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No. It is not possible to CALCULATE STANDARD cost ESTIMATE for a PAST date.

No. It is not possible to calculate standard cost estimate for a past date.

Both of these are cost objects which collect production COSTS for manufactured product. Product cost collector is a SINGLE ORDER created for a material. All the costs during the month for that material is debited to single product cost collector. No costing by lot SIZE is required in case of product cost collector.

The LATTER is where there are many production orders for a single material during the month. Costs are collected on each of this production order. Costing by lot size is the main requirement in case of production orders.

Both of these are cost objects which collect production costs for manufactured product. Product cost collector is a single order created for a material. All the costs during the month for that material is debited to single product cost collector. No costing by lot size is required in case of product cost collector.

The latter is where there are many production orders for a single material during the month. Costs are collected on each of this production order. Costing by lot size is the main requirement in case of production orders.

Preliminary COSTING in the product COST by period component calculates the costs for the product cost collector. In repetitive MANUFACTURING you can CREATE cost estimate for specific production VERSION.

Preliminary costing in the product cost by period component calculates the costs for the product cost collector. In repetitive manufacturing you can create cost estimate for specific production version.

The preliminary cost estimate is required for the following:-

• Confirm the actual activity quantities.
• VALUATE WORK in process.
• CALCULATE production variances in VARIANCE calculation.
• Valuate the unplanned SCRAP in variance calculation.

The preliminary cost estimate is required for the following:-

YES. It is possible to update the standard cost estimate to other fields such as COMMERCIAL PRICE ETC. in ACCOUNTING view.

Yes. It is possible to update the standard cost estimate to other fields such as commercial price etc. in accounting view.

The price update in the MATERIAL master is DEFINED in COSTING TYPE. This costing type is attached to the costing variant.

The price update in the material master is defined in Costing type. This costing type is attached to the costing variant.

ASSEMBLY SCRAP is scrap that is expected to occur during the production of a material which is used as an assembly. If a certain amount of scrap always occurs during the production of an assembly, the quantities and activities used must be increased by the system so that the required lot size can be produced. To increase the lot size of an assembly you can enter a percentage, flatrate assembly scrap in the MRP 1 view of the material MASTER record. This assembly scrap is REFLECTED in all the subordinate components. The system increases the quantity to be produced by the calculated scrap quantity. This increases both the materials consumed and the activities consumed and consequently the cost.

Assembly scrap is scrap that is expected to occur during the production of a material which is used as an assembly. If a certain amount of scrap always occurs during the production of an assembly, the quantities and activities used must be increased by the system so that the required lot size can be produced. To increase the lot size of an assembly you can enter a percentage, flatrate assembly scrap in the MRP 1 view of the material master record. This assembly scrap is reflected in all the subordinate components. The system increases the quantity to be produced by the calculated scrap quantity. This increases both the materials consumed and the activities consumed and consequently the cost.

Scrap COSTS are assigned to the RELEVANT cost component and can be SHOWN separately for a MATERIAL in the costed multilevel BOM.

Scrap costs are assigned to the relevant cost component and can be shown separately for a material in the costed multilevel BOM.

SCRAP variance are calculated by valuating the scrap QUANTITIES with the AMOUNT of the actual costs less the PLANNED scrap costs.

Scrap variance are calculated by valuating the scrap quantities with the amount of the actual costs less the planned scrap costs.

COMPONENT scrap is the scrap of a material that is expected to OCCUR during production. When an ASSEMBLY is PRODUCED with this component, the system has to INCREASE the component quantity to enable to reach the required lot size. The component scrap can be entered in the BOM item or in the MRP 4 view of the material master.

Component scrap is the scrap of a material that is expected to occur during production. When an assembly is produced with this component, the system has to increase the component quantity to enable to reach the required lot size. The component scrap can be entered in the BOM item or in the MRP 4 view of the material master.

Operation SCRAP is a scrap that is expected to occur during production. Operation scrap is used to REDUCE the planned input quantities in follow up operations and to calculate the PRECISE AMOUNT of assembly scrap. Operation scrap can be maintained in % in the routing and in the BOM.

