Entering content frameProcess documentation Cost Estimate with Quantity Structure: Process Flow 

Purpose

The cost estimate with quantity structure enables you to calculate the non-order-related cost of goods manufactured and the cost of goods sold for products, based on the BOMs and routings (PP).

Prerequisites

You have checked the settings in the costing variant. For more information, see

Structure linkPreparing for Material Costing.

Process Flow

  1. Create a cost estimate for a material. If you want to cost more than one material, create a costing run.
  2. For further information, see the following:

    Structure linkCreating a Cost Estimate with Quantity Structure
  3. Structure linkCosting Run
    1. The system creates the quantity structure (BOM and routing/master recipe) automatically through the quantity structure control as defined in the costing variant in Customizing, or copies an existing quantity structure using a reference variant.

    For further information, see the following:

    1. The system valuates the quantity structure using the valuation variant that you defined in Customizing, or copies existing costing data.

    For further information, see the following:

    1. The system includes any additive cost estimates, if you have provided for this in the costing variant in Customizing.
    2. For further information, see

      Structure linkAdditive Costs.
    3. The system calculates overhead.
    4. For further information, see

      Structure linkOverhead.
    5. You analyze the costing results and save the cost estimate.

    For further information, see the following:

    1. You can update the costing results in the material master record, and transfer them into Profitability Analysis.

    For further information, see the following:

    1. You can archive and delete material cost estimates.

    For further information, see the following:

    Example

    You create a cost estimate with quantity structure for material P-100.

    This graphic is explained in the accompanying text

    First, the system determines the quantity structure, being the BOM and routing. It then valuates the materials in the BOM and the production activities from the routing with prices and calculates the overhead.

    The material costs are calculated for the

    material components by multiplying a price from the material master record by the input quantity from the BOM. For example, the unit price for material M 100-110 is EUR 10. For materials not included in inventory (that is, non-stock materials), the unit price is entered in the BOM itself, such as material 100-400. The costs of the material components are variable costs.

    The costs of the

    assemblies are calculated using the input quantity in the BOM and the data on the material in the BOM and routing. For example, the costs for material 100-100 consist of the material costs for materials 100-110, 100-120 and 100-130 and the costs specified in the routing for the assembly of these components (activity 1420). These costs comprise variable costs (for the raw materials used) as well as fixed and variable costs (for the internal activities, overhead and, if applicable, process costs).

    The costs of the assemblies are calculated level by level. This means that the costs for assemblies 100-100, 100-200, 100-300 and so on are first calculated, and then included in the total costs for assembly P-100. The process of assigning the costs of the subordinate material components and assemblies to each of the higher production levels is called

    Structure linkcost rollup.

    See also:

    • Structure linkOrigin of Costing Data
    • For more information about the relevant settings in Customizing, see the Implementation Guide (IMG) for Product Cost Planning.
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