Urgent issue on... Product costing

[Former Member]

Hi all,

I am working for a process industry, Here my client is having a fixed amount of mechine cost and Catalyst cost which would be amortized on monthly basis to the production orders.

apart from those costs laboratory cost is also charged on monthly basis to total quantity of production to arrive at cost per metric ton.

How can we charge this? shall we need to use any activity type for this?

this is not charged at the workcenter level but can be charged at production order level for the total quantity produced on monthly basis.

Please advise..

Any help will be greatly appricited..

Thanks in advance...

Regards,

Kumar.

[Former Member]

Hi

We had a similar requirement where we needed to allocation catalysts cost to the production orders, we went for keeping Catalysts as Fixed Assets are depreciate based on the amortization rate. Assign the costs to the Activity type.

As suggested you can use Revaluation to revalue the Activity types from planned costs with actual costs.

Regards,

Suraj

[Former Member]

Hi...

Thanks for the immediate response..

I got some insight about the solution with the information which you all have provided.. but in my case, the depreciation is caliculated from plant(Asset) and amortized on monthly basis to all the production orders in that month.

This mean.. the amortization of depreciation is for total number of tonnes produced. with activity how can i charge that? could you please explain the procedure for the same?

Depreciation is amount..what kind of activity unit i have to select? and what kind of activity type category i have to select?

i have the depreciation amount in cost element.. shall i need to assgin the same cost element in the activity type?

Please advice... thanks in advance

Anil.

Message was edited by:

anilkumar

[Former Member]

Hi Anil

If your monthly ammortization is directly charged to the production orders, why do you need the Activity type.

Otherwise you created Activity type with Category 1.

Plan for the cost in KP06 with the cost element of depreciation

Assign the Activity in the Routing of the production order.

Regards

Suraj

[Former Member]

Hi Suraj,

<b>If your monthly ammortization is directly charged to the production orders, why do you need the Activity type.</b>

As per your above statement how can we charge the amount directly to the production orders? there are approximately 15 production orders per month. In this case how can we ditribute or ammortize it to production orders?

Plz... let me know

Anil.

[Former Member]

Hi Anil

That statement you made, Anyways.

Normally the depreciation is charged to the cost center. The cost center is assigned to the work center. Activity type is also assigned in the work center. Create a rounting, assign work center, give base qty = 1, and Activity qty as 1, that means for each unit of production, it would allocate the per unit cost of catalyst to the production order.Before this you plan for the Acivity qty in KP26 for the cost center. You can plan the cost in KP06.Calculate the activity price in KSPI.

This is how the cost of catalyst from the cost center is loaded to the prod order.

Regards,

Suraj

[Former Member]

dear suraj,

Could u please provide me with ur personal mail id or with ur contact number...

My mail id is anil.reddy999@gmail.com

1. there is a fixed amount say 1000 $ of depreciation to be charged to the finished product.

Eg:- total finished product qty is 5000 ton

total no. of production orders are 40 in this month

total bill of materials are 20 in this month

total routing processes are 2

total work centers are 3

please explain in this scenario how u will charge the depreciation of plant 1000$ to finished product.....THIS IS A PROBLEM IN DISCREET MANUFACTURING.

thanks for your valuable answers...

To assgin points as "6" as helpful answer, that radio button is not active.. so i have assgined only 2 points.. please give the solution for the above question and ill assgin u full points..

Anil.

Message was edited by:

anilkumar

[Former Member]

Hi Anil

We can have Activity Type for each Resourses with unit as Min or HR & then do the confrmation on the Order based on the Time taken for each product

OR

If its possible to get %age derived based on certain assumption we can Add the %age throught he Cost Sheet as Overhead on Order........

Regards

Ash

[Former Member]

Hi anil,

Machine and Catalyst Cost is Direct cost of production. Initially you can have Planned Activity Cost and then you can revaluate the at the amonth before the settlement of the production Orders.

So above two costs need to be categorised as Activities in SAP.

Laboratory cost is a Support Cost (Indirect Production Cost). This cost can be absorbed aa Quantity Based OH and even these Overhead can be revaluated at the month end.

Before a decision is arrived at have a through discussion with your power user as well

<i><b>Award Points suitably</b></i>

Best Regards