If utility cost is daily changing, how we can calculate in KP26.

[former_member465143]

Sir,

Current Scenario is like, we are planning to implement co module, but problem is like

1. Client are not maintaining any Cost Center planning and Work Center in routing.

2. There is in house production of Power and they are changing price daily.

3. Due to power all utilities like Steam, DM Water price changes daily. Here all utilities are maintained in BOM as a component.

4. Company paying fixed salary for operator i.e those who are allocated to that particular production plant.

5. Each production unit they have created one cost center to calculate direct employees and on contract (Third Party Contract) labour also. How we are going to calculate on contract labour (Third Party Contract) cost.

So, kindly give solution, how we can calculate production cost.

Regards,

Kumar

[former_member259539]

it may be late but there is also another way to allocate overhead cost on production order. you can use assessment or distribution cycle to allocate cost from cost center to production order. just enabled it via BS12 T-code. enabled RKIU business transaction in ORH type and test it.

[former_member259539]

for power sector there are IS solutions you must go for it. as per your current scenario you cannot allocate overhead cost on production orders. production orders are used for production and after that you do GRN too and GRN quantiity is valuated on the basis of standard cost.

[former_member259539]

are you calculating standard cost? if there is no routing and work center then there is no way to post overheads on production order. you cannot post JV on production order. what the actual scenario? what type of material you are producing in house?

[former_member465143]

Current Scenario is like, we are fertilizer and crop type industry planning to implement SAP-CO module,

1. Client is not maintaining any Work Center in routing.

2. There is in house production of Power and they are changing price daily. MRP type ND and no strategy type selected.

3. Due to power all utilities like Steam, DM Water price changes daily. Here all utilities are maintained in BOM as a component.

4. Company paying fixed salary for operator i.e those who are allocated to that particular production plant.

5. Each production unit they have created one cost center to calculate direct employees and on contract (Third Party Contract) labour also. How we are going to calculate on contract labour (Third Party Contract) cost.

[former_member259539]

its not like that. you will maintained it in on periodic basis as we normally do in CO.

at the time of confirmation your cost center is credited and production order is debited with the rate maintained in KP26.

if you are maintaining it on daily basis then on every confirmation system will credit the cost center and debit the production order with new rate which will appear in price variance category.

actual posting from FI can be done on daily basis with different rates but while executing revaluation process at month end, system will calculate the new rate with total actual cost debited on cost center and actual confirmation of minutes and then revaluate the production orders with new rates which will subsequently post all the variance from cost center on the production orders. in other words your total variance will be updated.

[former_member465143]

Hello Akram,

I have one more doubt.

As per your reply "at the time of confirmation your cost center is credited and production order is debited with the rate maintained in KP26".

But here no work center concept in production order in routing only 0010 operation assigned but work center not assigned, so how production order is debited utilities.

Regards

Kumar

[former_member259539]

Dear Kumar,

i am afraid i don't have such document with me now. but i can tell you the step by step process that we did on that project.

at the start of the period

KP26 (total Plan activity)

KP06( for total plan cost)

KSPI(Plan cost calculation) it will update KP26

and at the end of the period after executions of cost allocation cycles use t codes

KSII( Actual price calculation)

MFN1 or CON2 ( Revaluation of Production Order)

it will post all the variance from the cost center on the production order. which will ultimately parked into production variance GL at the time of order settlement. test it on any of your development server and create new cost centers so that you can understand its calculations

[former_member465143]

Hi Mr.

Thanks for your reply, It means we have to maintain total plan cost daily basis and plan activity period basis and at the end of the month which price we will take please correct if I am wrong.

step by step process:

KP26 (total Plan activity) monthly

KP06( for total plan cost) Daily

KSPI(Plan cost calculation) it will update KP26 Daily

and at the end of the period after executions of cost allocation cycles use t codes

KSII( Actual price calculation)

MFN1 or CON2 ( Revaluation of Production Order) Monthly

[former_member259539]

we had the same scenario at one project but there we used activity dependent planning with KP06, KP26 and KSPI.we created a separated utility activity but its UOM was per minute and at the month end, we used actual price calculation method and revaluated the production orders so that all the variance on the cost centers could be captured on the production order.

[former_member465143]

Hi Mr. Akram,

Can you share some documents (Activity Dependent planning, separated utility activity and Actual price calculation method) with us for better understanding and helpful for us.

Thanks

Kumar

[former_member259539]

it is not recommended. you cannot calculate it or change it on daily basis. if you do so, system will park the difference in variance. plan cost should be updated and calculated at the start of the period

[former_member465143]

Yes True. Here in-house Power cost is main corner, How can we fixed In-house produced Power cost for a month, Kindly share if you have any reference of Power plant using SAP.

Thanks for reply...!