prices in material master

[Former Member]

Hi experts,

I am working on Engineer to order type of scenario. After receipt of sale order material master will be created but almost all the semi finished and raw materials will be ready in SAP. First they will send all required BOM comp to subcontracting and bring it back. After receiving they will do testing(Inhouse) and sale.

My concern is about prices in material master. This situation I am thinking of creating two materials one will be customer invoice item (E) and other will be subcontracting item ( F , 30 ) after MRP planned order will be created for sale order item and purchase req is created for subcon item . After getting back I will release prod order issue suncont mat. against prod ord.

I think price of subcontracting item (planned) in accounting 1 view should be equal to all BOM components + subcontracting labor. And price of sale order item should be equal to price of subcontracting tem + testing labor.

Please suggest if I am thinking right.

Neal

[Former Member]

Hi Neal,

This proposal should work. This is how we operated for a fully subcintracted assembly in a firm i used to work for. However you should also consider the transportation costs of components (depending on scope) and Purchasing overheads for the subcontractes assembly(F) and also consider the storage overheads for the Finished Good (E).

Regards,

Ashok

[Former Member]

Hi Ashok,

Thanks for the response . I guess Production and purchasing overherad will be taken from overhead group defined on costing 1st view .

Correct me if I am wrong .

Neal

[Former Member]

Hi Neal,

If you have assigned a overhead group that considers all these costs, then these costs should be taken care of and the model should work...

Regards,

Ashok

[Former Member]

Hi Ashok ,

Thanks again, now second half of problem

This is project based company, where 300 -1000 new material master will be created. I think they should run costing ck11n and release it in ck24n after every material ( Product ) master creation to get correct planned price in accounting view which will reduce their effort of manually calculation ( As BOM will be huge ) and to reduce variance as well .

I know std cost estimate is not done so frequently, but as every product is unique I think this can be used. Now my question is

1) Is costing run required after every MM CREATION?

2) If yes, who will do it (suggest role of End user)?

3) If not , will balance sheet or any finance activity get affected because of rough price in MM. ?

Neal

Edited by: Neal Gibson on Sep 15, 2008 12:32 PM

[Former Member]

Hi,

2) The best person will be the Costing executive in Finance dept... who furnishes the costing reports and handles product costing releated activities

1) Costing run need not be done after every MM creation. It is usually a periodic activity (weekly / fortnightly). It is not practically possible because of high volume of MM creation and difference in roles. MM is created by PP guy and costing run is usually by a costing executive.. Since the newly creted material will not have planned costs your varance will be high for the material till the costing run.. that is all...

3) The price in mm is for calculating target/planned costs only and variance between the actual and planned is posted into variance accounts and only the actual costs are considered for legal documents so this should not be a major problem... but your budgeting / financial planning will not be relaistic if there is too much approximation in the MM price...

Alseo refer link below for a PDF on costing for Projects

http://help.sap.com/printdocu/core/Print46c/en/data/pdf/PSCOS/PSCOS.pdf

Regards,

Ashok