Difference between the planned cost and the target cost

[Former Member]

Hello guys,

I am really confused between the planned cost and the target cost.As Per the sap help target cost is cost required to produce certain quantity of material.And planned cost even carry the same definition.

So is there any difference between these two cost.Are they same?

[former_member196398 · Accepted solution]

Jitendra,

Genarally in CO we will define Target cost is getting calculated in the Production order based on the "Standard Cost Estimate" after GR. Planned costs are calculated based on the current costs.

Example:

Assumption: Assembly Material A with Standard Price, Component B and Component C is maintained with Moving average

Material A Cost 1EA = (component B = $10 + Component cost C = $20+ Activity Price $1) = $31, this is the standard cost estimate for the material.

Now I create a production order on 15th of the month, and the Moving average price for component is now $20 due to subsequent GR with higher price. Now the planned cost for the order would be (20201)=$41, whereas the Target cost would be still $31.

Hope I was able to clarify,

Regards,

Prasobh

[Former Member · Accepted solution]

hi karunkar

iam too conusd with planed cost ,actula cost target cost ,in ur exmaple target cost is still same though moving price cahnged ,

how the order willl be closed ,and varince how calculated

[Former Member]

i am closing the thread.

[Former Member]

Hi,

The actual cost is the Cost of the material after the Production

Plan cost is the cost of material before the production...

target cost is the targeted cost the material production..that means for this particular material the cost will be targeted eg:10 rs the after the production the cost of material should not exceed this cost....

if usefu; assign points...

[jaiswin_patel]

hi

Target cost is calculated after variance calculation and which display after GR is done for PO.

Plannned cost is cost shows without variance calculation.