Operation scrap is a scrap that is expected to occur during production. Operation scrap is used to reduce the planned input quantities in follow up operations and to calculate the precise amount of assembly scrap. Operation scrap can be maintained in % in the routing and in the BOM.

If the operation SCRAP is maintained only in the ROUTING, the costing lot SIZE is reduced by this percentage.

If the operation scrap is maintained in the BOM, the planned input (not the output quantity) is INCREASED and any assembly scrap is reduced.

If the operation scrap is maintained only in the routing, the costing lot size is reduced by this percentage.

If the operation scrap is maintained in the BOM, the planned input (not the output quantity) is increased and any assembly scrap is reduced.

Additive COSTS are used to ADD costs manually to a MATERIAL cost estimate when it cannot be CALCULATED by the system. Examples of such costs are freight charges, INSURANCE costs and stock transfer costs.

Additive costs are used to add costs manually to a material cost estimate when it cannot be calculated by the system. Examples of such costs are freight charges, insurance costs and stock transfer costs.

To include ADDITIVE costs in the material COST estimate you NEED to set the indicator “Incl. additive costs” for each VALUATION strategy in the valuation variant. Further you also need to set in the COSTING variant to include additive costs.

To include additive costs in the material cost estimate you need to set the indicator “Incl. additive costs” for each valuation strategy in the valuation variant. Further you also need to set in the costing variant to include additive costs.

The following are the steps:-

1.  Create PROCUREMENT ALTERNATIVES based on the valuation types for the MATERIAL.
2.  MAINTAIN Mixing ratios for the procurement alternatives.

The following are the steps:-

YES. SAP calculates the COST estimate EVEN for raw and packing material and stores it in the STANDARD price field for information purposes.

Yes. SAP calculates the cost estimate even for raw and packing material and stores it in the standard price field for information purposes.

To PREVENT the system from calculating cost estimates for raw and PACKING material, you need to select the “No COSTING” checkbox in the costing view of the material MASTER.

To prevent the system from calculating cost estimates for raw and packing material, you need to select the “No costing” checkbox in the costing view of the material master.

It is possible through overhead groups. You configure 2 overhead keys. DEFINE RATES for each of this overhead key. These two overhead keys is then assigned to the two overhead groups. These overhead groups are ATTACHED in the costing view of the finished goods MATERIAL master.

It is possible through overhead groups. You configure 2 overhead keys. Define rates for each of this overhead key. These two overhead keys is then assigned to the two overhead groups. These overhead groups are attached in the costing view of the finished goods material master.

System will post a DELTA WIP of 15000 USD in period 2.

System will post a delta WIP of 15000 USD in period 2.

GENERALLY in PRODUCT cost by order, WIP is CALCULATED at ACTUAL costs and in product cost by period WIP is calculated at TARGET costs.

Generally in product cost by order, WIP is calculated at actual costs and in product cost by period WIP is calculated at target costs.

The system first runs through all the production ORDER for the month and checks for the status of each production order. If the status of the production order is REL (Released) or PREL (Partially released) and if COSTS are incurred for that order system calculates WIP for the production order.

The system cancels the WIP for the production order when the status of the order becomes DLV (delivered) or TECO (Technically complete).

The system first runs through all the production order for the month and checks for the status of each production order. If the status of the production order is REL (Released) or PREL (Partially released) and if costs are incurred for that order system calculates WIP for the production order.

The system cancels the WIP for the production order when the status of the order becomes DLV (delivered) or TECO (Technically complete).

In the product cost by order component the system does not calculate a VARIANCE for PARTIALLY delivered stock on the production order. Whatever is the BALANCE on the production order is considered as WIP. In the product cost by period component, system will calculate WIP as well as variance provided.

In the product cost by order component the system does not calculate a variance for partially delivered stock on the production order. Whatever is the balance on the production order is considered as WIP. In the product cost by period component, system will calculate WIP as well as variance provided.

The following are the steps:-

1. Activate Valuation Areas for Material Ledger.
2. ASSIGN Currency TYPES to Material Ledger Type.
3. Assign Material Ledger Types to Valuation Area.
4. Maintain Number Ranges for Material Ledger Documents.
5. Activate Actual costing (whether activity update RELEVANT for price determination).
6. Activate Actual cost component split.
7. Customizing SETTINGS in OBYC.

