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COGS account not as cost element

Dear SAP experts,

I need some clear understanding about something.

I run MTO project.

My friend in team say that COGS account doesn't need to be created as cost element category 12.

But, if we not created COGS account as cost element, can we still transfer COGS amount from SD condition type?

Please advice.

Regards

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  • Best Answer
    Posted on Nov 10, 2010 at 04:30 AM

    Hi Anu

    1. COGS is not recommended as a Cost Element if you are in a MTS Scenario

    2. COGS is required as a cost element if your sales order is a Cost Object

    The dependancy is not on Costing based or account based COPA, rather it is on whether your sales order is a cost object or not

    In MTS, COGS is not reqd as a cost element.. In this case, you can update COGS to COPA in 2 ways

    a. VPRS cond type in SD pricing procedure

    b. Cost Comp Split from prod costing to COPA.. (IMG Settings in KE4U, KE40, KE4J/KEPC and KE4R)

    Regards

    Ajay M

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  • author's profile photo Former Member
    Former Member
    Posted on Nov 10, 2010 at 03:53 AM

    Hello Anulekha,

    COGS account is not recommended when you have a costing based COPA because the cost cost components are captured from the standard / actual cost estimate at the time of billing (prerequisite is that you link the cost components to value fields) and therefore if you create a cost estimate then it would be capturing the data twice once at the time of PGI and another at the time of invoicing. However, if you are not having COPA then you can create a cost element and the COGS would be posted with Sales Order as a cost object.

    Additionally you can also capture COGS from SD with VPRS but capturing the COGS with cost components is recommended.

    Kind Regards // Shaubhik

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