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SAP AG 2003
AC040 Cost Management and Controlling
THE BE8T THE BE8T THE BE8T THE BE8T- -- -RUN BU8NE88E8 RUN 8AP RUN BU8NE88E8 RUN 8AP RUN BU8NE88E8 RUN 8AP RUN BU8NE88E8 RUN 8AP
SAP AG 2003
AC515 AC515 AC515 AC515
Cost Ob]ect Controlling for 8ales Orders
AC515 Cost Object Controlling for Sales Orders



n SAP R/3 Enterprise
n 2003/Q2
n Material number: 50062181
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SAP AG 2003
Copyright 2003 SAP AG. All rights reserved.
No part of this publication may be reproduced or transmitted in
any form or for any purpose without the express permission of
SAP AG. The information contained herein may be changed
without prior notice.
All rights reserved.
Copyright


Trademarks:
n Some software products marketed by SAP AG and its distributors contain proprietary software
components of other software vendors.
n Microsoft, WINDOWS, NT, EXCEL, Word, PowerPoint and SQL Server are registered
trademarks of Microsoft Corporation.
n IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390,
AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner,
WebSphere, Netfinity, Tivoli, Informix and Informix Dynamic ServerTM are trademarks of
IBM Corporation in USA and/or other countries.
n ORACLE is a registered trademark of ORACLE Corporation.
n UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.
n Citrix, the Citrix logo, ICA, Program Neighborhood, MetaFrame, WinFrame,
VideoFrame, MultiWin and other Citrix product names referenced herein are trademarks of
Citrix Systems, Inc.
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Web Consortium, Massachusetts Institute of Technology.
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n JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for
technology invented and implemented by Netscape.
n MarketSet and Enterprise Buyer are jointly owned trademarks of SAP AG and Commerce One.
n SAP, SAP Logo, R/2, R/3, mySAP, mySAP.com, and other SAP products and services mentioned
herein as well as their respective logos are trademarks or registered trademarks of SAP AG in
Germany and in several other countries all over the world. All other product and service names
mentioned are the trademarks of their respective companies.
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SAP AG 2003
l SAP20 - SAP R/3 Overview (recommended)
l AC040 - Cost Management and Controlling (recommended)
l AC505 - Product Cost Planning
l Basic knowledge of and experience in cost accounting
l Good working knowledge of the Microsoft Windows
operating system
Course Prerequisites



Note:
n The training course material is not intended for self-teaching programs. You will only obtain all
information if the material is explained by the instructor. Your material includes space for noting
this additional information.

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SAP AG 2003
l Participants
n Project team members responsible for implementing product
cost controlling projects related to sales orders
n Accounting personnel responsible for planning, allocating,
and analyzing the cost of production processes related to
sales orders
l Duration: 3 days
Target group




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SAP AG AC515 1-1
SAP AG 1999
Course Overview
l Course Goals
l Course Objectives
l Course Content
l Course Overview Diagram
l Main Business Scenario
Contents:



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SAP AG AC515 1-2
SAP AG 1999
Course Goals
This course will enable you to:
l Configure and operate Cost Object Controlling
by Sales Order
l Acquire the knowledge you need to plan, post,
allocate, and analyze costs in several Make-to-
Order Scenarios



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SAP AG AC515 1-3
SAP AG 1999
Course Objectives
l Distinguish between several Make-to-Order Scenarios
l Describe and maintain Cost Object Controlling by
Sales Order master data and related information
l Identify sources of Cost Object Controlling by Sales
Order postings and perform transaction processing
l Discuss periodic processing options and
underlying configuration
l Analyze cost information about sales orders
using reports
At the conclusion of this course, you will be able to:



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SAP AG AC515 1-4
SAP AG 2003
Course Content
Unit 1 Introduction
Unit 2 Overview Product Cost
Controlling
Unit 3 Make-to-Order Scenarios
Unit 4 Make-to-Order without
Sales Order Controlling
Preface
Exercises
Solutions
Appendix
Unit 5 Make-to-Order with
Sales Order Controlling
Unit 6 Period-End Closing
Unit 7 Sales Order Controlling
without Manufacturing
Unit 8 Information System



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SAP AG AC515 1-5
SAP AG 1999
Course Overview Diagram
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 1-6
SAP AG 1999
Main Business Scenario
l You are in the Cost Accounting department of the
IDES Group. IDES, with the help of external
consultants, has implemented the SAP R/3 System,
including Cost Object Controlling by Sales Order.
l Initially, you are temporarily assigned to the project
team to review the customization of Cost Object
Controlling by Sales Order. You will not only verify
the configuration choices, but will also assist the
consultants in making changes and completing the
system set up.
l Once the system is productive, you will be one of
the primary users of Cost Object Controlling by
Sales Order.




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SAP AG AC515 2-1
SAP AG 1999
Overview Product Cost Controlling
l Integration of Product Cost Controlling
l Benefits of Product Cost Controlling
l Cost Object Controlling
n by Order
n by Period
n by Sales Order
Contents:



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SAP AG AC515 2-2
SAP AG 2003
Explain how product cost controlling relates to
other CO components
Explain how to use cost object controlling
Explain the differences between cost object
controlling
- By order
- By period
- By sales order
Overview Product Cost Controlling: Unit
Objectives
At the conclusion of this unit, you will be able to:



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SAP AG AC515 2-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 2-4
SAP AG 2003
Overview Product Cost Controlling:
Business Scenario
l You are in the Cost Accounting department of the
IDES Group. IDES, with the help of external
consultants, has implemented the SAP R/3 System,
including Cost Object Controlling by Sales Order.
l We are in the situation to analyze which business
processes in our plant will utilize Cost Object
Controlling.
l We must analyze what production types are used
and what are the main requirements in
Cost Object Controlling.
l Because of this, we must know what controlling
methods are supported by Cost Object Controlling
in the R/3 system.



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SAP AG AC515 2-5
SAP AG 2003
Roadmap: Overview Product Cost Controlling
l Integration of Product Cost Controlling
l Benefits of Product Cost Controlling
l Cost Object Controlling
n By Order
n By Period
n By Sales Order
SAP AG 1999



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SAP AG AC515 2-6
SAP AG 2003
Profit Center Profit Center
Enterprise Enterprise
Controlling Controlling
Management Management
Consolidation Consolidation
Business Business
Planning Planning
EC EC
TR
TREASURY
l Cash
l Treasury
l Funds
CO
CONTROLLING
FI
FINANCIAL
ACCOUNTING
Investment and financing Investment and financing
l G/L
l Receivables/
Payables
l Asset
l Consolidation
l Overhead
l Product cost
l Profitability
FI FI
IM IM
EIS EIS
Accounting Architecture



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SAP AG AC515 2-7
SAP AG 1999
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Product Cost
Controlling
Overhead Cost Controlling
CO
OM
CO
PA
Profitability Analysis
l Are the responsibility areas working
efficiently?
l How high are the costs of organizational
activities? Do they keep to their budgets?
l How can we optimize the internal processes?
How can we rein in our overhead?
EC-
PCA
CO
PC
CO
CEL
What costs occur within our organization?
Cost Element Accounting
What are the
manufacturing
costs of a
product?
How profitable are individual
market segments?
How profitable
are individual
enterprise areas?
CO Components


n How do we rein in our overhead costs? In many organizations, overhead costs have taken a huge
upward jump, including costs which the organization cannot assign directly to either products or
services. While production areas often display great progress in controlling costs and optimizing
processes, overhead continues to display little cost transparency. Overviews and allocations of
overhead costs are supported by the following three application components in Overhead Cost
Controlling (CO-OM).
n Are our responsibility areas actually working efficiently? Cost Center Accounting (CO-OM-CCA)
examines where overhead costs arise within the organization. You can assign the costs from
organizational sub-areas to their exact causes, with a wide variety of allocation methods to choose
from when allocating amounts and quantities. In particular, activity accounting permits allocation of
a great many of those costs which would not be normally assigned to products.
n How high are the costs of our organizational measures? Do they remain within their budgets?
Overhead Orders (CO-OM-OPA) gather and control costs according to the measures taken in the
organization. You can assign budgets and arrange that their requirements are monitored by the R/3
System.
n How can we optimize processes within our organization? Optimizing business processes treats not
only the goals of individual divisions, but those of the entire organization. In recent years,
monitoring of functions and products has been joined by control of business processes spanning
organizational boundaries. The functional view on your organization is complemented by a cross-
functional, process-oriented view. CO-ABC gives you both a powerful management tool for
improving your business process performance as well as an information base for your strategic
decision making process.
n What costs occur within our organization? Cost Element Accounting (CO-OM-CEL) indicates which
costs and revenues have occurred and is used for reconciliation of cost controlling with the Financial
Accounting (FI) module.
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SAP AG AC515 2-8
SAP AG 2003
EC EC- -
PCA PCA
HR HR
CO CO
PC PC
Production
Order
Process
Overhead
Order
Material
Valuation
Cost
Center
Profitability
Analysis
Profitability
Analysis
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Product Cost
Controlling
Overhead Cost
Controlling
Human
Resources
Cost Element Accounting
Cost Element Accounting
CO CO
OM OM
CO CO
PA PA
Profitability
segment
Financial
Accounting
Financial
Accounting
Asset
WIP Revenue
FI FI
Stock
CO-Architecture: Quantities and Values
Material Labor OH Process
Procure Produce Move Stock Sell, Bill



n This diagram illustrates the quantity and value flow.
n The quantity flow is triggered by processes in logistics
(procurement, production, stock movements, selling and billing)
n Product Cost Controlling is integrated through the processes in logistics.
oit sets prices for material valuation
oit provides cost component splits for valuation in Profitability Analysis
production cost centers and business processes allocate costs to cost objects (like production
orders) in CO-PC
it calculates Work in Process
it settles production variances to Profitability Analysis
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SAP AG AC515 2-9
SAP AG 2003
Benefits of Product Cost Controlling
l Integration of Product Cost Controlling
l Benefits of Product Cost Controlling
l Cost Object Controlling
n By Order
n By Period
n By Sales Order
SAP AG 1999



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SAP AG AC515 2-10
SAP AG 2003

Product Cost Controlling Benefits


Management Requirements
l Support cost reduction concepts
l Strategic Decision Support
n Which products
n Where or how to produce
l Operating Decision Support
n Pricing of products
n Effectiveness of manufacturing

Legal Requirements
l Valuation of:
n Raw Materials
n Semi finished Goods
n Finished Goods
l Work-in-Process
l Reserves for Losses



n Evaluate the effectiveness of your production system.
- Set meaningful standards to measure performance
- Use variance analysis to compare
- Report by plant, product group, product or even order
n Strategic decisions
- (Primary) cost component split, cost component splits by organizational unit
- Scrap costs, full integration of Activity Based Costing
n Inventory valuation
- Alternative valuations (legal, group, profit center)
- Three parallel currencies
- Standard costs
- Actual costs
n Semi-finished and finished goods valuation
- Standard prices provided by cost estimates
- Creation of alternative cost estimates for balance sheet purposes as closing activities
n Value Work-in-Process at the close of period end
n Provisions for losses
- Used in a make-to-order environment
- Update balance sheet and profit-and-loss statements accordingly
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SAP AG AC515 2-11
SAP AG 2003
Product Cost Controlling Components (I)
BOM Routing
Prices for Materials
Prices for Activities
Prices for Processes
Overhead
Cost estimate:
Standard costs
Product Cost Planning
Value Structure
Quantity Structure:
PP Master Data



n Product Cost Planning refers to the creation of cost estimates for the production of goods or services.
There is no reference to a production order (the cost estimate is independent of any given production
order). If a quantity structure (bill of material and routing) is available in the PP (Production
Planning) module of the R/3 system, you can create a cost estimate automatically using the PP data.
If no quantity structure is available in R/3, the costing items can be entered manually by means of
unit costing, or can be transferred automatically from a non-SAP system using batch input.
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SAP AG AC515 2-12
SAP AG 2003
Product Cost Controlling Components (II)
BOM Routing
Prices for Materials
Prices for Activities
Prices for Processes
Overhead
Cost estimate:
Standard costs
Product Cost Planning
Value Structure
Quantity Structure:
PP Master Data
Work in process
Scrap
Variances
Settlement
Planned
costs,
Actual
costs
Order
Material $
Labor $
Overhead$
Process $
Total ...
Final Costing
Period-End Closing
Preliminary Costing,
Simultaneous Costing
Cost Object Controlling



n In Cost Object Controlling, the costs incurred in the production of a product or service are collected
on a cost object (such as a production order). Which cost object is used depends on your controlling
requirements. It may be a sales order, a production order, a process order or a production cost
collector. Cost Object Controlling is used to calculate work in process, scrap costs and variances at
period close.

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SAP AG AC515 2-13
SAP AG 2003
Product Cost Controlling Components (III)
Process
Material Ledger
Material movements
Material Settlement:
Actual Costs
Value Structure
Actual Costing /
Material Ledger
Quantity Structure:
Material movements
BOM Routing
Prices for Materials
Prices for Activities
Prices for Processes
Overhead
Cost estimate:
Standard costs
Product Cost Planning
Value Structure
Quantity Structure:
PP Master Data
Work in process
Scrap
Variances
Settlement
Planned
costs,
Actual
costs
Order
Material $
Labor $
Overhead$
Process $
Total ...
Final Costing
Period-End Closing
Preliminary Costing,
Simultaneous Costing
Cost Object Controlling



n Actual Costing is used to calculate actual product costs at period close. The result may be transferred
to the material master as a weighted average price for the closed period. As of Release 4.5 the
quantity structure is derived dynamically using the materials movements in the R/3 system. The
values connected with these movements are collected in the Material Ledger. Single-level settlement
functions to calculate the actual material costs at period close are available in Release 4.0A. Multi-
level settlement functions are available in Release 4.5.
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SAP AG AC515 2-14
SAP AG 2003
Cost Object Controlling
l Integration of Product Cost Controlling
l Benefits of Product Cost Controlling
l Cost Object Controlling
n By Order
n By Period
n By Sales Order
SAP AG 1999



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SAP AG AC515 2-15
SAP AG 2003
l What actual costs did we incur in our area in the
current period?
l What costs were we expecting
based on the quantities manufactured?
l Are some product groups performing significantly
better than others?
l What is causing these variances?
l What are the scrap costs of our new line?
l Did continuous improvements show cost effects?
What can Cost Object Controlling do for me?



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SAP AG AC515 2-16
SAP AG 2003
How Does It Work Preliminary Costing?
Material 4,000
Labor 2,500
Overhead 1,500
Process 1,000
Glass 1,500
Total 9,000
Cost Object Cost Object
Name Cost Items Name Cost Items Plan Actual Plan Actual
Plug 2,000
Cable 0,500



n Product costing uses the data in Logistics to determine the material consumption (BOM) and the
activities used (routing). This data forms the quantity structure.
n Product costing valuates this quantity structure with the following information:
prices for materials
prices for activities
overhead on the direct costs for these materials and activities
overhead for sales and administration costs
processes by evaluating the process template
n The results are saved in various forms, and are also used by other applications.
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SAP AG AC515 2-17
SAP AG 2003
How Does It Work Simultaneous Costing?
Material 4,000 4,600
Labor 2,500 2,800
Overhead 1,500
Process 1,000
Glass 1,500 1,800
Total Costs 9,000 7,400
Cost Object Cost Object
Name Cost Items Name Cost Items Plan Actual Plan Actual
Plug 2,000 2,200
Cable 0,500 0,600
CONFIRMATION
GOODS ISSUE
EXTERNAL
PROCUREMENT
EXTERNAL
ACTIVITIES
Resource
Allocation



n The following business transactions result in actual costs:
goods movements in Materials Management
invoice receipts in Financial Accounting
confirmations in Production Planning
reposting and allocation of overhead in Cost Accounting
n You can enter the material withdrawals, the confirmations and the goods receipts in separate
transactions.
n Otherwise you can use the control key of the operation to specify that a goods receipt is to be posted
when the operation is confirmed (normally the last operation). You can assign materials that are to be
backflushed to an operation and post a goods issue for these components when you create the
confirmation.
n You can create the confirmation for each order or for each transaction. Confirmation at transaction
level is recommended for the subsequent calculation of WIP and variances.
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SAP AG AC515 2-18
SAP AG 2003
How Does It Work Period End Closing (I)
Material 4,000 4,600
Labor 2,500 2,800
Overhead 1,500 1,600
Process 1,000 1,500
Glass 1,500 1,800
Total Costs 9,000 10,500
Cost Object Cost Object
Name Cost Items Name Cost Items Plan Actual Plan Actual
Plug 2,000 2,200
Cable 0,500 0,600
REVALUATION
PROCESS COSTS
Periodic Costs
OVERHEAD
%
%



n Period-end closing in Cost Object Controlling contains two new steps in Release 4.0.
n Process costs can be allocated via the process template.
n Activities and processes which have been posted directly to the respective cost objects can be
revaluated with actual activity prices.
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SAP AG AC515 2-19
SAP AG 2003
Settlement
Scrap,
Variances,
Target Costs
Work in Process
Overhead
Template Allocation
Revaluation
Periodic
Costs
Analyzing
Costs
FI/CO -Posting
How Does It Work - Period-End Closing (II)



n Template Allocation includes process costs and activities.
n Calculating work in process will calculate your WIP either at actual costs (when using full
settlement) or at target costs (when using periodic settlement).
n Variance calculation calculates not only variances, but also target scrap and target costs as the basis
for the target/actual comparison and scrap variances.
n Settlement is the last step in period-end closing in Cost Object Controlling. The necessary
accounting documents are posted in Financial Accounting and in the Material-Ledger and data
passed on to other components such as Profitability Analysis and Profit-Center Accounting.

