Unabsorbed cost on cost center

[former_member588855]

Dear All,

Our company product valuation is being done on standard price. Now the management wants a report where it can see the actual cost of the product from sfg level to FG, line item wise.

Now there are some cost remaining on the cost center unabsorbed and we want the same to be allocated to the product manufactured during the period as sustaining cost in the Z report.

Is it possible to do it. Please suggest any other workaround available. We are not using COPA.

Regards,

Divraj

[ajaycwa1981]

Hi

How can you allocate the costs to products when you are not having COPA??

I guess what you are asking for is to absorb all the costs incurred on the cost center into Production orders... Is that right?

thats very much possible... What you need to do and ensure is

a. Assessment cycle - Allocate costs from Service cost centers of manufacturing plant to manufacturing cost centers...

The balance of service cost centers should be zero after that... I am not including marketing and other ex-factory costs here

b. Calculate actual activity price on prod cost centers

c. revaluate prod orders with actual act price (CON2).... Allow revaluation in Plan Version 0 in OKEQ

d. Your Activity Master KL02 should have Actual Price Based on Activity indicator

With all these settings, there wil be no under/over absorbed cost in Manufacturing plant

Any marketing and other ex-factory costs can be allocated if you have COPA....Since you dont have COPA, you can subtract the costs incurred on them at a Higher level in your reports

br, Ajay M

[former_member588855]

Hi Ajay,,

Thanks for the reply. However this is not the case.

For allocating overhead cost we had configured costing sheet and allocating same as a % of RM issued on production orders.

All service cost centers cost like IT dept costs are not being absorbed on the product following accounting standard 2 - Inventory Valuation.

Now the management wants to understand the profit being made on every product. i.e. Sales - Total Costs (COGM + Sustaining Cost + Sales & Distribution Cost).

IF COPA would have been in place then such unabsorbed cost could have been transferred to it.

Kindly advise.

Regards,

Divraj

[ajaycwa1981]

Hi

One thing is for sure - w/o COPA you cant see Product wise profitability from system.. You can manipulate it outside SAP as much as you can

Workarounds are possible where in you create a IO for each product, but thats not a good design option

br, Ajay M

[former_member588855]

What I have planned Ajay is to create a cost center where all the unabsorbed cost can be transferred through assessment cycle having secondary cost element. From there apportioning these costs to the product batch wise in a Z report. These costs will be stored in a Z Table apportioned to FG production batch wise.

The Z report will be runned with input of FG batch.

Regards,

Divraj

[ajaycwa1981]

Hi

I would suggest you to implement COPA.. It would take lesser time and effort as compared to Z report

br, Ajay M

[former_member588855]

Hi Ajay,

In COPA, not sure but I think we cannot analyse the cost batchwise for FG and also Line Item wise material cost used in FG and SFG order ( being issued to FG order) which is the requirement of the management.

Later on when COPA is implemented I can transfer the cost from this particular cost center created to the profitability segment.

Regards,

Divraj