Product Cost Planning

Product Cost Planning (CO-PC-PCP) is an area within Product Cost Controlling (CO-PC) where you can plan costs for materials without reference to orders, and set prices for materials and other cost accounting objects.

You can use Product Cost Planning to analyze your product costs, such as for:

Manufactured materials
Services

Analyzing product costs helps provide answers to questions such as:

What is the value added of a particular step in the production process?
What proportion of the value added can be attributed to a particular organizational unit?
What are the material, production, and overhead costs?
How can production efficiency be improved?
Can the product be sold at a competitive price?

Components of Product Cost Planning

Product Cost Planning comprises the following components:

Material Cost Estimate With Quantity Structure
Costing materials based on a quantity structure in Production Planning
Material Cost Estimate Without Quantity Structure
Costing materials without a quantity structure in Production Planning
Price Update
Transferring the results of material cost estimates to the material master
Easy Cost Planning and Execution Services
Rapid cost planning without master data within an ad hoc cost estimate.

Implementation Considerations

In your organizational structure, each company code needs to be assigned to a controlling area.
Materials are always valued at valuation area level, while costing must be performed at plant level. You therefore need to define the plant as the valuation level in Customizing under Enterprise Structure Definition Logistics - General Define valuation level . This creates a valuation area with the same name for each plant. All costing data is then stored with reference to a plant.

This graphic is explained in the accompanying text.

Integration

Product Cost Planning accesses master data in other components, such as BOMs, routings, and work centers in Production Planning, and cost centers, activity types, and business processes in Overhead Cost Controlling. Costing data within Product Cost Planning can also be made available to other applications. For example, you can update the standard price in the material master with the results of cost estimates, and valuate materials using this new standard price.

For more information, see Information for Other SAP Applications.

Caution Caution

Because of this high level of data integration, SAP recommends that you make a thorough check before going live to ensure that the correct data is accessed for the quantity and value structures, to prevent incorrect costing results.

End of the caution.

For more information about integration, see Origin of Costing Data.

Features

Functions

You can access the functions of Product Cost Planning from either the Accounting menu or the Logistics menu:

Accounting Controlling Product Cost Controlling Product Cost Planning
Logistics Production Product Cost Planning
Logistics Production - Process Product Cost Planning

The following table gives you an overview of the menu and functions of Product Cost Planning:

Menu Option	Function	Cost Estimate
Material Costing Costing Run Edit Costing Run	Costing Run with BOM and routing	Used to process mass data, and is created automatically with Production Planning data (product cost estimate)
Material Costing Cost Estimate with Quantity Structure	Cost Estimate with Quantity Structure (with BOM and routing or master recipe)	Created automatically with Production Planning data (product cost estimate)
Material Costing Cost Estimate with Quantity Structure Additive Costs	Additive Costs	Created using data you enter manually (unit costing)
Material Costing Cost Estimate Without Quantity Structure	Material Cost Estimate Without Quantity Structure	Created using data you enter manually (unit costing) or transfer from a non-SAP system
Easy Cost Planning & Execution Services Edit Ad Hoc Cost Estimate	Ad Hoc Cost Estimate	Created using a planning form (costing model) that can access the data in the SAP system

Menu Option	Function
Material Costing Price Update	Price Update
Material Costing Master Data for Mixed Cost Estimate	Definition of procurement alternatives and mixing ratios for Mixed Costing
Easy Cost Planning & Execution Services Edit Costing Model	Define planning forms for Easy Cost Planning

Menu Option	Functions Available	Examples
Information System	Costing results	Lists of material cost estimates Detailed reports Comparison reports
Environment	Additional functions in Product Cost Planning	Archive and delete costing data Check costing variant

You use different costing methods in Product Cost Planning depending on the availability of data in Production Planning (PP and PP-PI) and on the type of object you want to cost.

This graphic is explained in the accompanying text.

Automatic costing (also known as product costing)
The quantity structure (BOMs and routings or master recipe) for the material is automatically determined and valuated using data from Production Planning (PP or PP-PI).

For more information, see Cost Estimate with Quantity Structure: Process Flow.
Unit costing
Calculates the costs for materials (for example, additive costs for a material cost estimate with quantity structure, material cost estimate without quantity structure) without accessing BOMs and routings in Production Planning.

With this costing method, you enter the costing items manually. You can access existing SAP system data such as materials, business processes, cost centers, and activity types for this purpose.

For more information, see Unit Costing.
Multilevel unit costing
Calculates material cost estimates without quantity structure, without accessing BOMs and routings in Production Planning.

With this costing method, you enter the costing items manually. You can access existing SAP system data such as materials, business processes, cost centers, and activity types for this purpose. You can also display the costing structure hierarchically and, using a worklist, access frequently used data.

For more information, see Multilevel Unit Costing.

Configuration Settings

You make the configuration settings for Product Cost Planning in Customizing for Product Cost Controlling.

For more information, see Preparation for Costing: Customizing and the Implementation Guide (IMG) for Product Cost Controlling.

More Information

Purpose of Product Cost Planning

Costing Sequence