Former Member

# Total Target Costs in Production order

HI All,

In production order, Cost analysis shows production cost calculation. We are not much clear about Total target costs values. We can understand the Consumption(GI) and production order settlement(GR) cost, but how come system calculate Target cost for activity types(Machine/Setup/labor)? In what basis system calculate this value? from where system get the value for calculation except the activity price which we maintained in KP26.

And also we need the clarification regarding the cos calculation of overhead material and overhead production. kindly give me detailed explanation to check myself with real time data.

Thanks

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• Posted on Jul 31, 2012 at 03:05 AM

Dear,

Target Costs = Delivered Qty X Std Costs

And standard cost consider your all activity rate (Machine/Setup/labor ) from KP26 and time from routing and raw material price as per the BOM.

Suppose production Order for 10 Qty

Finish good Delivered Qty to FG stock location - 5

Std cost for the item is 100

Target costs = Delivered Qty * Std Cost = 5 *100 = 500

Hope clear to you.

Regards,

R.Brahmankar

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• R Brahmankar Former Member

Dear,

Activity target cost will be there it self in standard cost it will will consider while calculating the total target cost for production order. Overhead cost will be there after you run KGI2 - Individual Processing of order overhead.

1 Equal distribution KP26 The entry value is distributed equally across all periods.

For the cost center 1234 and activity type XYZ you have enter the value for 3 period = 90 then it will be distributed 30 for each period. You can test the same in KP26 just use the period screen (F6) button. You can set up your own distribution key in transaction code KP81.

Regards,

R.Brahmankar