Planned cost in REM

[Former Member]

Hii experts,

Can we have planned cost in REM? If yes, how?

regards

kapil

[former_member184655 · Accepted solution]

Dear Kapil,

After doing Production confirmation in MFBF you will be able to

see the Target Costs And Actual Cost in the Product Cost

Collector in KKF6N .

Before doing production confirmation (or never MFBF is carried

out) for a HALB or FERT material ,then in T code KKF6N ---

>Header -

---

> Click on Costs ,You can not find any data.

So unless if production confirmation is not carried out,you

cannot find the target costs.

Target Cost are the Planned Costs

Regards

Mangal

[Former Member · Accepted solution]

Thanks for writing sir,

Are you talking about target cost?

Is target cost is consider as planned cost?

I can see some variance figures in TGT/ACT VAR (%). How does it generated and what is the impact on system?

thanks in advance.

kapil

[former_member184655 · Accepted solution]

Dear Kapil,

For your Understanding

1.Target costs are the planned costs adjusted to the actual

operating rate.Target costs can be used for purposes such as:

To determine variances

To valuate work in process

To valuate unplanned scrap

2.The Target cost will be your Planned Cost which you have

used during Cost Rollup---this generally given for Raw Materials.

3.The actual Cost will be the price of the consumption that has

happened for 261 moevment materials.

4.Moving average Price of your Raw materials gets varied as

per the GR & its value,So whenever production confirmation is

done for the HALB or FERT materials,you can see the actual

cost getting varied for your RAW materials.

5.So Variance will be of +ve value if Actual Costs is greater

than Target Costs & variance will be - ve Value if Target Costs

is greated than Actual Costs.

6.So during Period end closing as per the Business

requirements varinace is calculated,then settled against some

Cost Objects.

7.For the Items which were not present in the BOM of a HALB

or FERT item during Cost rollup and later on added,for these

items you can see the Target cost will be Zero and only actual

costs field gets updated.

I hope this will be sufficient to get a better understanding.

Revert back in case of any queries.

Regards

Mangalraj

[Former Member · Accepted solution]

Thanks so very much for your reply sir. I have got a bit idea about this. Another question, I am having in my mind. What if I frequently backflush for particular material, then every time I need to settle the cost. Please suggest when we should settle the cost in case of REM.

I can see COST SETTLE option in KKF6N.

kapil

[Former Member]

As I know, you can define planned cost in product cost collector for REM. To define it, you must set up product cost structure.