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Function documentationProduct Cost Estimates for Sales Order Items

 

You can create a product cost estimate for a multilevel BOM for a sales order item. The material in a multilevel BOM for a sales order item can be a material with a closed BOM (nonconfigurable material), a configured material, or a material with an open BOM (configurable material) whose characteristic values were defined in the sales order item.

Prerequisites

You can define the following default values in Customizing for Product Cost by Sales Order under Start of the navigation path Control of Sales-Order-Related Production Next navigation step Check Requirements Classes End of the navigation path:

  • Costing method

  • Costing variant

  • Costing sheet

The Costing indicator in the requirements class allows you to specify whether sales order items must be costed.

You can use the Costing indicator to control the time point at which the sales order is costed and the sales order cost estimate marked.

Note Note

If you enter A (automatic costing) or B (automatic costing and marking), the sales order item is automatically costed, or automatically costed and marked, when the sales order is saved.

If you entered B but cost the sales order manually before you save the sales order, you must also mark manually.

If you don’t enter anything, you must always manually cost and manually mark (see also: Manually Creating a Product Cost Estimate for a Sales Order Item).

End of the note.

You specify the following in Customizing for Product Cost by Sales Order under Start of the navigation path Preliminary Costing Next navigation step Costing Sales Order Items with Product Costing Next navigation step Costing Variants for Product Costing Next navigation step Check Costing Variants for Product Costing End of the navigation path:

  • Whether an itemization should be saved for the sales order cost estimate

    The system requires the itemization if you are using a valuated sales order stock and if:

    • You want to calculate variances for the material and the standard price is calculated in a sales order cost estimate

    • You want to valuate work in process at target costs and calculate the target costs in the sales order cost estimate

    • You want to valuate scrap variances with the target costs calculated in the sales order cost estimate

  • Whether the costing lot size is determined by the order quantity or by the lot size in the material master record

    For example, you can specify that the lot size is only passed on for materials from individual requirements. You specify whether a material is an individual requirements material or a collective requirements material in the MRP view of the master record.

Requirements Explosion

Passing On the Costing Lot Size

The settings for the costing lot size should not conflict with the transfer control.

  • Costing type

    The costing type determines the technical attributes of costing. For sales order costing, it also determines the following:

    • Whether the costing sheet in the sales order item is used to calculate the overhead for individual requirements materials

    • Whether overhead is calculated for externally procured individual requirements materials

  • Valuation variant

    In addition to the other settings in sales order costing, the valuation variant determines which costing sheet is used for the material components, depending on the costing type.

  • Transfer control

    The transfer control parameters determine whether a material is recosted when cost planning data for the material exist in the plant or controlling area of the finished product. Transferring existing costing data can significantly improve performance.

    For example, you can specify that existing standard cost estimates should be passed on for all collective requirements materials.

Transfer Control for Collective Requirements Materials

  • Whether Order BOM Cost Estimate should be transferred

    Transferring existing order BOM cost estimates can significantly improve performance.

    Note Note

    You specify in the costing variant whether you want to transfer order BOM cost estimates. Order BOM cost estimates are only transferred if they were created with the same costing variant. You therefore use the same costing variant for sales order costing as for order BOM costing.

    End of the note.

  • Date control

  • Quantity structure control

  • If applicable, allowance for costing across company codes

You define the cost components and activate the cost component split in Customizing for Product Cost by Sales Order under Start of the navigation path Preliminary Costing Next navigation step Costing Sales Order Items with Product Costing End of the navigation path. The cost components group the costing results and determine how the costs are rolled up through the structure. If you are using a valuated sales order stock, the costs are rolled up the same way as in make-to-stock production.

If you are using Activity-Based Costing, go into Customizing for Product Cost by Sales Order under Basic Settings for Product Cost by Sales Order and make the appropriate settings for Activity-Based Costing.

If you want to calculate the overhead for collective requirements materials differently than for individual requirements materials, then when defining the material account assignment in the Materials Management component you must make sure that the individual requirements materials and the collective requirements materials are assigned to different accounts and thus different primary cost elements. If you are using a valuated sales order stock, the individual and collective requirements inventories are separated by means of the valuation classes in the accounting view of the material master record.

Features

Product costing is a tool for planning costs. It normally calculates the cost of goods manufactured of a material using the material’s BOM and routing in Production Planning. In sales-order-related production, product costing is used to calculate the planned costs for the production of the material in the sales order item.

  • For materials with nonconfigurable BOMs, the system selects the BOM and routing for the quantity structure using the quantity structure date and the quantity structure determination ID that you define in Customizing for Product Cost Controlling.

  • For configurable materials with configurable BOMs, you define the configuration of the configured material in the sales order by selecting characteristic values (such as color or weight) for the components. The system creates the quantity structure for costing using this information and the object dependencies in the BOM and routing.

For trading goods and other materials without BOMs or routings, you can use product costing to select a price that can be different from the price according to price control (S or V) in the accounting view of the material master. This allows you to specify, for example, that for materials with V price control a planned price is used from the costing details screen in the material master record. You can calculate material overhead on the basis of this information.

The system always saves a cost component split for the product cost estimate for the sales order item. You can transfer a cost component split calculated in a sales order cost estimate to Profitability Analysis (CO-PA). This provides a view in CO-PA by cost components according to the sales order cost estimate.

More Information

For more information on the required settings in Customizing, refer to the Implementation Guide (IMG) for Product Cost Controlling.

For information on the special features of overhead calculation in sales-order-related production, refer to the section Overhead in Sales-Order-Related Production.

For information on transferring the cost component split to CO-PA, refer to the following section: Update of Planned Costs

For information on Activity-Based Costing, see the document CO-ABC Activity-Based Costing.

For information on cost component splits, refer to the document Product Cost Planning.