Purpose of Product Cost Planning (SAP Library - Product Cost Planning (CO-PC-PCP))

Purpose of Product Cost Planning

Use

You can use Product Cost Planning to do the following:

To calculate the non-order-related cost of goods manufactured and cost of goods sold for each product unit

To establish how the costs are broken down for each product, and to calculate the value added for each step of the production process ( Concept of Cost Rollup)

To optimize the cost of goods manufactured through comparison costing ( Product Cost Controlling Information System)

To provide basic information for other R/3 applications, for example:

To establish standards with which to assess production efficiency in Cost Object Controlling

To update prices in the material master record and in Profitability analysis

Lower price limits for Sales and Distribution

Features

The following graphic illustrates the aims of Product Cost Planning, which are:

Calculation of the cost of goods manufactured (COGM) and the cost of goods sold (COGS) of a product
Analysis of the costing results using the various reports available
Provision of information for other SAP applications

The following table describes the reports with which you can analyze the costing results:

Report	Content
Cost component split	A view of the costs of a material cost estimate broken down into cost groups, such as material costs, production costs, and overhead costs.
Itemization	Detailed information about the costs contained in a material cost estimate or base object cost estimate
Itemization by cost element	Detailed information about the costs contained in a material cost estimate or base object cost estimate, sorted by cost element
Costed multilevel BOM	Quick overview of the BOM and costs of a material cost estimate or base object cost estimate in hierarchical form
Partner cost component split	Overview of the value added portions of organizational units (partners) in relation to the total costs of a material

You can use the Product Cost Controlling Information System (CO-PC-IS) to analyze the costing results. The following table gives you an overview of the various analysis options in the Information System:

Information about Material Cost Estimates
Detailed reports	Cost component reports Itemizations Costed multilevel BOMs Partner cost component splits
Comparative reports	Product costing vs. preliminary costing Cost component comparison Cost element comparison Itemization comparison
Analyzing the costing run	Results of the costing run Price vs. costing Costing run variances

Information about Base Planning Objects

Detailed reports

Multilevel Explosion of Base Planning Objects

Costed multilevel BOMs

Itemizations

Comparative reports

Object Comparison for Unit Costing