PCC ( Product Cost Collector)

PCC is a cost object and it collects cost for specific product for sp
To Analyse the cost for specific product for specific period
PCC is a long term Cost object (Master data)
Where we need to track the cost at the product level then
we can analyze the cost of the product which are mfg. in
PCC can be used to analyze the cost of the product for the
This method can be used in below business scenario’s
1In repetitive mfg. environment where the product i
2PCC can also be use in desecrate mfg. environment
3Where you want to calculate both WIP and varian
4Low complexity of production
5Low setup cost
6Stable demand pattern
Ex: One lakh units per year
7Simplified Process in the Systems ( simplified data r
Repetitive nature of product (same product is mfg. repeti
FMCG product, car engine, foundry, steel industry
PCC can be use for both MTS and MTO scenario’s
PCC in Descrete Mfg ( PCC with BOM & Routing (PCC with
1 Where product is standardize and not required Job/Batch wise
2 Costing is required at product level
3 To calculate both WIP & variance at the same time at any level

4 to keep simplified Process in the system

5 To keep the simplified data recording process
This is can be use both in MTO & MTS
Ex: Mother board, processor, FMCG , Car engine
 At what level and which details need to be analysed which deci
To analyze cost at what level you want to analyze the cost.

PCC with Production version;-

We can create separate P.C.C for every combination of c
PCC is a real cost object.
Production version contains the logistic(BOM and Rate R
Prouction version specifies which BOM and routing (Rate
P.C.C can be created with production version and not req
Used in Repetetive Mfg
Possible single product can haveMultiple producti
PCC with BOM and Routing;- (PCC with Production Order)
Separate P.C.C can be created for every combination of c
PCC is a real cost object.
P.C.C created either with production order/process orde
Production order is a stastical object for logistic in
Production order are used To track the goods movemen
Production orde is used for logistic information purpose
Used in Descrete Mfg Process
All cost ( Mat cost+Actycost +OH) booked against PCC
All Period end process performed at PCC level,
GI , Acty confirmed against Production Order Level but c
GR from Production Order but GR value booked against

Material per plant :- ====> Without Qty Strcture

 P.C.C can be created for every combination of characteri
PCC is a real cost object.
Product Wihout qty Str
Key terminalogies in PCC

1 P.C.C ====> Product cost collector

2 Production version
3 Preliminary cost estimate
4 Target cost
5 WIP calculation
6 Variance calculation
7 Settlement type
8 REM profile (Repetitive mfg. profile)
9 Back flush
10 Material master
11 BOM
12 Work center (Product line)
13 Rate routing.

Preliminary cost estimate

It can be called as plan cost for the PCC
Preliminary cost generate for P.C.C at the time of creation of P.C
It is nothing but plan cost for P.C.C
How preliminary cost generates for PCC :-
Preliminary cost generate for PCC based on costing variant, BOM
Costing variant for P.C.C.
Costing type 19à Generate preliminary cost estimate
Valuation variant Not required to update in M.M.
Purpose of preliminary cost estimate :-
It is used as a base to determine target cost for WIP valuation pu

Target cost purpose :-

The target cost is used to valuate the WIP qtys (WIP calculation)
The target cost is used to identity and valuate the scrap value in
The target cost is used to re-valuate the reporting point quantiti

How to determine target cost :-

The target cost determines based on valuation variant for WIP a

Valuation Variant for WIP and Scrap

This valuation variant for WIP & scrap it specifies the sequence o
Valution Variant Priority :
1 Preliminary cost
2 Std cost
 ific product for specific Period.
cific period

oduct level then will prefer to use the product cost by period
hich are mfg. in the same way over longer periods
product for the specific period for the specific product
s scenario’s
re the product is stable and continuous flow of production
g. environment where the product is standalize and not required job or batc
WIP and variance at any level and irrespect of the status of the order

implified data recording)

ct is mfg. repetitive over a longer period)
steel industry
enario’s
Routing (PCC with Poduction Order) :
uired Job/Batch wise costing.
me time at any level
system
ding process
PCC in Repetetive Mfg (PCC with Production
The product is stable and continuous flow of productio
Ex: foundry ,steel
Costing is required at product level
To calculate both WIP & variance at the same time at an
Product is mfg. with repetitive environment
Demand is stable and producing large volume of produc
This is can be use both in MTO & MTS
nalysed which decides PCC to be created At what level.
alyze the cost.

ry combination of character of production version, material, production plant and planning plan

tic(BOM and Rate Routing details , Lot Size) information

M and routing (Rate routing) to be used and also it specifies lot size of version (maximum lot siz
version and not required any other cost objects (Prod order or Process orders)

