are fixed for each usage. In addition. You can define your own characteristics and enter values for these characteristics using the customer exit AD010003. The sources define the data used to determine dynamic items (for example. billing request and credit memo request) per usage. All rights reserved. You can define your own sources using the customer exit AD010005. are defined. which you can use for creating quotations as well as billing. you can determine if the system should perform a warranty check during billing. planned costs and so on). All other data should be entered when you are creating a document. various characteristic attributes. exclusion of other characteristic values from billing). You can define which service materials are determined from characteristic values for billing request items or quotations. You decide on the type of sales documents that are to be generated (quotation. 2006/Q2 . and the way in which they are presented during the processing of the billing request. In addition.

All rights reserved.TFIN22_1 Lesson: Customizing Facilitated Discussion Discussion Questions Use the following questions to engage the participants in the discussion. 403 . Feel free to use your own additional questions. • • What is the difference between account assignment categories “B” and “E”? How is the material determination controlled using the DIP profile? 2006/Q2 © 2006 SAP AG.

All rights reserved. 2006/Q2 .Unit 6: Controlling by Sales Order Without Production (Service) (optional unit) TFIN22_1 Lesson Summary You should now be able to: • Explain Customizing for the requirements class • Describe Results Analysis methods • Explain Customizing for resource-related billing (DIP profile) 404 © 2006 SAP AG.

TFIN22_1 Unit Summary Unit Summary You should now be able to: • Explain the quantity and value flows in Controlling by sales order for a service • Explain unit costing for sales orders • Understand when to use resource-related billing • Explain the necessary settings in Customizing • Debit the sales order with direct activity allocations and with actual costs using the time sheet • Use resource-related billing • Understand network confirmations • Understand Execution Services • Explain the Results Analysis for the sales order • Describe the settlement of the sales order • Explain Customizing for the requirements class • Describe Results Analysis methods • Explain Customizing for resource-related billing (DIP profile) 2006/Q2 © 2006 SAP AG. 405 . All rights reserved.

Unit Summary TFIN22_1 406 © 2006 SAP AG. 2006/Q2 . All rights reserved.

...... and finally discussing the object lists and the summarization.. you will be able to: • • • • Describe the structure of the information system Use the standard reports for effective controlling Understand the technique used by the information system Customize the information system to suit your needs Unit Contents Lesson: Information System........... Unit Overview This unit explains the structure of the information system in Cost Object Controlling and shows the options for reporting..408 Exercise 18: Information System .................. 407 ..... then explaining the detailed and line item reports..423 2006/Q2 © 2006 SAP AG................Unit 7 393 Information System Show the information system by first describing the general structure.......................... Unit Objectives After completing this unit........... All rights reserved.

you are reviewing the delivered reports and reporting tools with this employee. you will be able to: • • • • Describe the structure of the information system Use the standard reports for effective controlling Understand the technique used by the information system Customize the information system to suit your needs Business Example You have a new employee who will be responsible for reporting.Unit 7: Information System TFIN22_1 Lesson: 394 Information System Lesson Duration: 60 Minutes Lesson Overview Lesson Objectives After completing this lesson. you will introduce your new staff member to the functions provided for creating and maintaining reports. 408 © 2006 SAP AG. You will also address special features which simplify and speed up report processing. As an orientation. This includes working out guidelines for choosing from the tools provided. You need to discuss: • • • What reporting structures are available What is the procedure for accessing a report How standard reports are processed Since reporting requirements are constantly changing. All rights reserved. 2006/Q2 .

All rights reserved.TFIN22_1 Lesson: Information System Structure Figure 212: Using the CO-PC Information System What can the CO-PC-IS do for me? • • What’s going on in my plant? Can I make or do – • • • • my regular decisions with periodic reporting? – my day-to-day activities effectively? Can I really concentrate on the critical 5%? Do I have enough reporting flexibility to meet all my specific requirements? Can I get the right reports to the right places? Can I enhance the standard reporting system with my own reports? 2006/Q2 © 2006 SAP AG. 409 .

Figure 214: Which Reporting Techniques are Used? In the CO-PC information system. different reporting tools are used. For consistency and transparency. each menu tree is structured according to the same report categories.Unit 7: Information System TFIN22_1 Figure 213: How is the Information System Structured? The report categories subdivide the menu tree on the first level according to the most common reporting needs. 2006/Q2 . The detailed reports for product costs by period used Report Painter reports and Report Writer reports in earlier releases. These reports are now generated using SAP List Viewer. All rights reserved. 410 © 2006 SAP AG. The report category is structured according to the report contents. Every report tool has its own features and range of applications.

you will find a description of reports that are standard for the component menu trees of the Information System for Product Cost Controlling. selectmySAP ERP and choose your language. 411 .0 and has been improved continuously since then.Library or on the Internet at http://help.TFIN22_1 Lesson: Information System Figure 215: Online Documentation Online documentation was restructured completely in Release 4. 2006/Q2 © 2006 SAP AG. The documentation provides you with information about the structure of the information system. You will find online documentation viaHelp → SAP. All rights reserved.sap. General Reporting Functions Figure 216: Reporting Functions Exception Reporting Exception conditions specify whether an object deserves special notice. Then choose SAP ERP Central Component → Accounting → Controlling → Product Cost Controlling → Product Cost Controlling Information System (CO-PC-IS). In the report categories. Those fields of note will be colored so that you can quickly recognize items such as variances that are above a certain value. You can enter this information as a key figure in a line or a column. Context-sensitive help is not supported.com On this webpage.

Download Functions • • • Spreadsheet Word processing HTML formats Detailed Reports: Report Painter and SAP List Viewer (ALV) Figure 217: Detailed Reports There is a large amount of information available for detailed reports that can be analyzed in reports or in SAP List Viewer as individual layouts. provisions for imminent loss. In particular the following information is provided: Planned costs. a powerful reporting system based on Set technology. 412 © 2006 SAP AG. results from Results Analysis (WIP. Report Painter was provided as an enhancement. funds commitment) for the sales order but also for funds assigned to the sales order. You can find extensive information on each of these tools in the corresponding courses (CA705 and CA710). You can also use key figures to categorize your data. provisions for unrealized costs. To save users from having to create these sets every time they define a new report. reports were defined almost exclusively using Report Writer. actual costs.Unit 7: Information System TFIN22_1 Drilldown reporting is an interactive information system that helps you evaluate the data collected in your application. In earlier releases. This information system is capable of analyzing data according to any of the characteristics that describe the data. All rights reserved. 2006/Q2 .

All rights reserved.removed from selection Combination of characteristics and key figures possible View changeable in the report without a new selection The SAP List Viewer standardizes and simplifies the use of lists in the SAP system. Each list has a standardized interface and a standardized list format available. 413 . SAP List Viewer contains features for dynamic creation of display variants... In the standard many Report Writer reports have already been substituted by ALV reports. Figure 218: ALV: Define Display Variants (Layouts) 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Information System SAP List Viewer SAP List Viewer (ALV) • • • • • • Presentation tool for lists with generic functionality Dynamic creation of display variants Predefined standard variants Presentation only . SAP List Viewer is used in CO-PC for the following reports: • • • • • • • Sales order selection List of existing product cost estimates Line items in cost estimate for product Analysis of a costing run Line item reports Order selection .

2006/Q2 . You can change the sequence of fields. Figure 219: Funds Commitment 414 © 2006 SAP AG. All rights reserved.Unit 7: Information System TFIN22_1 You can use display variants to change the format of your list. You can modify the column widths to suit your needs. You can choose which fields will be displayed. User-specific display variants accessible only to the user who created the display variant. There are two types of display variants: Customer-specific display variants accessible to all users.

you can generate extracts when accessing reports. When you display the report data in the extract. 415 . All rights reserved. It is possible to generate multiple extracts if you execute the report with different selection criteria. The data of the extract can then no longer be displayed. Note. Therefore after a release upgrade you should generate new extracts with the desired selection criteria. inconsistencies may arise between the current data structure and the structure in the extract. An extract is a saved file containing the report data selected at the time the extract was generated. This means that after a release upgrade you usually cannot access extracts generated in a previous release. If you make changes in the data structure in Customizing for the Information System (especially the field selection for order selection or for the selection of classification characteristics). you have the same navigation and formatting features as with online execution of the report. You can generate extracts in the order selection. that an extract is normally only valid for the duration of one release. 2006/Q2 © 2006 SAP AG.TFIN22_1 Lesson: Information System Extracts Figure 220: Using Extracts (1) To reduce runtimes. You generate an extract when you execute a report with reference to the report selection parameters. the sales order selection and the "Analyze Costing Run" report.