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SAP AG AC515 2-20
SAP AG 1999
When to Use?
l Very flexible production
environment
l High set-up costs
l Full cost tracability needed
l Controlling by individual
production lots needed
l Example: Order related
production
Product Controlling by Order
Work center 3
Work center 1
Work center 2
Lot
Lot
Lot



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SAP AG AC515 2-21
SAP AG 2003
Example: Cumulative Controlling per Process Order
Production
Order
Goods issues
Confirmations
Goods receipt
Debit:
Material 1,200 $
Internal Act. 800 $
Overhead 200 $
Credit: 2,100 $
Production
Order
Goods issues
Confirmations
Goods receipt
Debit:
Material 1,200 $
Internal Act. 800 $
Overhead 200 $
Credit: 2,100 $
Production
Order
Goods issues
Confirmations
Goods receipt
Debit:
Material 1,200 $
Internal Act. 800 $
Overhead 200 $
Credit: 2,100 $
Material
PP
CO CO- -
PC PC



n In this case the costs posted onto the process order via goods issues, confirmations and goods
receipts are stored on a CO-object, which has a one-to-one relationship to the process order.
n In this example process orders have the settlement type FULL.
n As long as the process order is not fully delivered or flagged technical complete the remaining order
balance is treated as WIP. Otherwise the order balance shows up in variance calculation.
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SAP AG AC515 2-22
SAP AG 1999
Status Relevance in Product Controlling by Order
Order
Status
Partially-Released
or Released
Partially Delivered Delivered or
Technically Completed
WIP
at Actual
=
=
-
=
-
P
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P
D
L
V
D
L
V
T
E
C
O
Actual Costs Actual Costs
Actual Costs
WIP
at Actual
Variances
Delivery
Value
Delivery
Value



n In the Product Cost by Order component, work in process is valuated at actual costs. The work in
process is calculated as the difference between the debit and credit of an order as long as the order
does not have the status DLV (delivered).
n In the Product Cost by Order component, the variances are not calculated until the order has the
status DLV (delivered). This means that when the order has this status, the system no longer
interprets the difference between the debit and the credit as work in process but as a variance. In
Product Cost by Order, orders never have work in process and variances at the same time.
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SAP AG AC515 2-23
SAP AG 1999
When to Use ?
l High volume production
l Stable and continuous
production
l No individual lot oriented
controlling needed
l Collecting costs on product
cost collectors
l Example: Repetitive
production
Line
am am- -120 120
am am- -200 200
am am- -line1 line1
am am- -110 110 am am- -210 210 am am- -220 220
am am- -100 100
Product Controlling by Period



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SAP AG AC515 2-24
SAP AG 1999
Example:
Periodic Controlling on Product Cost Collectors
Product Cost Collector
Debit:
Material
Interal Act.
Overhead
Credit:
1,200 $
800 $
200 $
2,100 $
Process
Order
Good issues
Confirmations
Goods receipt
Process
Order
Goods issues
Confirmations
Goods receipt
Process
Order
Goods issues
Confirmations
Goods receipt
PP-
PI
CO CO- -
PC PC
Material



n In this case the costs posted onto the process order via goods issues, confirmations and goods
receipts are stored on a product cost collector. A product cost collector may exist per production
version of a product and collects all costs, which are posted to the logistic object of the according
production version.
n Product Cost Collectors always have the settlement type PER.
n With period-end closing, Work in Process at Target Costs as well as Variances can be calculated on
the product cost collector.
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SAP AG AC515 2-25
SAP AG 1999
Periodicity in Product Cost Controlling by Period
Period
-
-
=
-
-
=
-
-
=
WIP
at Target
Actual Costs
Variances
Delivery
Value
WIP
at Target
Actual Costs
Variances
Delivery
Value
WIP
at Target
Actual Costs
Variances
Delivery
Value



n In Product Cost by Period the work in process is calculated at target costs. For repetitive
manufacturing you must enter reporting point backflushes for the operation, and for manufacturing
orders you must enter confirmations for the operation. Confirmed quantities that are not scrap are
valuated in WIP calculation at target costs in accordance with the valuation variant for work in
process and scrap defined in Customizing for Product Cost by Period.
n In the Product Cost by Period component, variances are calculated by period. Variance calculation
compares the confirmed actual values with the target values. The variances are determined as the
difference between the actual costs, less the delivery values, less the WIP at target values.
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SAP AG AC515 2-26
SAP AG 1999
Product Controlling by Order vs. by Period
Lot-based
Product Controlling
Period-based
Product Controlling
Settlement Type
Work in Process
Variances
Settlement
Cost Object
FULL PER
WIP calculated based
on Actual Costs
WIP calculated based
on Target Costs
Variances = Actual Costs -
Delivery Value
Variances = Actual Costs -
Delivery Value - WIP
Should be done
per period
Has to be done
per period
Production Order,
Process Order
Functions
Production
Order,
Process,
Order
Product Cost
Collector,
Cost Object
Hierarchy
Product Cost
by Order
Product Cost
by Period



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SAP AG AC515 2-27
SAP AG 1999
When to Use ?
l Costs and revenues collected by
Sales Order irrespective of
manufacturing scenario
l Collecting special sales costs on
sales orders
l Tracking Funds committed
l Calculating Work in Process and
Reserves with Results Analysis
l Example: Controlling complex
Make-to-Order Production
M MM Sales Order
Product Cost by Sales Order



n The Product Cost by Sales Order component is recommended for complex make-to-order
environments.
n You can use the Product Cost by Sales Order component in the following situations:
When you are manufacturing in-house with reference to a sales order.
When you are purchasing products with reference to a sales order and reselling them to your
customers.
When you are providing services whose costs are assigned to a sales order.
n This component allows you to do the following:
Calculate and analyze planned costs and actual costs by sales order item
Calculate and analyze planned revenues and actual revenues by sales order item
Calculate the value of your inventories of finished and unfinished products
Create reserves automatically
Transfer data to Financial Accounting (FI)
Transfer data to Profitability Analysis (CO-PA)
Transfer data to Profit Center Accounting (EC-PCA)
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SAP AG AC515 2-28
SAP AG 1999
Controlling by Sales Order
Semi Semi- -1 1- -2 2
Semi Semi- -2 2
Finish Finish
Raw Raw- -1 1- -1 1 Raw Raw- -2 2- -1 1 Raw Raw- -2 2- -2 2
Semi Semi- -1 1
Raw Raw- -1 1- -1 1 Raw Raw- -1 1- -1 1
Make-to-Order-Production
Make-to-Stock-Production
Controlling by Order or by Period
Controlling by Sales Order vs.
Make-to-Order Production
M MM
Sales Order



n The slide shows the relationship between Controlling by Sales Order, Controlling by Order/ by
Period.
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SAP AG AC515 2-29
SAP AG 2003
Overview Product Cost Controlling: Unit Summary
You are now able to:
Explain how product cost controlling relates to
other CO components
Explain how to use cost object controlling
- Explain the differences between cost object
controllingBy order
- By period
- By sales order




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SAP AG AC515 3-1
SAP AG 1999
l Customer Order Management
l Make to Order: Controlling Scenarios
Contents:
Make-to-Order Scenarios



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SAP AG AC515 3-2
SAP AG 2003
Make-to-Order Scenarios: Unit Objectives
l Explain the process chain of a standard order
in customer order management
l Describe the main make-to-order scenarios
At the conclusion of this unit, you will be able to:



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SAP AG AC515 3-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 3-4
SAP AG 2003
Make-to-Order Scenarios: Scenario
l Your initial aim is to gain an understanding of the
process chain of a standard order in customer order
management.
l You learn that make-to-order manufacturing has two
main scenarios.
l You learn what the main decisions from the
controlling perspective are.



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SAP AG AC515 3-5
SAP AG 1999
Roadmap: Make-to-Order Scenarios
l Customer Order Management
l Make to Order: Controlling Scenarios
SAP AG 1999



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SAP AG AC515 3-6
SAP AG 1999
Customer Order Management
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Delivery
Billing
Payment
Invoice
Pre-Sales Activities
Sales Order Processing
Inventory Sourcing
Delivery
Billing
Payment



n Effective sales order processing ties all activity to customer demand in a series of tightly integrated
processes. R/3 Sales and Distribution gives you precisely this kind of sales order processing using a
series of linked documents to generate a workflow for sales and distribution. Sales and Distribution
begins with pre-sales processing and ends with customer payment for goods received and services
rendered. Sales Distribution represents each of these processes with electronic documents, each
linked both to preceding and subsequent electronic documents.
n The Customer Order Management cycle can begin with Pre-Sales Activities. For example: In
response to a Request for Quotation (RFQ) from your customer, you create and send a quotation.
n As part of Sales Order Processing, you create a sales document.
n During Inventory Sourcing, R/3 determines the supplier of the inventory, based on data that you
create and control. Is the supplier one of your plants? If so, which one? Is the supplier a third-party
vendor? If so, which one?
n As a part of Delivery, you create a delivery document.
n During Billing, you create a billing document.
n In the Customer Payment process, you receive monies and post these monies in Financial
Accounting (FI).
n In R/3, the documents defined in Sales and Distribution help you manage the Customer Order
Management cycle for you and your customer.
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SAP AG AC515 3-7
SAP AG 1999
Order Management: Pre-Sales Activities
Pre-Sales activities may include:
n Mailing lists
n Phone call records kept on the R/3 System
n Inquiries
n Quotations
Pre-Costing
necessary ?



n Order cycles sometimes begin with a sales query such as an inquiry or request for quotation. Sales
queries help you enter and store important, sales-related information you can use later during order
processing.
n Use this pre-sales information to plan sales strategies or help build a long-term relationship with the
customer.
n Using sales queries provide data that can have great value for you later, particularly when:
tracking lost sales
recording pre-sales data to help negotiate large contracts
selling to large organizations that must require documentation of the entire process
n Any one of the activities listed above can begin the sales process.
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SAP AG AC515 3-8
SAP AG 1999
Order Management: Sales Order Processing
l Customers place orders with a customer service representative.
l Standard orders normally contain:
n Customer and material information
n Pricing conditions for each item
n Schedule lines and delivery information
n Billing information
Costing information for
individual items
required ?



n A sales order is an electronic document that captures and records your customer's request for goods
or services.
n The sales order contains all pertinent information to process the customer's request throughout the
Customer Order Management cycle.
n Sales and Distribution automatically proposes appropriate existing data from relevant master records
in order to minimize errors and redundant effort in order processing.
n You can enter a sales order with many items in a single screen, or place a complex order using an
expanded order view.
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SAP AG AC515 3-9
SAP AG 1999
Order Management: Inventory Sourcing
Inventory Sourcing (Make/Buy) determines:
n If the product is available (availability check)
n How the product will be supplied:
w From stock on hand
w By replenishment activities
(production order, purchase order)
w Make-to-order production
w Shipped from an external supplier
w Shipped from another warehouse



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SAP AG AC515 3-10
SAP AG 2003
Delivery supports:
n Creating delivery documents
n Creating transfer orders (picking)
n Packing (if required)
n Goods issue
Order Management: Delivery



n Creating the delivery document signals the start of all shipping activities for your sales order.
n Creating a delivery document includes copying information from the sales order, such as the
materials and the quantities, onto the delivery document.
n The delivery document is the electronic means to help you manage all the activities of delivery
processing, including efficiently picking product, packing, planning and monitoring shipments,
preparing shipping papers, and posting goods issue.
n Creating a transfer order includes copying information from the delivery document to the transfer
order for processing within the warehouse.
n The transfer order is essential for controlling the movement of goods within your warehouse. The
transfer order is based on a simple principle: where are you taking goods from and where are you
taking goods to, within your warehouse. There is a source location and a destination location for
every transfer order.
n When you post a goods issue, you see the automatic update to the general ledger. R/3 affects the
general ledger by debiting the Cost-of-Goods Sold account and crediting the Inventory account. For
inventory, both stock quantities and inventory balances are reduced while the cost of goods sold
increases.
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SAP AG AC515 3-11
SAP AG 1999
Billing supports:
n Creating invoices for deliveries and services
n Creating credit and debit memos on the basis of requests
n Canceling business transactions
n Transferring billing data to financial accounting
Invoice
Order Management: Billing



n Creating a billing document includes copying information from the sales order and the delivery
document onto the billing document.
n The billing document serves several important functions:
The billing document is the electronic means to help you prepare invoices, which are considered
output of Billing.
The billing document serves as a source to Financial Accounting (FI) to help you in the
monitoring and management of customer payment.
When you create a billing document, you see the automatic update to the general ledger. R/3
affects the general ledger by debiting the customer's Accounts Receivable account and crediting
the Revenue account.
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SAP AG AC515 3-12
SAP AG 1999
Order Management: Payment
l Final step of the COM cycle
l Customer Payment includes:
n Posting payments against invoices
n Reconciling differences, if necessary



n When you post a customer payment, you see the automatic update to the general ledger. R/3 affects
the general ledger by debiting the Cash account and crediting the customer's Accounts Receivable
account.
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SAP AG AC515 3-13
SAP AG 2003
Business Process Summary
Picking
Accounts
Receivable
Accounts
Receivable
Scheduling
agreement
Scheduling
agreement
Contract
Invoice
Invoice
Order
Contact
Contact
Inquiry
Quotation
Delivery Goods Issue
Account
Material Stock
Account
Shipment
Pre-
Sales
Sales Order
Processing
Inventory Sourcing
Delivery/
Transportation
Billing
Customer payment /
Financial
Accounting
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SAP AG AC515 3-14
SAP AG 1999
Make-to-Order Scenarios
l Customer Order Management
l Make to Order: Controlling
Scenarios
SAP AG 1999



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SAP AG AC515 3-15
SAP AG 1999
Controlling by Sales Order
M MM Sales Order
Sales Order Item functions as Cost Object
l Cost collecting by Sales Order Item
irrespective of manufacturing
scenario
l Ability to assign revenues and costs
to sales order item
l Ability to show commitments on
sales order items
l Ability to calculate goods in transit
and reserves



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SAP AG AC515 3-16
SAP AG 2003
Make-to-Order Production
l A product and sub-assemblies are
individually manufactured for a particular
customer
l Stocks are managed in individual
customer segments sales order stock
l Quantities produced for a particular sales
order cannot then be used to cover
another sales orders demand
l Components can be procured specially
for an individual sales order



n A make-to-order product is planned as a requirement for production using the sales order item
number. A separate segment is created in the planning run for this requirement. In the planning
segment, the requirements and stocks of the sales order item are managed separately. Thus, various
customer-specific variants of a product can be managed using only one material number.
n Starting from the sales order, single-item planning can be carried out for any level of the BOM
structure. Therefore, it is also possible to procure assemblies and components specifically for the
sales order and manage this stock individually for the sales order. This is of particular importance if
components can also be configured for the production of the individual customer product.
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SAP AG AC515 3-17
SAP AG 1999
Relevant Decisions
l Make-to-Order Production with
or without Sales Order Controlling?
l Do you want to keep your
sales order stock valuated
or unvaluated ?



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SAP AG AC515 3-18
SAP AG 1999
Without versus With Sales Order Controlling
CO CO
PA PA
Scenario
l Both scenarios similar to
make to stock production:
n Production variances to
Profitability Analysis
n Valuation of sold quantity
with cost component split
n Sales order costing
(necessary for variant
production)
l With Sales Order
Controlling provides
additional functions
Sales Order
Cost Estimate
Mat. Labor OH Process



n A similar handling of make-to-order production in comparison with make-to-stock production is
enabled with the new R3/4.0 functionality of valuated sales order stock.
n This enables you
to calculate production variances of related production orders
to settle these variances to Profitability Analysis
to provide a cost component split for Cost of Goods sold
n Moreover the sales order costing provides a basis for:
sales and pricing decisions
planned costs
methods of results analysis (percentage of completion)
n Sales order costing supports different cost component views, delivers a costed BOM structure, cost
element, and cost itemization information.
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SAP AG AC515 3-19
SAP AG 1999
Without Sales Order Controlling
When to Use ?
l Production controlling
focused on product groups
l High production volumes
l Sales controlling similar to
make-to-stock
Examples:
n Assemble to order
n Make to order with
packaging variants



n Use this option when your production controlling is strictly focused on products and not on the sales
order itself.
n This scenario fits perfectly to a make to stock environment and no additional period end closing
activities have to be performed.
n The Sales Controlling in such a scenario is accomplished in Profitability Analysis.
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SAP AG AC515 3-20
SAP AG 2003
With Sales Order Controlling
Sales Order
Cost Estimate
Mat. Labor OH Process
l When to Use ?
l Complete Cost Overview
n Estimated costs
n Special sales costs
n Funds commitment
n Cost situation of related
production orders
l Results Analysis
n Automatic creation of
reserves
n Control of Goods in Transit
l Examples:
n High Order Value
n Complex MTO structures
Complete
Overview
CO CO
PA PA



n Sales Order Controlling is recommended if the following information is essential to your business:
You high is my profit margin with this special sales order?
How can I control my special sales efforts?
How high is my fund commitment. Is this sales order performing well from a costing viewpoint?
Where did late customer changes effect my production costs heavily?
n Moreover you can use results analysis to:
Automatically create reserves for expected losses
manually add reserves for foreseen risks
calculate Goods in Transit where goods have been shipped but not yet invoiced
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SAP AG AC515 3-21
SAP AG 1999
Valuated Sales Order Stock
l Combined quantity and value flow
l Simplified inventory processing
l Assembly costs shown with multilevel
make-to-order production
l Variances can be determined for these
production orders
l Similar to make to stock production
l Enable more controlling scenarios and
the first step in logical de-coupling of
CO-PC and PP.



n Material movements are made via individual sales order stock.
n In Release 3.0/3.1 this stock is not valuated In Release 4.0 you can choose whether you manage this
stock as unvaluated or valuated sales order stock.
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SAP AG AC515 3-22
SAP AG 1999
Combined Quantity and Value Flow for
Sales Order Stock
Material $ 100
Labor $ 200
Surcharge $ 150
Process $ 150
Total $ 600
SD Order 4815
SD Order 4815
10 Product-X 1 pc
10 Product-X 1 pc
Production Order
Production Order
Material $ 110
Labor $ 180
Inv. Change $ 600
Material: Product-X
Sales Order Stock
Item Quantity Value
4763 30 3 1,500.-
4783 20 2 900.-
4711 10 1 450.-
4815 10 1 600.-
Delivery
Sales Order Cost
Estimate
Material Management
Material: Product-X
Sales Order: 4815/10
Debits:
Credits:



n Because the inventories assigned to sales orders and projects carry costs as well as quantities, goods
movements for these inventories generate postings in Financial Accounting. The costs of the
materials can be determined in a cost estimate for the sales order or production order. The inventory
value can therefore be shown immediately in Financial Accounting - costing in the Controlling
module is not necessary. The valuated goods movements result in debits and credits to the affected
objects.
n The goods receipt is valuated using a predefined valuation strategy sequence.
n The first goods receipt results in valuation on the basis of one of the subsequent strategies in the
specified sequence. A standard price selected through one of the subsequent strategies is copied into
strategy and serves as the valuation basis from this point onwards.
The system calculates the standard price on the basis of your customer exit COPCP002 Material
valuation for valuated sales order stock.
The system calculates the standard price in a sales order cost estimate. This sales order cost
estimate can be based on a unit cost estimate or on a product cost estimate.
The system determines the standard price using the production order cost estimate or the planned
costs for the WBS element. If there are multiple production orders for the same sales order item,
the system uses the standard price that results from the production order that delivers first (see
strategy 1).
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SAP AG AC515 3-23
SAP AG 2003
Unvaluated Sales Order Stock
Cost Object Controlling by Sales Order is necessary !
The quantity flow is separated from the
value flow
The quantity flow (goods receipts, goods
issues) is made via individual customer
stock segments
The value flow is made via the sales
order item and all assigned orders.
Costs are not posted to the sales order
item until order settlement or until the
invoice is received for purchased goods
No variance calculation on assigned
production orders



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SAP AG AC515 3-24
SAP AG 2003
Separated Quantity and Value Flow for
Sales Order Stock
Material Management
Material $ 110
Labor $ 180
Settlement $ 290
Material: Product-X
Sales Order Stock
Item Quantity
4763 30 3
4783 20 2
4711 10 1
4815 10 1
Cost Object
Sales Order 4815 / 10
Settlement $ 290
Debits
SD Order 4815
SD Order 4815
10 Product-X 1 pc
10 Product-X 1 pc
Goods receipt
Production Order
Debits:
Credits:
Material: Product-X
Sales Order: 4815/10



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SAP AG AC515 3-25
SAP AG 1999
Plants
l Consistent Cost Object Controlling
Approach for production
n Order Related Production
n Process Industry
n Stable and Continuous Production
n Make-to-order Production
l Top-Down Reporting Approach
n Key Figures
n Aggregated Data
n Aggregation Levels
l Lean Scenarios
Product
Groups
Materials
Orders
Key Message Valuated Sales Order Stock



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SAP AG AC515 3-26
SAP AG 1999
Decision Table
Controlling by
Sales Order
Sales
Order Stock
Valuated
Unvaluated
Without With
Not supported
X X
X
SAP Recommendation



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SAP AG AC515 3-27
SAP AG 2003
You are now ablw to:
l Explain the process chain of a standard order in
customer order management
l Describe the main make-to-order scenarios
Make-to-Order Scenarios: Unit Summary




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SAP AG AC515 4-1
SAP AG 1999
MTO without Sales Order Controlling: Contents
l Quantity and Value Flow in a Make-to-Order
Scenario without Sales Order Controlling
l Using Make-to-Order with Repetitive Manufacturing
to demonstrate the Scenario
Contents:



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SAP AG AC515 4-2
SAP AG 1999
l Explain the quantity and value flow in a Make-
to-Order Scenario without Sales Order
Controlling
l Explain the possibilities of lean controlling for
mass production with a product cost collector
l Explain how to carry out the confirmation and
period closing in this scenario
l Identify the necessary settings in customizing
At the conclusion of this unit, you will be able to:
MTO without Sales Order Controlling: Objectives



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SAP AG AC515 4-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 4-4
SAP AG 1999
MTO without Sales Order Controlling:
Business Scenario
l In your plant 1000, you trigger sales order
related repetitive manufacturing using a
single production line when a sales order is
received for the automobile T-FA00 (in
original IDES use am2-gt).
l You must now maintain the necessary
master data in the R/3 system.
l Then you have to carry out the necessary
postings in the R/3 system.