Multiple production verions

oduction Order) can be used in Descrete Mfg
ry combination of character material, BOM, routing, production plant and planning plant.

order/process order
ect for logistic information purpose.
e goods movement and to collect the logistic data
formation purpose

oked against PCC

PCC level,
n Order Level but cost booked against PCC
ue booked against PCC

y Strcture
nation of characteristics of material, production plant & planning plant

e of creation of P.C.C

osting variant, BOM, Routing (Rate routing) and lot size of P.C.C
or WIP valuation pupose in WIP Target cost Method

ys (WIP calculation)
e the scrap value in the scrap variance calculation
rting point quantities if the reporting point structure has been changed

n variant for WIP and scrap

fies the sequence of priority of which cost estimate to be used as a base to calculate target cos
ired job or batch wise costing. Costing is required at the product level
he order
C with Production version):
ous flow of production

at the same time at any level

nvironment
arge volume of production
nt and planning plant

n (maximum lot size of version).

lanning plant.
calculate target cost.
uct level
WIP
 WIP Method
Two Methods
Actual cost method T
àIt is used in production order/ process àPreliminary c
Order and sales order
->WIP=ActualCost dibited-Actual cost credited Target cost m
àWIP calculate if order status having
either REL or PDLV
àSystem calculate either WIP or variance àwe can calcula
Based on order status. At any level .
àIn this case not possible to calculate àAny level mean
Both WIP and variance for the same order called as report
with same Status.

àThe reason the order status àWIP calculate at rep

can not have multiple at the same time. àReporting point lev
àWIP valuate/calcula
Cost to valuate the op
Means yield conforma
WIP qty=planned inpu

WIP = WIP qty X Targ

 Target cost method
àPreliminary cost to be used to valuate WIP Qty

Target cost method can be used only in PCC

==>WIP Target method can be used in all scenarios in PCC

àwe can calculate both WIP and variance at the same time at any level
At any level .
àAny level means operational levelà it is
called as report point level.

P calculate at reporting point level.

eporting point level-->operation level
P valuate/calculate by using the target
to valuate the operational qty confirmà
ns yield conformation.
qty=planned input qty required as per preliminary
Cost estimate X( Operational Qty Confirmed-A
= WIP qty X Target cost( Price as per preliminary cost estimate)
Qty Confirmed-Actual Gr qty)
Scenarios in PCC

Scenerios;-
1 PCC with production version----> Repetetive Mfg
2 PCC with production order------>Descrete Mfg

PCC With Production version :

Order Type for PCC (PCC Order type)
 PCC is real cost object
All the cost posted against PCC
All period end process performed at PCC level
PCC also is a type of order
At the time of creation of PCC ,system generate preliminary(plan
This preliminary cost generates based on costing variant

Costing variant for PCC

Costing type 19
Valuation variant
At the time of GI to the PCC
Dr Material Consumtion
Cr Stock-RMX
Actual GI qty X MM price as per price contr
At the time of confirmation of activities againat PCC
FI entry
Dr Lab Acty GL
Cr Lab Acty GL
( actual Acty qty X plan acty rate as per valuation
Goods received from PCC to Stock
Dr Stock-FGX
Cr COGM
( Actual GR qtyX MM price asper price cont
All period end process performed at PCC level (product level)

CPTE CPTD Run Actual Template Allocation

Dr Acty GL
Cr Acty GL
 1 Period end process in CC
1 Actual SKF
2 Actual Assessment / distribution
3 Actual Cost center Split
4 Actual Acty Price calculation

2 Period end process in PCC

All period end process performed at PCC level (p
CON1 CON2 1 Revaluation of activities at PCC level
Dr/Cr Acty GL ( Lab acty)
Cr/Dr Acty GL ( Lab acty)

CO42 CO43 2 Actual overhead calculation at PCC level

Dr Admin OH GL
Cr Admin OH GL

KKA0 3 WIP Cutoff Period

KKAS KKAO 4 WIP calculation

KKS6 KKS5 5 Variance calculation

KK87 CO88 6 Settelement of PCC

1 FI entry for WIP
Dr
Cr

2 FI entry for Variance

Dr
Cr
on----> Repetetive Mfg
------>Descrete Mfg

Order type) ===> Order Categor

med at PCC level

,system generate preliminary(plan) cost for PCC

enerates based on costing variant for PCC, BOM, Routing, PCC lot size

g type 19 19====> Preliminary cost estimate

on variant

sumtion Dr PCC Order

y X MM price as per price control

n of activities againat PCC
CO entry
Dr PCC
Cr CC
plan acty rate as per valuation var for actual)
to Stock