The following are the steps:-

When a MATERIAL ledger is activated it is imperative that ACTUAL costing RUN has to be done every MONTH. Actual costing run needs to be done immediately after the new month roll over. After the actual costing run you cannot post any MM(Materials Management) entry to the previous PERIOD.

When a material ledger is activated it is imperative that actual costing run has to be done every month. Actual costing run needs to be done immediately after the new month roll over. After the actual costing run you cannot post any MM(Materials Management) entry to the previous period.

There are 2 OPTIONS AVAILABLE:-

Revaluation: You can REVALUE the finished GOODS stock
Accrual : You can accrue the revaluation GAIN or loss without actually changing the price in the material master.

There are 2 options available:-

Revaluation: You can revalue the finished goods stock
Accrual : You can accrue the revaluation gain or loss without actually changing the price in the material master.

In TRANSACTION CODE OBYC select transaction KEY LKW and maintain the balance sheet ACCOUNT for accrual.

In transaction code OBYC select transaction key LKW and maintain the balance sheet account for accrual.

The following are the steps to be taken:

1. Execute all the allocation cycles in the cost center accounting MODULE.
2.  Execute actual activity price calculation.
3. Revalue all the production orders with the actual activity prices. The under or over absorbed cost on cost CENTERS are passed on to the production order through this step of REVALUATION of production orders.
4.  CALCULATE overheads, do a variance calculation and FINALLY settle the production order.
5.  Finally execute the actual costing run.

The following are the steps to be taken:

In actual COSTING run there is a process of single level price determination and MULTI level price determination. The production price difference variances are COLLECTED on the material ledger for each of the finished goods and semi finished goods.

During single level price determination the price difference collected on a single finished product is ALLOCATED to consumption. This allocation to the consumption is not individually allocated to the good issues.

In multi level price determination the price difference is allocated to individual goods issue. The price differences are PASSED on to the next level of consumption. The system calculates a weighted average price for the finished goods and semi finished goods. This weighted average price is called as the periodic unit price.

In actual costing run there is a process of single level price determination and multi level price determination. The production price difference variances are collected on the material ledger for each of the finished goods and semi finished goods.

During single level price determination the price difference collected on a single finished product is allocated to consumption. This allocation to the consumption is not individually allocated to the good issues.

In multi level price determination the price difference is allocated to individual goods issue. The price differences are passed on to the next level of consumption. The system calculates a weighted average price for the finished goods and semi finished goods. This weighted average price is called as the periodic unit price.

When REVALUATION is performed in ACTUAL costing for the previous PERIOD the price control in the MATERIAL master is changed from S to V and the periodic price is UPDATED as the valuation price for the previous period.

When revaluation is performed in actual costing for the previous period the price control in the material master is changed from S to V and the periodic price is updated as the valuation price for the previous period.

In the operating CONCERN two things are basically defined

a) Characteristics
b) VALUE Fields

Characteristics are nothing but those aspects on which we want to break down the profit logically such as customer, region product, product HIERARCHY, sales person etc.

Value Fields are nothing but the values associated with these characteristics., EG Sales, Raw Material Cost, Labour Cost, Overheads etc Once you DEFINE the characteristics and value fields these values are updated in the table.

In the operating concern two things are basically defined

a) Characteristics
b) Value Fields

Characteristics are nothing but those aspects on which we want to break down the profit logically such as customer, region product, product hierarchy, sales person etc.

Value Fields are nothing but the values associated with these characteristics., Eg Sales, Raw Material Cost, Labour Cost, Overheads etc Once you define the characteristics and value fields these values are updated in the table.

The variance categories from product costing along with COST ELEMENT is to be ASSIGNED to the value FIELDS in COPA

The variance categories from product costing along with cost element is to be assigned to the value fields in COPA

The costs and revenues which we have CAPTURED in the above manner are then analysed by writing reports USING the REPORT Painter FUNCTIONALITY in SAP.

The costs and revenues which we have captured in the above manner are then analysed by writing reports using the Report Painter Functionality in SAP.

Characteristic Derivation is usually USED when you want to derive the CHARACTERISTICS . An EXAMPLE of this could be say you want to derive the first TWO characteristics of product hierarchy.

