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Sale order costing process : Help required

Hello All,

Belatted Happy New Year 2011 to all.

I have a question related to Sale Order Costing. It goes like this,

My client is into Pipe coating business who receives the pipe from the customers, coats it as per there requirements and despatches it thereon. There is no concept of FG here as its only the service he is doing on it and also when he receives the pipe there is no raw material cost on it. Raw materials for him would be chemicals etc which he uses to coat the pipe.

And also this demands variant configuration from SD and PP angel.

As this scenario is customer specific, it demands Sale Order based costing(Sale order cost estimate).

My doubt is, how the sale order costing process goes with.

In general scenarios, Make to stock, we use production order based costing where standard cost estimate is calculated for planned cost and actuals are incurred on PO settling the variance to COPA

Similarly how the costing goes with if Sale order cost estimate is used. What i think is, here instead of Standard cost estimate for plan, we will go with Sale order cost estimate at sale order level, and incur actual cost at production order and settle the cost of Production order to Sale order. Correct me if i am wrong, and request you ppl there to explain me the process of costing in the scenario said above.

apart from that, my client wants the flexibility to change the cost estimate at quotation level.

Please suggest me with solution explaining the process of costing here.

Thanks in advance,

Ravi Kumar

Former Member


Yes, you can execute CON2 to revalue the prod orders with actual activity cost.... After CON2, when you settle prod order to sales order, it will include the actual activity cost...

In Sales order costing, you can use a Costing Variant and attach costing sheet to it.... It will calculate overhead as per the logic you define in Costing Sheet...

In MTO also, PGI triggers COGM only because PGI happens at Std Cost... The selling & admin exp are allocated to COPA separately

I would suggest you to close the thread as your initial query in this thread is addressed... This will give a chance to others as well to participate


Ajay M

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