Material Cost Estimate with Quantity Structure 

Purpose

Costing with a quantity structure is a tool for planning costs and setting prices for materials without reference to orders. It is used to calculate the cost of goods manufactured and cost of goods sold for each product unit. You can use the results of material cost estimates with a quantity structure to valuate materials at standard prices.

Before a cost estimate with a quantity structure can be created, a bill of materials and routing (PP) or a master recipe (PP-PI) must exist for the material being costed. For more information, see Master Data for Costing with Quantity Structure.

A cost estimate with a quantity structure uses the PP or PP-PI master data to determine the materials and internal activities required to manufacture the product. The cost estimate is created automatically using this data.

You can use a costing run to process mass data.

There are a number of reports in the cost estimate itself and in the Product Cost Controlling Information System that you can use to display and analyze the costing results together with the relevant quantity structure:

• Costed multilevel BOM
• Itemizations

In addition to these PP-oriented displays of the costing results, there is a cost component split for each material that breaks the costs down into cost components:

• Cost component split for the cost of goods manufactured
• Primary cost component split
• Partner cost component split

Purpose of Product Cost Planning

Calculation of Cost of Goods Manufactured and Cost of Goods Sold