In such cases you define characteristic derivation where you maintain the rules, which contain the table names of the product hierarchy fields and the number of characters to be extracted, and it also specifies the target characteristic field in PA.

Characteristic Derivation is usually used when you want to derive the characteristics . An example of this could be say you want to derive the first two characteristics of product hierarchy.

In such cases you define characteristic derivation where you maintain the rules, which contain the table names of the product hierarchy fields and the number of characters to be extracted, and it also specifies the target characteristic field in PA.

In PA when we configure the SYSTEM i.e. creating operating concern, maintain structures no CUSTOMIZING request is generated. The configuration needs to be transported through a DIFFERENT TRANSACTION called as KE3I.

In PA when we configure the system i.e. creating operating concern, maintain structures no customizing request is generated. The configuration needs to be transported through a different transaction called as KE3I.

ACCOUNT based PROFITABILITY ANALYSIS is a form of Profitability analysis (PA) that uses accounts as its base and has an account based approach. It uses costs and REVENUE elements.

Costing based Profitability Analysis is a form of profitability analysis that groups costs and revenues according to value fields and costing based valuation approaches. The cost and revenues are shown in value fields.

Account based Profitability analysis is a form of Profitability analysis (PA) that uses accounts as its base and has an account based approach. It uses costs and revenue elements.

Costing based Profitability Analysis is a form of profitability analysis that groups costs and revenues according to value fields and costing based valuation approaches. The cost and revenues are shown in value fields.

YES. It is possible to configure both TYPES of costing BASED profitability analysis at the same TIME.

Yes. It is possible to configure both types of costing based profitability analysis at the same time.

The ADVANTAGE of activating account based profitability analysis ALONG with costing based PA is that you can easily reconcile costing based profitability analysis to account based profitability analysis, which MEANS indirectly reconciling with Financial accounting.

The advantage of activating account based profitability analysis along with costing based PA is that you can easily reconcile costing based profitability analysis to account based profitability analysis, which means indirectly reconciling with Financial accounting.

No. There are no special CONFIGURATIONS required except for activating the account BASED profitability ANALYSIS while maintaining the OPERATING concern.

No. There are no special configurations required except for activating the account based profitability analysis while maintaining the operating concern.

PROFITABILITY analysis lets you analyze the profitability of segments of your market according to PRODUCTS, customers, REGIONS, division. It provides your SALES, marketing, planning and management organizations with decision support from a market ORIENTED view point.

Profit center accounting lets you analyze profit and loss for profit centers. It makes it possible to evaluate different areas or units within your company. Profit center can be structured according to region, plants, functions or products (product ranges).

Profitability analysis lets you analyze the profitability of segments of your market according to products, customers, regions, division. It provides your sales, marketing, planning and management organizations with decision support from a market oriented view point.

Profit center accounting lets you analyze profit and loss for profit centers. It makes it possible to evaluate different areas or units within your company. Profit center can be structured according to region, plants, functions or products (product ranges).

The basic purpose of creating a Profit Center is to analyse the revenues and costs for a PARTICULAR product line, or a plant or a business unit. THOUGH you can GENERATE balance sheets and profit and loss accounts per Profit Center still a profit center should basically be used as a tool only for internal reporting purposes. If legally one has to produce the Balance sheets and Profit and Loss Accounts for a profit center then it is ADVISABLE to create it as a company code INSTEAD of a profit center.

The basic purpose of creating a Profit Center is to analyse the revenues and costs for a particular product line, or a plant or a business unit. Though you can generate balance sheets and profit and loss accounts per Profit Center still a profit center should basically be used as a tool only for internal reporting purposes. If legally one has to produce the Balance sheets and Profit and Loss Accounts for a profit center then it is advisable to create it as a company code instead of a profit center.

No. SINCE the statistical key FIGURES are created in a controlling area. PROFIT center is a sub module WITHIN controlling area. The statistical key figure is created for the controlling area and as such is available in profit center ACCOUNTING module.

No. Since the statistical key figures are created in a controlling area. Profit center is a sub module within controlling area. The statistical key figure is created for the controlling area and as such is available in profit center accounting module.

