The purpose of cost rollup is to include the cost of goods manufactured of all the materials in a multilevel production structure within the costs of the material located at the top of the structure. For costing, you assign the costs in a cost estimate to cost components in Customizing for Product Cost Planning. The cost components break down the costs of a material.

In the cost rollup process, the data for these cost components is passed on to the costing results of the next-highest material. The data structure is called a cost component split. The results of the cost estimate ( with and without quantity structure) are always saved in the form of a cost component split. The structure of the cost component split (that is, the number of cost components) is the same for all materials in the cost estimate.

However, a multilevel production structure may also contain costs that should not be rolled up, such as sales and administration costs. In Customizing for Product Cost Planning you specify whether the assigned costing results should be rolled up for each cost component.

Costing usually involves a multilevel production structure. The costs are rolled up automatically using the costing levels.

1. The system first calculates the costs for the materials with the lowest costing level and assigns them to cost components.
2. The materials in the next highest costing level (such as semifinished materials) are then costed. The costs for the materials costed first are rolled up and become part of the material costs of the next highest level.

This process is continued until the costing results of the highest material in the structure (such as the finished product) contain the cost of goods manufactured for every material in the structure.

Quantity Structure Determination

Valuation of the Quantity Structure

Cost Estimate with Quantity Structure: Process Flow