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Standard Cost Estimate from multiple plants scenario

Former Member
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Dear Friends,

I have a scenario wherein my client operates in multiple countries and is thus having multiple company codes. Among this, in one of the company codes he is having production facilities to produce same product under two different plants. Here we are not using transfer control functionality of costing variant to cost the product but are valuating std cost for each plant. Now this particular material is being sold to a different plant operated under a different company code. Considering one of the plant as Master Plant I can use the transfer control through special procurement type in material master to transfer the material cost estimate.

But when I do the final sale of this product and reflect the transaction in CO-PA it will reflect with the cost estimate transferred from the master plant. But in order to get my actual profitability, my std cost from both plants should be considered based on the ratio of stock transferred from both the plants. Can anyone tell me if how to achieve this.

Regards

Anurag Gupta

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Answers (3)

Answers (3)

Former Member
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Hi Anurag, Kamal and Rajneesh,

you already found the solution:

If you have multiple procurement or production processes then you have to use mixed costing.


Define two procurement alternatives of type 'Stock Transfer' for the material in the receiving plant. In the procurement alternatives you specify the sending plants. Then define a mixing ratio e.g. 50:50.

You also have to set cross-company costing active or use group costing . Otherwise the costs will not be rolled up at company code boundaries (transfer control will not help).

Afterwards system will calculate the material costs in the sending plants and roll up the results (CCS) into the receiving plant according to the mixing ratio.

Best regards,
  Johannes

kamalkumar_biswas2
Active Contributor
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Hi

   Same material code  are you using to manufacture in diff plant in same com code ? So using diff costing variant in plant level to get diff stand cost...is it?

   If so..I don't know mix costing will work or not,,but your requirement is focusing on mix costing process as Rajneesh told. As because manufacturing process are in diff plant with diff variant..I have doubt...

   One work around we may try,,,by STO method...in MM we can move material from one plant to other through STO..and here in receiving Plant Material will be at "V" price control...so when same material with diff stand cost will flow to Receiving plant may have an average price..

  If works ..please revert us

Kamal

Former Member
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Hi,

Thanks Kamal & Rajneesh for your reply.

I would like to clarify that I am using the same costing variant in my manufacturing plants operated under the same company code and am manufacturing using the same material code in both the plants. I am not using the functionality of Transfer Control of costing variant as my client wants to cost the material in the two plants based on the cost incurred in the respective plants.

How can mixed costing help me in this scenario is my concern. I have never used mixed costing but I understand that we can define quota based on the valuation type ( In case of split valuation) to do the costing. How can this help me. Request you to please elaborate.

Kamal, your suggestion I would have taken, but the problem is when after the sale from my final plant The whole cost for my sfg will be shown as material cost and conversion cost could not be separated if I keep material indicator as "V" which is not acceptable to the client. Please suggest if I am wrong somewhere.

Regards

Anurag Gupta

kamalkumar_biswas2
Active Contributor
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Hi Anurag..

    Got your process...cost estimation in diff Plants with same variant to justify plant level expenses...so you have separate costs for the same material in diff plant..I think Mix Costing is used to make average cost of same type of materials with diff code produced in the same plant..

   What I have suggested may be an option to test..now I could not understand your doubts mentioned in para 3....please if you elaborate with some example so that people can give some suitable solution.

  Kamal

Former Member
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Hi Kamal, So my process goes like this... I produce the same material in two different plants and cost them separately using the same costing variant. This material so produced has to be transferred to a third plant as input material. This third plant is in another company code. I need to keep this transferred material at price indiactor "S" in the third plant so that I can have conversion cost flowing to cost components which can then be forwarded to COPA. When I do the costing in my third plant I can use the transfer control to do that but again the same is going to work only for one master plant. Accordingly, when I sale the final finished product, the copa document that is going to get updated will have results of revenue from sales document along with material cost that was flowing from the cost components of master plant. How to incorporate in my co-pa the results of second cost estimate that also existed and the material even is transferred from that particular plant. I hope I have made my point clear. Please let me know in case there is any further detail required. Regards Anurag Gupta

kamalkumar_biswas2
Active Contributor
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Hi

If you consider the transferred material in 3rd plant where this will be an input..what is harm to make it Price control as "V"  because it will be a component mat in BOM.... your header mat is S..so CCS will reflect the cost of Header Material with all conversion cost of Header item...in copa also CCS of header material will flow in respective value field...only thing transferred material will be consider as RM/SFG (Pur)  not as manufactured because it will flow to other plant like trading item.

Wait if any body can provide us some thing better....

kamal

kamalkumar_biswas2
Active Contributor
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Hi Anurag

Have you got your solution?

You can try with Batch & Valuation type combination concept to separate and identify the cost at plant level at the point of sales (selling plant)

See the following link as helpful:

Kamal

rajneesh_saxena
Active Contributor
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Hi

I think you need to use mixed costing and  create procurement alternative based on purchase order and vendor plant and the mixing ratios. Test this in test system and let us know the results.

Frankly speaking I have never done this but hope this will work.

Comments from , Sir are solicited.

Regards

Rajneesh