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SAP AG AC515 4-5
SAP AG 1999
Roadmap: MTO without Sales Order Controlling
l Overview Business Scenario
l Master Data
l Actual Postings
l Period-End Closing
l Customizing
SAP AG 1999



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SAP AG AC515 4-6
SAP AG 1999
MTO without Controlling by Sales Order
CO-Scenario
l Sales order costing
(necessary for variant
production)
l Production variances to
Profitability Analysis groups
l Valuation of quantity sold with
cost component split
When to Use ?
l Production controlling focused
on product groups
l High production volumes
l Sales controlling similar to
make-to-stock
Controlling by
Sales Order
Sales
Order Stock
Valuated
Unvaluated
Without With
Not
supported
X
X
X



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SAP AG AC515 4-7
SAP AG 1999
Repetitive Manufacturing (I)
Line
am am- -120 120
am am- -200 200
am am- -line1 line1
am am- -110 110 am am- -210 210 am am- -220 220
am am- -100 100
When to Use ?
l High volume production
l Stable and continuous
production
l No individual lot oriented
controlling needed
l Repetitive manufacturing



n In repetitive manufacturing, the same product is usually produced over a longer period of time on
one production line. Instead of being manufactured in restricted production lots, a total quantity of
the product is manufactured over a specific period of time, with a specific production rate per partial
period. Products generally go through production in a relatively steady flow. Semi-finished products
are often processed further directly, without being placed in interim storage.
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SAP AG AC515 4-8
SAP AG 1999
Repetitive Manufacturing (II)
Production Line Production Line
Make-to-Order
Make-to-Stock
Sales Order
SD SD
Demand
Management
Production Line
Production Line



n Make-to-stock repetitive manufacturing: one alternative is to use repetitive manufacturing in make-
to-stock production. This means that you produce products with no direct reference to sales orders.
Depending on your production strategy, you can settle planned independent requirements from
Demand Management against sales orders.
The same product is produced repeatedly over a substantial period of time. Instead of being
manufactured in restricted production lots, a total quantity of the product is manufactured over a
specific period of time, with a specific production rate per partial period. Products go through
production in a relatively steady flow. Sales orders are delivered from stock.
n Order-oriented repetitive manufacturing: the other alternative is to use repetitive manufacturing for
order-oriented production. Sales orders can be processed separately and planned orders are created
with direct reference to sales orders. Production is therefore controlled via sales orders. The
quantities you produce cannot be swapped between the individual sales orders, the finished products
are stocked specifically for individual sales orders (sales order stock). Sales order stock is reduced
via goods issue for sales order.
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SAP AG AC515 4-9
SAP AG 1999
Creation of the Sales Order and Planned Order
Creation
Sales Order
Creation Creation
Sales Sales Order Order
Material Requirement Planning/
Assembly Processing
SD SD
Production Line
Planned Order
Planned Planned Order Order
Header
p Material
p Quantity
p Date
Items



n The system generates a planned order for the material listed in the sales order item. This planned
order contains all the material components necessary for the manufacture of the finished product.
The planned order can be created in the following ways:
In requirement planning
When the sales order is saved
n In order to generate the planned order generated when the sales order is saved, you must enter
assembly type 1 (planned order: static processing) or 4 (planned order: dynamic processing) in the
requirements class.
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SAP AG AC515 4-10
SAP AG 1999
Controlling Scenario Product Cost Collector
Stock
Sales Order
valuated
$
MM MM
Stock
Sales Order
valuated
$
MM MM
Stock
Sales Order
valuated
$
MM MM
Product
Cost Collector
Product Product
Cost Collector Cost Collector
Debit
Credit
Sales Order
Sales Sales Order Order
Planned Order
Planned Planned Order Order
SD SD
Sales Order
Sales Sales Order Order
Planned Order
Planned Planned Order Order
Sales Order
Sales Sales Order Order
Planned Order
Planned Planned Order Order
SD SD
SD SD
CO CO- -
PA PA
Actual Actual
+
Product Group Product Group
+
-
30,000 30,000
45,000 45,000
54,000 54,000
12,500 12,500
20,000 20,000
21,500 21,500
5,000 5,000
13,000 13,000
Motor Motor Cycles Cycles
Freight vehicles Freight vehicles
Cars Cars
Sport Sport cars cars
Convertibles Convertibles
Limousines Limousines
Class Class A A
Class Class B B
CO CO- -
PC PC



n If you are in a sales-order-related production environment and using a valuated sales order inventory
with repetitive manufacturing, you can collect the costs for a configurable material on a product cost
collector for the material.
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SAP AG AC515 4-11
SAP AG 2003
Logistical Benefit Separate Backflushing
3 C
3 C 3 C
Aggregated Component Goods Issue
Single Component Goods Issue
Finished Product Level / Assembly Level
Component Level
C = Component
C = Component
2 C
2 C 2 C
Monday Tuesday
1C
1C 1C
1C
1C 1C
1C
1C 1C
1C
1C 1C
1C
1C 1C
Separate Backflushing



n If you have to process a high volume of data, you can significantly improve performance by
separating the backflushing processes.
n For this purpose, the backflushing processes are split into critical and uncritical partial processes. In
the standard system backflushing includes the following partial functions:
Goods receipt posting
Goods issue of the material components
Calculation of actual costs in production activity posting
Reduction of the production quantities
Adjustment of the dependent requirements of the components in the reporting point backflush
Adjustment of the capacity requirements
n By separating the backflushing processes, you can instruct the system to post the goods receipts, and
reduce the production requirement quantities and capacity requirements immediately. The partial
functions that can be carried out later (uncritical functions) are collected in a work list and processed
in a background job sometime later. These uncritical functions include, for example, BOM
explosion, posting goods issues, reduction of the dependent requirements and posting the production
activities. Before posting the goods issues the single component requirements are aggregated, so that
the number of material documents are decreased dramatically.
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SAP AG AC515 4-12
SAP AG 1999
Master Data Master Data
l Overview Business Scenario
l Master Data
l Actual Postings
l Period-End Closing
l Customizing
SAP AG 1999



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SAP AG AC515 4-13
SAP AG 1999
Master Data
Routing
Material Material master master
BOM BOM
Production line Production line
Routing Routing



n For make-to-order repetitive manufacturing, you must maintain the following logistics master data:
material master, bill of materials, production line and routing. As of Release 4.0, you must also
create a product cost collector. If you are prepared not to use capacity planning and to carry out
simplified cost accounting (for example, not posting production activities for materials with a high
material cost share), it is not absolutely necessary to maintain a routing for repetitive manufacturing.
n You should not use materials of standard material type KMAT. Instead, you should use a material
that is not material type KMAT and for which you select the Material is configurable' indicator in
the Basic data view.
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SAP AG AC515 4-14
SAP AG 2003
Master Data: Material
n Repetitive manufaturing indicator and profile
n Production versions
n Financial accounting and costing
Material Material master master
BOM
Production line
Routing



n In the material master (MRP view), the indicator Repetitive manufacturing authorizes the material
for repetitive manufacturing. This enables the use of various repetitive manufacturing functions (for
example, using various backflushing transactions).
In the views Costing and Financial accounting, you define the price of the material and the price
control to be used (standard price, moving average price) to valuate the material in backflushing.
n The repetitive manufacturing profile contains control parameters for repetitive manufacturing. You
define the repetitive manufacturing profile in Customizing for Repetitive Manufacturing and assign
it to a material in the material master record. Various standard profiles for typical procedures are
shipped with the standard system. They define, for example:
whether, in backflushing, the system posts goods issues for the components simultaneously with
goods receipt of the assembly, or only posts a goods receipt (field GR and GI). If you set the
system to only post goods receipts, the goods issue for the components must be posted later in a
separate transaction.
whether, in backflushing, the system posts production activities simultaneously with goods receipt
of the assembly, or only posts a goods receipt (field Activities). If you set the system to only post
goods receipts, the production activities must be posted later in a separate transaction (if you want
to post production activities).
whether, when the backflushing processes are separated at final backflush, the system does not
post the goods issues for the components and/or the production activities in a separate transaction,
but automatically as a background job at a later point in time (field Process control).
which movement types are to be used for the goods movements.
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SAP AG AC515 4-15
SAP AG 1999
Master Data: BOM
n Repetitive manufacturing indicator and profile
n Production versions
n Financial accounting and costing
n Planned material consumption
n Storage location for backflush
BOM BOM
Material master
Production line
Routing



n The BOM defines planned material consumption for the components.
n In the status/long text of the BOM item (field production storage location), you can define which
issue storage location is used to backflush the components in the repetitive manufacturing backflush.
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SAP AG AC515 4-16
SAP AG 1999
Master Data: Production Line
n Repetitive manufactoring indicator and profile
n Production versions
n Financial accounting and costing
n Planned material consumption
n Storage location for backflush
n Available capacity
n Cost center
n With scheduling based on takts: takt time
Material master
BOM
Routing
Production line Production line



n Simple production lines, often consisting of one work center, are created in the R/3 system as work
centers with work center category 0007 (WkCtr on prod. line).
Other work center categories can also be used in repetitive manufacturing. The work center category
WkCtr on prod. line is simply there to separate repetitive manufacturing work centers from other
work centers, for organizational purposes.
n The work center defines the available capacity (standard or shift sequence). Various capacity
categories can be stored.
n The formulas the system uses to calculate capacity requirements are defined in the work center.
n You make the assignment to a cost center for valuation of internal activities in the work center.
n It makes sense to use the standard value key SAP3 (Production line planning) in the work center. For
this standard value key, you can set the production time to must be entered and the setup and
teardown times to should not be entered (for the times in the routing).
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SAP AG AC515 4-17
SAP AG 1999
Master Data: Routing
Routing
n Repetitive manufacturing indicator and profile
n Production versions
n Financial accounting and costing
n Planned material consumption
n Storage location for backflush
n Available capacity
n Cost center
n With scheduling based on takts: takt time
n Operations
n Standard values for operations
Material master
BOM
Production line
Routing Routing



n The routing is often used in repetitive manufacturing simply as a basis for scheduling/capacity
requirements determination, since it defines the production rate (quantity per time unit). Rate
routings therefore often have only one operation and do not describe the operations which are
actually to be carried out.
The operations which are actually to be carried out by personnel are often described in externally
created work center instructions. These are for the information of work center personnel and are kept
directly at the production line.
You could, however, use a printout of the routing as an alternative to work center instructions.
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SAP AG AC515 4-18
SAP AG 1999
Collecting Costs on the Product Cost Collector
Production version 0001
Production version 0002
Product cost collector
Production version 0001
Production version 0002
Product cost collector
Product cost collector



n In repetitive manufacturing, all costs incurred in production of a material are collected on a product
cost collector and settled at period close (period-based Controlling).
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SAP AG AC515 4-19
SAP AG 1999
Product Cost Collector
Data
Production Process
Short Text
Planning Plant
Production Version
Plant
Characteristics for production process
Material
Production Version
Short Text
External order no
Overhead Key
Profit Center
Costing Sheet
Results analysis key
Variance Key
Business Area
COPC-CONFIG-1
CO01
COPC-CONFIG-1
Cstg. variant planned
Cstg. variant actual
Variance Calculation
is possible !
Product Cost Collector
0001



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SAP AG AC515 4-20
SAP AG 1999
Actual Postings
l Overview Business Scenario
l Master Data
l Actual Postings
l Period-End Closing
l Customizing
SAP AG 1999



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SAP AG AC515 4-21
SAP AG 2003
Creation of the Sales Order
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
4720/10 FIN-I
4720/10 FIN 4720/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
Material Labor OH Process
150 200 100 150 600



n With the creation of the sales order a product cost estimate could be created automatically to cost the
order specific quantity structure. This cost estimate assigns the planned costs for material, labor and
so on to the cost components.
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SAP AG AC515 4-22
SAP AG 2003
Creation of the Planned Order
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
4720/10 FIN-I
4720/10 FIN 4720/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
Material Labor OH Process
150 200 100 150 600
Planned Order
4710 /10
Material Quantity
Component-1 2
Component-2 3
... ....
Planned Order
4720 /10
Material Quantity
Component-1 3
Component-2 5
... ....



n The system generates a planned order for the material listed in the sales order item. This planned
order contains all material components necessary for manufacture of the finished product. The
planned order can be created in the following ways:
In requirement planning
When the sales order is saved (assembly processing).
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SAP AG AC515 4-23
SAP AG 2003
Goods Receipt for Sales Order Stock
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
4720/10 FIN-I
4720/10 FIN 4720/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
Material Labor OH Process
150 200 100 150 600
Stock
Sales Order
4710 / 10
450
MM MM
Stock
Sales Order
4720 / 10
600
MM MM
Debit
Credit
Product Cost Collector Planned Order
4710 /10
Material Quantity
Component-1 2
Component-2 3
... ....
Planned Order
4720 /10
Material Quantity
Component-1 3
Component-2 5
... ....
Stock Change -450
Stock Change -600



n Once you have manufactured the material, you enter a goods receipt for the planned order. To do
this, access the menu of Repetitive Manufacturing and enter a goods receipt for the sales order.
n The sales order stock is valuated on the basis of the sales order cost estimate.
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SAP AG AC515 4-24
SAP AG 2003
Goods Issue
Product Cost Collector
Debit
Credit
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
4720/10 FIN-I
4720/10 FIN 4720/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
Material Labor OH Process
150 200 100 150 600
Material 270
Stock Change -450
Stock Change -600
Planned Order
4710 /10
Material Quantity
Component-1 2
Component-2 3
... ....
Planned Order
4720 /10
Material Quantity
Component-1 3
Component-2 5
... ....



n The product cost collector is debited with the costs for the material components listed in the planned
order.
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SAP AG AC515 4-25
SAP AG 2003
Activities
Production Cost Collector
Debit
Standard Cost Estimate
Cost Center
Direct activity
allocation
Material 10
Labor 25
Surcharge 15
Process 10
Total 60
Material 270
Labor 300
Stock Change $ -450
Stock Change $ -600
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
4720/10 FIN-I
4720/10 FIN 4720/10 FIN- -I I
SD SD
Debit
Credit



n Automatic posting of the product cost collector with the activities used only takes place if you have
created a standard cost estimate for the configurable material. If you have created a standard cost
estimate for the configurable material and if you have specified in the repetitive manufacturing
profile that activities should be posted, then when the goods receipt is posted in the menu of
repetitive manufacturing the product cost collector is debited with the activities according to the
standard cost estimate. The debit with direct material costs is still made in accordance with the
material components listed in the planned order.
n If you have not created a standard cost estimate for the configurable material but you still want to
debit the product cost collector for the activities used, carry out an internal activity allocation in the
Product Cost by Period menu.
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SAP AG AC515 4-26
SAP AG 2003
Delivery to Customer
Stock
Sales Order
4710 / 10
450 450
Cost of
Goods Sold
450
Post Goods Issue
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
Delivery
Goods issue:
n Reduces warehouse stock
n Posts the value change to the stock
accounts in inventory accounting
n Reduces delivery requirements
n Updates the document flow for sales
and delivery documents
n Creates a work list for billing
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
FI FI



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SAP AG AC515 4-27
SAP AG 2003
Invoicing Customer
Customer
800
Sales Revenue
800
Creating an invoice:
n Automatically creates an
accounting document that updates
the general ledger account
n Updates the customers
credit record
n Updates sales statistics for the
sales information system
n Updates controlling such as
profitability analysis and profit
center accounting
FI FI
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
Delivery
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
SD SD
Material Labor OH Process
100 150 80 120 450
4710/10 FIN-I
4710/10 FIN 4710/10 FIN- -I I
Invoicing
CO CO- -
PA PA



n At billing, the R/3 System will debit the customer's Accounts Receivable account and credit the
Revenue account.
n Please note: In your implementation of the R/3 System, there may be automatic update to other
accounting components, if implemented. For example: Controlling (CO), Profitability Analysis (CO-
PA), and Legal Consolidation (FI-LC). In your implementation of the R/3 System, there may be
additional updates to the general ledger if you implement Warehouse Management or if you accept
multiple methods of payment, in addition to Credit Management.
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SAP AG AC515 4-28
SAP AG 1999
Analysis Paths in Reporting
Division
R
e
g
i
o
n
Region
C
u
s
t
o
m
e
r
g
r
o
u
p
Sales revenue
Sales deduction
Net revenue
Cost gds mfd
Contr. margin 1
Actual
Detail List: North
3500
550
2950
1200
1750
Cst grp1
Cst grp2
Total
Drilldown List
Net
revenue
Contr.
margin
1100 680
1850 1070
2950 1750
Contr.
marg. 1
Drilldown List
Net
revenue
2950 1750
3400 1540
North
South
CG2 CG1
North South
Customer
group



n You can summarize the data according to the derived characteristics and then drill down interactively
in reporting. At each level of the report, you can display the drilldown list (overview) or detailed
information (margin analysis).
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SAP AG AC515 4-29
SAP AG 1999
CO-PA Reporting
Total Revenues 49.997.014 203.313.263
Quantity Discounts 103.700 807.910
Customer Discounts 890.630 1.203.980 .
.
.
Total Discounts 994.330 2.011.890
Net Revenue 49.002.684 201.301.373
Raw Materials 25.340.480 110.200.260
Labour Costs, var. 6.100.340 23.600.140
Machine Costs, var. 1.100.320 3.000.540
Production Process Cost, var. 800.520 900.720
Total Variable Production Cost 33.341.660 137.701.660
Contribution Margin 1 15.661.024 63.599.713
Labour Costs, fix. 3.500.340 15.600.140
Machine Costs, fix. 3.100.320 17.000.540
Production Process Cost, fix 4.200.660 16.600.680
Total Fixed Production Cost 10.801.320 49.201.360
Total Overhead Surcharges 1.000.000 4.000.000
Contribution Margin 2 3.859.704 10.398.353
Administration Process Cost 600.300 1.204.500
Marketing Process Cost 760.600 1.708.000
Total Period Cost 1.360.900 2.732.500
Contribution Margin 3 2.498.804 7.665.853
Vans Motor Bikes
Material
Labor
OH
Process



n In a CO-PA contribution margin report value fields containing process costs can now be included for
a more realistic profitability analysis on product families, customers, distribution channels etc. The
CO-PA reporting functionality allows a Turn and Twist' through all the dimensions of CO-PA to
even drill down to the profitability of single products.
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SAP AG AC515 4-30
SAP AG 1999
Period-End Closing
l Overview Business Scenario
l Master Data
l Actual Postings
l Period-End Closing
l Customizing
SAP AG 1999



