product cost for subcontracting

[Former Member]

Hi,

We are receiving raw material from one vendor X and then we are sending these raw materials to another vendor Y to manufacture the FG. We are having a schedulling agreement for this. Then we receive the FG from the vandor Y.

In this scenarion how product cost is calculated?Production order is not invlolved in this scenario.

Kindly let me know?

Regards,

satyajit

Edited by: Satyajit Kumar on Mar 20, 2009 1:56 PM

[Former Member · Accepted solution]

Hi,

Please consider the following in Sub-contracting

1. Maintain BOM for subcontracting material (FG), which includes material sent for job work

2. Maintain Sub-contracting PO. Maintain Price (this is relevant to the job work charges).

3. Explode BOM in subcontracting PO

4. Maintain Valuation Variant - Subcontracting tab (Gross PO, Quotation Price etc)

5. Maintain Jobwork cost element in cost comp structure

6. Maintain default cost ctr / maintain cost ctr in PO

7. Run Std cost estimate for subcontracting material

8. The cost of subcontracting material would include material cost based on BOM and job work charges.

Hope this helps. Assign pts if useful.

[Former Member · Accepted solution]

Hi,

Please explain the last two points in detail? Finally where we willsee the cost?

Regards,

satyajit

[Former Member · Accepted solution]

Step 7 - Run CK11n

Step 8 - look at costing reports (itemization or cost component) to see material and vendor charge

[Former Member · Accepted solution]

Hi,

when i run ck11n, it is not picking the BOM components. If manaully in the "qty structure" tab if i give the usage as "1', it is picking the BOM compoennets but i am getting the error as "Cost component split costed with value of zero

". Message number:ck240.

All the BOM components are unvalauted materials.

Please let us know where exactly is the problem.

Regards,

satyajit

Edited by: Satyajit Kumar on Mar 23, 2009 8:45 AM

[Former Member · Accepted solution]

Seems to me there are two problems - the BOM has no cost and the CK11n is no finding a subcontract cost.

If none of the BOM component have value, then the cost component split is 0 for them. Since you purchased the raw material that is sent to the subcontractor, I am guessing that you want that cost in the FG.

1 - Material Master for the FG should have special procurement key 30 (MRP 2)

2 - Costing Variant should include use of a subcontract info record.

3 - reveiw steps above:

Is there a BOM for the FG that includes the Raw MAterial? Are the components relevant for cost? SHOULD it be relevant for cost? To see a cost for the material it must be relevant for cost

Is there a subcontract info-record?

4 - Do you see cost components with cost for other materials? Is it just subcontracting that you have an issue with?