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Unit & Product Costing

<b>What do you mean by Unit Costing and Product Costing and what is the difference between the two.Where do you capture this and how does it get attached to SD</b>

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1 Answer

  • Nov 12, 2007 at 11:10 AM

    Dear Sunil

    <b>1) Unit Costing</b>

    Unit costing allows you to plan in detail for an internal order at a lower level than with overall planning. To do this, call up unit costing from overall planning.

    You can also use detailed planning to execute detailed planning below the cost element level. This is useful when you have totaled a number of individual jobs and activities under one cost element.

    You use unit costing once information on supply sources, quantities and prices is available, and do so on an overall or an annual basis.

    Wage costs are recorded under cost element 420000. The plan envisages USD 368,700 for this. You can, however, differentiate the wage costs by employee category and period.

    This means that the planned figure for three category A employees is USD 1,000 per period, making a total of USD 36,000 for category A personnel. For category B personnel, however, the figure is only USD 1,000 per period for periods one to three and periods 10-12 (making USD 6,000 in total). This is because these are external personnel, employed on a seasonal basis. For category C personnel, the figure is USD 900 per period for periods 6-8 (making USD 2,700 in total). These are personnel working in their vacations from, say, higher education. You cannot achieve this degree of detail in "normal" primary cost planning at totals level (for each cost element), but only in unit costing

    <b>2) Product Costing</b>

    Product Costing provides an extensive and powerful range of reports for the following areas:

    --> Product Cost Planning

    --> Cost Object Controlling with the subcomponents

    --> Product Cost by Period

    --> Product Cost by Order

    --> Product Cost by Sales Order

    --> Costs for Intangible Goods and Services

    --> Actual Costing / Material Ledger

    You can use the Information System to evaluate the data generated in the respective components. The information system provides reports for both standard and specialized analysis purposes.


    The information system is a part of Product Cost Planning, the application component Cost Object Controlling, and Actual Costing / Material Ledger.


    The standard setup of the Product Cost Controlling Information System is a structured report list from which you can choose the reports you need.

    The standard reports provided in the R/3 System are presented in a structure predefined by SAP. You can change this structure to suit your own needs, and add your own custom reports.

    The documentation for the Product Cost Controlling Information System is oriented around the structure of the SAP menu. This ensures easy access to the desired information in the documentation, as navigating through the documentation mirrors navigating through the menu.

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