Use of Costing Variant Actual (PPP3) in Product Cost Collector

[Former Member]

Dear Experts,

I have searched a lot for subjected issue but could not get the clarity. I am pretty clear about PREM (Preliminary Cost) and PPC1 (Standard Cost Estimate). I do not have any clue on Costing Variant Actual (PPP3). Queries are.

1. Use of Costing Variant Actual (PPP3)?

2. Where (in which step/transaction) does any calculation takes place with PPP3 (like PREM calculates value in KKF6N and PPC1 calculates value in CK11N and CK24/CK40N)?

3. Why is it called Costing Variant Actual (PPP3), how it brings value of Material, Activity Price and Overhead cost?

4. Where can we see the difference between PPP3, PREM, PPC1?

Please give clarity on above points. I would be thankful to you guys. Thanks in advance.

Regards

Ruksana

[ajaycwa1981 · Accepted solution]

Hi Ruks

Any Costing Variant is used for the purpose of Cost Calculation..

1. You do Std cost / Inventory Cost Estimate in CK11N. Std SAP provides PPC1 for that

2. You do Prelimary cost estimate for Production Orders, using PPP1 and for Cost Collectors using PREM.. In Prel Costing, you calculate the Planned cost for the Manufacturing cost object

3. Then you do Simultaneous Costing, which is the accumulation of actual cost on the Cost Object (Prod order or Cost Collector).. You once again need a Costing Variant for this (PPP3).. This Costing Variant is assigned in the Order Type (PP01, RM01 or PI01), just like the Costing variant in 2

In PPP3, the material price valuation strategy is set to "Prices as per Price Control". This makes sense because the posting in FI for RM consumption would happen based on the Price Control

You can check settings in each individual costing variant.. there is no report that can show a comparison between them

And lastly, the settings offered in PPC1, PPP1, PPP3, PREM are just for reference. Don't restrict yourself to those.. You can decide what you want and create a new costing variant accordingly.. The ones for Prel and Simul. costing you must assign in the order types

Hope this clarifies

Rgds

Ajay M

[Former Member]

Dear Experts,

Still I am waiting for my original questions. Please help.

Regards

Ruksana

[kamalkumar_biswas2]

Hi Ruksana

I have replied your original question in my 1st post..

Can you explain more about your doubt anymore? If possible put some example ...

Kamal

[Former Member]

Kamal Sir,

Please reply my basic questions.

"""""2. Where (in which step/transaction) does any calculation takes place with PPP3 (like PREM calculates value in KKF6N and PPC1 calculates value in CK11N and CK24/CK40N)?

3. Why is it called Costing Variant Actual (PPP3), how it brings value of Material, Activity Price and Overhead cost?

4. Where can we see the difference between PPP3, PREM, PPC1?""""""

Regards

Ruksana

[Former Member]

This valuation variant of PPP3 and PPP2 determines which activity prices are used to valuate the activity types using t-code MFBF or order Confirmation t-code like CO11N.

Strategies for material valuation or price determination of external processing and subcontracting in this valuation variant of PPP3 and PPP2 are not taken to account in simultaneous costing.

Material cost is valuated according to material master’s price control for simultaneous costing.

If material have price control ‘’V’, material cost will be valuated using MPV.

If material have price control ‘’S’, material cost will be valuated using standard price.

[kamalkumar_biswas2]

Hi Ruksana

When you post actual Goods Issue and Activity confirmation for Product cost collector through back flash (MFBF) system consider the setting in PPP3 to value the cost of consumption of goods issued and activity hrs to calculate actual cost of production.

This variant is called actual because it calculate actual cost of goods issued and actual cost of activity confirmed.

Diff between PREM and PPP3 is for repetitive manufacturing order at cost collector level

PPC1 for standard cost calculation which is used to value GR level for SFG/FG product

Kamal

[kamalkumar_biswas2]

Hi Rusana

   First of all you should understand the concept and use of costing variant at different object level cost calculation as well as to calculate standard cost/plan cost.

   1. PPC1  is used when we calculate standard cost in CK11N/CK40N to update cost at costing view 2 in material master

   2. PREM is used when we calculate preliminary cost at Cost Collector level

   3. PPP3 is used to calculate actual cost at Cost collector that means when you post GI/Activity through Back Flash system calculate cost for actual posting based on PPP3

    Basically when we calculate standard cost at CK11N/CK40N no actual cost is required to be calculate..so only PPC1 is used to calculate Plan/Standard cost

   But when we are calculation object level costing always a preliminary cost is calculated..you may call it estimated cost of plan production qty and Actual cost for actual consumption of goods & activity.So 2 costing variant are used at every object level cost calculation.

   In your case..PREM for preliminary cost and PPP3 for Actual cost at cost collector level

   I think this will clarify your question

Kamal

[Former Member]

Dear Kamal,

My doubt is about PPP3 only. How it works at Confirmation-MFBF (back flushing for BOM Components)?

Accounting Entry at MFBF: BOM (Finished Goods i.e. FG1) has only one Raw Material i.e. RM1

1. Dr. FG Inventory(FG1)                      1000

2. Cr. Cost of Goods Manufacturing       1000

3. Dr. Raw Material Consumption          1050

4. Cr. Raw Material Inventory(RM1)       1050

Now this is very clear to all that line items 3 and 4 are consumption entry (of RM1) and that will be posted at any cost at as MAP of the material (in case of Indicator V) irrespective of what standard price is calculated at costing run or irrespective of anything you have in PPP3, because if PPP3 has "Planned Price1' as valuation variant; system will still pick MAP instead of 'Planned Price1'.

So please let me know, how it  (PPP3) works? and where can see the difference.

Regards

Ruksana

[Former Member]

Hi..

PPP3 is used  for the simultaneous costing(Actual costing) and final costing of manufacturing orders.

You pay attention to the following information in this site : Check Costing Variants for Manufacturing Orders (PP) - Product Cost Controlling - SAP Library

Strategies for material valuation or price determination of external processing and subcontracting are not taken to account in simultaneous costing.

[kamalkumar_biswas2]

Hi Ruksana

Yes it is system default behavior that if for RM consumption it gets MAP in MMaster it will take priority irrespective of strategy defined as Plan price 1 etc to avoid PRD at consumption point. But if does not get any MAP then it will take as per strategy...

kamal