product costing

[Former Member]

Hi gurus,

what is the purpouse we have to standard cost estimate. Is it only planned cost of the material and other cost. what happend if we run ck11n, and what is the updation in ck11n. if it planned cost is it mandatary.

thanks

raj

[Former Member]

Hi!

Costs in the Standard Cost Estimate can be categorized in to three parts:

Cost of inputs i.e. raw and packing materials used for the manufacture of the product would be arrived at by taking the material master rates (MAP) and the standard usages as defined in the bills of materials (BOM)

Cost of operations to be compiled by computing the rates of all activities and using the standard values of activities required to produce a material. These standard values of activities are defined in the Master recipe and

Cost of services of supporting departments to be added as overheads which is normally as a percentage to the activities performed in the production departments.

It is recommended to run Std. Cost Estimate at starting of any month and the same can be done through CK40N (Mass Std. Cost Estimate Run) for all Materials or CK11N (For Individual Material). So, that you can have your Std. price updated in Mateial Master and with compare to that price and actual cost for producing that material at your plant, you will be having your plan Vs Actual data in terms of reports.

So for organizational MIS perspective it is really important reporting aspects for planning as well as budgeting.

Hope it will clear to you. Pls get back to me for further query.

Thanks & Regards,

Taral Patel

[Former Member]

HI taral,

thanqu for quick replay, price updated after mark and release, then, why the standard cost estimate is required.

thanqu

raj

[Former Member]

Hi,

The Price as per Std cost estimate will be used for,

a)Valuating the stock

b) all transactions of that material, e.g GI/GR etc.. will be valuated with this Price ( as per std cost estimate).

Thanks,

Santosh

[Former Member]

Hi!

You mark and release price updation through CK24 ( for Indiavidual article) or through CK40N, but that is only for that specific period for which you are doing the same. Without releasing cost estimate, system will not allow you to run std. Cost Estimate.

Std. price in material master will be saved for that period only when you will run Std. Cost Estimate through CK40N or CK11N. The same will be taken into account as your planned price when you will create your process Order / Production Order (For respected Finished Goods / Semifinished Goods) and book the cost on the same as per your business. After that only you can have variance on Order with comparison of Plan Vs Actual cost on the Order. Without this planned cost, system even will not allow you to run variance cycle.

Hope it will clear to you. Pls get back to me for further query.

Thanks & Regards,

Taral Patel