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Former Member
Apr 18, 2011 at 03:56 PM

Revaluation of activity ith Machine hour base..


Dear Experts,

My client is doing absorption costing. So i have planned something based on their expectation.

All Rm and Pm is based on moving and SFG and fg is based on standard price

We have MTS and MTO

Production order with ful settlement and wip is based on actual cost for both mto/MTS

My cost estimate contain BOM- Rm cost and pm cost based on Moving and Scrap Cost based on standard price

I will create 6 activity type - Machin,Repair and Maintaince,Labour,Consumable,Power and Fixed OH( Becoz our approach is absortion costing)

Activity type -Consumable,Fixed OH,Repair and Maintaince uom are Hour and qty equivalent to Machin Qty.

ie machin hour is defined 10 hour for I tn fg production so consumable ,R&M,Fixed OH qty will be same 10 hour but rate will be different in kp26 based on activity type.

Ie i know Fixed OH cost are 10 lakh and total machine hour are 10000 during the month so my fixed OH rate is 100 rs.Same way consumable and R&M activity rate will be calculated.

Month end i will do splitting ,actual activity price calculation and revaluation of activity .so that all my activities will be actualize based on actual booking on cost center.

then i will settle the variance to copa in c088.

My questions are

1) Revaluation of activity can be possible without activating actual costing.control only in version and activity type master data for revaluation(con2) need not to select actual costing indicator.

2)The above logic will work. like machine as base qty for fixed OH,R&M,consumable.

3) In case of standard price for Fg and SFG.Will all my ending inventory be revaluated based on standard price?.Becoz i am transfering all the variance between standard and actual to copa .

4) Rm is maintaned at moving Price.based on that i am calculating standard price for fg.Let say i released 10 rs FG standard price that time my rm moving price was 6 rs but later it is 7 rs.

then all my production order will charged 10rs target cost (which is released sandard price) or additional 1 rs also flow to cost and my productio order are charged with 11 rs target cost with additional 1 rs.

I think.It will be based on relaesed standard price only irrespective of change in rm cost during the month. M i correct?.