# OKTZ Cost Component Structure & Fixed cost portion

Dears

In the Cost Component structure, our 'depreciation' component is Fixed + Variable Portion.

How do the system determine the fixed portion of a component ? I find a radio button where we can mark it as 'variable'. But for fixed portion, I did not find any specific setting.

eg. Depreciation = 12 USD (Total) = 9.56 (Variable) + 2.44 (Fixed).

How the system divides this into fixed and variable ?

Regards.

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### Related questions

• Posted on Dec 18, 2017 at 04:41 PM

Hi Nikki,

In KP26 it is possible to check your credit key under costing sheet. So, you can maintain your preference, it means if you set '*' in "fixed" column, then the system will automatically divide the cost i.e fixed 60% and variable 40%. However, if you set '100' in "fixed" column, then the total cost will show goes in fixed cost.

Note that are 3 types of Materials in OKTZ:

- Finished -> Valuation (Fixed + Variable);

- Semi-Finished -> Valuation (Fixed + Variable);

|- The inventory Valuation for finished goods (that should be fixed - variable) contains material price as well as overheads.

- Raw Materials: Variable (should always variable);

I hope that this information helps you with your doubt.

All the best,

Cassiano Lins

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• Posted on Dec 21, 2017 at 05:34 AM
-1

Hi Nikki,

In SAP rate for particular activity Type (such as Depreciation) is calculated by dividing planned expenses (KP06) by plan activity quantity (KP26). This rate is used to charge manufacturing overheads to a product.

In transaction KP06, we have separate columns for both variable and fixed cost. If we only enter the amount in the fixed column, a fixed rate will be calculated representing fixed cost portion in product costing.

If we enter the amount in both fixed and variable column, a rate will be calculated consisting of a fixed and variable portion. In product costing, manufacturing overhead (i.e. depreciation exp) will be reported as fixed OH and variable OH.

*When activity rate is defined as only fixed:

1)\$100/10Hr = Rs10 (Fixed)

*When activity rate is divided between fixed and variable:

2) i) \$40/10Hr = Rs4 (Fixed)

ii) \$60/10Hr = Rs6 (Variable)

Shall you have any query, please feel free to discuss.

Regards,

Abdullah