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SAP AG AC515 4-31
SAP AG 1999
Period End Closing: Product Cost Collector
1. Template Allocation
2. Revaluation at Actual Activity Prices
3. Overhead
6. Settlement
Product
Cost Collector
5. Variances
4. Work in Process



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SAP AG AC515 4-32
SAP AG 2003
Integration of Variances S Price Control
Material 1000
Labor 500
Overhead 100
Process 800
Total 2400
Credit
Inv. Change -2000
Debit
2000
Stock Price variance
400
Financial Accounting
Variance Categories
Input Price 150
Input Quantity 150
Resource-Usage 100
Scrap 0
Lotsize 0
Output Price 0
Total: 400
Profitability Analysis Product Cost Collector
Variance 400



n It depends on your business scenario if a variance calculation is usefull for the analysis of production
costs.
n To settle the price differences to CO-PA, you can
process variance calculation and settle the variance categories. In case that you do not want to
analyse the variance categories, use only variance category remaining variances.
Define the price difference account as a cost element and enter a default account assignment to a
profitability segment.
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SAP AG AC515 4-33
SAP AG 2003
Integration of Variances V Price Control
Material 1000
Labor 500
Overhead 100
Process 800
Total 2400
Credit
Inv. Change -800
Debit
Variance 400
Inv. Change -1200
Product Cost Collector
Stock
Sales Order
4710 / 10
800
160
MM MM
400 x
800
2000
Stock
Sales Order
4720 / 10
1200
240
MM MM
Apportion Variances
according to
Delivery Value
400 x
1200
2000



n Settlement dynamically distributes the variance to the different individual requirements stock
segments according to the delivery values of the delivered quantities. Dynamic distribution to
individual stock segments and to stock segments of make-to-stock materials is also possible.
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SAP AG AC515 4-34
SAP AG 1999
Customizing
l Overview Business Scenario
l Master Data
l Actual Postings
l Period-End Closing
l Customizing
SAP AG 1999



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SAP AG AC515 4-35
SAP AG 2003
Sales Document Structure
Sales documents contain information
that is logically organized:
Controlling by Sales Order at Item Level
Controlling by Sales Order at Item Level
Header
Item 1
Schedule line 1
Item 2
Schedule line 1
Schedule line 1
n The header contains customer-related
data for the entire order, such as currency
and term of payment
n The item contain data about the material
and quantities ordered
n Schedule lines inform you as to when and
in what quantity the individual items will be
delivered



n A sales document can contain as many items as you require. Items contain information such as:
Conditions
Texts
Partner
n Each item may contain several schedule lines. The requested delivery date appears in the first
schedule line. If the order quantity cannot be confirmed for the requested delivery date, the R/3
System proposes delivery dates and confirmed quantities in the following lines. Schedule lines
contain the following information:
n Delivery dates
Quantities to be delivered on these dates
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SAP AG AC515 4-36
SAP AG 1999
Item Categories
Partner
Texts
Partner
Texts
Relevance for delivery
Schedule lines allowed
Relevance for delivery
Schedule lines allowed
Incompletion log
Incompletion log
Pricing
Relevance for billing
Pricing
Relevance for billing
Item category
Item category



n Item categories provide additional control functions for the sales order documents.
n By using an item category, the system can process a material differently in each document type.
n The item category in the sales document depends on the sales document type and the material.
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SAP AG AC515 4-37
SAP AG 2003
Item Category Determination
Document Type: Inquiry
Document Type: Standard Order
SD SD
SD SD
Item Material Item Category
10 M1 AFN Standard Item
Item Material Item Category
10 M1 TAN Standard Item
Material master
Material
M1
Item category group
Norm
MM MM



n You can find the item category group in the Sales: sales org 2 view of the material master record.
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SAP AG AC515 4-38
SAP AG 1999
Requirement Class Determination (I)
Customizing for
common business processes
for example sales order type OR
Requirement Class
Requirement Type
Planning Strategy
Material Requirement Planning
Strategy Group
MRP Group



n You can select the requirements type through the MRP group or the strategy group in the MRP 1
view in the material master record.
n Strategy for Determining the Requirements Type:
n First, an attempt is made to find a requirements type using the strategy group in the material
master.
n If the strategy group has not been maintained, the system will determine it using the MRP group.
n If the MRP group has not been defined, the system uses the material type instead of the MRP
group
when accessing the corresponding control tables.
n If no requirements type is found here, the system assumes a special rule and attempts to find a
requirements type with the aid of the item category and the MRP type.
n If this is not possible, a last attempt is made to find a requirements type with the item category
only.
n If the last attempt fails, the system declares the transaction as not relevant for the availability
check or transfer of requirements.
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SAP AG AC515 4-39
SAP AG 1999
Requirement Class Determination (II)
Requirement Class
Requirement Type
Planning Strategy
Item Category MRP Type
Sales and Distribution Material Requirement Planning
Customizing for
special business processes
for example returns
Strategy Group
MRP Group Item Usage Item Category Group Document Type



n Another possibility is to select the requirement type through the item category group (sales view
material master record) and the order type of the SD document (inquiry, quotation, sales order)
n You can select an alternative search strategy in the customizing step Check Control of
Requirements Type Determination'. If the field Source' field contains the value 1 or 2 the
requirement type is selected through the item category group and order type.
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SAP AG AC515 4-40
SAP AG 2003
Customizing - Requirement Class (I)
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Account Assgt. Category E
Valuation
Without Val.-Strategy
Settlement Profile
Result Analysis Key
Account Assignement Sales Order Stock Product Cost by
Category Sales Order
E Yes Yes
M Yes No
B No Yes



n To enable goods movements to take place through the sales order stock, you must select a
requirements class that specifies an account assignment category that specifies that goods
movements take place through the sales order stock ( Special stock field). Goods movements take
place through the sales order stock if the entry in the Special stock field is "E" (order stock).
n To be able to collect costs on a sales order item, you must select a requirements class that specifies
an account assignment category that allows costs and revenues to be collected on a sales order item
(Consumption posting field). Collecting costs and revenues on the sales order item is allowed when
the entry in the Consumption posting field is "E" (settlement through sales order).
n Collecting costs and revenues on the sales order item is recommended in complex make-to-order
production. In the standard system, the account assignment category is "E" (individual customer
requirements with controlling by sales order).
n You make no entry in the Consumption posting field if you are using a valuated sales order stock and
do not want to flag the sales order item (item in an inquiry, quotation, or sales order) as carrying
costs and revenues. This is especially recommended in mass production on the basis of sales orders.
In the standard system, the account assignment category is "M" (individual customer requirements
without controlling by sales order).
n You can also carry materials from make-to-stock production in a sales order item that carries costs
and revenues. This is recommended for replacement parts that are delivered for a material of the
sales order stock and are withdrawn from the non-customer inventory. Here you enter "E" in the
consumption posting field (settlement through sales order). In the standard system the account
assignment category is "B".
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SAP AG AC515 4-41
SAP AG 2003
Customizing - Requirement Class (II)
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Account Assgt. Category
Valuation M
Without Val.-Strategy
Settlement Profile
Result Analysis Key
Controls, if the special stock is valutated:
- SPACE: No stock valuation
- M: Separate valuation with ref. to sales document/project
- A: Valuation without reference to sales document



n The special stock indicator in the sales order item determines how the sales order stock for that SD
document item is to be valuated. For dependent requirements that are controlled by individual
requirements, the valuation approach is taken from the SD document item assigned to the
component.
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SAP AG AC515 4-42
SAP AG 2003
Valuation of Sales Order Stock
Already existing Price in
Sales Order Stock Segment
Already existing Price in
Sales Order Stock Segment
Customer Exit
Customer Exit
Sales Order Costing
Sales Order Costing
Production Order
Planned Costs
Production Order
Planned Costs
Standard Price
(Standard Cost Estimate)
Standard Price
(Standard Cost Estimate)
Valuation Strategy
Goods Issues Debit
Orders
Cost collectors
Sales order item
Goods Receipt Credits
Orders
Cost collectors



n The goods receipt is valuated using a predefined valuation strategy sequence.
The first goods receipt results in valuation on the basis of one of the subsequent strategies in the
specified sequence. A standard price selected through one of the subsequent strategies is copied
into strategy and serves as the valuation basis from this point onwards.
The system calculates the standard price on the basis of your customer exit COPCP002 Material
valuation for valuated sales order stock.
The system calculates the standard price in a sales order cost estimate. This sales order cost
estimate can be based on a unit cost estimate or on a product cost estimate or a mixture of the two.
The system determines the standard price using the production order cost estimate or the planned
costs for the WBS element. If there are multiple production orders for the same sales order item,
the system uses the standard price that results from the production order that delivers first (see
strategy 1).
If you created the same material as a collective requirements material, the system reads the
material master record of the collective requirements material. The standard price in the master
record of the collective requirements material may have been calculated in different ways, such as
in a standard cost estimate.
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SAP AG AC515 4-43
SAP AG 2003
Customizing - Requirement Class (III)
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Account Assgt. Category
Valuation
Without Val.-Strategy
Settlement Profile
Results Analysis Key
X Special stock is
valuated by a standard
cost estimate.



n You have to set the indicator Without Val. Strategy to valuate the valuated sales order stock with the
standard price of the non-allocated warehouse stock.
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SAP AG AC515 4-44
SAP AG 2003
Customizing - Requirement Class (IV)
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Account Assgt. Category
Valuation
Without Val.-Strategy
Settlement Profile
Result Analysis Key
Controls the automatic
costing of a sales order
item:
- A Automatic Costing
- B Automatic Costing
and marking
Requirement Class



n The costing activities indicator controls, whether the system automatically
costs any remaining uncalculated sales document items, or
costs and marks any remaining uncosted sales document items.
when you save an SD-document.

n The following values are allowed for this indicator:
Enter an A if the sales document item should be automatically costed when you save the
document.
Enter a B if the sales document item should be automatically costed and marked when you save
the document.
Enter nothing, if you want to be able to cost a sales document item manually in the sales
document.
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SAP AG AC515 4-45
SAP AG 2003
Requirement Class for Demonstrated Scenario
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Costing
Costing-Id B
Costing Method 1
Costing Variant PPC4
Costing Sheet COGM
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Account Assgt. Category M
Valuation M
Without Val.-Strategy
Settlement Profile
Results Analysis Key
Automatic Costing and
Marking
Valuated Sales Order Stock
without Cost Object
Controlling on Sales Order
Requirement Class



n You have to set the indicator without val. strategy to valuate the valuated sales order stock with the
standard price of the non-allocated warehouse stock.
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SAP AG AC515 4-46
SAP AG 1999
Account Assignment Category M
Consumption Posting
Account Modification
Ind.Account Assigment Screen
Special Stock
Detailed Information
Acc.assigt.changeable
Acc.ass.change on IR
Derrive acct. assigt.
VKB
1
E
Special stock
Account Assignment Category M
No Product Cost by
Sales Order
=>
No Cost Object is
created



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SAP AG AC515 4-47
SAP AG 2003
MTO without Sales Order Controlling: Unit
Summary
You are now able to:
l Explain the quantity and value flow in a Make-to-Order
Scenario without Sales Order Controlling
l Explain the possibilities of lean controlling for mass
production with a product cost collector
l Explain how to carry out the confirmation and period
closing in this scenario
l Identify the necessary settings in customizing



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SAP AG AC515 4-48
MTO without Sales Order Controlling: Exercises


Unit: MTO without Sales Order Controlling

At the conclusion of this exercise, you will be able to:

Describe quantity and value flow in make-to-order production
without sales order controlling using repetitive manufacturing.
Maintain the master data required for make-to-order repetitive
manufacturing.
Check the control data of the sales order item.
Create a planned order to fulfill the sales orders requirement.
Carry out backflushing in sales-order-oriented repetitive
manufacturing.
Create a delivery and a billing document for a sales order.
Analyze the relevant accounting and controlling documents for make-
to-order production.

In plant 1000, the end product R-FA## can be produced on production
line AM-LINE1##. Verify the master data that has already been
maintained. Create a sales order, check the control data of the sales order
and backflush the quantity produced in the R/3 System. At the end of the
exercise, create a delivery to the customer and a billing document for the
delivery.
1-1 The master data for the production of assembly R-FA## has already been prepared.
In the following exercise, you will check that the entries for the repetitive
manufacturing process are correct.
1-1-1 Is the material authorized for repetitive manufacturing? (Use MRP4 view in
the material master record).
Menu path:
Logistics Production Master Data Material Master
Material Display Display Current

Material: R-FA##
Choose Enter. In the dialog box, select MRP 4.
Choose Enter. In the dialog box, enter the following information:
Plant: 1000
Choose Enter.

What is the repetitive manufacturing profile?

_____________________________________________________

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SAP AG AC515 4-49

1-1-2 According to the repetitive manufacturing profile, are production activities
automatically posted to the product cost collector at final backflush for this
material?

Menu path:
Tools Customizing IMG Project Management

Select SAP Reference IMG.

Customizing path:
SAP Customizing Implementation Guide Production Repetitive
Manufacturing Control Data Define Repetitive Manufacturing
Profiles

or
Implementation Guide Controlling Product Cost Controlling Cost
Object Controlling Product Cost by Period Simultaneous Costing
Check Control Data for Repetitive Manufacturing Profiles

1-1-3 Does a product cost collector exist for the material R-FA##?

Menu path:
Accounting Controlling Product Cost Controlling
Cost Object Controlling Product Cost by Period Master Data
Product Cost Collector Edit

Enter the following data:
Material: R-FA##
Plant: 1000
Choose Enter

Create a product cost collector if none exists. Use order type RM01 and
selection production version 0001. Once created, view the Header and
Production Process.
Save the product cost collector. When prompted whether a pre-costing
should be created for the product cost collector, select Yes. Save the cost
estimate and exit the transaction.
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SAP AG AC515 4-50

1-2 Start by creating a sales order for the finished good R-FA##.

1-2-1 Create a sales order for one piece:

Menu path:
Logistics Sales and Distribution Sales
Order Create

Order type: OR (standard order)
Sales Organization: 1000
Distribution Channel: 12
Division: 00
Choose Enter

Enter the following data:
Sold-to party: 1012
PO Number: 55##
Req.deliv. date: in 10 days
Material: R-FA##
Order quantity: 1 piece
Choose Enter

On the characteristic value assignment screen, enter the following data:

Engine: 66 (4 cyl. engine 66kW)
Transmission: 01 (5-speed)
Paint: UWE (white)
Trim: L (Leather)
Interior color: S (Black)
Special options: RBU (Radio Business Sound)

Select Back

1-2-2 Check the following control data of the sales order item.

What item category does the item have?

______________________________________________________

What requirement type was determined for the sales order item?
(Select the Procurement tab).

______________________________________________________

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SAP AG AC515 4-51

1-2-3 Save the sales order and write down the sales order number:

______________________________________________________

1-2-4 Check the cost estimate that was generated when you saved the sales order.

Menu path:
Logistics Sales and Distribution Sales Order Display

Menu path:
Extras Costing

Make a note of the cost of goods manufactured:

______________________________________________________

1-3 Create a planned order for the sales order.
1-3-1 To do this, execute an MRP run for the finished product R-FA## in plant
1000:

Menu path:
Logistics Production MRP Planning Single-Item, Multi-Level
Planning

Material: R-FA##
Plant: 1000
Confirm your entries by choosing Enter twice.

1-3-2 Check the planning results in the MRP list for the material:

Menu path:
Logistics Production MRP Evaluations MRP List

Material: R-FA##
Plant: 1000
Select Enter to confirm your entries.

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SAP AG AC515 4-52

1-4 You have produced 1 end product R-FA##.
1-4-1 Carry out the final backflush in Repetitive Manufacturing:

Menu path:
Logistics Production Repetitive Manufacturing Backflush
REM Backflush

Select the Make-to-order tab.

Enter the following data:

Backflush qty: 1
Sales order: Your sales order number
Sales order item: 10
Plant: 1000
To location: 0002

Choose Enter and save the final backflush.

In the dialog box that appears, select Create serial no. automatically. Select
Enter to exit the dialog box.

Make a note of the serial number:

______________________________________________________

1-4-2 Display the goods receipts/issue document and determine what financial
accounting or cost accounting documents were created.

Menu path:
Logistics Production Repetitive Manufacturing Environment
Material Document for Material

Enter the following data:
Material: R-FA##
Plant: 1000
Posting Date: Today

Select Execute to confirm your entries.

Select the relevant material documents and the accounting documents.
Menu path:
Environment Accounting document

Select the relevant material documents for the accounting documents.
Environment Material document

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SAP AG AC515 4-53
1-5 The vehicle ordered is now available for delivery.
1-5-1 Create a delivery for the vehicle.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Outbound Delivery

Enter the following data:
Shipping point: 1000
Selection date: Todays date plus 10 days
Order: Number of your sales order
Choose: Enter

Enter the serial number for the vehicle.
Menu path:
Extras Serial Numbers

Enter the following data:
Serial Number: Your serial number from the final backflush

Select Continue/Enter, to exit the dialog box.

Proceed with the steps for picking.
Select the Picking tab.

Enter the following data:
Storage Location: 0002 and select RETURN

Select the item and choose Subsequent Functions Create transfer order.
Select Yes if a prompt appears asking you whether you wish to save. Write
down the delivery document number.
On the next screen, select Activate item, post in the background and Adopt
pick quantity: 2 in the Control section.
Select Enter to save the transfer order. Exit the transaction.
1-5-2 Display the goods issue document and determine if any financial accounting
or cost accounting documents were created for the goods issue.

In delivery processing, select Outbound delivery Display, then
Environment Document flow. Choose the line GD goods issue, then
Environment Display document. Select Accounting documents.
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SAP AG AC515 4-54

1-6 Create a billing document for the delivery. Display the billing document, the
accounting document and the cost accounting document created.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Billing Document

Save the billing document.

To display the billing document, select Billing document Display. Enter the
billing document number, and then select Enter. Select Accounting to view the
accounting documents and analyze the FI and CO documents.

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SAP AG AC515 4-55
MTO Without Sales Order Controlling: Solutions


Unit: MTO Without Sales Order Controlling


1-1 The master data for producing the assembly R-FA## has already been prepared. In
the following exercise, you will check that the entries for repetitive manufacturing
are correct.
1-1-1 Is the material authorized for repetitive manufacturing?
Menu path:
Logistics Production Master data Material master
Material Display Display current
Material: R-FA##
Choose Enter. In the dialog box, select MRP 4.
Choose Enter. In the dialog box, enter the following:
Plant: 1000
Choose Enter.

The Repetitive manufacturing allowed indicator is set. This means that
the material R-FA## is authorized for repetitive manufacturing.
What is the repetitive manufacturing profile?

A001 Man.cost coll/total res/aggr.

1-1-2 According to the repetitive manufacturing profile, are production activities
automatically posted to the product cost collector at final backflush for this
material?

Menu path:
Tools Customizing IMG Project Management

Select SAP Reference IMG.

Customizing path:
SAP Customizing Implementation Guide Production Repetitive
Manufacturing Control Data Define Repetitive Manufacturing
Profiles
or
Implementation Guide Controlling Product Cost Controlling Cost
Object Controlling Product Cost by Period Simultaneous Costing
Check Control Data for Repetitive Manufacturing Profiles


The repetitive manufacturing profile A001 specifies that activities are
posted automatically on goods receipt.

