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Former Member

Production costs for material with price control V

Dear all,

Can anyone pls tell me, how will the costing occur for a material produced in-house and having price control 'V' ? I am not able to see the target costs.

Also kindly tell me the settings to be done in CO, like target cost version, valuation variant, costing variant, etc.

Thank you,

Shrenik

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2 Answers

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    Former Member
    Oct 15, 2007 at 03:39 AM
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    Former Member
    Oct 15, 2007 at 03:50 AM

    Rather than giving my own versions I have compiled here SAP inputs. Pl let me know if you require any clarifications:

    Costing variant has the following components:

    <b>Define Costing Types

    Define Valuation Variants

    Define Date Control

    Define Quantity Structure Control

    Define Transfer Strategy

    Define Reference Variants</b>

    <u>Costing type:</u>

    In the costing type, you define the purpose of a material cost estimate by specifying, for example, which field in the material master record the costing results can be transferred to:

    Update Cost Estimate

    Standard price Standard cost estimate (01)

    Tax-based price Inventory cost estimate

    Commercial price Inventory cost estimate

    Price other than std price Modified standard cost estimate or

    current cost estimate

    No update Any cost estimate

    Define Valuation Variants:

    Define Valuation Variants

    Here you create a valuation variant containing the parameters required for valuation of a cost estimate.

    You also specify which costing sheet should be used to calculate overhead.

    Valuation Strategies

    Material valuation

    Here you define the sequence in which the system searches for prices from the accounting view or costing view of the material master record to valuate materials. You can also access prices from purchasing info records and condition types.

    For material cost estimates, you also specify whether additive costs can be added to the selected price.

    With configurable/configured material components and with procurement alternatives, the sequence defined here is ignored if the strategy "price from purchasing info record" was selected, in which case that strategy is always executed first. For more information, refer to the SAP Library in the component Product Cost Planning under Raw Material Costing or Mixed Costing.

    Activity Types / Processes

    Here you define the sequence in which the system searches for prices in activity type planning or actual activity price calculation in Cost Center Accounting or Activity-Based Costing to valuate the utilized activity types and business processes.

    You also specify which plan/actual version is used.

    Subcontracting

    Here you define the sequence in which the system searches for prices in the purchasing info record. In purchasing, quota arrangements are used to create a mixed price for materials that are manufactured with external vendors with parts provided by the customer. You can specify whether the quota of the individual vendors that are entered in the source list for the material to be processed should be determined through the planned quota arrangement or the actual quota arrangement.

    External processing

    Here you define the sequence in which the system searches for prices in the purchasing info record or routing operation for valuation of the external activities.

    Strategy Sequence

    You define the individual valuation methods for the valuation variant as strategy sequences. For the valuation of the material components you define a strategy sequence that reads the fields of the material master record in a particular sequence such as:

    1. Planned price 1

    2. Standard price

    3. Moving price

    The first price that is not zero is used to valuate the material component.

    Target versions:

    Target cost versions are used in the following ways:

    In variance calculation:

    To control which variance (total variance, production variances or planning variance) is calculated

    To valuate unplanned scrap( scrap variance)

    Unplanned scrap is valuated in the period-end closing activities when the variances are calculated. You can specify in a valuation variant for WIP and scrap which cost estimate you want to use to calculate the target costs for the valuation of unplanned scrap. You assign the valuation variant to target cost version 0 if you want to include it in the valuation of scrap.

    When you are using a cost object hierarchy with active distribution, you use the target cost version to control which cost estimate the system uses to calculate the target costs, which are used as the basis for determining equivalences for actual cost distribution.

    The actual costs collected at the level of the hierarchy are distributed across the orders in accordance with these equivalences. This distribution is proportional to the target costs for the cost element under which the actual costs are written. Actual costs for material costs are distributed in proportion to the target costs for the origin group, such as for the material, if you have entered an origin group in the costing view of the material master record and have set the indicator Material origin, for example.

    If no target costs were calculated under this cost element, enter a cost element group in the target cost version. The actual costs are distributed in proportion to the target costs for this cost element group. This cost element group should be complete. If costs were updated under a cost element that is not in this cost element group, no distribution is possible.

    You can calculate equivalences on the basis of SAP standard target cost versions 0, 1 and 3.

    The standard system supplies the following target cost versions:

    Target cost version 0 ( total variance)

    The amount of the total variance generates a posting in Financial Accounting during settlement.

    For this version, select actual costs as the control costs and standard cost estimate as the target costs.

    Target cost version 1 ( production variance)

    For this version you choose actual costs as the control costs and planned costs as the target costs.

    Target cost version 2( planning variance)

    With target cost version 2, the costs from the preliminary order cost estimate are interpreted as control costs.

    For this version, select planned costs as the control costs and current cost estimate as the target costs. You cannot calculate planning variances for the product cost collector.

    Target cost version 3 (production variance of the period)

    You compare the planned costs of the period calculated on the basis of an alternative material cost estimate (such as a modified standard cost estimate) with the actual costs of the period on the basis of the yield delivered to stock in the period.

    The base quantity for variance calculation is the yield.

    For this version, you choose the actual costs as the control costs and the alternative material cost estimate as the target costs. To determine the alternative material cost estimate, enter a costing variant and choose a costing version.

    The target cost version specifies which data is to be compared. The target cost version also specifies which variance variant is used and therefore which variance catagories are calculated. You can define a different target cost version for each controlling area

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    • Former Member Former Member

      I am quite aware that CO is complex. But i donot have a CO consultant. So i need to do it on my own.

      Can anyone pls suggest a solution ?

      Shrenik