Product Cost Collectors in Sales-Order-Related Production (SAP Library

Product Cost Collectors in Sales-Order-Related Production

Purpose

You can use repetitive manufacturing as sales-order-oriented production. The system generates one or more planned orders that have a direct link to the sales order item. The material is manufactured on the basis of these planned orders. The manufacturing process is therefore initiated by sales orders.

If you are using a valuated sales order stock in sales-order-oriented repetitive manufacturing, you create a product cost collector for the individual requirements material (the material that is manufactured for the sales order stock). The costs incurred in the production of the individual requirements material are collected on this product cost collector. The costs can then be analyzed on the product cost collector. You use the functions of Product Cost by Period.

In sales-order-oriented repetitive manufacturing, the sales order stocks are usually valuated. This scenario is used in the automotive industry, for example. The production of each vehicle is triggered by a sales order (or by a sales order item). The costs incurred for each particular vehicle are only of secondary importance. Instead, the focus is on period-based analysis of the costs for all vehicles manufactured during a particular period, whose costs are collected on the same product cost collector. The costs are not collected and analyzed separately for each sales order item.

For example, it may be appropriate to create a product cost collector for a configurable material. The costs incurred for all variants (configured materials) manufactured for the configurable material are collected on the product cost collector for the configurable material. Another possibility is to collect the costs by material / plant / production version.

Note

You only use a sales order item that carries costs and revenues when you want to collect additional costs on the sales order item (such as special direct cost of sales). If you want to use a sales order item that carries costs and revenues as an additional cost object, you use the functions of Product Cost by Sales Order. This will not normally be necessary.

If you are using a nonvaluated sales order stock, you cannot use product cost collectors in sales-order-related production. However, in sales-order-oriented repetitive manufacturing, SAP recommends that you use a valuated sales order stock (and therefore product cost collectors).

Prerequisites

You are in a repetitive manufacturing environment.

Ensure that you are using a valuated sales order stock by determining a requirements type for the sales order item that specifies a requirements class in which it has been specified that you are using a valuated sales order stock (see also: Control of Requirements Type Determination; Checking the Requirements Type in the Sales Order).

You are not using a material that does not have an accounting view (for detailed information on this point, refer to the section Valuated Sales Order Stock).

In this scenario you will not normally need a sales order item that carries costs and revenues (i.e. you will not need to use the functionality of Product Cost by Sales Order). Make sure that the sales order item does not carry costs and revenues by entering an account assignment category in the requirements class that specifies that the sales order item does not carry costs and revenues.

You can also specify the settings for requirements type determination, the requirements type, the requirements class, and the account assignment category in Customizing for Product Cost by Sales Order under Control of Sales-Order-Related Production.

In the material master, select the Repetitive manufacturing indicator in the MRP view.

In the MRP view of the material master record, you specify a repetitive manufacturing profile in which the settings described as follows were made.

Make the following settings in Customizing for Product Cost by Period under Simultaneous Costing ® Check Control Data for Repetitive Manufacturing Profiles:

Make sure that no reporting point backflushes are allowed.

In sales-order-oriented repetitive manufacturing, you will normally backflush the goods issue at the same time you enter the goods receipt. Specify in the repetitive manufacturing profile that the goods issue should be entered at the same time as the goods receipt.

If you specify in the repetitive manufacturing profile that you want to post activities, the system automatically performs an activity allocation at the time of the goods receipt for the sales order. If you have specified in the repetitive manufacturing profile that the activities are to be posted on the basis of the standard cost estimate for the material, this cost estimate can be a standard cost estimate for the configurable material, for example. You can also specify in the repetitive manufacturing profile that the activities are to be posted on the basis of the preliminary cost estimate for the product cost collector.

Since it’s not possible to calculate work in process for product cost collectors for materials manufactured for sales orders, you do not enter a results analysis key in the product cost collector. You can specify this as a default value in the order type. To do this, go into Customizing for Product Cost by Period under Product Cost Collectors ® Define Default Values for Order Types.

You can also use one product cost collector on which the costs for a material are collected that is manufactured both for the sales order and for the make-to-stock inventory. A requirement is that the Repetitive manufacturing indicator in the material master record is selected. In this case, work in process can arise on the product cost collector for the material manufactured for the make-to-stock inventory, and this work in process can be determined in the period-end closing process of the Product Cost by Period component. In this case, you specify a results analysis key in the product cost collector.

Note

If you want to use product cost collectors for different materials in make-to-stock production and in sales-order-related production, you should define two separate order types. This enables you to customize the order types in accordance with the requirements at hand. To create order types for product cost collectors, go into Customizing for Product Cost by Period under Product Cost Collectors ® Check Order Types for Product Cost Collectors.

Since you cannot calculate scrap for a product cost collector used for a material manufactured for a sales order, you use a variance key for variance calculation in which the Scrap indicator is not selected. You do this in Customizing for Product Cost by Period under Period-End Closing ® Variance Calculation ® Variance Calculation for Product Cost Collectors ® Define Variance Keys.

You create a material with a production version. You set the repetitive manufacturing indicator in the production version.

Note

You need a BOM and a work center for the production version. If you want to represent multiple operating sequences, such as in production line design, you also need a routing.

Process Flow

In Product Cost by Period, you create a product cost collector for a material that you are manufacturing in repetitive manufacturing for a valuated sales order stock.