Unit 7: Information System TFIN22_1 Figure 221: Using Extracts (2) Selecting Cost Objects Figure 222: Information System Controlling by Sales Order 416 © 2006 SAP AG. All rights reserved. 2006/Q2 .

a variety of selection criteria supports your efforts to analyze only the critical sales orders. The number of selection criteria regarding the sales order items was enhanced again in 4. All rights reserved. 417 . 2006/Q2 © 2006 SAP AG. In conjunction with exceptions and filters. and you get a first impression by looking at the key indicators. You can adapt the list to your needs easily. Now that you have identified the critical sales orders that you want to examine more closely. You can also go to different views without having to make a new selection. You can use the features of the SAP List Viewer.6C. you now drilldown to detailed cost element reports to view them.TFIN22_1 Lesson: Information System Figure 223: Selecting Sales Orders (1) Sales order selection provides you with powerful means to build up a list of sales orders that interest you. You get a list of sales orders based on your selection criteria. It is therefore recommended that you define your own display variants.

you can calculate totals and subtotals over one or more chosen columns. Total and subtotal values Within a list. All rights reserved.Unit 7: Information System TFIN22_1 Figure 224: Selecting Sales Orders (2) Sales Order with Assigned Orders The SAP List Viewer standardizes and simplifies the use of lists in the SAP system. Some of the important functions for the SAP List Viewer are: Create display variant You can use display variants to change the format of your list. It contains convenient features for dynamic creation of display variants. Set filters You can choose to display only those lines that meet certain criteria. Sorting You can sort the lines in ascending or descending order according to column values. 418 © 2006 SAP AG. Each list has a standardized interface and a standardized list format available. 2006/Q2 .

All rights reserved. 419 . 2006/Q2 © 2006 SAP AG. It gives you a structure of the sales document items and the related production or internal orders. The report shows predefined views: • • • • • Plan/Actual costs Plan/Actual quantities Planned costs fixed/variable Actual costs fixed/variable Planned/Actual revenues You can create display variants with the figures in which you are most interested.TFIN22_1 Lesson: Information System Figure 225: Sales Order with Assigned Orders (1) Figure 226: Sales Order with Assigned Orders (2) A sales order hierarchy report gives you an impression of the structure of an individual sales order.

2006/Q2 . Figure 227: Report Tool: Hierarchy Graphics The following reports use hierarchy graphics in CO-PC: • • • • • • Sales order with assigned orders Multilevel costed BOM Order hierarchy Cost object hierarchies Collective order Partner cost component split 420 © 2006 SAP AG. By drilling down.Unit 7: Information System TFIN22_1 Sets of sales orders are supported in the report. you access detailed cost element reports for the sales order. or for the assigned orders. All rights reserved. for the sales document items.

TFIN22_1 Lesson: Information System Performing a Cost Object Summarization Figure 228: Summarization of Different Object Types You can save cost object data “permanently” in “summarization objects”. 421 . Customizing Figure 229: Customizing To use the reporting options. All rights reserved. This means that every so often current data must be “added and summarized” by a new run. you have to customize the Information System 2006/Q2 © 2006 SAP AG. The data in the summarization objects does not change.

All rights reserved. 422 © 2006 SAP AG. SAP recommends that you summarize using master data for Release 4. 2006/Q2 . the “summarization hierarchy”.Unit 7: Information System TFIN22_1 The following steps are necessary: • • Product Drilldown: Import/transport reports Order selection and summarization – – – – • Define selection profiles Define selection screens for order list Define exception rules Create order hierarchies Product Cost by Order – – Import reports for Product Cost by Order Generate reports for Product Cost by Order • Product Cost by Sales Order – – Import reports for Product Cost by Sales Order Generate reports for Product Cost by Sales Order Figure 230: Summarization Hierarchy for Sales Orders To execute a summarization you need a predefined summarization technique.5 and higher. There are basically two procedures for performing a summarization: Summarizing with classification characteristics or master data.

