Function documentationPurpose of Product Cost Planning

 

You use Product Cost Planning to:

  • Calculate the non-order-related cost of goods manufactured (COGM) and cost of goods sold (COGS) for each product unit

  • Establish how the costs are broken down for each product, and to calculate the value added for each step of the production process (cost rollup)

  • Optimize the cost of goods manufactured through comparison costing with the Product Cost Controlling Information System

  • Support make-or-buy decisions

  • Provide information for other SAP applications, such as:

Features

Product Cost Planning enables you to answer questions such as:

  • Which is our most effiicient production line?

  • How much of the total cost is overhead?

  • How much have our costs increased, and why?

  • How much can we lower our unit costs by increasing output?

Reports

You can analyze the costing results using various reports:

Report

Contents

Cost Component Split

A view of the costs of a material cost estimate broken down into cost groups, such as material costs, production costs, and overhead costs.

Itemization

Detailed information about the costs contained in a material cost estimate

Itemization by Cost Element

Detailed information about the costs contained in a material cost estimate, sorted by cost element

Costed Multilevel BOM

Quick overview of the BOM and costs of a material cost estimate in hierarchical form

Partner Cost Component Split

Overview of the value added portions of organizational units (partners) in relation to the total costs of a material

You can use Product Cost Controlling Information System (CO-PC-IS) to analyze the costing results. The following table gives you an overview of the various analysis options: