Standard Cost Estimates 

Use

You usually create a standard cost estimate for a material at the beginning of a fiscal year or a new season. The standard cost estimate then remains valid for the entire year or season. You can use it to establish a standard price for materials for the time period.

You should not change the standard cost estimate during this time. The standard costs then remain constant and are not influenced by price fluctuations or changes in the production structure during the planning period.

You valuate the planned quantity structure of a standard cost estimate with standard prices. A standard cost estimate for a material is not associated with an order or production version.

Prerequisites

You create a cost estimate based on a costing variant. For standard cost estimates, the costing variant contains the following settings:

·        The costing type specifies that the costing results can be updated to the material master as the standard price.

·        The valuation variant specifies that the materials are valuated at the standard price or planned price.

For more information, see Preparation for Costing: Customizing.

For standard cost estimates for materials involving repetitive manufacturing, you need to make the following settings in the MRP view of the material master:

·        Set the Repetitive mfg indicator

·        Enter a repetitive manufacturing profile

Features

The standard cost estimate calculates a standard price for materials with price control S:

·        When you mark the standard cost estimate, the system writes the result of the cost estimate to the costing view of the material master record as the future standard price. You can use this price to valuate a material component in the cost estimate.

·        When you release the standard cost estimate, the system writes the result of the standard cost estimate to the material master record as the standard price. This price is then active for Financial Accounting and is used to valuate the material until the next time a standard cost estimate is released.

·        From this period onward, all transactions involving products produced in-house are valuated in Logistics using the standard price (that is, the result of the standard cost estimate). When a material with standard price control is transferred to the warehouse, for example, inventories of this material are valuated with the standard price as determined by the standard cost estimate. This provisional valuation can be corrected later by settling the actual costs incurred during the period.

Valuation at standard prices calculated in the standard cost estimate applies only to materials with price control S.

You can also use the standard cost estimate to calculate the following data for each production order or run schedule header (make-to-stock production) at the end of the accounting period:

·        Variances for the actual costs of a product

·        Prices for confirmed scrap quantities

·        Target costs for valuating the work in process based on the confirmed quantities

See also:

For more information on the costing results, see the following:

·        Purpose of Product Cost Planning

·        Price Update

For more information on creating cost estimates, see Cost Estimate with Quantity Structure: Process Flow.

For more information on standard cost estimates in connection with a valuated sales order stock, see the following documents in the SAP Library under Cost Object Controlling (CO-PC-OBJ):

·        Valuated Sales Order Stock: Valuation

·        Standard Price with Valuated Sales Order Stocks

For more information on calculating material prices when using the Actual Costing/Material Ledger component, see the following documents in the SAP Library under Actual Costing/Material Ledger (CO-PC-ACT):

·        Actual Costing/Material Ledger

·        Standard Price Versus Moving Average Price

·        Price Control and Material Price Determination

·        Integration of Actual Costing/Material Ledger

For more information on standard prices for material valuation, see the following documents in the SAP Library under MM Material Valuation:

·        Price Control

·        Value Calculation with Standard Price: Example