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SAP AG AC515 4-56
1-1-3 Does a product cost collector exist for the material R-FA##?

Menu path:
Accounting Controlling Product Cost Controlling
Cost Object Controlling Product Cost by Period Master Data
Product Cost Collector Edit

Enter the following data:
Material: R-FA##
Plant: 1000
Choose Enter

Create a product cost collector if none exists. Use order type RM01 and
selection production version 0001. Once created, view the Header and
Production Process.
Save the product cost collector. When prompted whether a pre-costing should be
created for the product cost collector, select Yes. Save the cost estimate and
exit the transaction.
1-2 Start by creating a sales order for the finished good R-FA##.

1-2-1 Create a sales order for one piece:
Menu path:
Logistics Sales and Distribution Sales
Order Create

Order type: OR (standard order)
Sales Organization: 1000
Distribution Channel: 12
Division: 00
Choose Enter

Enter the following data:
Sold-to party: 1012
PO number: 55##
Req.deliv. date: in 10 days
Material: R-FA##
Order quantity: 1 piece
Choose Enter

On the characteristic value assignment screen, enter the following data:

Engine: 66 (4 cyl. engine 66kW)
Transmission: 01 (5-speed)
Paint: UWE (white)
Trim: L (Leather)
Interior color: S (Black)
Special options: RBU (Radio Business Sound)

Select Back

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SAP AG AC515 4-57

1-2-2 Check the following control data of the sales order item.

What item category does the item have?
(Select the Sales tab).

TAC (Variant Configuration)__________________________________


What requirement type was determined for the sales order item?
(Select the Procurement tab)

KEKS (Ord. + cons. of char. planning)
1-2-3 Save the sales order and write down the sales order number:

______________________________________________________

1-2-4 Now check the cost estimate that was generated when you saved the sales
order.

Menu path:
Logistics Sales and Distribution Sales Order Display

Enter the sales order number
Select Enter.
Menu path:
Extras Costing

Make a note of the cost of goods manufactured:
______________________________________________________

1-3 Create a planned order for the sales order.
1-3-1 To do this, execute an MRP run for the finished product R-FA## in plant
1000:

Menu path:
Logistics Production MRP Planning Single-Item, Multi-Level
Planning

Material: R-FA##
Plant: 1000
Confirm your entries by choosing Enter twice.

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SAP AG AC515 4-58

1-3-2 Check the planning results in the MRP list for the material:

Menu path:
Logistics Production MRP Evaluations MRP list

Material: R-FA##
Plant: 1000
Choose: Enter
A planned order was created for the individual requirement of your
sales order.
1-4 You have produced 1 end product R-FA##.
1-4-1 Carry out the final backflush in Repetitive Manufacturing:

Menu path:
Logistics Production Repetitive Manufacturing Backflush
REM Backflush

Select the Make-to-order tab.

Enter the following data:

Backflush qty: 1
Sales order: Your sales order number
Sales order item: 10
Plant: 1000
To location: 0002

Select Enter and save the final backflush

In the dialog box that appears, select Create serial no. automatically. Select
Enter to exit the dialog box.

Make a note of the serial number:

_____________________________________________________
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SAP AG AC515 4-59

1-4-2 Display the goods receipts/issue document and determine what financial
accounting or cost accounting documents were created.
Menu path:
Logistics Production Repetitive manufacturing Environment
Material Document for Material

Enter the following data:
Material: R-FA##
Plant: 1000
Posting Date: Today

Select Execute to confirm your entries.

Select the relevant material documents for the accounting documents.
Menu path:
Environment Accounting document
Environment Material document
1 piece R-FA## is in the sales order stock.

1-5 The vehicle ordered is now available for delivery.
1-5-1 Create a delivery for the vehicle.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Outbound Delivery

Enter the following data:
Shipping point: 1000
Selection date: Todays date plus 10 days
Order: Number of your sales order
Choose: Enter

Enter the serial number for the vehicle.
Menu path:
Extras Serial Numbers

Enter the following data:
Serial Number: Your serial number from the final backflush

Select Continue/Enter, to exit the dialog box.

Proceed with the steps for picking.

Select the Picking tab.

Enter the following data:
Storage Location: 0002 and select RETURN

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SAP AG AC515 4-60
Select the item and choose Subsequent Functions Create transfer order.
Select Yes if a prompt appears asking you whether you wish to save. Write
down the delivery document number.
On the next screen, select Activate item, post in the background and Adopt
pick quantity: 2 in the Control section.
Select Enter to save the transfer order. Exit the transaction.

1-5-2 Display the goods issue document and determine if any financial accounting
or cost accounting documents were created for the goods issue.

In delivery processing, select Outbound delivery Display, then
Environment Document flow. Choose the line GD goods issue, then
Environment Display document. Select Accounting documents.

1-6 Create a billing document for the delivery. Display the billing document, the
accounting document and the cost accounting document created.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Billing Document

Save the billing document.

To display the billing document, select Billing document Display. Enter the
billing document number, then select Enter. Select Accounting, to view the
accounting documents and analyze the FI and CO documents.


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SAP AG AC515 5-1
SAP AG 2003
MTO with Sales Order Controlling
l Quantity and value flow in a make-to-order scenario
with sales order controlling
l Using make-to-order production with discrete
manufacturing to demonstrate the scenario
Contents:



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SAP AG AC515 5-2
SAP AG 1999
l Explain the quantity and value flow in a Make-to-Order
Scenario with Sales Order Controlling
l Understand the discrete manufacturing process
l Describe commitment management
l Identify the necessary settings in customizing
At the conclusion of this unit, you will be able to:
MTO with Sales Order Controlling: Objectives



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SAP AG AC515 5-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 5-4
SAP AG 1999
MTO with Sales Order Controlling: Business
Scenario
l Since you have management responsibility for this
application, you need to understand the flow of costs
onto sales orders and production orders, which are
assigned to the sales orders.
l Since the enterprise uses all of the SAP integrated
application components, you will examine how
business events recorded in other applications affect
your sales order.



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SAP AG AC515 5-5
SAP AG 1999
Roadmap: MTO with Sales Order Controlling
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning
n Actual Posting
n Funds Commitment
l Customizing



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SAP AG AC515 5-6
SAP AG 2003
MTO With Sales Order Controlling
Controlling by
Sales Order
Sales
Order
Stock
Valuated
Unvaluated
Without With
Not
supported
X
X
X
When to Use ?
l Complete Cost Overview
n Estimated costs
n Special sales costs
n Funds commitment
n Cost situation of related
production orders
l Results Analysis
n Automatic creation of reserves
n Control of Goods in Transit
l Examples:
n High Order Value
n Complex MTO structures



n Sales Order Controlling is recommended if the following information is essential to your business:
How high is my profit margin with this special sales order?
How can I control my special sales efforts?
How high is my fund commitment? Is this sales order performing well from a costing point of
view?
Where did late customer changes effect my production costs heavily?
n In this scenario you have the ability to:
allocate sales overhead to the sales document item
allocate process costs to the sales document item
assign special direct costs of sales and distribution to the sales document item
n Moreover you can use results analysis to:
automatically create reserves for expected losses
manually add reserves for foreseen risk
calculate Goods in Transit when goods have already shipped but not yet invoiced
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SAP AG AC515 5-7
SAP AG 1999
Discrete Manufacturing
When to Use?
l Very flexible production
environment
l High set-up costs
l Full cost tracability needed
l Controlling by individual
production lots needed
Work center 3
Work center 1
Work center 2
Lot
Lot
Lot



n Typical of discrete manufacturing is the frequent switching from one manufactured product to
another. The products are typically manufactured in individually defined lots, for each of which the
sequence of work centers through production varies. Costs are calculated on the basis of orders and
individual lots.
With repetitive manufacturing, products remain unchanged over a longer period and are not
manufactured in individually defined lots. Instead, a total quantity is produced over a certain
period at a certain rate.
n Discrete manufacturing typically involves varying sequences of work centers through which
products can pass as they are being made. The order of work centers is determined in routings, which
can often be very complex. There can be waiting times between the individual work centers. Also,
semi-finished products are frequently placed in interim storage prior to further processing.
n In discrete manufacturing, component materials are staged with specific reference to the individual
production lots. Completion confirmations for the various steps and processes document the progress
of work and serve the purposes of fine-tuned control.
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SAP AG AC515 5-8
SAP AG 1999
Product Cost by Sales Order Product Cost by Sales Order
When to Use ?
l Costs and revenues collected
by Sales Order irrespective of
manufacturing scenario
l Collecting special sales costs
on sales orders
l Tracking Funds committed
l Calculating Work in Process
and Reserves with Results
Analysis
l Example: Controlling complex
Make-to-Order Production
M MM Sales Order



n The Product Cost by Sales Order component is recommended for complex make-to-order
environments.
n You can use the Product Cost by Sales Order component in the following situations:
When you are manufacturing in-house with reference to a sales order.
When you are purchasing products with reference to a sales order and reselling them to your
customers.
When you are providing services whose costs are assigned to a sales order.
n This component allows you to do the following:
Calculate and analyze planned costs and actual costs by sales order item
Calculate and analyze planned revenues and actual revenues by sales order item
Calculate the value of your inventories of finished and unfinished products
Create reserves automatically
Transfer data to Financial Accounting (FI)
Transfer data to Profitability Analysis (CO-PA)
Transfer data to Profit Center Accounting (EC-PCA)
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SAP AG AC515 5-9
SAP AG 1999
Additional Focus of Sales Order Controlling
SD-Order
SD SD
Production order
PP PP
Production order
PP PP
Stock
Sales Order
valuated
$
MM MM
Stock
Sales Order
valuated
$
MM MM
CO CO- -
PA PA
Revenue
Cost of sales
Profit
SD-Order
SD SD
Production order
PP PP
Stock
Sales Order
valuated
$
MM MM
SD-Order
SD SD
+
Product Group Product Group
+
-
30,000 30,000
45,000 45,000
54,000 54,000
12,500 12,500
20,000 20,000
21,500 21,500
5,000 5,000
13,000 13,000
Motor Motor Cycles Cycles
Freight vehicles Freight vehicles
Cars Cars
Sport Sport cars cars
Convertibles Convertibles
Limousines Limousines
Class Class A A
Class Class B B
Target Target Actual Actual
34,400 34,400
47,000 47,000
63,900 63,900
13,500 13,500
22,500 22,500
27,900 27,900
11,000 11,000
15,000 15,000
CO CO- -
PC PC



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SAP AG AC515 5-10
SAP AG 1999
Controlling by Sales Order vs.
Make-to-Order Production
Controlling by Sales Order
Semi Semi- -1 1- -2 2
Semi Semi- -2 2
Finish Finish
Raw Raw- -1 1- -1 1 Raw Raw- -2 2- -1 1 Raw Raw- -2 2- -2 2
Semi Semi- -1 1
Raw Raw- -1 1- -1 1 Raw Raw- -1 1- -1 1
Make-to-Order-Production
Make-to-Stock-Production
Controlling by Order or by Period
M MM
Sales Order



n The slide shows the relationship between Controlling by Sales Order, Controlling by Order and
Controlling by Period.
n Complex make-to-order production could involve order-specific changes or complete redesigns of
products. The costs and revenues of such products must be planned and monitored in detail.
n Different methods are available for complex make-to-order production:
Tracking costs directly on the sales order item (make-to-order)
Using projects for complex production, such as in plant engineering (engineer-to-order)
n The inventories assigned to sales orders or projects are valuated in both cases. Because these
inventories are valuated, the actual costs on the sales order or work breakdown structure element do
not result from the goods receipt for a purchase order or production order as with nonvaluated
inventories, but instead are incurred at withdrawal or delivery of the sales order inventory or project
inventory. The funds tied up in the inventories are reported in the Controlling Information System.
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SAP AG AC515 5-11
SAP AG 1999
Customer Order Processing
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning
n Actual Posting
n Funds Commitment
l Customizing



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SAP AG AC515 5-12
SAP AG 1999
Sales Order Controlling: Planning Options
Material 4,000
Labor 2,500
Overhead 1,500
Process 1,000
Glass 1,500
Total 9,000
Sales Order Item Sales Order Item
Name Cost Items Name Cost Items Plan Actual Plan Actual
Plug 2,000
Cable 0,500
BOM Routing
A Unit Cost Estimate could be used to add known costs to a Product
Cost Estimate when they cannot be represented in the quantity structure
Unit Cost Estimate
Product Cost Estimate



n You can plan the costs of manufacturing the material in a product cost estimate or a unit cost
estimate. You could specify the Costing method in the customizing. If you do not specify the costing
method in customizing, then you choose the method when you call up costing.
n When product cost estimates are post processed with unit costing, the system does not save a cost
component split. If the standard price is based on a post processed cost estimate, the system cannot
transfer a cost component split to CO-PA.
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SAP AG AC515 5-13
SAP AG 1999
Product Cost Planning Sales Order
** Debits 97,500
Cost Element Plan
* 62000 Overhead Sales 15,000
* 89000 Finished Consumption 75,000
* 61000 Overhead Administration 7,500
Sales Order Values in USD US Dollar
Sales Order Sales Order
Mat. Labor OH Process
Product
Raw 2
Overhead
Semi-2
Raw 1
Semi-1 +
-



n The sales order costing contains the detail of the cost estimate. All that is shown on the sales order
cost object is the cost of good sold (COGS), not the detail (itemization). With the sales order as a
cost object, the only actuals that post to the sales order are for the sales order delivery and invoice.
The entire Cost of goods manufactured will be reported under one cost element, it will not display
the itemization.
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SAP AG AC515 5-14
SAP AG 2003
Product Cost Planning Sales Order: Overheads
** Debits 97,500
Cost Element Plan
* 62000 Overhead Sales 15,000
* 89000 Finished Consumption 75,000
* 61000 Overhead Administration 7,500
Sales Order Sales Order
Mat. Labor OH Process
Product
Raw 2
Overhead
Semi-2
Raw 1
Semi-1 +
-
Costing Sheet in valuation
method of costing variant for
material/manufacturing
overheads
Costing Sheet in valuation
method of costing variant for
material/manufacturing
overheads
Costing Sheet from
requirement class for
sales / administration
overhead
Costing Sheet from
requirement class for
sales / administration
overhead
Sales Order Values in USD



n Overheads for sales and administration are calculated with the costing sheets of the requirement
class.
n Overheads for goods of manufactured are calculated with the costing sheet of the valuation variant of
the costing variant.
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SAP AG AC515 5-15
SAP AG 2003
Costing Sales Order BOM (I)
Material-X
Assembly 1
???
SD Order 4711
10 Material-X 1 pc
Sales Order BOM
Mat. Labor OH Process
Mat. Labor OH Process
Mat. Labor OH Process
-
-
Assembly 2
Raw 1
Raw 2
Separate costing
for subassemblies



n Before the sales order BOM is completed, you can cost the sub-assemblies. This cost can be used to
value the stock for these sub-assemblies.
n With the following menu path you can create a cost estimate for a sub-assembly:
Accounting Controlling Cost Object Controlling Product Cost by Sales Order Master
Data/Planning Create)
n You can only use this function with valuated sales order stock.
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SAP AG AC515 5-16
SAP AG 1999
Costing Sales Order BOM (II)
Material-X
Assembly 1
Semi-Finished 1
Sales Order BOM
Mat. Labor OH Process
Mat. Labor OH Process
Mat. Labor OH Process
-
-
Assembly 2
Semi-Finished 2
Raw 2
Raw 1
Mat. Labor OH Process
SD Order 4711
10 Material-X 1 pc



n You can transfer the planned costs, which are already calculated for the sub-assemblies, into the
sales order cost estimate for the finished good. This improves performance significantly.
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SAP AG AC515 5-17
SAP AG 2003
Exploding Requirements
BOM Structure
Individual
requirements
Collective
requirements
Individual Requirement Indicator
l 1 - only individual requirements
l 2 - only collective requirements
l - collective and individual requirements
Material 1
Material 2 Material 2



n Indicator determining whether the following requirements are allowed for the dependent
requirements of the material:
Individual requirements
Requirement quantities of the dependent material are stated individually.
Collective requirements
Requirement quantities of the dependent material are grouped together.
n The collective/individual requirement indicator applies to all lower level BOM components.
n For each component with individual requirements, a separate order is created with lot-for-lot order
quantity (that is, orders created for different sales orders cannot be grouped together).
n You can maintain this indicator in the following places:
In the material master record
For the explosion type of the BOM item (in Customizing for Basic Data in the IMG activity
Define explosion types)
n The setting for the explosion type overrides that in the material master record.
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SAP AG AC515 5-18
SAP AG 1999
Planned Revenue
n Price list
n Material price
n Individualized
n Other
Conditions
Prices Surcharges and discounts
n On customer
n On material
n On price group
n On material group
n On customer/material group
n On customer/material
n On price group/material group
n . . . .



