Standard Cost Calculation

A cost estimate used to calculate the standard price for semi- and finished goods for valuation purposes.

Standard costs for products are updated as part of the annual operations planning (AOP). This is necessary to reflect the changes in, for example, the prices of purchased parts, and change in labor and overhead costs.

This scenario consists of the following steps:

• Create costing run
• Execute costing run
• Review errors
• Analyze proposed standard prices
• Repeat annual operating plan scenarios
• Edit cost run and execute
• AOP - revenue cost of sales transfer
• Create frozen costing run
• Execute costing run
• Mark as future planned price
• Release standard cost estimate and revalue stock at start of new fiscal year

• Prices are updated as future planned costs in the respective material master records
• Revaluation of existing inventory to the new standard prices