Cr PCC
qtyX MM price asper price control(Std price)
med at PCC level (product level)

te Allocation
Dr PCC
Cr CC as per template alloction
sment / distribution
enter Split
rice calculation

process performed at PCC level (product level)

ation of activities at PCC level
Acty GL ( Lab acty) Dr/Cr PCC
Acty GL ( Lab acty) Cr/Dr CC

overhead calculation at PCC level

Admin OH GL Dr PCC
Admin OH GL Cr CC

utoff Period

alculation

ce calculation

ement of PCC
FI entry for WIP
WIP-BS
WIP-P&L

FI entry for Variance

Production Variance Dr COPA(PSG)
COGM Cr PCC
Order Category 05
alloction
PCC With Production Order
It is used in Descrete Mfg
1 Where product is standardize and not required Job/Bat
2 Costing is required at product level
3 To calculate both WIP & variance at the same time at an
4 to keep simplified Process in the system
5 To keep the simplified data recording proce
This is can be use both in MTO & MTS
Ex: Mother board, processor, FMCG , Car engine

Two Order types required

PCC with Production Order
One Order Type for PCC (PCC Order type)
Second Order Type (PP Order type

1 PCC create at BOM and routing level

2 This scenario can be used in discreet manufacturing
3 PCC is real cost object
4 The production order is statically object
Production order is used for logistic information purpose
Not possible to post any cost against the production ord
Not possible to save the plan cost against producion orde
We can generate plan cost but not possible to sav
PP order type
1 PCC indicatoràIn the P.P order type it specific tha
2 At the time of creation of production order, the pr
3 The production order status represents as a PCC (
 That means the production order linked to

Process:
One PCC can have multiple production order
1 àCreation of PCC by using BOM & routing.
System generates preliminary cost estimate
It generate based on costing variant for P

2 At the time of Creation of production order:

It assign automatically to the PCC
3 The production order status represent as a PCC
Status it specifies that the production order it
We can generate plan cost but not possible
Not possible to post any actual cost against
This production order just used for logistic i

4 At the time of Goods Issue to the Production Orde

Dr Material Consumtion
Cr Stock-RMX

5 At the time of confirmation of activities againat Pr

Dr Lab Acty GL
Cr Lab Acty GL

6 Goods received from Production order to Stock

Dr Stock-FGX
Cr COGM
7 All period end process performed at PCC level (pro
Period end pocess not possib
Prod order linked to the PCC

CPTE CPTD Run Actual Template Allocation

Dr Admin OH Acty GL
Cr Admin OH Acty GL

1 Period end process in CC

1 Actual SKF
2 Actual Assessment / distributi
3 Actual Cost center Split
4 Actual Acty Price calculation

2 Period end process at PCC level

All period end process perform
CON1 CON2 1 Revaluation of activitie
Dr Lab Acty GL
Cr Lab Acty GL

CO42 CO43 2 Actual overhead calcula

Dr Admin OH GL
Cr Admin OH GL

KKA0 3 WIP Cutoff Period

KKAS KKAO 4 WIP calculation

KKS6 KKS5 5 Variance calculation

KK87 CO88 6 Settelement of PCC
1 FI entry for WIP
Dr
Cr

2 FI entry for Varia

Dr
Cr
d not required Job/Batch wise costing.

at the same time at any level

in the system
a recording process

G , Car engine

der type) ===> Order Category

====> Activate pCC Indicator ===> Order category

nufacturing

rmation purpose / logistic goods movement and activity booking purpose used
e production order
st producion order.
ot possible to save the plan cost for the production order

ype it specific that the orders created under this order type link to PCC and it specific
tion order, the production order automatically assigns to the PCC
esents as a PCC (Production order link to PCC).
n order linked to PCC

ction order
& routing.
ry cost estimate for PCC.
sting variant for PCC, BOM, Routing, PCC lot size

tion order:

esent as a PCC
oduction order it link to PCC and main cost object is PCC
but not possible to save plan cost.
ctual cost against production order
used for logistic information purpose

Production Order
sumtion Dr PCC

tivities againat Production Order

Dr PCC
Cr CC

order to Stock

Cr PCC
d at PCC level (product level)
pocess not possible at Production order level as no values(Cost) posted against Produ
nked to the PCC hence not possible to prform any periodend process at the Producti

te Allocation
n OH Acty GL Dr PCC
n OH Acty GL Cr CC as per template alloction

sment / distribution
enter Split
rice calculation

at PCC level
d process performed at PCC level (product level)
uation of activities at PCC level
Lab Acty GL Dr PCC
Lab Acty GL Cr CC

overhead calculation at PCC level

Admin OH GL Dr PCC
Admin OH GL Cr CC

utoff Period

alculation

ce calculation
ement of PCC
FI entry for WIP
WIP-BS
WIP-P&L

FI entry for Variance

Production Variance Dr COPA(PSG)
COGM Cr PCC
 Category 05
category 10

purpose used

PCC and it specific that PCC is real cost object and production order is statistical obje
osted against Production order
cess at the Production order level.

alloction
r is statistical object
Back Flush :
Back flush is nothing but auto goods issue or receipt.
Back flush concept can be used only in the repetitive mfg

Back Flush
Work center Routing Material master level
2nd priority Operations

1 Priority 1.Always back flush

2.work center
Decide whether back
Flush or not
3rd priority.