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SAP AG AC515 5-19
SAP AG 1999
Step
Step
Condition type
Condition type
Description
Description
Ref. level
Ref. level
Manual
Manual
Req.
Req.
1
2
3
4
5
6
7
Price
Gross value
Spec. offer disc.
Discount %
Discount %
Discount value
Net value
PR00
KA00
RA01
RA00
2
3-5
X
2
2
2
2
8
9
10
HA00
HD00
Header disc. %
Freight
Net value 2
X
11
12
13
MWST
SKTO
Output tax
Cash disc. basis
Cash discount
Pricing Procedure
SD document
SD document
Sold-to party
Sold-to party
Pricing procedure
Pricing procedure
Sales organization, distribution channel, division
Sales organization, distribution channel, division



n All condition types permitted in pricing are contained in the pricing procedure.
n You determine how the system is to use conditions by specifying requirements for each condition.
n The sequence in which the system accesses conditions in the business document is also determined
here.
n The reference level provides a method to specify a different basis for the condition type calculation
and for grouping conditions for subtotals.
n The pricing procedure can contain any number of subtotals between gross and net price.
n You can mark a condition type in the pricing procedure as being:
a mandantory condition
a manually entered condition
for statistical purposes only
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SAP AG AC515 5-20
SAP AG 2003
SD pricing on Cost Plus
Pricing for Item 10
EK01 3,000 1 pc 3,000
Profit increase 10 % 300 300
Net value 3,300
Costing only Statistical
Pricing for Item 10
PR00 4,000 1 pc 4,000
Sales Deduction 10% 400 400
Net value 3,600
EK02 - statistical - 3,000
Contribution margin 1,000
Product
Raw 2
Semi-2
Raw 1
Semi-1 +
-
Transferring Costing Data into Pricing



n The definition of the condition type per requirement class allows you to determine different
condition types for the different items of sales and distribution. For example, you could carry out
pricing for one item on the basis of a sales order pricing procedure, while the value of the sales order
pricing might only be forwarded statistically for another item in the same document. The sales order
costing refers to the sales order item.
n If you do not store a condition type in the requirements class, then the condition type is determined
via the sales document type. In this case, the condition type is valid for all sales document items of
the sales document.
n In the standard version of the SD system, two condition types are provided for the cost transfer of
line items:
EK01
If you choose this condition type, the result of the sales order costing is first printed to the pricing
screen for the item. The value can be used as the basis for price computation.
EK02
If you choose this condition type, the result of the sales order costing is simply a statistical value,
which you can compare with the price.
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SAP AG AC515 5-21
SAP AG 2003
Product
Raw 2
Semi-2
Raw 1
Semi-1 +
-
Assembly Processing Type 2 (I)
Material: Product-X
Sales Order: 4815/10
Sales Order: 4815
Pricing for Item 10
PR00 4,000
Sales Deduction 400
Net value 3,600
EK02 - statistical - 3,000
Contribution margin 600
Production Order
Sales Order Cost
Estimate
Cost Estimate:
Material $ 1400
Labor $ 800
Overhead $ 450
Process $ 350
Total $ 3000



n If you are using assembly type 2 ("production order, network or service stat. processing) before
Release 4.5 the system copies the planned costs, which are calculated using the preliminary cost
estimate for the production order, to the SD conditions. You are unable to create a sales order costing
for the sales document item.
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SAP AG AC515 5-22
SAP AG 1999
Assembly Processing Type 2 (II)
Material: Product-X
Sales Order: 4815/10
Cost Estimate:
Sales Order: 4815
Pricing for Item 10
PR00 4,000
Sales Deduction 400
Net value 3,600
EK02 - statistical - 3,200
Contribution margin 400
Production Order
Material $ 1400
Labor $ 800
Overhead $ 450
Process $ 350
Total $ 3000
Product
Raw 2
Semi-2
Raw 1
Semi-1 +
-
Sales Order Cost
Estimate



n Now you have the choice if the system copies the planned costs, which are calculated using the
preliminary cost estimate for the production order, to the SD conditions, or if the planned costs of a
sales order costing for the sales document item are transferred to the SD conditions.
n You control this feature in the requirement class.
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SAP AG AC515 5-23
SAP AG 1999
Actual Postings
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning
n Actual Posting
n Funds Commitment
l Customizing



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SAP AG AC515 5-24
SAP AG 1999
Material:
- FIN-I : Finished Good Individual requirement
- SEMI-I : Semi-Finished Good Individual requirement
- RAW-I : Raw Material Individual requirement
- RAW-C: Raw Material Collective requirement
Material:
- FIN-I : Finished Good Individual requirement
- SEMI-I : Semi-Finished Good Individual requirement
- RAW-I : Raw Material Individual requirement
- RAW-C: Raw Material Collective requirement
SD SD
BOM
FIN-I
SEMI-I RAW-C
RAW-I
PP PP
SD Order 4711
Item 10 FIN-I 1 PC
Example: Valuated Sales Order Stock



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SAP AG AC515 5-25
SAP AG 1999
Cost Object - 4711 / 10
Plan Revenue
500
Plan Costs
FIN-I 200
Special Costs 10
Actual Revenue
Actual Costs
BOM Routing
Product Cost
Estimate
Unit Cost Estimate
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
Sales Order Controlling: Planning



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SAP AG AC515 5-26
SAP AG 2003
BOM
FIN-I
SEMI-I RAW-C
RAW-I
PP PP
Plan Costs
RAW-I 50
ACTIVITY 100
Actual Costs
PP Order 1 PC
SEMI-I 4711/10
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
PP Order 1 PC
FIN-I 4711/10
PP PP
Components with individual
requirements are costed when
using the valuated sales order stock
based on the valuation strategy
Components with individual
requirements are costed when
using the valuated sales order stock
based on the valuation strategy
Purchase order
RAW-I 4711/10
MM MM
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
Materials Requirements Planning



n MRP (Material Requirement Planning) creates 2 production orders and 1 purchase order. This
example is only using the planned costs of the production order. There is no sales order estimate.
The goods receipt for the raw material will be treated as valuated sales order stock, also. With multi-
level structures, it would be recommended to cost the item on the sales order. Any components using
individual requirements will also be valuated sales order stock.
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SAP AG AC515 5-27
SAP AG 1999
Goods Receipt / Invoice Receipt Raw Material
Valuation strategy:
Value Purchase Order
Expense Stock change
Customers Vendors
GR/IR Stock
Goods Receipt
1 PC RAW-I 60
Invoice Verification
1 PC RAW-I 60
RAW-C
100 PC 10
Stock: Quantity / Valuation
RAW-I
4711/10 1 PC 60
FI FI
SEMI-I
FIN-I
Purchase order
RAW-I 4711/10
MM MM
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n The goods receipt creates a debit to the valuated sales order stock. If price differences occur after the
issue of the material (during invoice receipt), and if the price difference account is a cost element,
then it could use the account assignment of the sale order item to post the price difference. This is the
reason for the valuated sales order stock valuation class (Accounting View 1 of the material master
record).
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SAP AG AC515 5-28
SAP AG 1999
Goods Issue Raw Material
RAW-C
100 PC 10
Stock: Quantity / Valuation
RAW-I
4711/10 0 PC 60
MM MM
Plan Costs
RAW-I 50
ACTIVITY 100
Actual Costs
RAW-I 60
PP Order 1 PC
SEMI-I 4711 / 10
PP PP
Expense Stock change
Customers
Sales
Revenue
Credit Stock
FI FI
SEMI-I
FIN-I
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n The goods issue of the raw material credits inventory and debits production expense.
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SAP AG AC515 5-29
SAP AG 1999
Goods Receipt Semi-finished Material
Valuation strategy:
production order
cost estimate
Plan Costs
RAW-I 50
ACTIVITY 100
Actual Costs
RAW-I 60
ACTIVITY 120
-150
PP Order 1 PC
SEMI-I 4711 / 10
PP PP
RAW-C
100 PC 10
MM MM
SEMI-I
4711/10 1 PC 150
Expense Stock change
Customers
Sales
Revenue
Credit Stock
Stock: Quantity / Valuation
RAW-I
4711/10 0 PC 60
FI FI
FIN-I
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n During the goods receipt of the sub-assembly, the debit is posted to valuated sales-order stock, and a
credit is posted to production output.
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SAP AG AC515 5-30
SAP AG 2003
Goods Issue: Components of the Finished Good
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
SEMI-I 150
RAW-C 10
PP Order 1 PC
FIN-I 4711/10
RAW-C
99 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC 60
MM MM
SEMI-I
4711/10 0 PC 150
Expense Stock change
Sales
Revenue
Credit Stock
FI FI
FIN-I
Customers
PP PP
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Goods issues in Materials Management (MM) for dependent requirements of the finished product
result in corresponding debits of the manufacturing orders. If the price control indicator of the
material is set to S, the production order is debited with the standard price; if the price control
indicator is set to V, the production order is debited with the current moving average price. The
manufacturing orders therefore always show the full actual costs. Note that if the price control
indicator of the material is set to S, the actual costs are calculated by multiplying the confirmed
quantity by the standard price.
n The goods issue is for the semi finished and raw materials to the finished goods. The FI postings are
normal, as with any goods issue from valuated stock.
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SAP AG AC515 5-31
SAP AG 2003
Goods Receipt Finished Good
Valuation strategy:
production order
cost estimate
Expense Stock change
Sales
Revenue
Credit Stock
RAW-C
99 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC 60
MM MM
SEMI-I
4711/10 0 PC 150
FIN-I
4711/10 1 PC 200
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
SEMI-I 150
RAW-C 10
ACTIVITY 50
-200
PP Order 1 PC
FIN-I 4711/10
FI FI
Customers
PP PP
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n During the goods receipt for the finished material, the debit to finished goods inventory and credit to
factory output is posted.
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SAP AG AC515 5-32
SAP AG 2003
Delivery to Customer
FI FI
Expense Stock change
Sales
revenues
Credit Stock
Delivery
Item 10 FIN-I 1 PC
RAW-C
99 PC 10
MM MM
SEMI-I
4711/10 0 PC 150
RAW-I
4711/10 0 PC 60
FIN-I
4711/10 0 PC 200
Stock: Quantity/Valuation
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
FIN-I 200 FIN-I 200
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n The sales order item is debited at the time of the goods issue for delivery to the customer. The cost of
sales is transferred to Financial Accounting with the goods issue posting.
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SAP AG AC515 5-33
SAP AG 2003
Results Analysis/Settlement (I)
FI FI
Expense Stock change
Price
Differences
Credit Stock
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
FIN-I 200 FIN-I 200
Special Costs 10
WIP 200
Work in Process
Goods in Transit
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n You can use results analysis to calculate the value of the costs that can be capitalized for each sales
order item. You can activate the costs that have an option to capitalize by means of settlement to
Financial Accounting (FI). For manufacturing enterprises, results analysis is recommended when you
want to capitalize goods that have been delivered but not yet invoiced.
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SAP AG AC515 5-34
SAP AG 2003
Invoices
FI FI
Expense Stock change
Sales
revenues
Credit Stock
Invoices
Delivery
Item 10 FIN-I 1 PC
10 FIN-I 1 PC 500
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500 500
Plan Costs Actual Costs
FIN-I 200 FIN-I 200
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n The actual revenues are updated on the sales order item by the invoice.
n Billing invoices the customer for the goods and services delivered for a sales order. In Sales and
Distribution, you create an invoice (billing document) on the basis of a reference document. In order-
related billing, the reference document is the standard order or the delivery document with delivery-
related billing.
n The data such as prices and quantities are transferred from the previous documents into the billing
documents. The price can be calculated in the following ways:
Using pricing on the basis of conditions (such as material or customer)
On the basis of the incurred costs if you want to use resource-related billing
n When you enter a billing document, the system proposes a billing type depending on the reference
document. The billing type determines the following:
Which pricing procedure is used for account determination for Financial Accounting
Whether the invoices are passed immediately to Financial Accounting
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SAP AG AC515 5-35
SAP AG 2003
Results Analysis/Settlement (II)
FI FI
Expense Stock change
Reserves
Sales
revenues
Credit Stock
Profit. Segment
Revenue 500
Cost of Sales 210
CO CO- -
PA PA
Cost Object - 4711/10
Plan Revenue Actual Revenue
500 500
Plan Costs Actual Costs
FIN-I 200 FIN-I 200
Special Costs 10
WIP -200
Reserves 10
COGS 210
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n When a sales order item is finally billed, this means that no more revenue is expected for that sales
order item. Only debit memos and credit memos can be entered. For this reason you can normally
cancel all capitalized inventories. In case of follow-up costs it is possible to create reserves.
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SAP AG AC515 5-36
SAP AG 2003
Settlement of Price Differences to Sales Order Item
Cost Object - 4711/10
Plan Revenue Actual Revenue
500 500
Plan Costs Actual Costs
FIN-I 200 FIN-I 200
Special Costs 10 Price diff. 40
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
SEMI-I 150
RAW-C 10
ACTIVITY 50
-200
PP Order 1 PC
FIN-I 4711/10
Plan Costs
RAW-I 50
ACTIVITY 100
Actual Costs
RAW-I 60
ACTIVITY 120
-150
PP Order 1 PC
SEMI-I 4711/10
FI FI
Expense Stock change
Price
Differences
Credit Stock
Profit. Segment
Revenue 500
Cost of Sales 200
CO CO- -
PA PA
Customers
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
30 30
10 10



n In complex MTO-scenarios, it might make sense to collect the total production costs including price
differences on the level of the sales order item. In this case, you can define the price difference
account as a cost element and post the value to the sales order item when settlement to FI takes
place.
n In this case, make sure that variance categories are not settled from the production order to CO-PA.
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SAP AG AC515 5-37
SAP AG 1999
Settlement of Variances to Profitability Analysis
FI FI
Expense Stock change
Price
Differences
Credit Stock
Profit. Segment
Revenue 500
Cost of Sales 200
Variance Finish 10
Variance Semifinish 30
CO CO- -
PA PA
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
SEMI-I 150
RAW-C 10
ACTIVITY 50
-200
PP Order 1 PC
FIN-I 4711 / 10
Plan Costs
RAW-I 50
ACTIVITY 100
Actual Costs
RAW-I 60
ACTIVITY 120
-150
PP Order 1 PC
SEMI-I 4711 / 10
PP PP
30 30
10 10
Customers



n Because the manufacturing orders contain the full actual costs for the production of the material
manufactured by the manufacturing order, you can calculate variances at the level of the
manufacturing orders and settle them to CO-PA.
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SAP AG AC515 5-38
SAP AG 1999
Funds Commitment
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning
n Actual Posting
n Funds Commitment
l Customizing



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SAP AG AC515 5-39
SAP AG 2003
Definition Funds Commitments
l Contractual commitments which
result in actual costs
n Purchase Requisition
n Purchase Orders
l Capitalized costs in the valuated
sales order stock



n Commitments show you the contractual or planned commitments that do not yet affect accounting
(no expenses yet) but that will result in actual costs at a later time. This allows you to analyze the
effects on cost accounting of purchase orders for sales document items.
n In addition, you can view the funds commitment in the valuated sales order inventory on the sales
order item as statistical actual data in the Product Cost Controlling Information System if the sales
order item carries costs and revenues.
n Unlike unvaluated sales order stock, a goods receipt in valuated sales order stock leads to actual
costs on the relevant Controlling objects (SD document item, WBS element). In order to be able to
display the committed funds on the sales order stock in the Controlling information system, the
system would need to read the corresponding segments in the material master.
n If the purchase requisitions are created by the MRP-run, the commitments for these purchase
requisitions are not updated.
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SAP AG AC515 5-40
SAP AG 2003
Reporting: Commitments
Cost
Element
Planned
Cost
Purchase
Requisition
Stock
Actual
Costs
Revenues
Steel
Purchase
Order
Electrical
Subcontr.
Purchase
Fin. Goods
- 1000,-
800,-
Total - 200,-
250,-
100,-
200,-
200,-
250,- 100,- 200,- 200,-
required,
not ordered yet
ordered,
not delivered
yet
Sales order
stock



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SAP AG AC515 5-41
SAP AG 1999
Customizing
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning
n Actual Posting
n Funds Commitment
l Customizing



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SAP AG AC515 5-42
SAP AG 2003
Customizing - Requirement Class
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id B
Costing Method 1
Costing Variant PPC4
Costing Sheet COGS
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Automatic Pre-
Costing of Sales
Order Item
Account Assgt. Category E
Valuation M
Val.-Strategy
Settlement Profile SD1
Results Analysis Key SDOR1
Valuated Sales Order
Stock with Cost Object
Controlling on Sales Order



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SAP AG AC515 5-43
SAP AG 1999
Account Assignment Category E
Consumption Posting
Account Modification
Ind.Account Assigment Screen
Special Stock
Detailed Information
Acc.assigt.changeable
Acc.ass.change on IR
Derrive acct. assigt.
VKB
1
E
E Acc. Via Sales Order
Account Assignment Category E
Special stock
Product Cost by
Sales Order



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SAP AG AC515 5-44
SAP AG 2003
Customizing Assembly Processing Type 2
Account Assgt. Category
Valuation
Val.-Strategy
Settlement Profile
Results Analysis Key
Assembly / Requirements
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
2
Requirement Class
This indicator controls whether
l the preliminary costing for the manufacturing
order should be used for assembly processing
l a sales order costing can be created



n This indicator is only relevant if you are using assembly type 2 ("production order, network or
service (stat. processing)").
If you don't set this indicator the system copies the planned costs, which are calculated using the
preliminary cost estimate for the production order, to the SD conditions. You are then unable to
create a sales order costing for the sales document item.
If you set this indicator, you can create a sales order costing for the sales document item, which is
then copied to the conditions. The planned costs, created using the preliminary cost estimate for
the production order, are not copied into the SD conditions.
n The following examples explain where it is appropriate to create a sales order costing for assembly
type 2:
A cost component split has been stored for sales order costing using the product costing method
but it is not available for the preliminary costing estimate of a production order (because the
system only creates a cost component split dynamically for the production order display). Copying
the cost component split based on sales order costing to Profitability Analysis (CO-PA) is useful
if you are working with a valuated sales order stock and the standard price is based on the sales
order costing (also see Valuation with standard price).
When you use the nonvaluated sales order stock, the preliminary cost estimate does not deliver the
complete planned costs to the assembly order. To receive the complete planned costs, it makes
sense to calculate the sales order costing and transfer this to the SD conditions.
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SAP AG AC515 5-45
SAP AG 2003
Customizing Transferring Costing Data into
Pricing
Account Assgt. Category
Valuation
Val.-Strategy
Settlement Profile
Results Analysis Key
Assembly / Requirements
Costing
Costing-Id
Costing Method
Costing Variant
Costing Sheet
Copy Costing Sheet
CndTypLineItems
CndTypLineItFix
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Transfer of the
total cost
EK01
Transfer of the
fixed cost part
Requirement Class



n If you also want to display the fixed cost part in the condition in addition to the full costs, then enter
a condition type in field "CondTypeIndFix". The transfer of the fixed cost part improves the ability
of the system to predict the profit margin.
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SAP AG AC515 5-46
SAP AG 2003
Only individual req.
20 x 30 x
10 x
Costing lot size
material master
BOM Structure
Individual
requirements
Collective
requirements
20 x
30 x
10 x
SD Order 4711
Item Quantity
10 Material 1 10
Production structure
Passing on the Costing Lot Size
Material 2
Material 2
Material 1
2 x 3 x
Material 1
Costing lot size: 10
Material 2
Costing lot size: 20
Material 3
Costing lot size: 30
Material 1
Costing lot size: 10
Material 2
Costing lot size: 20
Material 3
Costing lot size: 100



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SAP AG AC515 5-47
SAP AG 1999
BOM Structure
Individual
requirements
Collective
requirements
Transfer only with collective requirements
Prio Strategy Designation
1 2 Current standard cost estimate
Transfer Strategy
Transfer Strategy for Collective Requirements



n The transfer strategy determines whether a material is recosted when cost planning data for the
material exists in the plant or controlling area of the finished product. Transferring existing costing
data can significantly improve performance.
n You can define strategy sequences in Customizing for Product Cost Controlling in order to specify
how you want the system to search for existing cost estimates for the purpose of transferring costing
data from one cost estimate to another:
The Transfer only with collective requirements material indicator in transfer control allows you to
have the transfer depend on the requirements indicator:
- For materials from individual requirements, the system creates a new cost estimate even if the
search strategy finds that a cost estimate already exists for that material.
- For materials from collective requirements, existing costing data are transferred into the new
cost estimate.
n The strategies for transfer control should harmonize with the setting in the costing variant for passing
on the costing lot size:
If the costing lot size is only passed on for individual requirements materials, you should make
sure that transfer only takes place for collective requirements materials.
If the costing lot size is always passed on, you should not define any transfer strategies for sales
order costing.
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SAP AG AC515 5-48
SAP AG 2003
Customizing Costing Variant (I)
Costing Variant
Control
Costing Type
Valuation Variant
Date Control
Transfer Control
Reference Variant
Update
Assignment
Misc
Transfer only with collective requirements material
Strategy Sequence Fiscal Year Periods ...
12 Current standard cost estimate
Single-Plant Cross-Plant
Quantity Structure Pass on Lot size Only with individual requirement
...
Performance Recommendation:
Pass on the lot size only with individual
requirements and use a transfer control,
which searches for existing cost
estimates for collective requirements



n A costing variant contains control parameters for calculating the planned costs of a sales document
item. From the sales document item you branch to the costing functions.
n Performance recommendation: Pass on the lot size only for individual requirements and use a
transfer control, which searches for existing cost estimates for collective requirements.
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SAP AG AC515 5-49
SAP AG 2003
Customizing Costing Variant (II)
Costing Variant
Control
Costing Type
Valuation Variant
Date Control
Transfer Control
Reference Variant
Update
Assignement
Defaults for Update Parameters
Save itemization
Save error log
Defaults changed by user
Quantity Structure
Itemization is needed, if target costs for
variance analysis are based on sales
order costing
Postprocessing with Unit Costing
Costing Variant
Misc
Sales document



n The indicator save itemization' must be activated, if the target costs for variance analysis are based
on sales order costing.
n If you cost a sales order item with a product cost estimate and you want to process the results of this
cost estimate manually as a unit cost estimate, enter a costing variant in the parameter costing variant
(postprocessing with unit costing) with which this unit cost estimate can be processed.
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SAP AG AC515 5-50
SAP AG 2003
Activate Components
Cost Center
Order Management
Commitment Management
Profit Analysis
Activity based Costing
Profit Center Accounting
Projects
Sales Orders
W. commit management
Cost Objects
1 Component active
1 Component active
1 Active
4 Profit Analysis
2 Activity based Costing
This indicator controls
whether commitments
are updated
Customizing Commitments
Controlling Area
0001 Europe



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SAP AG AC515 5-51
SAP AG 1999
Basic Data
Names
Controlling Area
Valid from
Name
Description
Cost Element Category
Attribute Group
90 Statistical cost element for Balance Sheet Account
Finished Goods
Finished Goods
01.01.1997 31.12.9999
0001
For balance sheet accounts
the cost element type 90 is
defined
Cost Elements for Balance Sheet Account
Cost Element
792000



n The committed funds on the sales order stock not only need to be displayed, but must have interest
calculated for them as well, especially in projects. Therefore the information on the committed funds
needs to be available up-to-date on a daily basis. But this information cannot be taken from the
material master, and thus needs to be updated in Controlling under the value type 11 Statistical actual
for all goods movements for sales order stock. To this end, cost elements are created with the cost
element category 90 statistical balance sheet account for the relevant statistical balance sheet
accounts.
n Note: Before an inventory account may be created as a statistical cost element, the inventory account
must be already identified for MM Account determination for the Inventory posting (BSX process).
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SAP AG AC515 5-52
SAP AG 2003
MTO with Sales Order Controlling: Unit Summary
You are now able to:
l Explain the quantity and value flow in a Make-to-Order Scenario
with Sales Order Controlling
l Understand the discrete manufacturing process
l Describe commitment management
l Identify the necessary settings in customizing



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SAP AG AC515 5-53
Make-to-Order Production with Sales Order Controlling: Exercises


Unit: Make-to-Order Production with Sales Order
Controlling

At the conclusion of the exercise, you will be able to:

Understand quantity and value flow in make-to-order manufacturing
with sales order controlling using discrete manufacturing
Check the control data of the sales order item
Determine which materials will be produced or purchased specifically
for the sales order
Create production orders and purchase orders to fulfill the sales
orders requirements
Create a delivery and a billing document for a sales order
Analyze the relevant accounting and controlling documents

The finished product R-F1## is produced in plant 1000. Verify the
existing master data. You will create a sales order for the material R-F1##
and execute material requirements planning for your sales order. You will
then create production orders and a purchase order and complete the
necessary postings (goods issues, goods receipts, confirmations) in the
system to produce the product R-F1##. At the end of the exercise, you
will create a partial delivery to the customer.

