Cost Components (SAP Library - Product Cost Controlling Information System (CO-PC-IS))

Cost Components

Use

This report shows the costs calculated in a material cost estimate or sales order cost estimate across all production levels, broken down into cost components. You can analyze the costs of the cost component split for the cost of goods manufactured and the costs of the primary cost component split.

The results of a cost estimate are updated as cost components (this is called a cost component split). The cost components break down the costs of a material across the entire production structure into material costs, production costs, material overhead, production overhead, and other costs. The costs for internal activities normally flow into the cost component split under secondary cost elements. In order to present primary costs for internal activities, you can use a primary cost component split as an alternative way of outlining the cost components.

The cost component split enables you to do the following:

Analyze the cost origin across multiple production levels.

You can analyze the value added within a multilevel production structure. The costs of the upper level consist of the internal activities and the overhead costs that are incurred at that level. The costs of the lower level include the materials and raw materials. The total costs of the upper level and lower level equal the total costs of the production level being analyzed.

View the costs by original production factors (primary cost component split).

Structure the costs according to the requirements of other areas (such as material valuation or profitability analysis).

In the cost component view, you can specify which cost elements are displayed in the report. For example, you can select the cost of goods manufactured or the cost of goods sold, or the costs that are relevant to inventory valuation. You specify various cost component views in Customizing for Product Cost Planning. For each cost component, you can decide which share of the costs contained therein (fixed, variable, full) is displayed in which cost component view.

Prerequisites

When you save a material cost estimate or a costing run, the system automatically updates a cost component split for each costed material in the BOM. For this to occur, you must have already defined a cost component structure in Customizing.

You specify the following in a cost component structure:

Which cost components the calculated costs should be assigned to

Which cost elements are grouped into which cost component

The cost component structure is selected through the company code, plant, and costing variant. You specify this assignment in Customizing for Product Cost Planning under Basic Settings for Material Costing ® Define Cost Component Structure.

If you want to see a primary cost component split for the cost components, you must first generate a primary cost component split in Cost Center Accounting or Activity-Based Costing.

Note

If you are using mixed costing, you can display the costing results for a specific procurement alternative broken down into cost components. Call up the desired procurement alternative in the report call using the menu option Settings. To display the cost component split for a mixed cost estimate that was formed from different cost estimates and procurement alternatives and weighted with equivalence numbers, do not enter a procurement alternative. The split for the mixed cost estimate is displayed automatically if a mixed cost estimate was created for the costing version.

Features

Main Cost Component Splits and Auxiliary Cost Component Splits

You can display the costs as a cost component split for the cost of goods manufactured and/or primary cost component split.

You can calculate the cost component split for the cost of goods manufactured and primary cost component split simultaneously. You can switch between the two cost component views (under Settings ® Type of cost component split). However, you can also generate only the cost component split for the cost of goods manufactured or the primary cost component split.

If you want to cost both cost component splits simultaneously, you must determine which cost component split is the main cost component split in Customizing for Product Cost Controlling. You can also generate a further cost component split as an auxiliary cost component split for comparison purposes.

Note

The update of the standard price in the material master is effected by the main cost component split.

An itemization is only created for the main cost component split.

In the report, you can switch between the main cost component split and the auxiliary cost component split. With the appropriate setting, you can switch between the cost component split for the cost of goods manufactured and the primary cost component split.

Upper Level / Lower Level / Aggregate Level

The cost estimate enables you to analyze the value added within a multilevel production structure. You can apportion the costs for each material according to the lower level and upper level.

You can find the cost component split display under Costs ® Display Cost components. You can make this setting with Settings ® Layout. You can create your own report from a large number of selections options.

When you display the costs:

For the upper level, you see the production costs, overhead costs and costs for external activities that are expected for this production level

For the lower level, you see the costs of all material components that are processed in this production level

In both cases, the costs are apportioned according to cost components. The total cost of the upper level and lower level equals the total costs of the production level being analyzed.

You can go to the following other reports in the same report group:

Total values

Upper level

Lower level

When the costs are apportioned according to cost components, the original identity of the costs (for example, costs of materials or fixed and variable production costs) are maintained throughout all production levels. At every production level, the value added at that level and the costs of the lower level can be separated through the cost component split.

When you save a material cost estimate or a costing run, the system automatically updates a cost component split for each costed material. For more information on saving costing results, see Saving Costing Results.

If you want to create a cost component split for raw materials and purchased parts, you can enter additive cost components for each material for these costs. You can then group these cost components in an "External procurement" cost component structure that only contains such costs. For more information, see Additive Costs.