TFIN22_1 Lesson: Information System 409 Exercise 18: Information System Exercise Duration: 15 Minutes Exercise Objectives After completing this exercise. 1. Display variant: User-specific: Description: AC515-## x Results Analysis Overview Continued on next page 2006/Q2 © 2006 SAP AG. Save the user-specific display variant that you just created. 423 . you will be able to: • Use the sales order selection report • Create a user-specific layout for this report Business Example You have to report the Results Analysis figures for a range of sales order items. 1171 Execute Create a user-specific display variant that displays the fields: Revenue affecting net income. All rights reserved. WIP. Your report must contain the following columns: • • • • • • Sales Order Number Order Item Revenue Affecting Net Income Cost of Sales WIP (Work in Process) Reserves for Unrealized Costs Task: The report for the sales order selection was developed on the basis of the SAP List Viewer. 3. Start by executing the report for the sales order selection. and provisions for unrealized costs. Enter the following data: Sold-to-party: Choose: 2. cost of sales. We use the SAP List Viewer functionality to create a user-specific display variant with the column order specified above.

Unit 7: Information System TFIN22_1 4. The report’s initial screen now displays your new display variant. but enter your new display variant AC515## on the initial screen. Sold-to-party: Display variant: Choose Execute. 2006/Q2 . Execute the report again. 1171 AC515-## 424 © 2006 SAP AG. All rights reserved.

TFIN22_1 Lesson: Information System Solution 18: Information System Task: The report for the sales order selection was developed on the basis of the SAP List Viewer. Choose: Continue Continued on next page AC515-## x Results Analysis Overview 1171 Execute 2006/Q2 © 2006 SAP AG. Planned profit pct (base: planned costs). Cost of sales. Display variant: User-specific: Description: a) Select Save Layout. Enter the following data: Sold-to-party: Choose: a) Menu path: Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Sales Order → Information System → Reports for Product Cost by Sales Order → Object List → Sales Order Selection 2. cost of sales. 425 . 3. Select Continue to confirm the selection. and Reserves for unrealized costs. Start by executing the report for the sales order selection. actual profit pct (base actual costs). a) Select Change Layout. and actual costs. In the list. We use the SAP List Viewer functionality to create a user-specific display variant with the column order specified above. All rights reserved. select the columns Revenue affecting net income. The report data is updated to display the requested fields. WIP. actual revenue (with sales deduction). Remove the following columns from the current display variant: Material. and provisions for unrealized costs. Create a user-specific display variant that displays the fields: Revenue affecting net income. Save the user-specific display variant that you just created. WIP. Plant. 1. Change the field group to Results Analysis.

Execute the report again. a) Proceed as in Step 1-1. The report’s initial screen now displays your new display variant. Sold-to-party: Display variant: Choose Execute.Unit 7: Information System TFIN22_1 4. 1171 AC515-## 426 © 2006 SAP AG. but enter your new display variant AC515## on the initial screen. 2006/Q2 . All rights reserved.

All rights reserved. 427 .TFIN22_1 Lesson: Information System Lesson Summary You should now be able to: • Describe the structure of the information system • Use the standard reports for effective controlling • Understand the technique used by the information system • Customize the information system to suit your needs 2006/Q2 © 2006 SAP AG.

Unit Summary TFIN22_1 Unit Summary You should now be able to: • Describe the structure of the information system • Use the standard reports for effective controlling • Understand the technique used by the information system • Customize the information system to suit your needs 428 © 2006 SAP AG. 2006/Q2 . All rights reserved.

and final costing in Cost Object Controlling Carry out important transactions for allocating costs to cost objects Carry out important transactions for period-end closing such as template allocation. Results Analysis. sales-order-related production with or without controlling by sales order. WIP calculation. product cost by period. 429 . valuated or unvaluated sales order stock Prepare the right Cost Object Controlling “design” for activity output processes and select the best cost object for it Carry out preliminary costing.TFIN22_1 Course Summary Course Summary You should now be able to: • • • • Explain how Product Cost Controlling relates to other CO components Explain how to use Product Cost Controlling Explain the differences between the following forms of product cost: product cost by order. and settlement Carry out important analyses in Cost Object Controlling using the information system • • • • • 2006/Q2 © 2006 SAP AG. simultaneous costing. All rights reserved. and product cost by sales order Explain the most important terms concerning the design of a scenario in Cost Object Controlling: Controlling on product or order level.

Course Summary TFIN22_1 430 © 2006 SAP AG. All rights reserved. 2006/Q2 .

431 .Feedback SAP AG has made every effort in the preparation of this course to ensure the accuracy and completeness of the materials. If you have any corrections or suggestions for improvement. please record them in the appropriate place in the course evaluation. 2006/Q2 © 2006 SAP AG. All rights reserved.

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