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Formula in costing of a work center

Hi Everybody

I am trying to understand the functionality of various forumales which can be given in costing tab of a workcentre. I am afraid the SAP help document is not very exhaustive on this.

I will ask my query in reference to IDES client (which i believe everybody has access to ) so that we can discuss one particular work centre with standard settings.

Let us take an example of work centre 1111 in plant 1000.

This workcenter shows three forumlaes for setup, machine and labor activities viz. sap005,006,007 respectively.

Query No. 1. How these forumlaes are helping in calculating the cost? Are they calculating the activity cost or activity quantity? I will appreciate if one can explain with the help of an example.

Query No. 2.There is another field below all these fields for formula which is carrying value as sap008. As of SAP008 in standard sap, it passes duration to cost calculation which is picking up cost maintained in kp26 trax. If cost (from kp26) and duration (from sap008) is getting multiplied then why the above mentioned formulas (setup, machine,labor) are there?

Sorry for a long posting, but just trying to make the queries 'clear'.

Thanks in advance.


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    author's profile photo Former Member
    Former Member
    Posted on Sep 04, 2009 at 10:54 AM

    Hi Martin,

    SAP has given some standard Requirement according to standard Production Process, It does 'nt mean that every one has same


    So to enhance the Process according to our Business scenario, we do Customizing Right..!

    If our Requirement suit with SAP standards we can go SAP001, SAP002, SAP00 Normal Production Std value Key.

    1) When u ask about Formula's...?

    See when we define parameter Say Labor , U define Unit of Labor.

    When u set labor formula, u Define the Capacity of labor.

    Suppose Labor (capacity should be Double of his working Operation /Hr).

    Labor* (Operation qty/Base Qty) if operation qy is 10 and base qty is 5 .

    2) Standard value key.

    it club the no of parameters . Max 6 parameters.

    This define who much such Parameter u need for your each Process Resource.

    3) Once u define Standard value Key in WC, it fetch Both parameter and Respective Formula's.

    So now once u defined capacity of labor , U have to define charge for each labor unit.

    That where u Define ACTIVITY TYPE, which in turn have link with Secondary cost element.

    In KP26 u define price for each unit of such parameter.

    When u book the cost, it will debit the secondary cost element and credit your Activity type . But it is Controlling Document.

    If i m wrong Pls correct me...



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  • Posted on Sep 03, 2009 at 12:14 PM


    First we defined the activity in Standard value in OP19 key then these activity are use as parameter in formula in work center like set up, machine Labour (op21). Then this work center is assigned to routing where we maintain the timing for this activity. When we create the production order system use the timing from the routing and formula from work center to schedule the order and capacity required to produce certain quantity of material.

    Same way it calculate the cost also you know cost center is assign to work center and activity type is assign to work center and we define the rate in KP26.

    So it take timing from the routing operation formula from work center and cost from KP26 to calculate the cost.

    SAP_08 is use an number of individual capacity noting but the splling of quantity on different work center or labour. So you will required less time for schedule the order.

    Hope clear to you.



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  • author's profile photo Former Member
    Former Member
    Posted on Sep 04, 2009 at 07:30 AM

    Hi Brahmankar

    Thanks for the reply.

    But there are certain queries which are still not replied or at least clear to me. Let me ask them point wise.

    1. Where in the system 'Standard value' maintained in OP19 is used. Because parameters and forumlas can be defined in separate customization. So what is the role of standard value and where is its link with w/centre/ routing/ formula etc.

    2. Now if three formulas taken for example for the given workcentre/ plant and mentioned in costing tab of workcentre are being used to calculate the quantity of activity and multiply it by kp26 values to arrive at activity cost then what is the role of field mentioned below and with value sap008? This point could not be cleared.

    3. I have found that system is passing duration thru sap008 formula and after multiplication with rate (from kp26) activity cost is appearing as planned cost of activity. In that case why the system is not using the formulas mentioned against these activity types in workcentre costing tab to work out qty.

    I hope my queries are clear. I will appreciate if somebody can answer with the help of an example.



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    • Dear,

      1)Go-to : OP7B "Parameters Overview"

      Her you will get all parameter define in you formula

      Then Go-to : OP19 " Standard Value Key Formula : Overview "Select SAP1 u2013 Normal Production

      Here we assigned theses Parameter

      Formula Definition :

      Go-to : OP54 "Formula Definition"

      Select SAP002 u2013 Prod.: Machine Time

      Then itu2019ll look some thing like SAP_02 * SAP_09 / SAP_08 / SAP_11

      We Create Secondary Cost Element (T.Code KA06), Assign this Sec. Cost Element to your new Activity Type, then KP26 " Change Activity / Price Planning"

      And we assigned Activity Type in Work Center Costing Tab & Assign our Formula.

      This way standard value are linked with formula.

      2) Go to CR02 capacity tap details you will get number of individual capacity.

      then go to routing ca02 operation details screen here you will get the filed required splitting and number of split. This required split is SAP_008.

      3) SAP008 Proj:RqmtsNetwkMaint it is use for different purpose It is use in PM work center.

      Hope clear you all doubts.



  • author's profile photo Former Member
    Former Member
    Posted on Sep 04, 2009 at 09:55 AM


    in normal production you can use formula ( sap001, sap002, sap003).

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  • author's profile photo Former Member
    Former Member
    Posted on Sep 05, 2009 at 05:02 AM

    Thanks everybody.

    The last reply was quiet good with examples.

    What I understand now is that the formulaes mentioned against each activity types is more relevant towards production orders. Whereas the formula field at the bottom in costing tab of work centre (with standard value sap008) is used for maintenance orders.

    Thanks again. Awarded the points as well.


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