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Former Member

doubt-product costing

Experts:- plz clarrify this one:-

2. what is the difference between:-

a.product cost planning,

b.cost object controlling

c.sales order costing.

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 31, 2008 at 04:31 AM

    Hi,

    Product cost planning is used to calculate the standard costs of the Materials. For which we need to prepare one cost sheet which calculates the overheads used in Production and cost component structure which includes all the cost elements with which the product is costed(materials,activities etc). In planning we create a Costing variant to capture / calculate the standard cost of the product. Costing variant is again a combination of valuation variant(which includes the strategy to calculate ur materials i.e. whether standard price or mov avg price,costing sheet etc.), date control, qty structure control etc. Planning can be done in 2 ways. 1 with qty structure and 2 without qty structure. with qty structure uses a bom and routing selection and without qty structure does not. When we run a standard cost estimate the system calculates the cost of the material based on the settings we make in planning.

    After making settings for the planning we need to make settings for costing the object i.e order, Cost collector etc. Cost object controlling settings are different for Order, Period(repetitive) and Sales order Production types.

    In cost object controlling we need 2 more costing variants.one for calculating and capturing planned costs as per ur BOM and another for calcualting the actuals which we confirm during production(sap standard ones will be used generally for both). Once the production is confirmed, the system calculates the variance i.e. the difference between ur standard cost and the actuals. Apart from order settings we also need to make settings for calculating WIP, Variance and Settlement of Order or Cost Collector in Cost object controlling.

    Sales order costing is one type of production like make to stock, make to order, repetitive. unlike others, in sales order costing production is done based on the sales order of the customer. Generally FMCG and other consumer goods are produced with make to stock and order.

    Hope this would help u.

    Pls assign points if useful.

    Regards,

    Vishnu.

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