Calculation of the Group Cost of Goods Manufactured (SAP Library

Calculation of the Group Cost of Goods Manufactured

Use

The group cost of goods manufactured (COGM) forms the basis for the calculation of the interunit (IU) profit/loss requiring elimination. This cost is determined for the group as if it were a single entity. Transportation costs for goods transferred within the corporate group, for example, are distribution costs from the point of view of the individual enterprise and part of COGM from the point of view of the group.

Prerequisites

COGM is calculated from the following data:

COGM
Incidental acquisition costs

You enter the incidental acquisition costs, for example, transportation costs, as part of the additional financial data concerning the inventory.

The system requires the following additional data in order to determine the group COGM:

Inventory data	Supplier data
Consolidation units involved in transaction	Consolidation units involved in transaction
Product group	Product group
Book value	Profit percentage
Inventory quantity	Distribution costs (%)
Valuation allowance	Cost of goods manufactured (%)
Incidental acquisition costs

Features

The system can calculate group COGM in the following ways:

Using the supplier’s profit percentage: group COGM = sales * percentage COGM + incidental acquisition costs
Using the COGM per unit of measure and the inventory quantity: group COGM = inventory quantity * COGM + incidental acquisition costs

Note

The inventory and supplier data used to determine the IU profit/loss are automatically translated from local into group currency within the program when you start the elimination task.