Read the following sections:
Basic Information on Cost Object Hierarchies
Examples for Cost Object Hierarchies
You specify the following parameters in Customizing for
Product Cost Controlling
under
:
Whether distribution is active
Whether overhead allocation is allowed
Whether variances are calculated at the level of the cost object nodes
Whether variance calculation and settlement is made for all orders for a material through the cost object hierarchy, or whether individual orders can be processed separately.
How settlement is performed
Caution
If you update quantities and values separately in
Materials Management
(MM), make sure that all quantity movements are valuated before you run the period-end closing transactions.
See also: Separation of Value Calculation from Goods Movements: Effects on Cost Object Controlling
You can use the
Schedule Manager
in the period-end closing process of
Product Cost by Period
. The Schedule Manager simplifies the period-end closing activities. In
Product Cost by Period
, you can use the
multilevel worklist
of the
Schedule Manager
. The multilevel worklist can significantly improve performance and facilitate error correction.
Multilevel worklists enable you to do such things as:
Display the objects in a processing step sequence that have errors
Note
Each function in the period-end closing process is regarded as a separate processing step. A group of processing steps that are performed one after the other is called a
processing step sequence
.
Eliminate the cause of the error, or specify manually by means of the processing status that the system should skip that particular processing step.
Have the system go through the processing step sequence again (once you have corrected the errors or set the processing statuses that control further processing of the objects)
The system then only processes the objects that had errors and the objects whose processing was forced manually.
The following section contains information on using the
Schedule Manager
in connection with a multilevel worklist:
Starting Transactions/Reports Online, Scheduling Jobs and Job Chains, Worklist
The following functions are available in the period-end closing process for cost object hierarchies:
Revaluation of activity types and business processes at actual prices
You do not perform actual cost distribution .
You calculate overhead to allocate your overhead costs to the cost object nodes.
You can allocate overhead for the single objects assigned to the cost object hierarchy as follows:
By means of overhead calculation for the cost object hierarchy
By starting the calculation of overhead expenses in the
Product Cost by Period
menu under
By means of overhead calculation for the assigned orders
You start the calculation of overhead expenses in the
Product Cost by Period
menu under
.
Since distribution is
not
active, the system can calculate the overhead expenses at the level of the cost object nodes. To do this, set the relevant indicator in Customizing in the
cost object category
and enter a
costing sheet
and (if applicable) an
overhead key
in the
cost object master data
.
Preliminary Settlement for Co-Products, Rework
is performed at the level of the assigned manufacturing orders (production orders or process orders). If you are manufacturing co-products with a manufacturing order, you distribute the actual costs collected on the order header to the order items on the basis of equivalence numbers. You then calculate WIP and variances, and settle. In joint production, these functions are performed with reference to the order item.
Note
You can only assign manufacturing orders that manufacture co-products to a cost object hierarchy if you have specified in the cost object category in Customizing that distribution is active for the cost object hierarchy.
Preliminary Settlement for Co-Products, Rework
takes place after the actual costs of the cost object hierarchy have been distributed to the assigned manufacturing orders.
Note the following:
You can only assign manufacturing orders to a cost object hierarchy if the manufacturing orders are settled by period (settlement type PER). Work in process is calculated at target cost for all orders settled by period.
In joint production, however, you cannot calculate work in process at target costs. Consequently, no work in process can be calculated for manufacturing orders that are assigned to a cost object hierarchy with which co-products are manufactured.
The illustration shows the settlement of a cost object hierarchy without distribution using
settlement through material account determination
(see item 9 below).
Work in process is calculated at the level of the orders (such as product cost collectors or manufacturing orders) assigned to the cost object hierarchy. In joint production, it is not possible to calculate WIP at target costs (see above). You can start WIP calculation through the cost object hierarchy. Work in process is calculated for all orders that are assigned to a cost object. In collective processing, you can calculate work in process for all orders in a plant, regardless of whether they are assigned to a cost object hierarchy.
You cannot calculate work in process for the cost object nodes themselves.
The calculation of WIP at target costs includes the quantities confirmed at the operations or reporting points.
If distribution is not active, you calculate the variances at the level of the cost object nodes. The system compares the actual costs with the target costs for each node of the cost object hierarchy. If costs are assigned under a given cost element to both a cost object node and the assigned orders, the system performs dynamic summarization and variances are shown at the highest node of the hierarchy at which a posting took place.
The system assigns the variances to variance categories (such as input price variances and input quantity variances). The assignment to variance categories is by cost element or cost element/origin.
You settle the cost object hierarchy.
If distribution is not active, the costs assigned to the cost object nodes must be settled from the level of the cost object hierarchy. You define how you want to settle the cost object hierarchy in Customizing for
Product Cost Controlling
in the cost object category.
If you are settling using
material account determination
, the system settles all costs to the highest node of the cost object hierarchy, and then settles those costs from that node to a price difference account. The price difference account is automatically selected by the system using material account determination at the time of settlement. For detailed information, refer to the section
Settlement
.
If you settle with
manual account assignment
, the system settles as follows:
The costs for each order are settled to a price difference account selected by means of material account determination.
The costs posted to the cost object nodes are settled in accordance with the settlement rules you created manually.
You must define settlement rules for all cost object nodes in the cost object hierarchy. The receiver you specify in each settlement rule is normally the price difference account to which you have also settled the orders.
When you create the cost object hierarchy, the system generates a distribution rule for settlement to FI. The distribution rule determines which percentage of the actual costs is settled to which receiver.
In the first settlement, the system automatically generates a distribution rule for settlement to
Profitability Analysis
(CO-PA) for all nodes in the cost object hierarchy (cost object nodes and orders) if the indicator
Variances
is set in the settlement profile and a corresponding PA transfer structure is defined. The system generates profitability segments as the receivers for this settlement. These profitability segments are derived from the characteristics of the cost object nodes.
See the following section for more information on settlement: Settlement Rules for Cost Object Hierarchies
You can see the data calculated by the period-end closing transactions in the Product Cost Controlling Information System .
In the
Product Cost Controlling Information System
you can choose between displaying the data entered on the cost object node (data entry object) and displaying the data summarized on a cost object node (summarization object). To display the summarized data, first execute a data collection run.
For more information, refer to the section Information System for Product Cost by Period and the sections following in the structure.
See also:
For information on material account determination, refer to the Implementation Guide for
Materials Management
under
Period-End Closing for Product Cost Collectors
Period-End Closing for Cost Object Hierarchies with Distribution