Period-End Closing for Cost Object Hierarchies Without Distribution
Prerequisites
Read the following sections:
Cost Object Hierarchies Cost Object Nodes Basic Information on Cost Object Hierarchies Examples for Cost Object HierarchiesYou specify the following parameters in Customizing for Product Cost Controlling under Cost Object Controlling
® Product Cost by Period ® Cost Object Hierarchies ® Define Cost Object Categories for Cost Object Hierarchies:
If you update quantities and values separately in Materials Management (MM), make sure that all quantity movements are valuated before you run the period-end closing transactions.
See also:
Process Flow
You can use the
Schedule Manager in the period-end closing process of Product Cost by Period. The Schedule Manager simplifies the period-end closing activities. In Product Cost by Period, you can use the multilevel worklist of the Schedule Manager. The multilevel worklist can significantly improve performance and facilitate error correction.Multilevel worklists enable you to do such things as:
Each function in the period-end closing process is regarded as a separate processing step. A group of processing steps that are performed one after the other is called a processing step sequence.
The system then only processes the objects that had errors and the objects whose processing was forced manually.
The following section contains information on using the Schedule Manager in connection with a multilevel worklist:
Starting Transactions/Reports Online, Scheduling Jobs and Job Chains, WorklistThe following functions are available in the period-end closing process for cost object hierarchies:
You can allocate overhead for the single objects assigned to the cost object hierarchy as follows:
By starting the calculation of overhead expenses in the Product Cost by Period menu under Period-End Closing ® Single Functions: Cost Object Hierarchy ® Overhead
You start the calculation of overhead expenses in the Product Cost by Period menu under Period-End Closing ® Single Functions: Product Cost Collector ® Overhead.
Since distribution is not active, the system can calculate the overhead expenses at the level of the cost object nodes. To do this, set the relevant indicator in Customizing in the cost object category and enter a costing sheet and (if applicable) an overhead key in the cost object master data.
Preliminary Settlement for Co-Products, Rework
is performed at the level of the assigned manufacturing orders (production orders or process orders). If you are manufacturing co-products with a manufacturing order, you distribute the actual costs collected on the order header to the order items on the basis of equivalence numbers. You then calculate WIP and variances, and settle. In joint production, these functions are performed with reference to the order item.
You can only assign manufacturing orders that manufacture co-products to a cost object hierarchy if you have specified in the cost object category in Customizing that distribution is active for the cost object hierarchy. Preliminary Settlement for Co-Products, Rework takes place after the actual costs of the cost object hierarchy have been distributed to the assigned manufacturing orders.
Note the following:
You can only assign manufacturing orders to a cost object hierarchy if the manufacturing orders are settled by period (settlement type PER). Work in process is calculated at target cost for all orders settled by period.
In joint production, however, you cannot calculate work in process at target costs. Consequently, no work in process can be calculated for manufacturing orders that are assigned to a cost object hierarchy with which co-products are manufactured.
Cost Object Hierarchy Without Distribution: WIP Calculation, Variance Calculation, and Settlement
The illustration shows the settlement of a cost object hierarchy without distribution using settlement through material account determination (see item 9 below).
Work in process is calculated at the level of the orders (such as product cost collectors or manufacturing orders) assigned to the cost object hierarchy. In joint production, it is not possible to calculate WIP at target costs (see above). You can start WIP calculation through the cost object hierarchy. Work in process is calculated for all orders that are assigned to a cost object. In collective processing, you can calculate work in process for all orders in a plant, regardless of whether they are assigned to a cost object hierarchy.
You cannot calculate work in process for the cost object nodes themselves.
The calculation of WIP at target costs includes the quantities confirmed at the operations or reporting points.
If distribution is not active, you calculate the variances at the level of the cost object nodes. The system compares the actual costs with the target costs for each node of the cost object hierarchy. If costs are assigned under a given cost element to both a cost object node and the assigned orders, the system performs dynamic summarization and variances are shown at the highest node of the hierarchy at which a posting took place.
The system assigns the variances to
variance categories (such as input price variances and input quantity variances). The assignment to variance categories is by cost element or cost element/origin.You settle the cost object hierarchy.
If distribution is not active, the costs assigned to the cost object nodes must be settled from the level of the cost object hierarchy. You define how you want to settle the cost object hierarchy in Customizing for Product Cost Controlling in the cost object category.
You must define settlement rules for all cost object nodes in the cost object hierarchy. The receiver you specify in each settlement rule is normally the price difference account to which you have also settled the orders.
When you create the cost object hierarchy, the system generates a distribution rule for settlement to FI. The distribution rule determines which percentage of the actual costs is settled to which receiver.
In the first settlement, the system automatically generates a distribution rule for settlement to Profitability Analysis (CO-PA) for all nodes in the cost object hierarchy (cost object nodes and orders) if the indicator Variances is set in the settlement profile and a corresponding PA transfer structure is defined. The system generates profitability segments as the receivers for this settlement. These profitability segments are derived from the characteristics of the cost object nodes.
See the following section for more information on settlement: Settlement Rules for Cost Object Hierarchies
Result
You can see the data calculated by the period-end closing transactions in the
Product Cost Controlling Information System. In the Product Cost Controlling Information System you can choose between displaying the data entered on the cost object node (data entry object) and displaying the data summarized on a cost object node (summarization object). To display the summarized data, first execute a data collection run.
For more information, refer to the section
Information System for Product Cost by Period and the sections following in the structure.See also:
For information on material account determination, refer to the Implementation Guide for Materials Management under Valuation and Account Assignment ® Account Determination ®
Create automatic postings.Period-End Closing for Product Cost Collectors
Period-End Closing for Cost Object Hierarchies with Distribution