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Define
Assignment
Here you assign the following cost elements to
line IDs:
- Cost elements under which an order is debited
and credited
Work in Process
at Actual Costs
The line IDs put the costs incurred for the
order into specific groups such as:
These groups should be based on the structure
of the cost of goods manufactured in the cost component structure (see
Maintain Cost Component Structure and Define Cost
Components).
In the Update, the
category indicates whether the cost elements under which the
different postings are made are debits or credits for WIP
calculation.
- You must assign all debits (such as for
material withdrawals) internal activities, external activities and overhead,
to line IDs of category K (costs).
- You must assign all credits (such as for
material issues and order settlement) to line IDs of category
A (settled costs).
See also:
Define Update
You can use the debit/credit indicator to
separate the costs that are written under the same cost element. This
information is needed for WIP calculation to treat the withdrawal of a
semifinished product from stock as a debit and the delivery of a semifinished
product to stock as a credit.
Work in Process
at Target Costs
In the Update, the category indicates whether
the cost elements under which the costs are updated in the cost estimate on
which target cost calculation for the valuation of work in process is based
are relevant to WIP calculation.
- Create line IDs of category K
(costs) for costs relevant to valuation (such as, direct material
costs).
- Create line IDs of category N
(do not take into account) for costs for which no work in process is to be
created (such as production overhead). If you don't create line IDs for these
costs, the system will issue an error message.
Assigning Fixed
and Variable Costs to Different Line IDs
The fixed/variable indicator allows you to
assign fixed and variable costs (such as costs for internal activities or for
semifinished products) to different line IDs.
Capitalizing
Work in Process
In the Assignment, you also define whether the
in process that must be shown as a result of these costs is to be capitalized
and in what amount. For example, you can specify that:
- 100% of the work in process calculated from
the direct material costs can be capitalized
- 80% of the work in process calculated from the
indirect costs can be capitalized
You also define the validity dates for the
assignment.
You assign the cost elements combined in line
IDs to one of the following groups:
- Costs with an option to capitalize
(OptToCap)
You then define the following:
- What percentage of the costs cannot be
capitalized
- For what percentage of the costs you can
choose whether the costs must be capitalized or cannot be
capitalized
This assignment can be taken into account in
the posting rules. There are three categories in the posting rules that are
created from this assignment:
WIPR |
Work in process with requirement to |
|
capitalize costs |
WIPO |
Work in process with option to |
|
capitalize costs |
WIPP |
Work in process with prohibition to |
|
capitalize costs |
You will normally define a posting rule that
assigns the work in process with requirement to capitalize costs to the G/L
accounts for unfinished products (balance sheet) and stock changes
(P+L).
Work in process is capitalized according to
this assignment.
Remember:
- The line IDs with requirement to capitalize
and the line IDs with prohibition to capitalize combine the costs that are
treated the same according to commercial and tax law.
- The line IDs with an option to capitalize
costs combine the costs that are treated differently by commercial law than by
tax law.
In the Product Cost by
Order component, if you are using multiple
valuation views in the calculation of work in process at
actual costs, the system automatically assigns the line IDs defined
in the results analysis version of the operational valuation view to the
results analysis versions of the multiple valuation views referencing the
operational results analysis version.
Requirements
You must already have defined the
following:
Standard
Settings
The standard system contains predefined line
IDs. You have to assign the cost elements in your cost element list to these
standard line IDs before you can calculate work in process.
Activities
1. Determine
which cost elements you have to assign to line IDs. To display the cost
elements valid in your controlling area, go into Cost Center Accounting and
select Reporting -> Master data index -> Cost
elements.
You must also assign
settlement cost elements that you use in the allocation structure to a line
ID.
Example:
1. Enter the
controlling area, your results analysis version and, if necessary, your
results analysis key.
2. Enter the
cost elements, as in your cost element list, under which the primary postings
are to be written to the orders, or to the standard cost
estimate.
You can mask these
entries. If you enter 00004+++++, for example, all cost
elements from 400000 to 499999 will be included. If you want particular cost
elements to be treated separately, enter them without masking (example:
0000415000).
Numeric values must
be entered right-justified. Alphanumeric values must be entered
left-justified.
For material costs,
you can define separate line IDs for particular origin groups by entering
origin groups in the costing views of the relevant material master records,
and entering these origin groups with the relevant cost elements in the line
IDs. If you don't want to differentiate the line IDs by origin group, mask the
origin group (i.e., enter ++++).
3. Enter the
secondary cost elements under which internal cost allocations are written to
the orders or under which the cost estimate on which the the target cost
calculation is based are updated.
For production
costs, you can define separate line IDs for particular cost centers, or cost
centers and activity types, by entering a cost center and an activity type for
secondary cost elements. If you want to differentiate the production costs
only by cost elements, mask the cost center and activity type with
++++.
If you want to
create separate line IDs for the fixed and variable costs from Cost Center
Accounting, you can enter "V" or "F" in the var-fixed costs
column.
4. Enter a
debit/credit indicator if appropriate.
5. Enter the
validity dates of the assignment.
6. Enter the
following:
- For each line ID, in one of the following
columns:
Requirement to
capitalize
Option to
capitalize
Prohibition to
capitalize
- A percentage for the costs with a prohibition
to capitalize
- A percentage for the costs with an option to
capitalize
7. If you are
valuating the work in process with actual costs, also enter the cost elements,
as in your cost element list, under which debits from deliveries and partial
deliveries are posted.