co03 cost analysis target

[Former Member]

Hi,

I see there is target quantity / target cost / actual qty / actual cost.

May I know what is target quantity and target cost? Is it similar to standard?

Thanks

[former_member311826 · Accepted solution]

Dear,

Target quantity and target cost are calculated from you standard BOM & from MAP or Std Price maintain in MM. Also the Cost contains the Operation qty & cost. Operation Qty is derived from Routing & Price from activity.

Prerequisite is that you should have run Std Cost Estimate for the Finished Material.

Then when you issue the RM & do the confirmation you will get this reflect in Co03.

[Former Member · Accepted solution]

hi,

better understanding now.

1 can I say

target quantity / cost = input to Production Order

actual quantity / cost = output from Production Order.

2 target cost the target quantity multiply the standard cost. right?

thanks

[Former Member · Accepted solution]

Hi,

1 so target quantity is actual quantity or standard quantity? I still confused.

Target quantity ---Actual quantity we used for production

2 target cost is the combination of what?

Is combination of Actual quantity cost we issued for production and activity cost.

Activity cost includes set up,labour,machining cost what ever is used in your client.this we maintained in KP26.

Regards,

Ananth.S

[former_member311826 · Accepted solution]

Yes correct. Target cost is calculated from you your std cost of MM.

[Former Member · Accepted solution]

Hi,

Though it is correctly /conceptually defined by Raja Sekhar about the Actual Quantity and Actual Cost.

As far as the Target Costing(Quantity) is concerned,Please find my response which elaborates precisely in genral terms of the business-

There is no clear definition to target costing. Organisations that have implemented it have

had to apply their own unique approach to the concept. In essence, it is a philosophy in

which product development is based on what the market will pay for it, not on what it has

cost to produce. In other words, market price becomes the determinant of cost and not the

other way around, as is the practice with most organisations.

Target costing is a strategic management tool that seeks to reduce a productu2019s cost over its

lifetime. Therefore, the target cost is not necessarily the cost to currently build the product.

Target costing presumes interaction between cost accounting and long-range profit planning; and a commitment to continuous cost reduction.

and you can apply the same logic while executing it for your desired business process in SAP determined by your process owners.

Hope it helps you at some extent.

Cheers

Chandra

[Former Member]

Hi

Target quantity the quantity for which you have created production order

Actual quantity is the quantity which you have confirmed through production Order confirmation

Target cots is the cost which you get through Material cost estimate

Actual cost is the cost which by the actual time considered for activity types while confirming the production order

Regards,

Raj

[Former Member]

Hi,

Target quantity and target cost coming after issuing material in MB1A and confirmation of an order in CO11N.

During creation of order it will take only actual quantity from Bom and actual cost from material master and activity.

Once we confirming the operation with extra quantity and time.it will be updated in target quantity an cost.what is the quantity and cost it will updated in target cost.

Actual quantity and cost---is the planned one

Target quantity and cost---actual quantity we used for production

Better run a cycle

co01-cost analysis(you can only see actual quantity and cost)

MB1A and CO11N (you can see actual and target )

Check it.

Regards,

Ananth.S