difference between Cost Object Controlling and Product Cost Planning?

[Former Member]

During the COPC config, we got 2 sets of configuration. One is cost object controlling and one is product cost planning. What is the difference between these configuration?

What is the purpose of these 2 configuration?

[Former Member · Accepted solution]

Hi,

Can you please tell me more detail about these three things?

Preliminary costing : calculating the target of of the cost object,

Simultaneous costing : valuating the flows of actual quantities

Final/Period end costing : calculating work in process, scrap analysis and variance analysis, as part of period-end closing

the function of these three things.

[Former Member · Accepted solution]

HI Lucas...

here is about the three things U asked:

let us take an example:

Ur company is to buy spare parts of computer, assemble them with the help of ur employees and sell it finally.

You know, you planned that ur total spare parts cost you 15000/- by enquiring in the market , labor costs is 5000/- per pc (acc. to employee wages u give to the labor)

so, ur total computer cost is 20,000/- & u wanna sell it for 25,000/-

Here, <b>Preliminary costing</b> per pc = 20,000/-

But, unexpectedly, on the day u r bought parts, one part rate has gone up by 1,000/- &

U assembled the computer & sold to your customer.

ur computer cost has come to 21,000. (15,000/- + 1,000/- + 5,000/-)

This is called <b>Simultanous costing</b>

This costing is done in SAP using production order confirmation.

at the month end(called period end closing in SAP) ur employee unexpectedly demanded to give 7000/- per pc for the pcs that were sold last month. You need that employee & u paid him accordingly. This cost u hav come to know only at the period end.

so the <b>Final period costing</b> is 23,000/- (15,000/- + 1,000/- + 7,000/- )

This is done in SAP using production order settlement.

Do assign points if it is helpful

Regards,

chaitanya

[Former Member · Accepted solution]

Hi,

01. Preliminary costing : calculating the target of of the cost object,

Cost planning can be performed for a production order before actual production starts

Preliminary costing is done when Production order is saved.

02. Simultaneous costing : valuating the flows of actual quantities

Based on actual quantities issued to production order

03. Final/Period end costing : calculating work in process, scrap analysis and variance analysis, as part of period-end closing

WIP is calculated for incomplete production order

WIP = Actual Costs – Production Completion

Calculated WIP amounts are recorded in FI

WIP calculation is performed at period-end until the production order is fully complete

Regards,

Murali

[Former Member]

Product Cost Planning is used to estimate what would be the cost for manufacturing a product. PCP determines an approximate value of the cost of finished product.

Whereas, Cost Object Controlling would capture the actual costs when a production order or a process order is executed. The actuals consists of raw material costs, activity costs as defined in the work center and other overheads as incurred during production.

P K

[Former Member]

Hi,

Product cost planning:

Product Cost Planning provides basic information for business functions that can be used by various applications such as pricing in Sales & Distribution (SD), stock valuation in Material Management (MM) and analysis in Controlling (CO)

Cost planning categories

Material Costing with Quantity Structure

With quantity structure i.e. with Bill of Materials (BOM) and routings from Production Planning (PP)

Material Costing without Quantity Structure

Without quantity structure i.e. with no BOM/routings, with manual input of costing items

Cost Object Controlling:

Cost Object Controlling consists of

Preliminary costing : calculating the target of of the cost object,

Simultaneous costing : valuating the flows of actual quantities

Final/Period end costing : calculating work in process, scrap analysis and variance analysis, as part of period-end closing

Costs incurred in producing a product are gathered on a cost object

The cost object could be a production order/process order/sales order/product cost collector.

There are different types of Cost Object Controlling for different types of production

Regards,

Murali