Background Information on Summarized Analysis 
This following explains the business methodology of summarization in Cost Object Controlling, along with the consequences of that methodology on how you interpret the data.
Summarizing Data on Original Objects
A common feature of all methods of summarized analysis in Cost Object Controlling (product drilldown, summarization hierarchy, cost object hierarchy) is that they are based on the data of the original objects, such as production orders and product cost collectors.
The data is updated to these original objects as follows:
With original period
With original cost element
A further subdivision is:
Planned costs (debit / credit)
Actual costs (debit / credit)
Target costs (debit / credit)
Work in process (results analysis data)
Variance categories
Data collection runs transfer the data for the summarization time frame to the summarization structures by period:
As key figures in product drilldowns
With original cost element for the summarization hierarchy or cost object hierarchy
Example
The following example is divided into a master data part and a scenario.
The master data includes:
BOM
Routing with valuated operations
Standard prices
The scenario describes a production process over two periods:
A production order for 1 semifinished product (HALB) is completely manufactured in period 1.
A production order for 1 finished product (FERT) is created in period 1 and withdraws the required materials in this period (1 raw material and a semifinished product). In period 2, additional activities are posted to the production order. The order is delivered to stock in period 2.
Both orders have a settlement rule with settlement type FUL (Full settlement). At the end of each period, period-end closing is carried out in Product Cost by Order.
Master Data
BOM | Routing | Standard Prices |
|---|---|---|
FERT | 950 | |
# 1ROH # 1HALB | Operation 1: 100 Operation 2: 200 | |
HALB | 400 | |
# 1ROH | Operation 1: 100 Operation 2: 100 | |
ROH | 100 |
Overhead is applied to the internal activities. The planned overhead rate is 50% but the actual rate is 75%, which results in variances.
Costs of Semifinished Products
The costs of semifinished products are usually a special case with summarization characteristics that are higher in the hierarchy than the material.
While raw materials, activities, overhead, work in process, variance categories, and plan/actual comparisons can easily be aggregated by cost element on the individual summarization levels, the summarized key figures for planned costs, actual costs, and target costs have to be interpreted separately.
Consider for example summarization at the key figure level for period 1. At the material level, the actual cost debit of USD 450 for the semifinished product and USD 675 for the finished product cause no problems in the interpretation of data.
But now look at the actual cost debits of both orders summarized as a key figure (450 + 675 = 1125). You cannot interpret this value as the entire actual cost of the period, because this key figure includes both the production costs of the semifinished product and the withdrawal of a semifinished product for the production of the finished product.
Even if you offset the actual cost debits of USD 1125 with the summarized actual cost credits of USD 400, this is still not the actual cost of the period.
A similar problem arises for the key figures for the planned costs and target costs.
Recommendation
Analyze the costs for semifinished products separately from other costs. You can do this in the summarization hierarchy and in the cost object hierarchy by means of cost-element-based summarization and an appropriately defined material account determination (separate cost element for the update of the consumption of semifinished products).
For the product drilldown you can define an appropriate cost component structure that assigns the cost element for the consumption of semifinished products to a separate cost component. You specify this cost component structure in Customizing for the Information System under Maintain Report Parameters for Product Cost Controlling.
When you interpret the costs of semifinished products, you need to decide which percentage is already reflected in the costs of the period or which semifinished products were already manufactured in the previous periods.
Objects with Full Settlement
Many users make use of summarized analysis for periodic reporting. The costs of the individual objects are normally cumulated. With manufacturing orders, this is achieved by the use of settlement type FUL (full settlement). The following explains the problem of periodic analysis of objects with full settlement.
The example production order above is a case where a production order with the settlement type full settlement runs over two periods. The total target costs are only calculated and updated on the database in the period in which the order is delivered or technically completed. In the SAP System, target costs are calculated and updated during Variance Calculation.
Note the key figures for the target costs and for the actual cost debit of the production order for the finished product. While the actual costs of period 1 have no corresponding target costs, the actual costs of period 2 have corresponding target costs cumulated across both periods in the amount of 950. Separate analysis of an individual period would lead to wrong results.
On highly summarized levels or reporting over extended periods of time, this periodic effect normally tends to zero.
Summarization Time Frame
With a data collection run, you specify a summarization time frame in the form of a period range.
The summarization time frame specifies the following:
Data on the summarization object for periods within the summarization time frame of the data collection run is reset and recalculated on the original objects.
Data on the summarization object for periods outside the specified time frame of the data collection run is retained. This prevents the data calculated in an earlier data collection run from being deleted by a new summarization run.
Recommendation
You should specify at least the open periods in Financial Accounting as the summarization time frame, since the data on the original objects could still change during the open periods. You normally choose the closing period and the period prior to that.
The restriction of the validity period in the data collection run has no influence on the selection of the objects whose data are summarized. You specify the objects to be selected by defining a summarization hierarchy, for example.
Status-Dependent Selection
If you use the summarization hierarchy in conjunction with a status selection profile, you need to take this into account in the definition of the summarization time frame.
Example
You are using a summarization hierarchy with a status selection profile that only includes objects for which variances have been calculated. You specify the summarization time frame as Period 2 to Period 2. This would result in the production order for the finished product from the example above being included for the first time, but only the data of Period 2 would be summarized. Consequently, the cumulative target costs would only have partial corresponding actual costs in the summarization report as explained under Objects with Full Settlement.
To obtain usable results, you would need to specify a time frame that reflects the maximum life of any original objects that are being summarized for the first time.