The back flush indicator can be define/specifies in three places.

1àMaterial master
MRP-2 TAB

2àWork center
3àRouting

MM
Always Back Flush
WC Decides
Always Back Flush

WC Decides ====> WC Master===> Back F

WC Mater If Indicator Activated====> Confirm the operation

 If Indicator not activated====> No back flush

Operation level :
Back Flush ativation for specific op and assi
At the time of confirmation of op====> Au

The back flush can be performed that is either at the time of ope
We can recommend back flush at the time of goods receipt if th
The back flush can be recommendable at the time of operation

The back flush concept can be applied or recommendable in the

1 Where the actual quantities is always equal to pl
2 Cannot be traceable or measurable actual consu
Example : Foundry , St
 receipt.
he repetitive mfg. scenario

Material master level

MRP 2 TAB

1.Always back flush

2.work center
Decide whether back
Flush or not

ree places.

Master===> Back Flush

rm the operation at this WC Level====> Components and activities booked automati

GI( By assining components in routing ),Acti
 o back flush

ecific op and assignement of component and control key assigned

n of op====> Auto GI ,Acty booking, GR( Controlled through control key and REM pr

r at the time of operation confirmation or at the time goods receipt(GR)

goods receipt if the production process is very short period (Just in time production).
time of operation confirmation if the production process is the long production process

ommendable in the below business cases

always equal to planned qty (There is no variance b/w plan and actual qty).
urable actual consumption of material for the specific output of production
ple : Foundry , Steel Mfg
booked automatically
ts in routing ),Activities booked , GR (Control key and REM specified auto Gr)
l key and REM profile)

duction).
tion process
d auto Gr)
REM Profile ( Repetetive Mfg Profile)

Entire PCC process controlled by R.E.M profile

It controls the back flush
The R.E.M profile it controls goods issue back flush.
GI back flush at GR posting
Reporting point back flush it control whether allow to calculate WIP or n
Activity back flush
1 Back flush using standard cost estimate for material.
2 Using data from preliminary costing of product cost colle

REM profile need to be assign FG (MM)-MRP4 tab

REM profile is required for all the scenarios that is PCC with production

Notes:
It controls the entire business process of the PCC ,The REM profile is spe
(It controls the reporting point back flush) that is whether WIP a
In the REM profile the if R.P back flush indicator not activated then not
System it allow to confirm only the last operation
The REM profile it controls whether allow to perform the goods issue ba
The REM profile it specify what activity qty need to be posted that is eit
REM profile it also specify how the error log to be updated/recorded an
REM profile it specify which movement type to be use while performing
REM profile need to be assign in the material master MRP 4 TAB
REM profile need to be use for all the PCC scenarios
 o calculate WIP or not

te for material.
f product cost collector (Propose as per preliminary cost estimate activity qty)

CC with production version, PCC with production order

e REM profile is specify whether WIP allow to be calculated or not

at is whether WIP allow to calculate or not
activated then not possible to calculate WIP and also not possible to confirm the activities indiv

m the goods issue back flush at the time of goods receipt. The REM profile also controls whethe
e posted that is either as per standard cost estimate or as per preliminary cost estimate quanti
dated/recorded and also to be re processed either cumulatively or collectively/individual
e while performing back flush. That means the REM profile it contain the default movement typ
MRP 4 TAB
m the activities individual operation wise

so controls whether allow to perform auto goods receipt at last reporting point back flush
ost estimate quantities while perform back flush
ely/individual
fault movement type.
int back flush
Rate Routing :
Can also be called as routing
It contains the list of sequence of operation and each operation it conta
Rate routing it specify time based output of the production
ex: 100pc output of production per hour
h operation it contains the work center and also it specify what activities to be perform on speci
e perform on specific work center and also it specify planned time is required to complete each
d to complete each activity
Production Version:

It specifies which BOM and rate routing to be used and lot size of the pr
Production version need to be assigned in MM MRP4 tab

Production line
Sequence of arrangement of Work centers can be called
nd lot size of the production version
MRP4 tab

ers can be called as poduction line