1-1 Start by creating a sales order for the finished good R-F1##.
1-1-1 Create a sales order for the material R-F1##:
Enter the following data:
Order Type: OR (standard order)
Sales Organization: 1000
Distribution Channel: 10
Division: 00

Sold-to party: 1171
PO number: 44##
Material: R-F1##
Order quantity: 10 pieces
Choose: Enter
Accept the proposed delivery date.

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SAP AG AC515 5-54

1-1-2 Check the following control data of the sales order item.

What item category does the item have?

_________________________________________________________

What results analysis key and costing sheet were transferred to the sales
order? How were the defaults for the costing sheet and results analysis key
calculated for the sales order item?

_________________________________________________________

What requirements type was determined for the sales order item?

_________________________________________________________

1-1-3 Save the sales order and write down the sales order number:

_________________________________________________________

1-2 Check the BOM (listed below) for R-F1##. Answer the following questions by
checking the material master setting for the individual/collective requirements
indicator for the BOM components.
1-2-1 Which assemblies will be produced specifically for the sales order
requirement?

________________________________________________________

1-2-2 Which materials will be issued from anonymous stock?

_________________________________________________________

1-2-3 Change the individual/collective requirements indicator for the material
R-T4## so that this component will be purchased specifically for the sales
order.

_________________________________________________________

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SAP AG AC515 5-55

R-F1##
R-B1##
1
R-B2##
1
R-B3##
1
BOM for the product
R-F1##
R-T2##
1
R-T1##
1
R-T4##
1
R-B4##
1
...

1-3 Execute material requirements planning for your sales order. Save the results for all
components.

1-4 From the Evaluations menu, go to the stock/requirements list for R-B3##, plant
1000, and display the planning result.
1-4-1 The list displays the planned order created to fulfill the dependent
requirement of your sales order. Convert this planned order to a production
order.

1-4-2 Display the assignments for the production order. Is the production order
assigned to the sales order?
___________________________________________________
1-4-3 Display the assignments for the production order. What is the settlement
receiver?
___________________________________________________
1-4-4 Release the production order.

1-4-5 Save the production order and note the production order number:

_______________________________________________________

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SAP AG AC515 5-56

1-5 Check the stock/requirements list for R-T4##. A purchase requisition was created
to cover the sales order requirement.
1-5-1 Convert the purchase requisition into a purchase order. Use the purchasing
organization 1000, vendor 1000, purchasing group 010 and company code
1000. The price is 25 EUR.
1-5-2 Save the sales order and write down the sales order number: If the dialog
box PO of today already exists appears, select New purchase order.

________________________________________________________
1-5-3 Go to the information system for Product Cost by Sales Order and call the
commitment cost report for your sales order. Check whether the
commitment for the purchase order was updated on the corresponding sales
order item.

1-6 From inventory management, process goods receipt for the material R-T4## and
review the valuated special stock report.
1-6-1 Process the goods receipt:

Menu path:
Logistics Materials Management Inventory Management Goods
Movement Goods Receipt For Purchase Order PO Number Known

Enter the following data:
Purchase Order: Your purchase order number
Choose: Enter

Set the OK indicator for the purchase order item.
Choose: Save

1-6-2 In the valuated special stock report, determine if the material R-T4## is
shown as valuated special stock.

1-7 Proceed with manufacturing material R-B3##.
1-7-1 Issue material R-T4## to the production order for R-B3##. Use movement
type 261, plant 1000, storage location 0001. Does the operation create an
accounting document?
______________________________________________________
1-7-2 Return to the production control menu. Enter the production confirmation
(time-ticket based) for the last operation, confirm a quantity of 10 and
increase the proposed activity quantity to 2 hours. Save the final
confirmation.

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SAP AG AC515 5-57

1-7-3 Go to the information system and display the actual costs for the production
order. Was the production order credited for the goods receipt of R-B3##?
How was the value of the goods receipt determined?
______________________________________________________

1-8 Return to the stock/requirements list for R-F1##. When MRP was executed for your
sales order, a planned order was created for R-F1##.
1-8-1 Convert this planned order to a production order.
Release and save the production order. Write down the production order number.

_______________________________________________________

1-9 Proceed with manufacturing material R-F1##.
1-9-1 Issue the material for the production order for R-F1##. Use movement
type 261, plant 1000, and storage location 0001.
1-9-2 Return to the production control menu. Enter a partial confirmation for
the production order for R-F1##. Confirm a quantity of 5 only and save
the partial confirmation.

1-9-3 Go back to the stock overview for material R-F1##. Is the goods receipt
for the production confirmation of 5 pieces displayed as sales order
stock? What is the total stock quantity and stock value for valuated sales
order stock of R-F1##?

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SAP AG AC515 5-58

1-10 5 of the 10 pumps ordered are now available for delivery.
1-10-1 Create a delivery for the 5 pumps.

Enter the following data:
Shipping point: 1000
Delivery date: Todays date plus 10 days
Sales order: Your sales order number
Note the delivery number.
______________________________________________________

1-10-2 Display the goods issue document and determine if any financial accounting
or cost accounting documents were created for the goods issue.


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SAP AG AC515 5-59
Make-to-Order Production with Sales Order Controlling: Solutions


Unit: Make-to-Order Production with Sales Order
Controlling

1-1 Start by creating a sales order for the finished good R-F1##.
1-1-1 Create a sales order for the material R-F1##:

Menu path:
Logistics Sales and Distribution Sales Order Create

Enter the following data:
Order Type: OR (standard order)
Sales Organization: 1000
Distribution Channel: 10
Division: 00
Choose Enter

Enter the following data:
Sold-to party: 1171
PO number: 44##
Material: R-F1##
Order quantity: 10 pieces
Choose Enter
Accept the proposed delivery date by selecting Delivery Proposal.
1-1-2 Check the following control data of the sales order item.

What item category does the item have?
(Sales tab)

TAN (Standard Item)

What results analysis key and costing sheet were transferred to the sales
order? How were the defaults for the costing sheet and results analysis key
calculated for the sales order item?

To check the results analysis key and the costing sheet, which are assigned
using the requirements class, select the following menu items:
Goto Item Account assignment

Results Analysis Key: SDOR1
Costing Sheet: COGS1

What requirements type was determined for the sales order item?
(In the sales overview, select the Procurement tab)
CO2 (Make-to-Order Manufacturing with Sales Order Controlling)

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SAP AG AC515 5-60
1-1-3 Save the sales order and write down the sales order number.

______________________________________________________

1-2 Check the BOM (listed below) for R-F1##. Answer the following questions by
checking the material master setting for the individual/collective requirements
indicator for the BOM components.
1-2-1 Which materials will be produced specifically for R-F1##?

Menu path:
Logistics Production Master Data Material Master
Material Display Display Current
Material number
Choose Enter. In the dialog box, select MRP 4.
Choose Enter. In the dialog box, enter the following:
Plant: 1000
Choose Enter.

From the MRP4 view in the material master, determine the entry for
individual/collective requirements for each subassembly. (Material:
R-B1##, R-B2##, R-B3##, R-B4##). As the indicator for R-B3## is not
selected, the setting of the higher-level assembly is used.

1-2-2 Which materials will be issued from anonymous stock?

The collective requirement indicator is selected for R-B1##, R-B2## and R-
B4##. This determines that these subassemblies will be issued from
anonymous stock to the production order for R-F1##.

1-2-3 Change the individual/collective requirements indicator for the material
R-T4## so that this component will be purchased specifically for the sales
order.

Ensure that the individual/collective requirements indicator for the material
R-T4## is not selected (or set to 1). R-T4## will then follow the same
control set for R-B3##. MRP will generate a purchase requisition for R-
T4## to cover the individual requirement for R-F1##.

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SAP AG AC515 5-61
R-F1##
R-B1##
1
R-B2##
1
R-B3##
1
BOM for the product
R-F1##
R-T2##
1
R-T1##
1
R-T4##
1
R-B4##
1
...

1-3 Execute material requirements planning for your sales order. Save the results for all
components.

Menu path:
Logistics Production MRP Planning Single Item Planning Sales
Order

Enter your sales order number and item 10. Select Enter twice. Save the MRP result
for R-F1##. If the window Next Stopping Point appears, select Proceed without
stopping, and then Continue.

1-4 From the Evaluations menu, go to the stock/requirements list for R-B3##, plant
1000, and display the planning result.

Menu path:
Logistics Production MRP Evaluations Stock/Requirements List
Enter material R-B3##, plant 1000, and select Enter.

1-4-1 The list displays the planned order created to fulfill the dependent
requirement of your sales order. Convert this planned order to a production
order.

To convert the planned order: Double-click the planned order, and select
Prod.ord (Convert planned order to production order).

1-4-2 Display the assignments for the production order. Is the production order
assigned to the sales order?
Select the Assignment tab.
The production order is assigned to the sales order item for material R-F1##.

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SAP AG AC515 5-62
1-4-3 Display the assignments for the production order. What is the settlement
receiver?
Menu path:
Header Settlement rule

Settlement rule: 100% to material

1-4-4 Release the production order.

To release the production order:
From the production order header, select
Functions Release
1-4-5 Save the production order and note the production order number.
(Select Refresh in the stock/requirements list, and write down the production
order number).

______________________________________________________

______________________________________________________
1-5 Check the stock/requirements list for R-T4##. A purchase requisition was created
to cover the sales order requirement.

Menu path:
Logistics Production MRP Evaluations Stock/Requirements List
Enter material R-T4##, plant 1000, and select Enter.
1-5-1 Convert the purchase requisition into a purchase order. Use the purchasing
organization 1000, vendor 1000, purchasing group 010 and the company
code 1000. The price is 25 EUR.
To convert the purchase requisition into a purchase order: Double-click the
purchase requisition, and select Purchase order (Convert purchase
requisition to purchase order).

Enter the vendor and purchasing organization, and select Enter. From the
selection screen, select the purchase requisition, and select Adopt.

If the dialog box PO of today already exists appears, select New purchase
order.
If necessary, enter a price of 25 EUR.
1-5-2 Save your purchase order and write down the purchase order number.
(Select Refresh in the stock/requirements list and write down the purchase
order number).

______________________________________________________

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SAP AG AC515 5-63

1-5-3 Go to the information system for Product Cost by Sales Order and call the
commitment cost report for your sales order. Check whether the
commitment for the purchase order was updated on the corresponding sales
order item.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Detailed Reports For Sales
Order

Enter the following data:
Sales order: Your sales order number
Item: 10
Choose: Execute
Go to the Funds commitment layout.
Yes, the commitment was updated on the sales order item.

1-6 From inventory management, process goods receipt for the material R-T4## and
review the valuated special stock report.
1-6-1 Process the goods receipt:

Menu path:
Logistics Materials Management Inventory Management Goods
Movement Goods Receipt For Purchase Order PO Number
Known
Enter the purchase order number and select the OK indicator for the
purchase order item.

Select Post, to post the goods receipt.

1-6-2 In the valuated special stock report, determine if the material R-T4## is
shown as valuated special stock.

Menu path:
Logistics Materials Management Inventory Management
Environment Stock Valuated Special Stock

Enter the following data:
Material: R-T4##
Choose Execute

Yes, R-T4## is displayed as valuated sales order stock.
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SAP AG AC515 5-64
1-7 Proceed with manufacturing material R-B3##.
1-7-1 Issue material R-T4## to the production order for R-B3##. Use movement
type 261, plant 1000, and storage location 0001. Does the operation create
an accounting document?

Menu path:
Logistics Materials Management Inventory Management
Goods Movement Goods Issue

Enter movement type 261, plant 1000, and storage location 0001. Select To
Order and enter your production order number for R-B3## in the dialog box
that appears. Select Continue and save the goods issue document.

Yes, an accounting document is created. To display the accounting
document:
Menu path:
Goods Issue Display
Enter the material document number. Select Enter. Select Accounting
documents.

1-7-2 Return to the production control menu. Enter the production confirmation
(time-ticket based) for the last operation, confirm a quantity of 10 and
increase the proposed activity quantity to 2 hours. Save the final
confirmation.

Menu path:
Logistics Production Production Control Confirmation Enter
For Operation Time Ticket

Enter the following data:
Order: Your production order number
Oper./activity: 0070
Confirm.type: Final confirmation
Select: Enter
Increase the proposed activity quantity to 2 hours and save the confirmation.
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SAP AG AC515 5-65

1-7-3 Go to the information system and display the actual costs for the production
order. Was the production order credited for the goods receipt of R-B3##?
How was the value of the goods receipt determined?
Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Detailed Reports For Sales
Order

Enter the following data:
Order: Your production order number
Choose: Execute

Select the Actual/planned comparison layout.
Yes, the production order was credited for the goods receipt of R-B3##.
The value was determined from the sales order cost estimate for R-B3##.
This can be verified by displaying the cost estimate for the sales order item.

1-8 Return to the stock/requirements list for R-F1##. When MRP was executed for your
sales order, a planned order was created for R-F1##.
Menu path:
Logistics Production MRP Evaluations Stock/Requirements List

Enter material R-F1##, plant 1000, and select Enter.

1-8-1 Convert this planned order to a production order.
To convert the planned order: Double-click the planned order, and select
Prod.ord (Convert planned order to production order).

1-8-2 Release and save the production order. Write down the production order
number.

_________________________________________________________
To release the production order: From the production order header, select
Functions Release.
Save your entries.
(Select Refresh in the stock/requirements list, and write down the
production order number).
______________________________________________________

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SAP AG AC515 5-66

1-9 Proceed with manufacturing material R-F1##.
1-9-1 Issue the material for the production order for R-F1##.
Logistics Materials Management Inventory Management
Goods Movement Goods Issue

Enter movement type 261, plant 1000, storage location 0001. Select To
order and enter your production order number for R-F1## in the dialog box
that appears. Select Continue and save the goods issue document.
(To view all materials, select Page Down on your keyboard).

1-9-2 Return to the production control menu. Enter a partial confirmation for the
production order for R-F1##. Confirm a quantity of 5 only and save the
partial confirmation.

Menu path:
Logistics Production Production Control Confirmation Enter
For Order

Enter the order number, and select Enter: Enter a quantity of 5 and check
the partial confirmation. Save the confirmation.

1-9-3 Go back to the stock overview for material R-F1##. Is the goods receipt for
the production confirmation of 5 pieces displayed as sales order stock?
What is the total stock quantity and stock value for valuated sales order
stock of R-F1##?

Menu path:
Logistics Materials Management Inventory Management
Environment Stock Valuated Special Stock

Enter the following data:
Material: R-F1##
Sales document: Your sales order number
Sales order item: 10
Choose: Execute

Yes, the 5 pieces of R-F1## are displayed as sales order stock.
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SAP AG AC515 5-67

1-10 5 of the 10 pumps ordered are now available for delivery.
1-10-1 Create a delivery for the 5 pumps.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Outbound Delivery

Enter the following data:
Shipping point: 1000
Selection date: Todays date plus 10 days
Sales order: Your sales order number

Select Enter

Proceed with the steps for picking.

Select the Picking tab.

Enter the following data:

Storage location: 0002
Pick quantity: 5
Delivery quantity: 5
Post the goods issue.

Note the delivery number.

______________________________________________________

1-10-2 Display the goods issue document and determine if any financial accounting
or cost accounting documents were created for the goods issue.

From delivery processing, select: Outbound Delivery Display. Enter the
delivery document, choose Enter, select item 10, and then Environment
Document Flow. Select the line GD goods issues, and then Environment
Display Document. Select Accounting documents.
Accounting documents were created for the goods issue. The value is based
on the inventory cost, which was determined by the sales order cost
estimate.



