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Former Member
May 04, 2011 at 07:20 AM

Transfer pricing

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Hi,

we want to capture the internal profit for individual profit center within a company code.

Say semi finished goods is being assigned to profit center 1 and when it is issue to production to produce finish goods, the process is being assigned to profit center 2.

The semi finished has a cost of 1 dollar per piece and has a market value of 2 dollar per piece.

Thus when issue to production to profit center 2 the cost should be valued at 2 dollar instead of 1 dollar. The further processing cost is 1 dollar per piece and the selling price for the finished goods is 4 dollar per piece.

So for company as a whole the profit is 4 - 1 -1 = 2

To break down profit by profit center the following should be the result:

profit center 1 profit margin = 2 - 1 = 1

profit center 2 profit margin = 4 - 3 = 1

My question is how to capture this in SAP? I have read the documents and i understand it must be done thru material ledger and tranfer prices in CO. That's the configuration part. For transaction part how should we do it? Should we do it in MM module by using material transfer for profit centers? or should we do it in SD module by configuration a pricing procedure for transfer pricing and set up an intracompany customer?

Anyone has experience of doing this please provide some helps and details. Must appreciated.