You should check the following before creating a cost estimate:
The indicator for relevancy to costing determines whether the individual material components are included in the standard cost estimate and preliminary cost estimate for the order. If this indicator is not selected, the material component will not be costed. For inventory cost estimates, this indicator determines the factor applied to the costs calculated for the material component.
Whether the operations listed in the routing are costed depends on the control key and the indicator for relevancy to costing.
If the control key says that the operations are costed, you can use the indicator for relevancy to costing to specify which factor is used to cost the activities in the operation for the inventory cost estimate. Otherwise the indicator for relevancy to costing is set to X (relevant to costing) or blank (not relevant to costing).
In repetitive manufacturing, you also specify whether the operation is a milestone. Milestones are necessary to backflush reporting points.
You can specify up to six activity types for each work center. You create the activity types in Cost Center Accounting. The standard value key determines how many activity types you can enter for each operation.
In the work center, you assign each activity type or business process to a formula. The system uses the formula in the work center and the standard values in the operation to calculate the quantities of the activities or processes expected in a given operation.
To enable a formula to be used to calculate the production costs, the indicator Costing allowed in Customizing for Product Cost Controlling must be set for this formula. You should also make sure that the formula parameters are linked to values that have been entered in the routing.