SAP PP-costing process

[Former Member]

Hello SAP-Guruu2019s

Product costing process is handled by PP or CO module?

[former_member196398 · Accepted solution]

Niranjan,

Product costing will generally be handled by CO Consultants, but necessairly with the help of PP Consultants as all the master data is relavant for PP.

Regards,

Prasobh

[Former Member]

hi

When you create a production order and after each subsequent change to the order, the system calculates the planned order costs that are expected to be incurred during production. The planned costs are assigned to cost elements.

Primary Cost Elements

Costs that are considered as primary cost elements include:

Material costs

Costs for external procurement/external processing

These costs are assigned to the order, for example, via primary costs, such as material withdrawals or the purchasing of externally processed parts.

Secondary Cost Elements

Costs that are considered to be secondary cost elements include:

Production costs

Material overhead costs

Production overhead costs

These costs are allocated to the order via internal cost allocation.

Planned/Actual Cost Comparison

Both planned costs and actual costs are recorded in cost segments. Actual costs are updated when material withdrawals or confirmations are carried out for the order, or when a goods receipt is posted for an externally procured material component, for example. This enables you to compare planned with actual costs at any stage of order processing.

The activity used in an order can be divided into internal activity and external activity. Planned costs are calculated for both.

The system calculates the planned costs for the activities contained in an operation or suboperation via the valuation variant specified for the order type (defined via the costing variant). The values of the individual activities are specified via the activities defined in cost center accounting.

In a production order, you can display costs according to the following criteria:

Costs per cost element

Itemization according to cost element and origin

Cost stratification

In this display format the system totals the order costs per cost element.

To display this form of cost breakdown, proceed as follows:

Call up the production order.

Choose Goto->Costs -> Analysis.

The system displays the total order costs broken down into cost elements

-ashok

[rupesh_brahmankar3]

Dear,

when a production order is created the planned costs will be calculated automatically by the system.

This planned cost includes Raw material costsproduction costs overhead costs.

During production some scrap would have occured so that our raw mat cost will increase against the standards

During production against the standard time mentioned to produce the material we would have taken some more extra time to finish the product.This brings extra production costs

So against the standard actual may differ .

This difference need to be settled called as variance.

1.KGI2 Overhead calculation

2. KKS1 Variance

3. KO88 ACTUAL SETTLEMENT

Every cost estimate we create is based on the costing variant.

In the costing variant we define the control parameters and settings for costing

Settings contains info such as prices that will be used to cost the materials and activities

Control parameters are used for the automatic determination of of qty str ie Bom and Routing

Every costing variant contains a valuation variant and a costing type , date control , qty str control.

Valuation variant:

Valuation variant defines the price with which the material and activities are valuated

Determines 1.which price is taken from material masterrecord to calculate the material cost

2.which price is taken from cost center accounting to calculate the costs for internal activities

3. which price is taken from purchasing info rec to calculate the the costs for ext activities / subcontracting

4. which costing sheet is used to calculate the over head costs

Costing type:

costing type defines the valuation view to be costed and defines the purpose of costing.

Date control :

controls the validity of the cost estimste , qty str date.

Valuation class:

For material costing the valuation class controls the cost element to which the planned cost of the material are assigned and the cost element under which the actual costs are updated when the material produced is delivered to stock

Valuation category:

specified the criteria according to which partial stocks are distinguished from one another

Price control indicator:

the price control indicator specifies whether the stock of the material is valuated with standard price or moving avg price

costing sheet:

The costing sheet links all the functions for overhead calculation.

In the costing sheet we determine the following

1.The direct costs to which the over head is applied

2.The condition under which the over head is applied

3.Whether the over head is applied as a percentage basis or on a qty basis

4.The amt of overhead percentage

5.The validity period of the over head

6.Which object is credited ( order , cost center) and which cost element in the case of actual posting

We enter the costing sheet in the valuation variant in customising

Regards,

R.Brahmankar