AC505: Product Cost Planning

TOC:

Unit 1:
Overview
*Planning New Product

- No master data
- Can carry out initial Planning and Cost Projections with BASE PLANNING OBJECTS using
REFERENCE AND SIMULATION COSTING

Reference and Simulation Costing

- If no reference and no master data

- Carry out initial Planning and Cost Projections

Material Cost Estimate without Quantity Structure

- First material master data is created

- Manually plan COGM and COGS
- Base Object Cost Estimate as Reference
- Can be done with
o MultiLevel Unit Costing – plan costs at assembly level without requirement for
production bill of materials
o Single Level Unit Costing

Material Cost Estimate with Quantity Structure

- Complete Master Data BOMs and Routings

- Automatically calculate COGM and COGS
o Uses data in logistic applications

Costing Runs

- Used for processing mass data

Tangible Vs. Intangible Goods

 - Tangible Goods
o In-house, subcontracted, Procured Externally
o Product Cost Estimates used for INVENTORY Valuation
- Intangible Goods
o Shipping, Repacking, Storage, Quality Check, Teleco, Consulting, Hospital, Training

Unit 3: Reference and Simulation Costing

Costing Variant

- Various control parameters and settings for costing

- Contain information
o Prices that system will use to cost materials, Activities, Business Process
- Control Parameters in costing variant

Control Parameters

- COSTING VARIANT = Valuation Variant + Costing Type

o For automatic determination of quantity structure
- Valuation Variant – prices of materials, activity types, proesses, subcontracting, external
activities
- Costing Type – determine purpose of costing (Base Object Costing, Material Costing, Price
Update)

Overhead

- Calculated automatically using COSTING SHEET

- Overhead rate is percentage based or quantity based

Costing Sheet

- Direct costs (where overhead is applied to)

- Conditions (which overhead is applied to)
- Percentage basis or amount per unit (overhead rate)
- Period of validity for Overhead
- Which Object
o Cost Center
o Process
o Order

Overhead Key

- Determination of overhead rate

- Apply overhead differently to different group of BASE PLANNING OBJECTS

Purpose of Base Planning Object

- Calculate cost of new product without mater data

Unit 4: Material Costing without Quantity Structure
- Maintain entries in material master
- Execute single-level and multi-level cost estimate
- List basic steps of multilevel unit costing
- Describe 3 types of costing resulys

Material Cost Estimates

- Saved in reference to a PLANT

- Product produced in more than One plant have separate cost estimate for each plant

Material Type

- Determine whether a costing view is allowed for a material

Lot Size

- Used as default value for material cost estimate

- Can be overwritten

Valuation Class

- Class controls the account determination

Origin Group as Subgroup of a cost element

- Origin group entered for material

- Combination of origin group and cost elements
-