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 Creating a Preliminary Cost Estimate for a Manufacturing Order Locate this document in the navigation structure


To manually create a preliminary cost estimate for a production order, go into the change mode of the production order and choose   Order   Functions   Calculate costs   .


If the cost estimate has no errors, then:

  • The system updates the planned costs for the manufacturing order

To see the planned costs in the production order, choose   Goto   Costs   Analysis   or   Goto   Costs   Itemization   .

  • The manufacturing order receives the status PRC (pre-costed).

If the cost estimate has errors, the manufacturing order receives the status CSER (Error in cost calculation) The system creates a log to collect the system messages and sorts them according to various criteria.

To access the log, choose   Goto   Logs   Cost calculation   in the production order.  

Displaying the Planned Costs

The planned costs for the production order can be displayed in the following forms:

  • Cost element itemization

To view the cost planning results, access the production order and choose   Goto   Costs   Analysis.  

This brings up a report showing the following information:

  • Planned costs by cost element

  • Sum of the planned costs

  • Planned output quantity

You can display the material numbers by double-clicking on the material costs if you have selected the Material origin indicator in the costing view of the material master record.

Note Note

The system displays both the planned credits (goods receipts) and the planned debits (material withdrawals, internal activity allocations, overhead, and so forth).

If your production process involves co-products, the planned credit in the order is not displayed.

To view the planned credit of the co-product, go to the information system and access a cost element report. Then choose   Extras   Order items   On/off   .

End of the note.

An itemization categorizes the planned costs by cost element and origin or by costing item. That is, it groups the planned costs according to the individual materials and activities whose costs were calculated when you created the production order. The system generates an itemization when you create the production order.

To display the itemization, access the production order and choose   Goto   Costs   Cost itemization   . You can view other formats of the itemization by choosing   Other report. You can display the itemization by operation, for example, where within the operations the costs are in turn subdivided into the internal activity and material consumption.

You can view the itemization directly in the production order. The system calculates it dynamically. It is not possible to view the itemization in the information system.

In joint production, the planned costs are reported according to the material master record at the end of the itemization with item category A.

  • Cost components

Cost components assign the cost planning results to groups that you define in Customizing for Product Cost Controlling .

To display the cost components, access the production order and choose   Goto   Costs   Split   .  

You define which cost components are created for the order in a cost component structure. The cost component structure is selected through the costing variant in the order header.

When you create a standard cost estimate for the material being produced, the costing results are stored in this form for each material in the BOM. In the product cost estimate, you enter various control parameters for each cost component. This allows you to specify parameters such as what values are included in inventory valuation or profitability analysis.

Only those cost components that are flagged as relevant to inventory valuation are displayed in the preliminary cost estimate for the order.

Since the cost component split is generated dynamically, it can only be displayed directly in the production order. It is not possible to see the cost component split for the preliminary cost estimate of a production order or process order in the Product Cost Controlling Information System .

Note Note

The cost split in the production order is generated dynamically and is not saved. In sales-order-related production, for example, if you calculate the standard price on the basis of a preliminary cost estimate for the production order, you cannot transfer that cost split to Profitability Analysis .

This cost component split is only generated for the planned costs. The actual costs are not assigned to any cost components.

The cost component split for the production order is not a true cost component split because it is a single-level split. The semifinished products used in the finished products are not broken down into cost components but instead are assigned to the cost component to which the cost element of the semifinished product is assigned. For example, the costs for semifinished products can be shown together with the costs for raw materials in the cost component "material costs".

End of the note.

If the controlling area currency differs from the company code currency, the planned costs for the production order will be updated in both currencies. You can display both currencies in the reports of the information system of Product Cost Controlling .

See also:

Preliminary Cost Estimates for Manufacturing Orders