Former Member

# Difference b/w planned cost and target cost

Hi folks,

1. can anyone explain the difference between planned cost and target cost.

2. by running MPS what is the additional feature we get than MRP

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• Former Member
Posted on Oct 06, 2008 at 09:20 AM

Hi,

Difference between Planned Cost and Target cost- refer this [Thread|Target And Planned Cost;

Difference between MRP & MPS- refer this [link|http://www.sap-img.com/production/difference-between-mrp-vs-mps.htm]

Regards,

Ashok

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• Former Member Former Member

Hi,

when you saw in prod order analysis it is always have three segment:

planned cost, actual cost, and target cost

planned cost : is re costing done by production order when it is release and save, it take the current activity and material price. for the lot is used prod order quantity

target cost : is get directly from material cost estimate for the current period

actual cost : is accumulated from the actual transaction (GI, confirm and GR) value

i hope it helps

best regards,

freddy ha

• Former Member
Posted on Oct 10, 2008 at 11:54 AM

Hey Joe ,

Total Plan Costs

Total value of the planned costs with which cost objects are debited and credited.

This value is calculated in the following formula:

Total planned costs = Planned cost debit + Planned cost credit

Use

In Cost Object Controlling, the planned debit of a manufacturing order is obtained from a preliminary cost estimate for the order. In accordance with the costed quantity structure, the order is debited with planned costs for material consumption, internal activity consumption, and overhead and process costs.

The planned credit of a manufacturing order comes from the delivery of the order to stock. The planned quantity of the order is valuated with the planned price according to the price control.

The total value of the planned costs is the sum of the planned debits and planned credits.

planned costs:The costs anticipated for a particular undertaking (such as an order).

On prod order level this cost will be picked by planned consuption from BOM for materials and planned activities from routing .

Total Actual Costs

Total value of the actual costs.

This value is calculated with the following formula:

Total actual costs = Actual cost debit + Actual cost credit

Use

In Cost Object Controlling, the actual debit of a manufacturing order normally results from material withdrawals, confirmations, overhead allocations, and so forth.

The actual credit of a manufacturing order results from the delivery of the order to stock. The actual quantity of the order is valuated with the planned price according to the price control.

The total value of the actual costs is the sum of the actual debits and actual credits.

A cost consisting of the total debits made to a cost object.

This will consider actual consuption of materials and actual activity when you confirm order with co11n or co15

Total value of the target costs.

Calculated with the following formula:

Total target costs = Target cost debit + Target cost credit.

Use

Target costs are the planned costs adjusted to the actual operating rate.

The target debit on a manufacturing order is the sum of the activity-independent planned debit of the order and the activity-dependent planned debit of the order multiplied by the actual quantity of the order.

The target credit of a manufacturing order results from the goods receipt postings to stock. The delivered actual quantity is valuated with the planned price according to the price control.

The total value of the target costs is the sum of the target debit and the target credit.

The target costs are calculated during variance calculation and updated to the database.

The target costs cannot be shown until you have performed variance calculation for this target cost version. The target credit for the calculation of the total variances and production variances cannot be calculated until an actual quantity for an order exists after a goods receipt posting.

For the calculation of variances, the target costs are compared with the control costs.

.

MPS is same as MRP features wise but MPS will be done only for A class materials where you have firming type and planning time fence to protect your plan from any automatic changes.

MRP : MD01 , MD02 , MDBT

MPS : MD40, MD41or MD42 .

Please revert back if any question .

Neal

Edited by: Neal Gibson on Oct 10, 2008 5:24 PM

Edited by: Neal Gibson on Oct 10, 2008 5:25 PM