Overview

Product CostingProduct costing is used for the calculation of cost of goods manufactured. COGM is comprised of· Material Cost· Activity Cost (Direct Overhead)· Indirect Overhead CostProduct Costing is divided into three main phases· Planning (Standard Cost Estimation)· Cost Object Controlling· Material Ledger Actual CostingDifferent types of cost estimation can be calculated in product costing like· Base Planning Object (BPO)· Cost Estimations without Quantity Structure· Cost Estimation with Quantity StructureQuantity structure is comprised of BOM & Routing / Master Recipe. In the Bom we specify the material those will be used for the manufacturing of finished goods. In routing we specify the activities which will be performed on raw material or semi-finished goods to convert them into final product.Standard Cost Estimation (Planning)Costing Variant:In the costing variant we specify the process for the calculation of material cost estimate. Following components are used for creating costing variant.· Costing TypeIn the costing type we specify which type of cost we are calculating. Different types of costing variants can be created to calculate different types of costs like standard cost, quotation cost etc.· Valuation VariantIn the valuation variant we specify how the cost will be calculated. Followings are the components of valuation variants.o Material Valuationo Activity Types / Processeso Subcontractingo External Processingo Overhead§ Costing Sheet· Date ControlIn date control we specify the validity of the date.· Quantity Structure ControlIn quantity structure control we specify Bom application area and routing selection ID.· Transfer ControlIn the transfer control we specify that the cost of the material will be transferred from single plant or from cross plant too.· Reference VariantCost Object ControllingIn cost controlling we specifyCosting Variant for plan cost Costing Variant for actual cost WIP (Result Analysis Key) Variance (Variance Key) SettlementProduct Costing Scenarios Product Cost by Ordero Production Ordero Process Ordero CO Order Product Cost by Period Sales Order CostingCosting SheetCosting sheet is used to allocate the overheads from cost center to the product cost.Cost Component StructureCost component structure will display the breakup of the cost how the total cost will be calculated?It will be comprised of material cost, activity cost & indirect overhead cost.

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