Project Costing

[Former Member]

Dear PS Experts,

Normally in FICO, the costing of the product gone through the Standard Cost Estimate. It explodes BOM, ROUTING & Over Head Cost. This is the way we have to finalize the Product Cost. Here in EHES they need to capture all the cost at WBS level and Project Level means here we need to finalize the cost through the Project Wise. In Project System through Activities, Network and WBS element only the cost will be captured, but in PP through BOM, ROUTING only capture the cost. My doubt is here can we have to calculate the Product Cost and Project Cost?

Can I have any suggession

thanqu

Raj

[Former Member]

closed

[nitin_patoliya]

In PS normal funcationality is to cover cost based on porject. Project Product costings comes when you manufacture product and sell to your customer. ( but normally if it is routine product than it is covered under PP ) If scenario is specialled & manufactruing each product wil take too much long time & cost sensitive at that time Product costing in PS comes. ( i.e Customer project where ends of the project we deliver final material to Customer )

Regards

Nitin

[Former Member]

Hi Nitin,

I have a question regarding costing in Project Systems. I understand that engineering costs are collected in WBS elements, but when do you cost a configured product? At what level (WBS or network)? Please let me know.

Thanks

[Former Member]

Hi Sarada

The basic advantage of Project System over other Project Management tools is its integration with other modules in the system like MM, SD, FI/CO, HR etc. By making WBS elements as Account Assignment, we can collect the costs incurred under the WBS element. WBS elements can be used as cost collectors.

With respect to engineering costs, these costs can be collected under a WBS element or Network (Activities under the network). It depends upon the structure of your project. If for example you want to procure some material for the engineering activity, the same needs to be attached to an activity as material cannot be attached to a WBS element. Similarly if you have some different activity types such as Internal (within the Orgnanization), External, Service or cost activities the costs of the same can be captured under Networks/ activities and consolidated at WBS level.

Product costing is a different aspect alltogether. It depends upon the costing strategy the organization adopts like Overheads, technology etc.

Hope this clarifies.

Venu

[nitin_patoliya]

There are mainly four type of cost planning in PS.

1. hierarchical cost planning (CJ40) : on WBS level is roughest form of cost planning it is not based on cost element or on dates.

2. Unit costing ( Cj40 ) : you can use Unit costing for the planning costs for WBS elements. When you create a unit costing in Cj40 you get empty list in it you ewnter the costing items line by line , when creating cosint items you specify item category.

unit costing for the WBS elements is contrlloed by the costing variants you define in the planning profile via txn OKKT. A costing variant references a costing type and a valuation variant. The costing type determines the technical properties of costing.

Unit costing normally used when you want to produce service / product for which the cost is fixed @ unit. If you produced more unit cost will normally multiplied by that factor.

3. Detailed planning for the WBs elemetns is cost planning that considers both cost elements 7 dates.

you can call tthe detailed planning via transaction CJ40 (cost element ) or via CJR2 (activity input planning )

In the cost element planning you select normally primary cost element for which you wnat to plan cost amd deter planned amoutng for the finscal year.

In activity input planning, you plan activities that you want to use from cost centers. enter the cost center respective activity types & planned quantities. from the cost center a/c sys will automatically determine priceof respective costcenter /activity type combination for the respective periods.

4. Easy cost planning : refers to planning cost on WBS elements levels similar to unit costing. the esay cost planning uses exisiting controlling , purchasing, MM datain the form of costing itmes. The easy cost planning allows you to use previsously defined planning templates so simplifies the csoting data entry. it's cost element based palnning. you cans does the same from Project builder ( Cj20n )

Network costing : if you are using network in your project. Netwrok costing is cost elements & date specific planning

For the details plese reffer the link

http://help.sap.com/erp2005_ehp_04/helpdata/EN/4c/226d8d46e611d189470000e829fbbd/frameset.htm

Regards

Nitin