Period-End Closing for Product Cost Collectors (SAP Library

Period-End Closing for Product Cost Collectors

Prerequisites

Product cost collectors are only included in the period-end closing process if the status of the order is not one of the following:

LKD (Locked)

CLSD (Closed)

DLFL (Deletion flag)

DLT (Deleted)

Note

You can withdraw the deletion flag any time after it has been set, for example if follow-up costs are incurred for the order. Deletion indicators, however, cannot be withdrawn.

Caution

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.

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 process. 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:

Display the objects in a processing step sequence that have errors

Note

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.

Eliminate the cause of the error, or set a processing status that instructs the system to skip that particular processing step

Instruct the system to perform a particular processing step sequence again (once you have corrected the errors or set processing statuses that control how objects are further processed)

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, Worklist

Note

Note the following in the period-end closing process for product cost collectors:

If you don’t enter a production process in the individual processing mode of the period-end closing transaction, but only enter the data for the material and plant, this period-end closing transaction will be performed for all production processes for that material.

The following functions are available in the Product Cost by Period component in the period-end closing process for manufacturing orders and product cost collectors:

Template allocation

Revaluation of activity types and business processes at actual prices

If the application component Actual Costing/Material Ledger is active and you perform actual costing there, you can also directly debit the material with the difference between the plan activity price and the actual activity price. In this case you do not perform the function Revaluation at Actual Prices.

For more information, go into Customizing under Controlling ® Product Cost Controlling ® Actual Costing/Material Ledger ® Actual Costing ® Activate Actual Costing.

Overhead calculation

Preliminary Settlement for Co-Products, Rework

The Preliminary Settlement for Co-Products, Rework function can be performed for production orders and process orders. This function is not available for product cost collectors. For this reason the menu of Product Cost by Period contains this function in the period-end closing functions for cost object hierarchies but not for product cost collectors. This function is also available in the period-end closing activities in Product Cost by Order.

WIP calculation

Variance calculation

In the Product Cost by Period component, you always calculate the variances separately for each object and period. The system compares the control costs against the target costs of the period. For the calculation of the total variance in the Product Cost by Period component, the control costs are the actual costs less the work in process and the scrap variance. Be sure to calculate the work in process before you calculate the variances.

You can:

Calculate the total variance of the period to explain the difference between the debit and credit of the product cost collector
Calculate the production variance of the period to explain the variances that occurred during the manufacturing process
Calculate the production variances against the planned price of the period to compare the net actual costs of the period with the planned costs of the period calculated on the basis of the alternative material cost estimate (such as a modified standard cost estimate)
Valuate the unplanned scrap quantities

Caution

If you are using cost object hierarchies and have distributed the actual costs, start variance calculation for the assigned single objects through variance calculation for the cost object hierarchy.

When you calculate variances for product cost collectors or manufacturing orders, the product cost collectors or manufacturing orders assigned to a cost object hierarchy are not included.

Settlement

The following happens during the settlement process:

The system checks whether the orders to be settled have a results analysis key. If work in process has been calculated with that results analysis key for materials that have not been delivered, the system generates corresponding postings in Financial Accounting (FI) and Profit Center Accounting (EC-PCA). Settlement of the work in process capitalizes the unfinished products in FI.

The difference between the debit and credit of the order (the order balance) less the work in process is transferred to FI, EC-PCA (if applicable), and Actual Costing/Material Ledger (CO-PC-ACT).
The total variance calculated with target cost version 0 is transferred to Profitability Analysis (CO-PA).

Note

The variances are normally settled to CO-PA as variance categories. However, you can also settle the order balance less the work in process to CO-PA.

When the orders are settled, the actual costs distributed from the cost object nodes to the single objects are settled as well.

The system finds the accounts for the settlement of the work in process in the posting rules specified in Customizing. The order balance is settled to FI on the basis of a settlement rule that the system generates automatically when you create an order (product cost collector or manufacturing order). The accounts in for the settlement of the order balance in Financial Accounting are selected through automatic account determination in MM.

Note

Do not settle the product cost collectors with transactions PRP (price differences product cost collector) or PRQ (offsetting entry price differences product cost collector) specified in automatic account determination. These transactions were created for production cost collectors in Release 4.0. You settle the product cost collectors of later releases with the same account determination as with manufacturing orders.

When you settle, the system automatically generates a distribution rule that it adds to the settlement rule. The distribution rule determines which percentage of the value to be settled can be settled to which receiver.

In the first settlement, the system generates a second settlement rule for settlement to CO-PA where the profitability segment is located.

Result

The data calculated and settled in the period-end closing process is now present in FI and (if applicable) EC-PCA, CO-PA, and CO-PC-ACT.

You can view the data calculated by the period-end closing transactions in the Product Cost Controlling Information System.

Note

To improve the performance of the period-end closing transactions, you can set the deletion flag for completed product cost collectors. Orders with a deletion flag are not included in the period-end closing process (see also: Reorganization of Product Cost Collectors).

Period-End Closing for Cost Object Hierarchies with Distribution

For information on material account determination, refer to the Implementation Guide for Materials Management under Valuation and Account Assignment ® Account Determination ® Create automatic postings.