PRODUCT COSTING CONFIGURATION

Title Tr Code Menu path Configuration Rationale

Maintain Overhead Cost Element
KA06 IMG -> Controlling -> PCC -> Overhead Cost Overhead Cost Element is the secondary cost element,
PCP -> Basic Settings for Element is used to a cost carrier which carries the cost from Cost centre’s to
Material Costing -> Overhead -> carry overhead cost Production Order and are used in Cost Component
Maintain Overhead Cost Element from Cost Center to Structure and costing Sheet.
Production Order

Maintain Calculation Base
Define Percentage Overhead
Define Credits
Define Costing Sheet
Define Cost Component Structure
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Page 1 of 6
SPRO IMG -> Controlling -> PCC ->
PCP -> Basic Settings for
Material Costing -> Overhead ->
Costing Sheet: Components ->
Define Calculation Base
SPRO IMG -> Controlling -> PCC ->
PCP -> Basic Settings for
Material Costing -> Overhead ->
Costing Sheet: Components ->
Define Overhead Percentage
SPRO IMG -> Controlling -> PCC ->
PCP -> Basic Settings for
Material Costing -> Overhead ->
Costing Sheet: Components ->
Define Credits
SPRO IMG -> Controlling -> PCC ->
PCP -> Basic Settings for
Material Costing -> Overhead ->
Define Costing Sheets
OKTZ IMG -> Controlling -> PCC ->
PCP -> Basic Settings for
Material Costing -> Define Cost
Component Structure
Material Calculation base helps in determining to which cost
elements overhead is applied together.
Production
Plan -> Overhead Type The planned overhead calculation works out to be 18%
1 of the total raw material consumption. Here we calculate
and assign plan and actual overhead and attach it to a
Actual -> Overhead dependency.
Type 2
E01, PUN, CHN, DUR, Credit key helps in attaching the cost center that needs
GUR, HOS, NAS, RAN to be credited when a production order is debited with
the earlier created overhead cost.
We create separate Costing sheet integrates all elements of overhead
costing sheet for each costing defined earlier such as calculation base,
of the manufacturing overhead rate and credit key. Since each credit key has
plants – PUNCS, a plant specific cost centre to be credited we have
CHNCS, DURCS, separate costing sheet for each plant.
GURCS, HOSCS,
NASCS and RANCS
Material The cost component structure breaks down the results of
Raw Material the standard cost estimate into factors such as raw
Consumption materials, production and overhead.
SFG Consumption
Production
Power
Labor
Machine
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Title
Define Costing Type
Define Valuation Variant
Define Quantity Structure Control
Define Date Control
Define Transfer Strategy
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Page 2 of 6
Tr Code Menu path
OKKI IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Costing Variant: Components ->
Define Costing Types
OKK4 IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Costing Variant: Components ->
Define Valuation Variant
OKK5 IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Costing Variant: Components ->
Define Quantity Structure Control
OKK6 IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Costing Variant: Components ->
Define Date Control
OKKM IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Configuration Rationale
Overhead
Production
Overhead
In the costing type we define which field in the material
Standard Price master record the costing result can be transferred to:
Update Std Price or the commercial price.
Valuation View: Legal
001 Planned Valuation Valuation variant contain parameters required for
Variant valuation of a cost estimate which include – Material
Valuation, Int Activity Types and Processes,
002 Current Valuation Subcontracting, Ext. Processing and Overhead.
Variant
006 Production order
planned
007 Production Order
Actual
Create a Valuation
variant for each of
these plants
Quantity Structure control is used in cost estimates with
SPEL Std Qty Struct quantity structure to specify for each plant how the
PEL system searches for valid alternative BOM and routing.
SPIL Std Qty Struct PIL
Date control, controls the dates on which the quantity
SPEL Std Cost Est PEL structure and the value structure are created.
SPIL Std Cost Est PIL
Transfer control prevents system from creating a new
PC01 Transfer w/ Plant cost estimate for a material when costing data already
Change exists. Instead existing costing data is simply transferred
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Title
Define Costing Variant
Define Order Types
Define Result Analysis Key
Define Cost Element for WIP
Calculation
Define Result Analysis Version
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Page 3 of 6
Tr Code Menu path
Costing Variant: Components ->
Define Transfer Control
OKKN IMG -> Controlling -> PCC ->
PCP -> Material Cost Estimate
With Quantity Structure ->
Define Costing Variant
KOT2 IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order ->
Manufacturing Orders -> Check
Order Types
OKG1 IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Results Analysis Key
KA06 IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Cost Element For WIP
Calculation
OKG9 IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Result Analysis
Configuration Rationale
into the new cost estimate.
Costing variant contains all the control parameters for
SPIL Std Cost costing which include valuation variant, costing type,
Estimate PIL date control, qty structure control and transfer control
SPEL Std Cost Also we can mention whether we want to pass on the lot
Estimate PEL size maintained for the FG in material master during
costing run
Production Order Also if we want to include the additive cost – like cost
Planned incurred with special procurement
Production Order
Actual
The most important thing we need to check here is
PP01 Standard settlement profile maintained for each of the production
Production Order order.
A copy of production
order for each of the
plant
Result analysis key is required for calculating the WIP
related to that order. During period end closing we need
RA Key – 0002 to define a Result Analysis Key. We use WIP calculation
at Actual Costs.
931000 WIP All Costs In this step we create cost element under which WIP and
931001 WIP Material reserves are updated on an order.
Cost Order is not settled when WIP is settled.
931002 WIP Secondary
Cost
Used the standard one We maintain the Result analysis Version and calculate
the WIP depending on the planned version.
Here we also specify the cost element that is going to
carry the WIP all cost created earlier
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Title Tr Code Menu path Configuration Rationale
Versions

