This is used for valuation of inventories like work in process & finished goods. - Data is flow from MM, PP, FI&CO modules - Product costing made easy- sap labs
- When we will take production – It will be standard cost - In the month ending we will knows the actual cost - The differences will be settle variances of accounts
Data flow in product costing: Example: Product AMLFG1
Cost sheet AML finished goods
Raw material XXX (Qty from BOM * Rate from material master Raw material overheads XXX (10% of raw material)
Production cost XXX (hours required * machine hour rate) ---
Cost of goods manufacturing XXX (COGM)
Admn& selling& dist exp XXX ---
Sales budget Production budget
Sales budget: Make to order
Make to stock
Production budget: Material requirement plan
Overheads planning
MM
Material master Accounting view
Raw material (AMLRM1) – Moving average price – 75/- (AMLRM2) – Moving average price – 100/-
PP: Bill of material (BOM) required for production
AMLRM1 – 1kg AMLRM2 – 1kg
Dept A Dept B Dept C Dept D Work centre in PP
X (Finished goods (AMLFG)
Finished product (AMLFG) process flow A C D (Routing) Salaries – 200000 Wages - 500000 Rent - 20000 --- 720000 Machines – 100 Machines
Machine hours = 100 * 24 hours * 30 days = 72000 machine hours Machine hour rate = 720000/72000 = 10/- per hour
Creation of secondary cost elements:
1. Overhead cost element 2. Activity cost element
Use the transaction code: KA06
Use the cost element: 1100000
Valid from: 01.04.2006 to 31.12.9999 Enter
Give the name: RM overhead rate Description: RM overhead rate
Cost element category: select 41 (Overhead rate) Save
One more cost element: 1200000 Valid from: 01.04.2006 to 31.12.9999 Enter
Give the name: Activity cost element Description: Activity cost element
Cost element category: select 43 (Internal activity allocation) Save
Creation o f activity type: (Called machine hour)
Accounting controlling cost centre accounting master data activity type individual processing create (KL01)
Activity type: AML
Name: Machine hour Description: Machine hour Activity unit: Select H (Hour)
Cost centre categories: Select * (All cost centre categories) Enter
Activity type category: select 1 (Manual entry, manual allocation) Allocation cost element: select 1200000
Save
Creation of 2 cost centers: (KS01)
Give the cost centre: Dept G
Valid from: 01.04.2006 to 31.12.9999 Reference cost centre: Dept A
Controlling area: AML Enter
Change the name to dept G Description: Cost centre dept G Other fields are common Save (or) (ctrl + s)
One more cost centre: Dept H
Valid from: 01.04.2006 to 31.12.9999 Reference cost centre: Dept A
Enter
Change the name to dept H Cost centre: Dept H
Cost centre category: Select 9 (Allocation cost centre) Save
Creation of cost centre group: (KSH1)
Give the cost centre group: AML Prod Enter
Give the cost centre group: AML prod Select insert cost centre button
Give the cost centre: Dept G Select save button (or) (ctrl + s)
Define overhead keys:
SPRO Controlling product cost controlling basic settings for material costing overhead define overhead keys
Select new entries button Overhead key name: AML Description: AML Overhead key Save
Save in your request
Define overhead group:
Same path
Select new entries button Valuation area: AMLP Overhead group: AML Overhead key: AML
Name of overhead group: Overhead group for AML Save
Save in your request
Define calculation bases:
SPRO controlling product cost controlling product cost planning basic settings for material costing overhead costing sheet components define calculation bases
Select new entries button Base: A1
Name: Raw materials Save, Save in your request Select: A1
Double click on details folder Give the controlling area: AML Enter
Select new entries button
From cost element: 400000 to 400099 Save
Select back arrow 3 times Select: New entries button Base: A2
Name: Production cost, Save
Select: A2
Double click on details folder Give the controlling area: AML Enter
Select new entries button
From cost element: 400100 to 400299 : 400500
: 1200000 Save (or) (Ctrl + s)
Define percentage overhead rates: Path: same path
Select: new entries button Overhead rate: A3
Name: Raw material overhead rate
Dependency: Select DO10 (Overhead type/H key) Save
Save in your request Select: A3
Double click on details folder Ignore the message, press enter Select new entries button
