Each cost estimate is based on a costing variant:

The costing variant contains control parameters and settings for costing. These settings determine how costing is executed, such as which prices the system uses to cost materials, activities, and business processes.

The control parameters in the costing variant and the settings you need to make will vary depending on whether you are creating a material cost estimate or a base object cost estimate.

Each costing variant specifies a particular valuation variant and costing type.

A costing variant for material cost estimates contains additional control parameters, such as for automatic determination of the quantity structure and for updating the prices in the material master.

For more information and overviews of Customizing, see: