The Product Cost by Order application component enables you to analyze costs at the level ofmanufacturing orders. You can use the Product Cost by Order application component in make-to-stock and sales-order-related production environments. In sales-order-related environments, you can use Product Cost by Order in mass production on the basis of sales orders and as a complement to the Product Cost by Sales Order component (including complex make-to-order environments).
In Product Cost by Order, the manufacturing orders themselves are the cost objects. Costs charged to manufacturing orders are usually analyzed and settled by lot. This means that variances can only be analyzed after the entire planned production quantity has been put into inventory.
The Product Cost by Order component allows you to do the following:
You can use the Product Cost by Order component in the following situations:
In this case you use the Product Cost by Order component together with the Product Cost by Sales Order component.
When based on manufacturing orders, the Product Cost by Order component is particularly suitable for measuring the cumulative cost of lots (that is, when the settlement rule specifies full settlement).
You can implement Product Cost by Order with production orders and process orders in order-related production or process manufacturing environments.
For general information on Cost Object Controlling, refer to the sectionCost Object Controlling.
You can use both the Product Cost by Order component and the Product Cost by Period component in conjunction with the Product Cost by Sales Order component.
You can use the Product Cost by Order component with projects.
You can look at the costs in the Product Cost Controlling Information System.
You can analyze costs of manufacturing orders by period. However, SAP recommends lot-based cost controlling for manufacturing orders. The manufacturing order must have settlement type FUL (full settlement) in this case.
You can implement Product Cost by Order with or without the Production Planning application component. If the Production Planning component is not installed, you can create aproduction order without a quantity structure in Controlling.
In Product Cost by Order, you can link production orders and process orders into acollective order.
You can represent joint production with process orders and production orders. (See also:Special Requirements in Joint Production).
When you are costing by lot, you calculate the work in process using the actual costs (difference between debits and credits for the order). When you are costing by period, you calculate the work in process at target costs based on the confirmed operations or reporting points.
You can do the following at the end of the period:
The information system allows you to summarize the data in various ways, so that you can view the costs by material, by order type, or by plant.
If you are using the Product Cost by Sales Order component with anonvaluated sales order stock, you cannot calculate work in process or variances for production orders or process orders assigned to a sales order item. Variance calculation is not supported by the system when you are using a nonvaluated sales order stock. Standard costing is therefore not possible in this case. However, all these functions are available if you are using a valuated sales order stock.
You can cost production orders and process orders by period. For information on the Product Cost by Period functions, such as on using cost object hierarchies, refer to the documentation on the application componentProduct Cost by Period.
You can use production orders and process orders in conjunction with the Product Cost by Sales Order component. It is advisable to use the Product Cost by Sales Order component together with cost object controlling on the basis of lots. For more information, refer to the documentation on the application componentProduct Cost by Sales Order. This document also provides information on the special aspects of valuated sales order inventories, such as calculating standard prices.
For detailed information on logistical processing, see the documentation PP Production Planning and PP-PI Production Planning Process Industries.
You can view the data of the Product Cost by Order component in the information system in a number of different formats. For more information, see the document Product Cost Controlling Information System.
For detailed information on Profitability Analysis (CO-PA), see the document CO Profitability Analysis.
For more information on Profit Center Accounting, see the document EC Enterprise Controlling.
For more information on engineer-to-order environments, see the document Project System.
For information on rework, see the following sections:Integration of Rework for Production Orders Representing Rework in the System Rework Operations and Rework Quantities Rework and Confirmations Preliminary Settlement for Co-Products, Rework Preliminary Settlement for Rework Performing Preliminary Settlement for Co-Products, Rework