Define Valuation Method OKGC IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Valuation Method
(Actual Costs)
Define Line Id SPRO IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Line IDs
Define Assignment OKGB IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process
-> Define Line IDs
Define Update OKGA IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period PMA K 000002
End Closing -> Work in Process PSC K 000002
-> Define Update
Define Posting Rules for Settling WIP OKG8 IMG -> Controlling -> PCC ->
Cost Object Controlling ->
Product Cost by Order -> Period
End Closing -> Work in Process WIP 70160000
-> Define Posting Rules for
Settling Work In Process
Use the standard one This creates a link between the Controlling area, the
result analysis key, the result analysis version and the
system status.
In product cost by order the WIP is normally calculated
at Actual costs.
PMA Material Cost The WIP for each order are calculated and apportioned
PSC Secondary Cost to the Line Id’s. For WIP that needs to be capitalized can
PAL Settlement Cost be mentioned for each line id.
We define the cost elements to the line id’s under which
an order is debited or credited. WIPR – WIP with
requirement to capitalize.
++99+++++
+ PSC
++98+++++
+ PSC
++9021+++
+ PMA
++80020002 PCE
PAL A 000002 All material withdrawals, internal activities, external
++80020003 PCE
PCE N 000002 activities and overhead assigned to line ID of K category
and for material issue and settlement to line ID’s of
category A and not to be used in WIP to category N.
Change in WIP Here we specify the GL accounts to which the WIP is
90020001 settled during the period end closing for all open orders
and reverse entry is passed once the order is settled.

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Page 4 of 6 Price Waterhouse Associates
Title
Define Number Ranges
Define Variance Key
Define Default Variance Keys for Plants OKVW
Check Variance Variant
Define order type dependent parameter OPL8
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Page 5 of 6
Tr Code Menu path Configuration Rationale
OKG6 IMG -> Controlling -> PCC -> KABG Automatic CO documents are created when these transactions are
Cost Object Controlling -> Result Analysis carried out. We must maintain number ranges to restrict
Product Cost by Order -> Period the areas for the numbers assigned.
End Closing -> Work in Process KSWP Calc. Primary
-> Define Number Ranges Target Costs (WIP)
KSWS Calc. secondary
target costs (WIP)
OKV1 IMG -> Controlling -> PCC -> Used the standard Production order can only be selected for variance
Cost Object Controlling -> calculation if a variance key is entered in the order.
Product Cost by Order -> Period 00001 Variance Variance calculation requires that order have the status
End Closing -> Variance Calculation for Orders DLV or TECO.
Calculation -> Define Variance
Keys
IMG -> Controlling -> PCC -> Assign Variance Key to Variance is calculated on the basis of the variance key
Cost Object Controlling -> each Plants shown in the order master record. The variance key
Product Cost by Order -> Period flows from the material master to the production order
End Closing -> Variance when the material is being produced.
Calculation -> Define Variance
Keys For Plants
OKVG IMG -> Controlling -> PCC -> Set as default. Variance variant determines the variances to be
Cost Object Controlling -> calculated which may include- scrap variance, input
Product Cost by Order -> Period price variance, input quantity variance, resource usage
End Closing -> Variance variance, remaining input variance, lot size variance,
Calculation -> Define Variance output price variance, mixed price variance and
Variant remaining variance.
IMG -> Production -> Shop Floor Here we assign each Here we define the parameters relevant to controlling
Control -> Master Data -> Order plant with the such as costing variant for planned and actual costs and
-> Define order type - dependent corresponding Order a result analysis key.
parameter type since we want to
maintain a different
document number
range for production
order in each plant.
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Title
Define Target Cost Version
Define Number Ranges for Variance
Document
Create Settlement Profile
Define Number Ranges
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Page 6 of 6
Tr Code Menu path Configuration Rationale
OKV6 IMG -> Controlling -> PCC -> We use the Standard Target cost means the cost expected to be incurred in
Cost Object Controlling -> Target Cost Version 0 producing a specified quantity of goods. Target cost can
Product Cost by Order -> Period be used to determine variance, WIP and scrap. For
End Closing -> Variance settlement only target cost version 0 is relevant.
Calculation -> Define Target Cost
Versions
KANK IMG -> Controlling -> PCC -> We assign Variance Documents are created when variance are calculated for
Cost Object Controlling -> Calculation related – target costs, variances, scrap, and distributed actual
Product Cost by Order -> Period transaction to number costs. Numbers assigned to these documents are
End Closing -> Variance ranges. maintained here.
Calculation -> Define Number
Ranges for Variance Documents
SPRO IMG -> Controlling -> PCC -> We don’t set the Settlement profile contains a range of control
Cost Object Controlling -> settlement indicator for parameters. We must define a settlement rule before we
Product Cost by Order -> Period Profitability analysis define settlement profile.
End Closing -> Settlement -> and only specify the If we want variance settlement to Profitability Analysis
Create Settlement Profile Allocation structure as we must also set the variance indicator and allow
CO object. settlement to a profitability segment.
SNUM IMG -> Controlling -> PCC -> Assigning of Controlling We define the document numbers or ranges for the
Cost Object Controlling -> to appropriate group of controlling area OSCR.
Product Cost by Order -> Period number ranges.
End Closing -> Settlement -> System generates documents while settling a object.
Define Number Ranges for
Variance Documents
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