Special considerations should be taken into account when using the Information System if you are using mixed costing.

When costing a material using mixed costing, a cost estimate is generated for each of the material’s procurement alternatives.

If you display the itemization created with the cost estimate, you will see a special type of itemization. Each line in this itemization corresponds to exactly one procurement alternative that was created for the material costed. The individual procurement alternatives are identified under item category M (material). In addition to showing the procurement alternative, a flexible itemization can also show the equivalence numbers used to weight the procurement alternative in the mixed costing.

Using mixed costing you can analyze a specific procurement alternative more closely by using different detailed reports on material cost estimates. If you use the cost component report, for example, you can display the material’s cost component split for a particular procurement alternative. When accessing the report, indicate which procurement alternative you would like to view, in addition to the usual selection entries. After choosing the usual selection criteria in the report selection screen, choose Settings ® Procurement alternative ® Choose. (In some reports, the menu path is Extras ® Procurement alternatives) You get a list of all procurement alternatives for the material indicated. Choose the desired procurement alternative from this list. The cost estimate number of the chosen procurement alternative is displayed in the selection screen of the report. The cost estimate number refers to a technical name that is issued by the system.

To display the cost estimate data for a mixed costing that was formed from different procurement alternatives and weighted with equivalence numbers, do not choose a procurement alternative in the selection screen of the report. The data for the mixed cost estimate is displayed if a mixed cost estimate was created for the indicated costing version.

If you use this report for materials that were used in a mixed cost estimate, a list is displayed containing the mixed cost estimate for the material as well as cost estimates for the individual procurement alternatives. There is an indicator showing that the cost estimate for the material is a mixed cost estimate. The name given to the alternative by the system is displayed along with the cost estimates for the procurement alternatives.

For a material costed with mixed costing, the material’s individual procurement alternatives are displayed (including the indication that they are a costing item of type M - material) in the costed multi-level BOM . A breakdown of one of these items displays the corresponding costing items and values for the particular procurement alternative.

Materials that were costed with mixed costing are indicated as such in the list of costed materials. In the same way, cost estimates are identified as belonging to a particular procurement alternative and the name of that procurement alternative is shown.

Goods receipts associated with a production order are valuated with the standard price that was calculated via mixed costing. The actual debit to a manufacturing order displayed in a detailed report is calculated by multiplying the material’s mixed price by the quantity (actual quantity) that was delivered to stock.

For the target cost version calculating the total variance (target cost version 0), the target costs from mixed costing are calculated based on the standard costs from the procurement alternative. Target credits are also calculated on this basis.

When using mixed costing, variance calculation determines the difference between the target credit (actual quantity * standard cost in the procurement alternative) and the actual credit to the order (actual quantity * mixed price) and then allocates this variance to a separate variance category, the mixed-price variance. Mixed-price variances deal with output side variances. These variances are only calculated when calculating the total variance. Therefore, you can only analyze mixed-price variances in variance reports for target cost version 0 (total variance).

Variance category mixed-price variance can be identified by using the report Variance Categories.