Preparing for Base Object Costing 
Use
When you create a base planning object, it is always linked to a costing variant. This costing variant contains all the information needed to cos
t the object. You define and check costing variants in Customizing for Product Cost Planning.The following graphic gives you an overview of Customizing for Reference and Simulation Costing:
In the costing variant for Reference and Simulation Costing, you enter a valuation variant and a costing type.
You also define in the costing variant whether a cost element is required for each costing item.
See also:
For more information about the relevant settings in Customizing, see the Implementation Guide (IMG) for Product Cost Controlling.