Problem in Standard Costing

[Former Member]

Dear Friends,

When i am running standard cost estimate, indirect overheads are calculated from KP26.

Suppose i have maintained the Machine Cost Rate at Rs. 60 for 1 Hour. When i run the standard cost estimate for that material, it is calculated by Rs. 30 per hour. For each and every cost, it is calculating half of the price maintained.

Please help me in this regards.

Regards,

Jimmy

[Former Member · Accepted solution]

Hi,

Can you please check your effeciency rate in the workcenter.

Regards

Chetan.

[Former Member]

Hello Friends,

I found the solution. The problem was in Valuation Variant. In Activity Types/Processes Tab, it was maintained as Plan Price as average of all fiscal periods, now i have changes it to Plan price for the period.

Thanks to all of your for supporting

[Former Member]

Hi Jimmy,

In addition to Mangalraj's suggestions, pls check the "Costing Relevancy" key assigned in the Operation. It may so happen that PP Consultant has assigned a Costing Relevancy Key for which Price Factor has been defined as 0.500 (50%).

Pls update us with result...

Srikanth Munnaluri

[former_member184655]

Dear Jimmy,

1.Check what's the unit maintained in the routing for the activity and for what unit the rates has been

maintained in KP26 for the activity type.

2.What is the formula maintained for the activity type in the work center also accounts.

3.The efficiency maintained in the work center is no way related to costing.

check and revert back.

Regards

Mangalraj.S

[Former Member]

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[Former Member]

Hi Mangalraj,

Thank you very much for your reply. I found all the things fine.

I found one new point by my due analysis. The points is,

I have maintained activity rates in advance till June 2009. its is as follow.

Jan - 60 Per Hour

Feb - 60 Per Hour

Mar - 60 Per Hour

Apr - 60 Per Hour

May - 60 Per Hour

Jun - 60 Per Hour

Now, the system calculates the indirect OH at the rate of Rs. 30 per hour ( i.e Rs. 360 for 6 months. Now the system calculates the OH rate at Rs. 30 per hour, which is derived by Rs. 360/12 months)

Why the system is behaving like this? it takes the average of 12 months in all cases. I tried by changing the distribution key also but it does not work.

What would be the reason behind it?

I hope to get back you soon friend.

Regards,

Jimmy