Material costs appear in the itemization as costing items of category M. These items are determined automatically in material costing with quantity structure. In unit costing (that is, material costing without quantity structure or base planning objects), you enter the materials manually as items of category M.
You can access the data of these materials in the material master record, in order to determine the prices of the materials for costing purposes. You can also transfer the results of material cost estimates into the material master record.
In addition, the material master record contains information about the determination of the quantity structure and about the procurement of the material to be costed.
The material master record contains all information needed for managing a material. This data is arranged in views. The views correspond to the Main Area within the company in which the material is used. For material costing, the Costing, Accounting and Material Requirements Planning (MRP) views are particularly relevant.
The cost estimate accesses data in the accounting and costing views of the material master record, in order to do the following:
Determine a price for externally-procured materials (in accordance with the valuation strategy for material valuation)
Assign the material costs of a cost element using the valuation class
Find the currency and price unit of the cost estimate
Establish parameters for the calculation of Overhead for specific materials
Determine a lot size for the cost estimate
The cost estimate accesses data in the costing and MRP views of the material master record, in order to do the following:
Select parameters to determine BOMs and routings (material costing with quantity structure only), such as the BOM and routing or production version
Select parameters to determine costing data in other plants (Special Procurement in Costing)
Material costing provides the following information for the accounting view or costing view of the material master record:
Standard prices for materials with standard price control
Tax-based prices and commercial prices for inventory valuation 1, 2, 3
Other planned prices 1, 2, 3
For more information about the material master record, see LO Material Master under the following: