Differentiate Planned Cost, Actual Cost & Targeted Cost

[Former Member]

Hello Friends,

I am searching for job and went for interview in Wipro. They asked me the difference between Planned, Actual and target cost..... I tried to search on Google and SAP Blog's but couldn't find the appropriate or understandable answer yet, So it would be great if you you can guide me a bit on this......

Thank You,

[former_member533946 · Accepted solution]

Hi dear,

Sincerely advicing you not to mention the history or why you are asking this question.

Total Plan Cost = Std Cost the material required to Produce X Planned Qty of the required material

Target Cost = Std Cost the material planned to Produce X Std Qty of material required to produce, for Produced Actual Qty

Actual Cost = Std Cost the material planned to Produce X Actual Qty of material consumed, for Produced Actual Qty

For Example : Final Material - A,- Qty Planned to Produce - 2 nos

As per Standards, Below Qty of Materials required to Produce A , for 2 Nos

Mat B - 2Nos X INR 50 = INR 100

Mat C - 4Nos X INR 60 = INR 240

Activity Cost = 2 hrs X INR 10 = INR 20

Total Plan Cost = INR 360

Actual Qty Produced = 1 No

Actual Consumption is as follows .

Mat B - 1.5 Nos ( X INR 50 = INR 75 )

Mat C - 2 Nos ( X INR 60 = INR 120 )

Activity Cost = 2 hrs ( X INR 10 = INR 20 )

So, Actual Cost = INR 7512020 = INR 215

Whereas, Target cost for the Actual Qty ( of Product A - 1 Ns) is , as follows,

Mat B - 1 Nos ( X INR 50 = INR 50 )

Mat C - 1.5 Nos ( X INR 60 = INR 90 )

Activity Cost = 1 hrs ( X INR 10 = INR 10 )

Therefore, Target cost = INR 509010 = INR 150

[Former Member]

Hello Friends,

Thank's both of you..... I got the point and understood all the things in costing.

You have helped me a lot to solve this issue.

Regards,

Mayank

[Former Member]

Hello Rahul,

I really do not understand why B=1 and C=1.5 (as follows statement)?

Whereas, Target cost for the Actual Qty ( of Product A - 1 Ns) is , as follows,

Mat B - 1 Nos ( X INR 50 = INR 50 )

Mat C - 1.5 Nos ( X INR 60 = INR 90 )

Activity Cost = 1 hrs ( X INR 10 = INR 10 )

Therefore, Target cost = INR 509010 = INR 150

Could you please help to explain it in detail?

Now I got problem how the target cost caculate...>"<

Thank you a lot.

Ella

[sundaresan_velayudam]

Planned cost:- system will take the price based on price control In a material master and multiply with per FG and Component quantity with respect to the production order

Actual cost : system will take the price based on price control In a material master and multiply with actual goods movement qty of the material with respect to the production order

Target qty: system will take the price from standard cost estimate - IF you not run the std cost estimate, system won;t uodate the target cost in production order