Status-Based Final Costing in Product Cost by Order

Actual Costs

Actual Costs

Actual Costs

Valuated Goods Receipt

Valuated Goods Receipt

=
Work in Process at Actual Cost

=
Work in Process at Actual Cost

=
Variance

Partially released or released

SAP AG 1999

EL PR E L R

Order Status

LV D

LV O D C TE
Delivery completed or technically completed

Partially delivered

Comparison of Product Cost by Period and Product Cost by Order

Functions
Settlement type Work in process Variances Settlement Cost object hierarchy

Product Cost by Order

FUL
WIP at actual cost Variances = Actual cost Valuated GR Should be performed by period Not possible

Product Cost by Period

PER
WIP at target cost Variances = Actual cost Valuated GR - WIP Must be performed by period Possible

SAP AG 1999

 Identify the correct sequence for the following period-end closing tasks: __ Work in process __ Revaluation at actual prices __ Variance calculation __ Settlement __ Process allocation __ Overhead calculation

Variance Calculation: Target Cost Version

Control Costs Target Cost Version Calculation of Calculation of Target Costs Target Costs
Actual quantity Std cost est. for material

Compare Target Costs with Actual costs Actual costs PCE for mfg order Actual costs

WIP

Scrap

Variance Variance on Input on Output Side Side

0 1 2 3

Actual Prelim. cost quantity est for order*

Plan order Std cost est. quantity for material

Actual Alternative quantity mat. cost est.

* Product cost collector or manufacturing order

PCE = preliminary cost estimate

Net Actual Costs = Actual Costs - WIP - Scrap

SAP AG 1999

 In variance calculation, target cost versions are used mainly to control the type of variance (total variance, production variance, or planning variance). They can also be used to valuate the scrap variances. The standard system uses the following target cost versions:
Target cost version 0 (total variance). The total variance equals the order balance. For this version, choose actual costs as the control costs and standard cost estimate as the target costs. Target cost version 1 (production variance). For this version, choose actual costs as the control costs and planned costs as the target costs. Target cost version 2 (planning variance). With target cost version 2, the costs in the preliminary order cost estimate are interpreted as control costs. For this version, choose planned costs as the control costs and current standard cost estimate as the target costs. You cannot calculate planning variances for product cost collectors. Target cost version 3 (production variance of the period). You compare the planned costs of the period calculated on the basis of an alternative material cost estimate (such as a modified standard cost estimate) with the actual costs of the period on the basis of the yield delivered to inventory in the period. The base quantity for variance calculation is the yield. For this version, choose actual costs as the control costs and alternative material cost estimate as the target costs.