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

Product Cost Planning

Purpose

Product Cost Planning (CO-PC-PCP) is an area within Product Cost Controlling (CO-PC) where you can plan costs for materials without reference to orders, and set prices for materials and other cost accounting objects.

You can use Product Cost Planning to analyze the costs of your company’s products such as:

Manufactured materials
Services
Other intangible goods

You can analyze costs to help provide answers to questions such as:

What is the value added of a particular step in the production process?
What proportion of the value added can be attributed to a particular organizational unit?
What is the cost breakdown including primary costs or transfer prices?
How high are the material, production, and overhead costs?
How can production efficiency be improved?
Can the product be supplied at a competitive price?

Product Cost Planning comprises the following components:

Cost Estimate with Quantity Structure	Costing materials based on a quantity structure in PP
Cost Estimate without Quantity Structure	Costing materials without a quantity structure in PP
Price Update	Transferring the results of material cost estimates to the material master
Reference and Simulation Costing	Planning new products and services using base planning objects
Easy Cost Planning and Execution Services	Rapid cost planning without master data within an ad hoc cost estimate

For further information, see the following:

Purpose of Product Cost Planning

Costing Sequence

Implementation Considerations

Caution

The following graphic provides an overview of the organizational structures required for costing:

This graphic is explained in the accompanying text

Materials are always valuated at valuation area level. Costing must be performed at plant level. Consequently you must define the plant as the valuation level in Customizing under Enterprise Structure ® Definition ® Logistics - General in the step Define valuation level. When you do this, a valuation area is created with the same name for each plant. All costing data is then stored with reference to a plant.

Integration

Product Cost Planning accesses master data in other components, such as BOMs, routings, and work centers in Production Planning, and cost centers, activity types, and business processes in Overhead Cost Controlling. Costing data within Product Cost Planning can also be made available to other applications. For example, you can update the standard price in the material master with the results of cost estimates, and valuate materials using this new standard price.

For more information, see Information for Other Applications.

Caution

Because of this high level of data integration, SAP recommends that you make a thorough check before going live to ensure that the correct data is accessed for the quantity and value structures, to prevent incorrect costing results.

For more information about integration, see Origin of Costing Data.

Features

The following table gives you an overview of the menu and functions of Product Cost Planning:

Note

Menu Option	Function	Cost Estimate
Material Costing ® Edit Costing Run	Cost estimate for multiple materials with BOM and routing	Used to process mass data, and is created automatically with Production Planning data (product cost estimate)
Material Costing ® Cost Estimate with Quantity Structure	Cost estimate for a material with BOM and routing or master recipe	Created automatically with Production Planning data (product cost estimate)
Material Cost Estimate with Quantity Structure ® Additive Costs	Additive cost estimate	Created using data you enter manually (unit costing)
Material Costing ® Cost Estimate Without Quantity Structure	Cost estimate for a material without BOM or routing	Created using data you enter manually (unit costing) or transfer from a non-SAP system
Reference and Simulation Costing	Base object cost estimate	Created using data you enter manually (unit costing)
Easy Cost Planning & Execution Services ® Edit Ad hoc Cost Estimate	... Ad hoc cost estimate	... Created using a planning form (costing model) that can access the data in the SAP system

Note

Menu Option	Function
Material Costing ® Price Update	Transfer of cost estimate results to the material master record
Material Costing ® Master Data for Mixed Cost Estimate	Definition of procurement alternatives and mixing ratios for a mixed cost estimate
Easy Cost Planning & Execution Services ® Edit Costing Model	Define planning forms for Easy Cost Planning

Note

Menu Option	Functions Available	Examples
Information System	Reports for Product Cost Planning	Lists of existing material and base object cost estimates Detailed reports Comparison reports
Environment	Additional functions in Product Cost Planning	Archiving and deletion of costing data Distribution of cost component splits (ALE)

Note

You use different costing methods in Product Cost Planning depending on the availability of data in Production Planning (PP and PP-PI) and on the type of object you want to cost (see graphic below):

This graphic is explained in the accompanying text

Automatic costing (also known as product costing)

The system determines the quantity structure (BOMs and routings or master recipe) for the material and valuates it automatically using data from Production Planning (PP or PP-PI). For more information, see Use of Cost Estimates with Quantity Structure and Cost Estimate with Quantity Structure: Process Flow.

Unit costing

This cost estimate calculates the costs for the following objects without accessing BOMs and routings in Production Planning:

Materials (for example, additive costs for a material cost estimate with quantity structure, material cost estimate without quantity structure)
Base planning objects

Unit Costing

Additive Costs

Use of Cost Estimates Without Quantity Structure

Use of Reference and Simulation Costing

Multilevel unit costing

This cost estimate calculates the costs for the following objects without accessing BOMs and routings in Production Planning:

Materials (material cost estimate without quantity structure)
Base planning objects

With this costing method, you enter the costing items manually. You can access existing SAP system data such as materials, business processes, cost centers, and activity types for this purpose. You can also display the costing structure hierarchically and, using a worklist, access frequently used data. For more information, see Multilevel Unit Costing.

Activities

You can access the functions of Product Cost Planning from either the Accounting menu or the Logistics menu:

Accounting ® Controlling ® Product Cost Controlling ® Product Cost Planning

Logistics ® Production ® Product Cost Planning

Logistics ® Production - Process ® Product Cost Planning

You make the configuration settings for Product Cost Planning in Customizing for Product Cost Controlling. For more information, see Preparing for Costing: Customizing and the Implementation Guide (IMG) for Product Cost Controlling.