EK01 and EK02 costing difference

[Former Member]

Dear Friennds,

In construction co which condition should I take for cost estimation, as management used to add their profits in the estimation only then how I can make the pricing procedure by selecting the right condition type for cost. It should be EK02 or EK01 or VPRS or something else and how can find the profit margin.

Please guide me

Regards,

Atul.

[Manoj_Mahajan78 · Accepted solution]

Atul,

EK01: If this is assigned, then system carries out sales order line item product costing and can be used to calculate net value for a line item as a basis.It is usually used to manage 'follow through type' of orders. Example you purchase something directly on behalf of the customer (outside normal stock) and then you sell it to the customer with a mark-up.

EK02: If this is assigned, sales order line item cost can be used only to compare with net value by which the profit margin can be calculated. It has close integration with “Controlling”. It may be used for BOM and configurable material.It Usually allows you to hold the cost of the item and therefore allow accurate accounting later on during the process and yes it should be added to the relevant pricing procedure if you want to use this type of process

Also

EK01 :

If you use this condition type, the result of unit costing is issued to the first position on the conditions screen for the item. The value can be used as a basis for price determination.

EK02:

If you use this condition type, the result of unit costing is simply a statistical value which you can compare with the price.

Please note the following points :

1) The condition type must have condition category 'Q' (costing).

2) The condition type must agree with the condition type defined for unit costing in the pricing procedure.

EK02 is used for calculating the magin in line item of order while in case price is based on cost + markup for example then EK01 is used

Reward if this helps...

Regds

MM

[Lakshmipathi]

Dear Atul

In general,

Condition type <b>EK01</b> is mainly used for cost-plus contracts in which the sales price depends on the expected costs.

Condition type <b>EK02</b> is mainly used when the sales price is a market price and the expected costs are only used for informational purposes.

The condition type <b>VPRS</b> goes into the valuation segment in the material master and determines from this the standard price or average price.

So if we compare all the above with construction, I feel the most appropriate condition would be <b>EK01</b>.

Thanks

G. Lakshmipathi