Overhead type: Select 2 (Planned overhead rate) Overhead key: AML
Percentage: 15%
One more:
Valid from: 01.04.2006 to 31.03.2007 Controlling area: AML
Overhead type: Select 1 (Actual overhead rate) Overhead key: AML
Percentage: 10% Save
Save in your request
Define credits:
Same path
Select new entries button Give the credit key: A4
Name: Raw Material credit key Save
Save in your request Select: A4
Double click on details folder Give the controlling area: AML Enter
Select new entries button Valid to: 31.03.2007
Fixed percentage: 100% Cost centre: Dept H Save
Example:
RM1 – Handling charges Dr - Dept H – 3000
To Bank 3000
RM2 – Handling charges Dr – Dept H – 7000
To Bank 7000 Dept H Handling 10000 | 3000 Charges | 7000 (7000 + 3000) | --- 10000 Production 1 production2 RM cost 30000 RM Cost 70000 10% of cost 3000 10% of cost 7000
Define costing sheet:
SPRO Controlling product cost controlling basic settings for material costing overhead define costing sheets
Select new entries button Costing sheet: AML
Description: AML costing sheet Select: AML
Double click on costing sheet rows folder Select new entries button
Give Row: 10, Basic: A1 (Raw materials)
Row: 20, overhead rate: A3 (Raw material overhead rate) From: 10 to Row 10: Credit: A4
Row: 30, Base: A2 (Production cost)
Row: 40, Description: Cost of goods manufacture From Row 10 to Row 30
SPRO controlling Product cost controlling product cost planning material cost estimate with quantity structure define costing variants
Transaction code: OKKN
Select costing variant: PPL1 (Standard cost estimate (Material)) Select details button
Select valuation variant button
Select create button (Beside valuation variant/plant) Select new entries button
Give the plant: AMLP Save, Save in your request Select back arrow
Select valuation variant: 001 with plant: AMLP Select details button
Select overhead tab
Give the costing sheet: AML – costing sheet The costing sheet: AML – costing sheet Save
Define cost component structure:
SPRO controlling product cost controlling product cost planning basic settings for material costing define cost component structure
Select structure: 01
Double click on: Cost components with attributes folder Select: cost component 10 (Raw materials)
Double click on assignment cost components – cost element interval folder Select new entries button
Cost component structure: 01 Chart of accounts: AML
From cost element: 400000 to 400099 Cost element: 010 (Raw materials)
Save, ignore the warning message, and enter Save in your request
Double click on cost components with attributes folder Select component: 80 (Material overhead)
Double click on assignment cost component – cost element interval Select: new entries button
Cost component structure: 01 Chart of accounts: AML
From cost element: 1100000 (Overhead rate) Cost component: 080 (Material overhead) Save
Double click on cost elements with attributes folder Select cost component: 50 (Production machine)
Double click on assignment cost component – cost element interval folder Select new entries button
Cost component structure: 01 Chart of accounts: AML
One more
Cost component structure: 01 Chart of accounts: AML From cost element: 400500 Cost element structure: 050 Cost component structure: 01 Chart of accounts: AML From cost element: 1200000 Cost element structure: 050
Save
Double click on cost element structure folder For ‘0’ select activate check box
Save (or) (ctrl + s)
Determine person responsible for work centre:
Path: SPRO production Basic data work centre general data determine
person responsible Select new entries button Give the plant: AMLP Person responsible: A Give the responsible: Mr. A Save
Save in your request
Define MRP controller: (MRP: Material requirement planning)
SPRO production material requirements planning master data define MRP controllers
Select new entries button Give the plant name: AMLP MRP controller: B
Description: Mr. B Save
Save in your request
Define floats (Scheduling margin key) (Floats: Cushion period)
Path: SPRO production materials requirement planning planning scheduling
& capacity parameters define floats (Schedule margin key) Select new entries button
Give the plant name: AMLP Schedule margin key: AML Opening period: 2 days
Float before production: 2 days Float after production: 2 days Release period: 2 days
