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Former Member
Jan 15, 2012 at 10:24 AM

Target sost calculation not considered Current cost estimate in KKBC_ORD

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Hi All,

We have an case wherein it observed that target cost calculation on SFG is wrong

in KKBC_ORD where system does not considered the current cost estimate.

We have all the necessayry customisation in place for Target cost version 0 for current cost estimate.

Below is detailsed case.

1 Process Order created in Dec 2011

2 Price Released to Mat master on 01.01.2012

3 Goods movement,Operation confirmad Material Issues, FG qty delivered @ std cost 0n 04.01.2012

4 Order Technically completed (TECO)

5 KKS1/KKS2 will be done at month end.

We know that In Process order, after deliver of FG the target cost on FG is not getting calculated,target cost will be updated only after calculating variance. it does

not calculate after delivery of finished goods, On Execution of KKS1/KKS2 variance will be calculated the target cost on FG and will be updated.

In process order (COR3 --> Cost analysis) Target cost ,Actual cost and Planned cost are calculated based on the following:

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

The variance is calculated on SFG and assemblies based on the difference between actual and target cost in KKBC_ORD. During creation of process order, the plan cost

will be updated with the valid standard cost upon the creation.

The target cost on SFG and Assemblies is only generated when there is good receipt from production order into inventory.

The target cost is generated using the valid / recent costing run for the correspondence SFG in KKBc_ORD.

All other target costs showed in COR3 (Menu Go to > Costs > Analysis) or KKBC_ORD before doing KKS1/2 is only statistical- However in our case Traget cost calculated

on SFG in KKBC_ORD not relevant with current cost estimate.

However Actual cost and Planned cost Calculated correctly.

Actual Cost= Current Standard costof the materilal(5.624,88)X Actual Qty (13.693)=77.021,48

Planned cost= Std Cost the material required to Produce (6.572,12) X Planned Qty (12.415)= 81.592,87

However Target cost is not considering the current cost estimate;It should be - Current Standard cost of the materilal(5.624,88)X Target Qty(13.958,124)=78512.07.

But Errorneously Target cost is showing 67.383,59 which causing unfavorable variance to standard.

It should be 78512.07-77.021,48= 1490.59 favourable var to standard in KKBC_ORD.

Any help,suggestion and input would be highly appreciated.

Thanks with Regards

Subrata