You create a sales order and specify the material to be produced in the sales order item. If applicable, you configure the material.

The system generates one or more planned orders for the material listed in the sales order item. This planned order contains all material components necessary to manufacture the material. The planned order can be created in the following ways:

In requirements planning
When the sales order is saved

To have the planned order generated when the sales order is saved, you must have entered assembly type 1 (planned order: static processing) or 4 (planned order: dynamic processing) in the requirements class in Customizing.

Since the Repetitive manufacturing indicator is set in the master record of the material to be manufactured, the planned order does not have a conversion indicator. For this reason the planned order is not converted into a manufacturing order or purchase requisition.

If you have chosen an alternative selection indicator in the material master that selects according to the production version, the planned orders (order type KD) are assigned in the planning table directly to the line.

If you have not set an alternative selection indicator, then in the planning table you can assign the planned orders (order type KD) generated by the planning run to the line(s).

You use sequencing to specify the sequence in which the orders are processed on the line.

You use the pull list to calculate the missing parts at the line and generate replenishment elements.

Once you have manufactured the material, you enter a goods receipt (delivery to stock). To do this, access the menu of Repetitive Manufacturing and enter a goods receipt for the sales order (see also: Goods Receipts for Sales Orders, Entering Goods Receipts for Sales Orders).

With a product cost collector for an individual requirements material, an automatic goods issue is usually generated for all withdrawn material components when the goods receipt is entered. This means that the product cost collector is debited and credited at the same time.

Debit of the product cost collector with material costs:

The product cost collector is debited with the costs for the material components listed in the planned order at the time of the goods issue. The quantities are determined in accordance with the quantities in the planned order. Valuation is performed in accordance with the price control of the material.

Debit of product cost collector with costs for activities used:

Automatic debit of the product cost collector with the activities used only takes place if you have specified in the repetitive manufacturing profile that activities are to be posted. The product cost collector is debited with the costs for the activities at the time of the goods receipt. The activity quantities are determined on the basis of the cost estimate selected in accordance with the repetitive manufacturing profile. The valuation is performed on the basis of the valuation variant for simultaneous costing (go into Customizing for Product Cost by Period under Product Cost Collector ® Define Default Values for Order Types).

You can manually change the proposed input quantities of materials and activities.

You can also perform a direct internal activity allocation manually.

The system posts the actual costs to the product cost collector, reduces the planned orders, and updates the statistics.

Credits of the product cost collector: The product cost collector is credited with the quantity delivered to stock multiplied by the value selected in accordance with the price control.

If the product cost collector is debited and credited at the same time, it will not have any work in process. For this reason, the system does not support work in process on product cost collectors for individual requirements materials.

You also cannot determine scrap variances for product cost collectors for individual requirements materials.

You therefore use a variance key in which the Scrap indicator is not set.

You can calculate variances.

You perform settlement. Settlement dynamically distributes the values to be settled to the different individual requirements stock segments according to the delivery values of the delivered quantities. Dynamic distribution to different individual requirements stock segments and to stock segments of make-to-stock materials is possible (see also: Settlement in Product Cost by Order or Period; Distribution Rules).

You can view the individual requirements stock segments. The individual requirements stock segment list shows the following information:

Material
Sales document
Sales document items
Total stock (quantity)
Total value
Price control
Moving average price
Standard price

See also: Viewing Valuated Special Stocks

Note

Reporting points are not supported in sales-order-related repetitive manufacturing. Total requirements can only be used in sales-order-related repetitive manufacturing.

See also:

Product Cost Collectors

Cost Analysis in Mass Production on the Basis of Sales Orders

For information on variants, see the documentation LO Variant Configuration Guide.

Example

Note

You create a product cost collector for a configurable material.
One material has a super BOM and a super task list. You create a sales order. In a sales order item, you define the material to be delivered to the customer by means of characteristics and characteristic values. The sales order item does not carry costs and revenues.
You have specified assembly type 1 in the requirements class. The system generates a planned order.
You create a sales order cost estimate. The sales order stock is to be valuated on the basis of the sales order cost estimate.
Once you have produced the configured material, you enter a goods receipt. The product cost collector is debited with the costs for the input materials at the time of the goods receipt and credited with the value according to the sales order cost estimate.
In the stock segment of the individual requirements material the total stock (quantity), the total value, the standard price calculated in the sales order cost estimate, and the moving price of the configured material are updated for the material, sales document, and sales document item. This first goods receipt updates the standard price of the configured material. In Financial Accounting (FI), the inventory account is debited and the inventory change account is credited. The accounts are determined by means of automatic material account determination in MM in connection with the valuation class from the accounting view of the material master record. If the Sales order stock VC indicator is set, the valuation class specified there is used for account determination. If the Sales order stock VC indicator is not set, the valuation class specified in the Valuation class indicator is used for account determination.
In the Product Cost by Period component, you perform the period-end closing activities. You can allocate the period costs to the product cost collector and calculate variances. Any difference between the debit and credit resulting from changes in the material input quantities or activity input quantities, or from substitution of input materials, is transferred to a price difference account in Financial Accounting during period-end closing of the Product Cost by Period component. The difference between the debit and the credit can also be transferred to Profit Center Accounting (EC-PCA). When you settle, you can transfer the variances to Profitability Analysis (CO-PA).