target cost on component in prod order

[Former Member]

Hi,

I would like to know how target cost being shown in production order for BOM component.

I know planned cost getting base on OPL1-ppp1 valuation strategy.

I know target cost getting base on OKKN

I know actual cost getting base on OPL1-ppp2 valuation strategy.

Say to produce FG, i need raw1 and raw2 which are moving price.

2012-09-01 after costing run, FG is costed at $2 where raw1 = $1.20 and raw2 = $0.80

2012-09-10 additional purchase of raw1 and raw2 and now price have moved where raw1 = $1.30 and raw2 = $1.00 BUT FG standard cost of course still remained the same which is $2 since costing run on 2012-09-01.

1) on 2012-09-15 production order created. the planned cost which base on OPL1-ppp1 valuation strategy will be this? Correct?

raw1 = $1.30

raw2 = $1.00

and FG will be deriving from raw1 + raw2

2) actual cost which also base on OPL1-ppp2 will be the below. Correct?

raw1 = $1.30

raw2 = $1.00

and the FG will be deriving from raw1 + raw2

3) target cost, from what i understand from forum, it should be the costing run price where FG is $2.

may i know what about raw1 and raw2? what price are they as moving price already changed on 2012-09-10 and also during costing run, there is no way to lock down the raw1 and raw2 price some where.

FG =

raw1 =

raw2 =

Thanks

[venkatasatyakrishna_achan · Accepted solution]

1) on 2012-09-15 production order created. the planned cost which base on OPL1-ppp1 valuation strategy will be this? Correct?

raw1 = $1.30

raw2 = $1.00

and FG will be deriving from raw1 + raw2

1.... yes u are right, it depends on your valuation strategy configured for the plant. if the strategy of sequence is defined with moving average price  this is correct

2) actual cost which also base on OPL1-ppp2 will be the below. Correct?

raw1 = $1.30

raw2 = $1.00

and the FG will be deriving from raw1 + raw2

yes the same will be true for even actual cost

3) target cost, from what i understand from forum, it should be the costing run price where FG is $2.

may i know what about raw1 and raw2? what price are they as moving price already changed on 2012-09-10.

target cost is actual quantity issued to the production order(this may be different from your standard)*price of the raw material at which standard price is executed

FG = 2* actual output quantity

raw1 = 1.2* actual input quantity

raw2 = 0.8 * actual input quantity

Krishna

[Former Member · Accepted solution]

Hi,

thanks for the reply.

actually i also have the same opinion with you on my point 3 target cost but my concern is how does the system know the raw1 is 1.2 and raw2 is 0.8 as the moving price already changed since 2012-09-10 when additional purchase that moved the price.

where does the system know raw1 is 1.2 and raw2 is 0.8 as like what i said, the BOM component price is not locked down(updated) some where in MM03 during costing run carried out on 2012-09-01 (okkn update price is updating Finished Goods)

thanks

[venkatasatyakrishna_achan · Accepted solution]

hi

it will pick up the price form standard price calculations, standard cost estimate will be stored in table keph and keko tables

krishna

[Former Member · Accepted solution]

Hi,

1 So meaning to get target cost in production order, system will check table to get the relevant BOM component costing run price.

Whereas for planned and actual, it is referring to MM03 as per valuation strategy of OPL1.

Both correct?

2 What if the production order still not yet TECO/CLSD the following month and another costing run in the following month, then can i say the target cost will be the latest costing run BOM component price updated in table?

Thanks

[venkatasatyakrishna_achan · Accepted solution]

hi

target cost will be calculated when goods receipt for the production order will be executed, system will check standard cost estimate based on production order release date, it will pick only the old standard cost and not the newly release cost estimate, and if there is no standard cost estimate is released for the product when the production order is released no target cost will be calculated

krishna

[Former Member · Accepted solution]

hi,

GR meaning when the product is done and want to credit the prod order and debit to inventory and depending on the complete quantity, the cost will be quantity x target price. Correct?

thanks

[venkatasatyakrishna_achan · Accepted solution]

yes, u are rite

krishna