You should not maintain the customer and VENDOR RECONCILIATION accounts in the 3KEH table. Further you should also not maintain the special GL accounts in this table. SINCE we are TRANSFERRING the customer and vendor balances to profit center MODULE through separate month end programs. If the reconciliation’s accounts are maintained here it will result in double posting in the profit center module.

You should not maintain the customer and vendor reconciliation accounts in the 3KEH table. Further you should also not maintain the special GL accounts in this table. Since we are transferring the customer and vendor balances to profit center module through separate month end programs. If the reconciliation’s accounts are maintained here it will result in double posting in the profit center module.

No. Since here we maintain only those accounts for which the VALUE should flow from FI to PCA. Secondary cost ELEMENTS are already defined in the controlling MODULE which will REFLECT in the postings in PCA also.

No. Since here we maintain only those accounts for which the value should flow from FI to PCA. Secondary cost elements are already defined in the controlling module which will reflect in the postings in PCA also.

The default settings can be maintained in transaction OKB9. Here we can specify for a company code, cost element which is the cost center to be defaulted or WHETHER PROFITABILITY segment is to be automatically derived. Further we can ALSO maintain whether business area is MANDATORY or profit center is mandatory and can maintain the default business areas and profit centers.

The default settings can be maintained in transaction OKB9. Here we can specify for a company code, cost element which is the cost center to be defaulted or whether profitability segment is to be automatically derived. Further we can also maintain whether business area is mandatory or profit center is mandatory and can maintain the default business areas and profit centers.

Where only 2 currencies are CONFIGURED (COMPANY code CURRENCY and a parallel currency) there is no need for an additional LEDGER. In case the third parallel currency is also configured and if it is different than the second currency TYPE, you would then need to configure additional ledger.

Where only 2 currencies are configured (Company code currency and a parallel currency) there is no need for an additional ledger. In case the third parallel currency is also configured and if it is different than the second currency type, you would then need to configure additional ledger.

A company CODE can have 3 CURRENCIES in total. They are local currency ie company code currency and 2 parallel currencies. This gives the company the FLEXIBILITY to report in the DIFFERENT currencies.

A company code can have 3 currencies in total. They are local currency ie company code currency and 2 parallel currencies. This gives the company the flexibility to report in the different currencies.

There is no POSTING which happens from MM in special periods. Special periods are only APPLICABLE for the FI module. They are required for making any additional posting such as closing ENTRIES, provisions, which HAPPEN during quarter end or year end.

There is no posting which happens from MM in special periods. Special periods are only applicable for the FI module. They are required for making any additional posting such as closing entries, provisions, which happen during quarter end or year end.

In a year dependent fiscal year variant the number of days in a month are not as per the calendar month. Let US take an example:- For the year 2005 the period January ends on 29TH, Feb ends on 27th, March ends on 29. For the year 2006 January ends on 30th, Feb ends on 26TH, March ends on 30th. This is applicable to many countries ESPECIALLY USA. Ever year this fiscal year variant needs to be configured in such a case.

In a year dependent fiscal year variant the number of days in a month are not as per the calendar month. Let us take an example:- For the year 2005 the period January ends on 29th, Feb ends on 27th, March ends on 29. For the year 2006 January ends on 30th, Feb ends on 26th, March ends on 30th. This is applicable to many countries especially USA. Ever year this fiscal year variant needs to be configured in such a case.

Fiscal year is nothing but the way financial data is STORED in the SYSTEM. SAP provides you with the combination of 12 normal PERIODS and ALSO four special periods. These periods are stored in what is called the fiscal year VARIANT.

There are two types of Fiscal Year Variant

• Calendar Year – e.g. Jan-Dec
• Year Dependent Fiscal Year .

Fiscal year is nothing but the way financial data is stored in the system. SAP provides you with the combination of 12 normal periods and also four special periods. These periods are stored in what is called the fiscal year variant.

There are two types of Fiscal Year Variant

A SINGLE COMPANY CODE can have only one Chart of Account assigned to it. The Chart of Accounts is NOTHING but the list of General Ledger Accounts.

A single Company code can have only one Chart of Account assigned to it. The Chart of Accounts is nothing but the list of General Ledger Accounts.