Product cost v/s Production Order cost

[Former Member]

Hi all Guru's,

Can any one help me in understanding difference between product cost and production order cost in SAP.

Will give full marks for helpful answer.

Thanks,

Abhishek

Edited by: ABHISHEK AGRAWAL on Jan 29, 2008 9:46 AM

[Former Member · Accepted solution]

Dear Abhishek -

Remember -

A product cost is the cost associated with the standard cost of the product.It cosisits of the fixed as well as variable cost.

For bought out materiak you need not calculate the cost seperatly.

For in house materials SAP has a system of cost run.

In production order costing the Planned cost and actual cost play a role.

At creation you can have planned cost and after completion you get actual costs.

Depending upon variances you can decide the the working.

Narendra lohokare.

[Former Member]

Hi,

Product cost is what u will see in material master record in accounting or costing view like moving average price or standard price

Production order cost will include --

1- raw and semi-finish material cost. that will be planned and actual

2- activity prices incurred in production order that will be planned and actual

then we will get the variance of these and after this order gets settled to that variance amount and then it will update the price of finish material .

reward points if useful to you.

[Former Member]

Thank you for ur replies now can any body give thoughts on Product cost v/s Production Order cost ( out of SAP) i .e general...

Thanks,

Abhishek

[Former Member]

Hii Abhishek!!

Lemme give you some brief idea. Cost of any material can be captured in 2 different ways. I give you an example say Motorcycle. In case of motorcylce, you will be concerend abt the cost of each motorcycle but on the same hand if I ask you to check out the cost of washer (Washer Mfg Company), you will not be worried about the cost of single washer. You will be concerned about the cost of production lots for these washers.

This is the same difference in Product Cost and the Production Order cost. In SAP functionality, If we talk about product cost, it simply covers the Product Cost Collector functionality, whereas in discrete mfg we capture the cost for production order. I hope, I have cleared you much. PLease come back for more clarification.

cheers!!!

kapil

[former_member184655]

Dear Abhishek,

Standard Cost Estimate or Material cost Estimate is nothing

but the standard cost for the Inhouse Manufactured materials

(FERT) = Raw Materials Cost + Activity(Operation Cost)

Cost+Overhead Cost if maintained for the Company code.

This cost will gets stamped in the material master in Costing2

view,under Current Planned Price field.

This cost will be the Planned Cost of the Production order and

after confirmation of the order the actual cost and the variances

for the production order can be viewed.

So the Production order cost is for the order quantity say for

Eg: for a quantity of 100.

The cost(variance) will be settled against that production order

after confirmation and TECO status.

I hope this will be helping you.

Regards

Mangalraj.S