Product Costing, part of the Controlling module, is used to value the internal cost of materials and production for profitability and management accounting. Product Costing is a niche skills and while highly integrated with other modules, many people avoid it due to the complexity. This 5 part blog will seek to simplify Product Costing.
3.8 Costing 1 view 73 3.9 Costing 2 view 82 3.10 Material valuation configuration 85 4 Costing Run Execution 101 4.1 Costing related configuration 102 4.2 Costing run processes 137 5 Actual Costs & Month-End Processes 175 5.1 Cost flow through system 176 5.2 CO integration with other modules 181 5.3 Month-end processing 186. SAP PRODUCT COSTING CONFIGURATION In tab Additive CostsFollowing configuration is decided:-. Whether we can transfer the cost components that were entered in the form of an additive cost estimate. Whether the additive costs for materials with the special procurement types stock transfer or production.
This training guide provides instructions for procedures of planning product costs (CO-PC-PCP) in SAP Controlling module (SAP CO-PC). Lugano 1920 kitsempty spaces the blog 2017.
- Purpose of Product Cost Planning in SAP
- Organizational Structure
- Cost Related Master Data
- Overhead Costs (Costing Sheets)
- Cost Components
- Cost Component Structure
- Costing Sequence
- Costing Methods
- Material Cost Estimate with Quantity Structure
- Material Cost Estimate Without Quantity Structure
- Customizing (Preparation of Costing)
- Product Cost Planning with Costing Run and Primary Cost Splitting
- Product Cost Planning with Multilevel Unit Costing
Download – SAP CO Product Cost Planning: The Absolute Beginner’s Guide
- SAP FICO Tutorial
- SAP FICO Useful Resources
- Selected Reading
SAP CO Product Costing module is used to find the value of internal cost of products. It is also used for profitability and management accounting for production.
While configuring Product Costing, it involves two areas for setting −
- Product Cost Planning
- Cost Object Controlling
The basics of Product Costing is Cost Center Planning. The goal of cost center planning is to plan total dollars and quantities in each Cost Center in a Plant.
Sap Product Lifecycle Costing Pdf
Product Costing - Overview
Use the T-code KP06 and enter the controlling area.
Cost Center dollars are planned by activity Type and cost element. You can also enter the variable and fixed dollar amounts.
You can plan all costs in production cost centers where they will end up through allocations, or you can plan costs where they are incurred and use plan assessments and distributions to allocate.
Sap Product Cost Controlling Pdf
To define cost center activity quantities, use the T-code KP26. You can also manually enter an activity rate based on last year's actual values. Note that if you enter an activity rate instead of using the system to calculate a rate, you lose the opportunity to review actual vs. plan and see dollar and unit variances. It is a best practice to plan activity quantities based on practical installed capacity which accounts for downtime. If you plan at full capacity, plan activity rates will be underestimated.
Let's say we are using Product Costing to value our inventory in a cookie baking shop. This will help us value our cookies (finished good), frosting (semi-finished good), and baking items like eggs, milk, and sugar (raw materials). In order to calculate costs, we need to come up with rates for each activity, such as mixing baking items, oven baking, and cookie cooling. Since a rate is a dollar per unit, we can either come up with a rate based on previous year's actual rates, or enter our total costs and total units.