Define Target Cost Versions
In this step you define how you want the
target costs to be calculated.
Target cost versions are used in the following ways:
- In variance calculation:
- To control which variance (total variance, production variances or planning variance) is calculated
- To valuate unplanned scrap(scrap variance)
Unplanned scrap is
valuated in the period-end closing activities when the variances are
calculated. You can specify in a
valuation variant for WIP and scrap which cost estimate you want
to use to calculate the target costs for the valuation of unplanned scrap. You
assign the valuation variant to target cost version 0 if you want to include
it in the valuation of scrap.
- When you are using a
- cost object hierarchy with active distribution, you use the target cost version to control which cost estimate the system uses to calculate the target costs, which are used as the basis for determining equivalences for actual cost distribution.
The actual costs
collected at the level of the hierarchy are distributed across the orders in
accordance with these equivalences. This distribution is proportional to the
target costs for the cost element under which the actual costs are written.
Actual costs for material costs are distributed in proportion to the target
costs for the origin group, such as for the material, if you have entered an
origin group in the costing view of the material master record and have set
the indicator Material origin , for
example.
If no target costs
were calculated under this cost element, enter a cost element group in the
target cost version. The actual costs are distributed in proportion to the
target costs for this cost element group. This cost element group should be
complete. If costs were updated under a cost element that is not in this cost
element group, no distribution is possible.
You can calculate equivalences on the basis of SAP standard target cost versions 0, 1 and 3.
The standard system supplies the following target cost versions:
- Target cost version 0 (
- total variance)
The amount of the
total variance generates a posting in Financial Accounting during
settlement.
For this version,
select actual costs as the control costs and
standard cost estimate as the target
costs.
- Target cost version 1 (production variance)
For this version you
choose actual costs as the control costs and
planned costs as the target costs.
- Target cost version 2(planning variance)
With target cost
version 2, the costs from the preliminary order cost estimate are interpreted
as control costs.
For this version,
select planned costs as the control costs and
current cost estimate as the target costs. You
cannot calculate planning variances for the product cost
collector.
- Target cost version 3 (production variance of the period)
You compare the
planned costs of the period calculated on the basis of an alternative (such
as a
modified standard cost estimate ) with the actual costs of the
period on the basis of the yield delivered to stock in the
period.
The base quantity
for variance calculation is the yield.
For this version,
you choose the actual costs as the control costs and the alternative material
cost estimate as the target costs. To determine the alternative material cost
estimate, enter a costing variant and choose a costing version.
The target cost version specifies which data is to be compared. The target cost version also specifies which variance variant is used and therefore which are calculated. You can define a different target cost version for each controlling area.
Requirements
You must already have processed the following steps:
- Implementation Guide for Controlling general:
Maintain versions
Here you maintain a
version in Maintain Versions and in the Settings in
Controlling Area . Only the versions created there can be defined in
this step as a target cost version.
- If you want to use the target cost version for variance calculation, you should perform the following steps:
- If you are using a cost object hierarchy, you should do the following:
- Under
- Define Cost Object Categories for Cost Object Hierarchies, check the cost object categories regarding variance calculation and distribution
- Under
- Check Cost Object Profiles for Cost Object Hierarchies, check the cost object profile regarding the variance key (if appropriate)
Standard Settings
The standard system contains predefined target cost versions that you can copy into your own controlling area without having to make any changes.
- Target cost version 0
Target cost version
0 is the only target cost version that is relevant to settlement. That is,
only the variances calculated with target cost version 0 can be settled to
Profitability Analysis.
Only in target cost
version 0 can you specify a valuation variant for the valuation of scrap and
work in process.
- Target cost version 1
- Target cost version 2
- Target cost version 3
Actions
1. Check
whether the predefined target cost versions meet your
requirements.
2. To create
your own target cost version, proceed as follows:
a) Choose
New entries.
b) Enter the
controlling area, a number, and a name for the new target cost
version.
c) Enter a
variance variant.
d) Select the
control costs.
e) Select the
target costs.
f) Specify a
cost element group if appropriate.
g) Save the
target cost version.