Save
Save in your request
Define production scheduler:
SPRO production shop floor control master data define production scheduler Select new entries button
Plant: AMLP
Production scheduler: C
Production scheduler name: Mr. C Save (or) (ctrl + s)
Version: 0
From period: 9 to 9 Fiscal year: 2006 Cost centre: Dept G Next page
Cost centre: 400100 (Salaries) Select form based radio button Select over view screen button Give plan fixed cost: 720000 Save
Planning for machine hours:
Accounting controlling cost centre accounting planning activity ad put/prices change (KP26)
Version: 0
From period: 9 to period: 9 Year: 2006
Cost centre: Dept G Activity type: AML
Select form based radio button Select overview screen button
Give plan activity 72000 (100 machines * 3 shifts * 30 days) Save
Machine down rate calculation:
Accounting controlling cost centre accounting planning allocations price calculation (KSPI)
Select cost centre group radio button Give the cost centre: AMLPRODN Version: 0
From period: 9 to period: 9 Fiscal year: 2006
Execute
Select save button (or) (ctrl + s) Ignore the message, press enter
Creation of material master: (MM01)
Give the material number: AMLRM2 Industry sector: Mechanical engineering Material type: Raw material
Press: select use button
Select: Basic data, purchasing, general plant data/storage one, accounting Select organization levels button
Give the plant: AML Storage location: Hyd Enter
Give the description: Raw material Basic unit of measurement: Kg Material group: Chem
Purchasing group: AML Select: Accounting1 tab Valuation class: AML1 Price control: V
Moving price: 100 Save
Creation of finished goods master (MM01):
Material No: AMLFG1
Industrial sector: Mechanical engineering Material type: Finished product
Press select views button
Select: Basic data1, MRP1, MRP2, work scheduling, general plant data/storage1, Accounting1, costing1.
Select organization levels button Plant: AMLP
Storage location: Hyd Enter
Give the description: Finished product1 Basic unit of measurement: Kg
MRP type: select PD (MRP) MRP controller: Select B (Mr. B)
Lot size: select Ex (Lot for lot order quantity) Select MRP2 Tab
In house production: 0 days Schedule margin key: AML Select work schedule time tab Ignore the warning message, enter Production: Scheduler C
Select accounting1 tab Valuation class: AML2 Price control: S (Standard) Give the standard price: 300/- Select costing1 tab
Overhead group: Select AML
Availability check: Select KP (No check) Save
Creation of Bill of material:
Logistics production master data bills of material bill of material material BOM Create (CS01)
Give the material No: AMLFG1 Plant: AMLP
Give the component
For item 10: AMLRM1; Qty: 1 Kg Item 20: AMLRM2; Qty: 1 Save
Creation of work centre:
Logistics production master data work centers work centre create (CR01) Work centre: Dept G
Work centre category: select 0001 (Machine) Select basic data button
Give the description: Work centre Dept G Person responsible: A
Usage, select 009 (All task lists types)
Standard value key: SAP1 (Normal production) Select costing tab
Start date: 01.04.2006 Cost centre: Dept G
For activity machine: Give the activity type AML Performance unit: H (Hour)
Formula key: SAP002 (Production machine types) Save
Creation of routing:
Logistics Production master data routings routings standard routings create (CA01)
Give the material No: AMLFG1 Plant: AMLP
Enter
Usage: select1 (Production)
Status: Select 4 (Release (General)) Select operation button
For operation at tab give the work centre: Dept G Control key: Select PP01 (In house production) Select operation: 10 and double click
Machine: standard values: 5 Unit: H (hours)
Save
Creation of cost estimate with quality structure:
Accounting controlling product cost controlling product cost planning material costing cost estimate with quantity structure create (T. Code: CK11N) Give the material: AMLFG
Plant: AMLP
Costing variant: PPC1 (Standard cost estimate) Enter
Give the costing date from: 08.12.2006 Costing date to 31.12.9999 Qty structure date: 08.12.2006
Valuation date: 08.12.2006 Enter
Standard cost should be: 251.25 Cost sheet
--- 175.00 RM overhead 15% 26.25 Production costs (5*10) machine hours 50.00 --- 251.25
From the menu select: Cost Display cost components Select save button (or) (ctrl + s)
Enter