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SAP AG AC515 6-1
SAP AG 1999
Period End Closing
l Period-End Closing in Controlling by Order
l Period-End Closing in Controlling by Sales Order
Contents:



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SAP AG AC515 6-2
SAP AG 2003
Period End Closing: Objectives
l Explain how to carry out the period-end
closing in controlling by order and controlling
by sales order.
l Understand which alternative valuation
methods you can use in results analysis.
l Maintain settlement rules and execute sales
order settlement.
At the conclusion of this unit, you will be able to:



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SAP AG AC515 6-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 6-4
SAP AG 2003
Period End Closing: Business Scenario
l In your company at the beginning of the new
month the following activities will be carried
out for the last period:
n Template Allocation, Overhead cost for materials
n WIP (Work in Process)
n Variance Analysis on production orders
n Results analysis on sales orders
n Settlement of the costs



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SAP AG AC515 6-5
SAP AG 1999
Roadmap: Period End Activities
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-6
SAP AG 1999
Period End Closing
Order related
Controlling
Sales Order
Controlling
1. Template Allocation
2. Revaluation at Actual Activity Price
3. Overhead
4. Work in Process
5. Variance Calculation
6. Settlement
1. Template Allocation
2. Revaluation at Actual Activity Price
3. Overhead
4. Results Analysis
6. Settlement
PP PP
SD SD



n The period end closing process for the production orders which are assigned to a sales order is now
identical to the traditional PP period closing process. Specifically, the period-end process now
includes WIP and variance calculation for the production orders that support the MTO strategy. If
you are using Sales Order Controlling, there are additional processes that may need to be completed:
overhead, results analysis and settlement. In the lean' environment, there is no sales order closing
process.
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SAP AG AC515 6-7
SAP AG 1999
Process, Overhead Costs
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-8
SAP AG 1999
Cost centers
Products
Sales Order
Allocation
Allocation
Allocation
Processes
Processes
Identify business processes
that consume significant
overhead resources
Assign costs to processes
through resource drivers
Detect non-value-added
activities
Provide realistic product
costs through product
cost driver consumption
Financial Financial Accounting Accounting
Process Costs



n This is a simplified illustration of general cost allocation for production. From other modules (such
as Financial Accounting), direct costs are directly assigned to cost object accounts, and the overhead
costs of the cost centers are assigned according to responsibility.
Traditionally, overhead costs are then allocated through various methods (surcharges, activity
accounting, etc.) from the cost centers onto the cost objects.
When using activity based costing, the overhead costs are first assigned from the cost centers onto
the processes and are allocated to the cost objects only according to the utilization of the
corresponding processes.
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SAP AG AC515 6-9
SAP AG 2003
Cost centers
Products
Sales Order
Surcharge
n Percentage of base cost element
n In reference to quantities
n On the basis of dependencies
n On the basis of fixed and variable cost portions
Overhead Cost Allocation via Surcharge



n You determine overhead costs in the Cost Center Accounting component. You can allocate these
costs to the product in a number of ways:
n Activity allocation
You can use activity allocation to allocate the machine or labor costs from a production cost center
to a product or order. You can calculate an activity price by cost center and specify the number of
activities in the routing.
n Overhead rates
You can define overhead rates in a costing sheet to allocate storage costs from the warehouse to a
product or order. You can calculate this allocation as a percentage of the direct material costs or in
proportion to the quantity.
n Process costs
You can use Activity-Based Costing to calculate process costs. You can then allocate these costs
to a product or order. You can calculate a price for each process based on the resources used by
that process, and a process template specifies the number of processes.
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SAP AG AC515 6-10
SAP AG 1999
Overhead versus Process Costs
Conventional Costing
Direct Material Costs $
Material Costs
Production Hours $
Production Costs
Total Cost of Goods
Manufactured
Costing using Process Costs
Direct Material Costs $
Material Costs
Production Hours $
Production Costs
Storage process $
Total Cost of Goods
Manufactured
Procurement process $
Commissioning process $
Production Overhead $
Set up process $
Test process $
Shop Floor control $
Material Overhead $



n Further information on activity based costing is available in course AC420.

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SAP AG AC515 6-11
SAP AG 1999
WIP (Work in Process)
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-12
SAP AG 1999
WIP Calculation in Product Controlling by Order
Order
Status
Partially-Released
or Released
Partially Delivered Delivered or
Technically Completed
WIP
at Actual
=
=
-
=
-
P
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V
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C
O
Actual Costs Actual Costs
Actual Costs
WIP
at Actual
Variances
Delivery
Value
Delivery
Value



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SAP AG AC515 6-13
SAP AG 2003
WIP (Work in Process)
Material 4,600
Labor 2,800
Overhead 1,600
Process 1,500
Total 10,500
Production Order
Credit
Stock Change - 5,400
Work in Process 5,100
Overhead 2,800
Process 1,500
Goods receipt 5,400
Debit
Goods Issue 4,600
Confirmation 2,800
Reserves
WIP
Stock change
Expenses
Financial Accounting
Profit Center Accounting
Division
Product
Product-
group
Settlement



n If you control your product cost by order, the work in process is that part of the order that has not yet
been delivered to stock. If no goods receipt has been posted by period close, the work in process is
the actual costs to date. If a part of the lot has been delivered to stock, the work in process is the
difference between actual costs and the value of the good receipt.
n The system updates the financial accounts with the work in process when the order is settled.
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SAP AG AC515 6-14
SAP AG 1999
Variance Analysis
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-15
SAP AG 2003
Variance Calculation
Debit
Credit
Stock Change - 2000
Production Order
Material 1000
Labor 500
Overhead 100
Process 800
Variance 400
Where do the
variances
come from?



n Variance calculation is an analysis tool for closer examination of problematic discrepancies.
n Product order variances result from either:
Too many or too few costs debited
Too many or too few costs credited
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SAP AG AC515 6-16
SAP AG 2003
Variance Categories
Variances on the
Input Side
20
50
100
INPUT PRICE
INPUT
QUANTITY
INPUT
Surcharge of 25%
on $150 (actual)
instead of $100
(planned)
STRUCTURE
O
S
Variances on the
Output Side
Setup
OUTPUT
PRICE
LOT SIZE
REMAINING
Sum of individual
variances does not
equal total
variances
Mixed price
Variances between the planned
prices and the actual prices of
the resources
Variances between the planned
input quantities and the actual
input quantities of the resources
Variances caused by a different
resource being used than was
planned
Variances that cannot be
assigned to any other variance
category, such as overhead rates
Variances between the planned
and actual costs (independent of
the lot size as calculated for the
delivered quantity)
Variances between the planned
credit (standard price) and the
actual credit (for example,
output price)
Variances that cannot be
assigned to any other variance
category, such as rounding
differences
Variances between the standard
price calculated from a mixed
cost estimate of multiple proc.
altern. and a specific proc. alt.



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SAP AG AC515 6-17
SAP AG 1999
Integration of Variances
Total 2400
Credit
Inv. Change - 2000
Debit
2000
Stock Price variance
400
Financial Accounting
Variance Categories
Input Price 150
Input Quantity 150
Resource-Usage 100
Scrap 0
Lotsize 0
Mix-Price 0
Output Price 0
Total: 400
Profitability Analysis Production Order
Variance 400
Material Labor OH Process
800 400 100 700
Sales Order
Cost Estimate
Target cost for variances
are based on the cost
estimate used for valuating
the delivery to stock
Target cost for variances
are based on the cost
estimate used for valuating
the delivery to stock
Material 1000
Labor 500
Overhead 100
Process 800



n The variances relevant to settlement are calculated based on the cost estimate used for valuating the
delivery to stock. If collective orders exist for a sales order, the delivery of semifinished products in
the collective order is valuated using the production order cost estimate. Consequently, variance
calculation requires information whether the valuation is based on a sales order cost estimate,
production order cost estimate, or standard cost estimate for the material. You can determine
additional target cost versions for these variances for the information system. Provided the material
is below the moving average price control, the variances appear only on production order levels.
n Variance calculation for the Controlling object of the SD document item is not planned.
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SAP AG AC515 6-18
SAP AG 1999
Results Analysis
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-19
SAP AG 2003
Results Analysis
Which amount of the
current expenses could
be capitalized as
work in process?
Should reserves for
unrealized costs be
created?
Are reserves for
imminent losses
necessary?
What is the
periodic result
of my sales?



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SAP AG AC515 6-20
SAP AG 1999
Integration of Results Analysis (I)
Sales Order Item
Material 1000 1100
Labor 500 600
OH 100 120
Process 800 1000
Plan Actual
Results Analysis Data
n Revenues
n Cost of Sales
n Work in Process
n Reserves
Results Analysis
Sales Order Item
Material 1000 1100
Labor 500 600
OH 100 120
Process 800 1000
Plan Actual



n The first stage of results analysis is to calculate the following values:
Inventory values
Reserves for unrealized costs
Reserves for imminent loss
Reserves for complaints and commissions
Cost of sales
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SAP AG AC515 6-21
SAP AG 1999
Integration of Results Analysis (II)
Reserves
WIP
Stock change
Expenses
Financial Accounting
Profit Center Accounting
Division
Product
Product-
group
Profitability Analysis
Revenues
Cost of sales
Profit
Sales Order Item
Material 1000 1100
Labor 500 600
OH 100 120
Process 800 1000
Plan Actual
Results Analysis Data
n Revenues
n Cost of Sales
n Work in Process
n Reserves
Settlement



n You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA):
Inventory values
Reserves for unrealized costs
Reserves for imminent loss
Reserves for complaints and commissions
The cost of sales if you are using a nonvaluated sales order inventory and are balancing in
Financial Accounting with the cost-of-sales accounting method
n You can settle the following to Profitability Analysis (CO-PA):
Cost of sales or calculated revenue
Reserves for imminent loss and complaints
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SAP AG AC515 6-22
SAP AG 1999
General Approach (1)
POC
Results Analysis provides different
methods to determine the
percentage of completion
n R(PA) = Percentage of Completion x Planned Revenue
n C(PA) = Percentage of Completion x Planned Costs
Profitability Analysis
R(PA) Revenues
C(PA) Cost of sales
Profit
CO CO- -
PA PA



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SAP AG AC515 6-23
SAP AG 1999
General Approach (2)
!
Profitability Analysis
R(PA) Revenues
C(PA) Cost of sales
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
R(a)
Actual
Revenues
C(a)
Actual
Costs
FI FI
CO-PA
does not equal
FI



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SAP AG AC515 6-24
SAP AG 1999
General Approach (3)
!
Profitability Analysis
R(PA) Revenues
C(PA) Cost of sales
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
R(a)
Actual
Revenues
C(a)
Actual
Costs
FI FI
If C(a) > C(PA)
Then WIP = C(a) C(PA)
Else Reserves = C(PA) C(a)
If R(a) < R(PA)
Then Capitalized Rev. = R(PA) R(a)
Else Revenue surplus = R(a) R(PA)
Costs
Revenue



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SAP AG AC515 6-25
SAP AG 1999
Profitability Analysis
R(PA) Revenues
C(PA) Cost of sales
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
R(a)
WIP
Capitalized
Rev.
C(a)
Reserves
Revenue
surplus
FI FI
If C(a) > C(PA)
Then WIP = C(a) C(PA)
Else Reserves = C(PA) C(a)
If R(a) < R(PA)
Then Capitalized Rev. = R(PA) R(a)
Else Revenue surplus = R(a) R(PA)
Costs
Revenue
Settlement
Reserves
Expenses
WIP
Stock change
General Approach (4)



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SAP AG AC515 6-26
SAP AG 1999
Method Based Results Analysis
01 - Revenue-Based Method - With Profit Realization
02 - Revenue-Based Method - W/O Profit Realization
03 - Cost Based POC-Method
04 - Quantity-Based Method
05 - Quantity-Based POC Method
06 - POC Method on Basis of Revenue Planned by Period
07 - POC Method on Basis of Project Progress Value Determination
08 - Derive Cost of Sales from Resource-Related Billing
09 - Completed Contract Method
10 - Inventory Determination, without Planned Costs, without partial billing
11 - Inventory Determination, without Planned Costs, with partial billing
12 - Inventory Determination, Reserve for Follow-Up Costs, without partial billing
13 - Inventory Determination "WIP at Actual Costs" for Objects Not Carrying Revenue
14 - Derive Cost of Sales from Resource-Related Billing of Dynamic Items
15 - Derive Revenue from Resource-Related Billing and Simulation of Dynamic Items



n What results analysis method you choose depends on your business requirements. A company will
normally run different types of processing and thus also different methods of results analysis
simultaneously. The results analysis method contains the formula for calculating the results analysis
data.
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SAP AG AC515 6-27
SAP AG 2003
l Different legal regulations in different
countries stipulate that unrealized profits can
be or cannot be capitalized.
l For automatic creation of reserves for
unrealized costs or reserves for imminent
losses, plan costs are necessary.
l When should the inventory and the reserves
be cancelled?
Decision Criteria



n Different legal regulations in different countries stipulate that unrealized profits can be or cannot be
capitalized. Differences exist for example between North America and Germany in this respect. This
situation requires different balancing methods in different countries.
If you do not want to capitalize unrealized profits, use a results analysis method
that can be used to create capitalized costs.
If you want to capitalize unrealized profits, use a results analysis method that can
be used to create inventory from which revenue can be generated.
n Some methods of creating capitalized costs and creating inventory from which revenue can be
generated also allow automatic creation of reserves for unrealized costs or reserves for imminent
losses.
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SAP AG AC515 6-28
SAP AG 1999
01: Revenue-Based Valuation Method
POC = R(a) / R(p)
R(PA) = R(a) / R(p) x R(p)
C(PA) = R(a) / R(p) x C(p)
Profitability Analysis
R(PA) = R(a)
C(PA) = R(a) / R(p) x C(p)
Profit
CO CO- -
PA PA
Percentage of Completion



n The revenue relevant to profit equals the actual revenue.
n The costs relevant to profit are calculated by multiplying the planned costs by the percentage of
completion (POC): (K(pa) = C(p) x R(a) / R(p)).
n If the actual costs are greater than the costs relevant to profit, the system creates capitalized costs.
n If the actual costs are less than the costs relevant to profit, the system creates reserves for unrealized
costs.
n If you are using the revenue-based method with profit realization, the calculated cost of sales is zero
as long as your actual revenue for the period is zero. The capitalized costs then equal the actual costs
of the period.
n This method provides you with the following capabilities:
You can create reserves for unrealized costs
You can create reserves for imminent losses
You can use milestone billing
You can report intermediate profits.
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SAP AG AC515 6-29
SAP AG 1999
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA)
C(PA)
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
1000 1000
FI FI
WIP
Inv. change
1000 1000
Sales Order Item Results Analysis
Revenue
Cost of sales
WIP
POC= 0 / 3000 = 0 %
Plan Actual
Revenue 3000 0
Cost 2000 1000
0
0
1000
Example: Revenue-Based Results Analysis (I)



n You have planned revenues of 3,000 and costs of 2,000 for your sales order.
n You have actual costs of 1,000 but no revenues. In results analysis, the system calculates the
following data:
Revenue of 0
Cost of sales of 0
Capitalized costs in the amount of the actual costs of 1,000
n You then settle the capitalized costs to FI and EC-PCA. No line item is generated for CO-PA.
n The settlement generates based on postings rules (you have to maintain in customizing) the
following posting: WIP Account against Inventory-Change Account of 1,000.
n The inventory change account is closed against the profit&loss account. Therefore the profit&loss
account shows on the profit side 1,000 and on the loss side actual costs of 1,000. In this case in FI
and CO-PA no profit is shown.
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SAP AG AC515 6-30
SAP AG 1999
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA) 1200
C(PA) 800
Profit 400
CO CO- -
PA PA
Financial Accounting
Profit/Loss
1200
200
1000
FI FI
WIP
Inv. change
200 200
Sales Order Item Results Analysis
POC= 1200 / 3000 = 40 %
Plan Actual
Revenue 3000 1200
Cost 2000 1000
Revenue
Cost of sales
WIP
1200
800
200
Example: Revenue-Based Results Analysis (II)



n You have actual costs of 1,000 and actual revenues of 1,200. In results analysis, the system
calculates the following data:
Revenue of 1,200
Cost of sales of 800
Capitalized costs in the amount of the actual costs of 200
n You then settle the capitalized costs to FI and EC-PCA. Also a line item is generated for CO-PA.
n The settlement generates in FI the following posting: WIP Account against Inventory-Change
Account of 200.
n The inventory change account is closed against the profit&loss account. Therefore, the profit&loss
account shows on the profit side 1,200 actual revenue plus 200 of inventory change and on the loss
side actual costs of 1,000. In FI and CO-PA a profit of 400 is shown.
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SAP AG AC515 6-31
SAP AG 2003
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA) 3000
C(PA) 2000
Profit 1000
CO CO- -
PA PA
Financial Accounting
Profit/Loss
3000 1800
200
FI FI
Reserves
Expenses
200 200
Sales Order Item Results Analysis
POC= 3000/3000 = 100 %
Plan Actual
Revenue 3000 3000
Cost 2000 1800
Revenue
Cost of sales
Reserves
3000
2000
200
Example: Revenue-Based Results Analysis (III)



n You have actual costs of 1,800 and actual revenues of 3,000. In results analysis, the system
calculates the following data:
Revenue of 3,000
Cost of sales of 2,000
The reserves for unrealized costs of 200
n You then settle the capitalized costs to FI and EC-PCA. Also a line item is generated for CO-PA.
n The settlement generates in FI the following posting:
Expense against Reserves-Change Account of 200
n The expense account is closed against the profit&loss account. Therefore the profit&loss account
shows on the profit side 3,000 of actual revenues and on the loss side actual costs of 1,800 plus
expenses of 200. In FI and CO-PA a profit of 1,000 is shown.
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SAP AG AC515 6-32
SAP AG 2003
POC = C(a)/C(p)
R(PA) = C(a)/C(p) x R(p)
C(PA) = C(a)/C(p) x C(p)
Profitability Analysis
R(PA) = C(a)/C(p) x R(p)
C(PA) = C(a)
Profit
CO CO- -
PA PA
Percentage of Completion
03: Cost-Based Percentage of Completion Method



n When you use the cost-based percentage-of-completion method in results analysis, the system
calculates the revenue on the basis of the actual costs incurred up to the current period.
n The percentage-of-completion method differs from revenue-based results analysis in that a profit or
loss is reported if actual costs have been incurred but no revenue. With revenue-based results
analysis, a profit or loss is not shown until actual revenue has been received.
n The percentage of completion for each sales order item is determined by dividing the actual costs by
the planned costs. It forms the basis for calculating the following data.
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SAP AG AC515 6-33
SAP AG 2003
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA)
C(PA)
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
1500 1000
FI FI
WIP
Inv. change
1500 1500
Sales Order Item Results Analysis
Revenue
Cost of sales
Cap. Rev.
POC= 1000/2000 = 50 %
Plan Actual
Revenue 3000 0
Cost 2000 1000
1500
1000
1500
1500
1000
500
Example: Cost-Based POC Valuation Method (I)



n You have actual costs of 1,000 but no revenues. In results analysis, the system calculates the
following data:
Costs affecting net income in the amount of the actual costs of 1,000
Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned costs
x planned revenue of 1,500
Revenue in excess of billings with the formula Revenue in excess of billings = Revenue affecting
net income Actual revenue
n The following values are shown in CO-PA:
Calculated revenue 1,500
Cost of sales (actual costs) 1,000
----------------------------------------------------------
Profit 500
n The settlement generates in FI the following posting:
WIP against Inventory-Change Account of 1,500
n The inventory account is closed against the profit&loss account. Therefore the profit&loss account
shows on the profit side 1,500 and on the loss side actual costs of 1,000. In FI and CO-PA a
profit of 500 is shown.
n Although no revenues have been received, profit has already been capitalized.
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SAP AG AC515 6-34
SAP AG 2003
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA)
C(PA)
Profit
CO CO- -
PA PA
Financial Accounting
Profit/Loss
1200
300
1000
FI FI
WIP
Inv. change
300 300
Sales Order Item Results Analysis
POC= 1000/2000 = 50 %
Plan Actual
Revenue 3000 1200
Cost 2000 1000
Revenue
Cost of sales
Cap. Rev.
1500
1000
300
1500
1000
500
Example: Cost-Based POC Valuation Method (II)



n You have actual costs of 1,000 and actual revenues of 1,200. In results analysis, the system
calculates the following data:
Costs affecting net income in the amount of the actual costs of 1,000
Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned costs
x planned revenue of 1,500
Revenue in excess of billings with the formula Revenue in excess of billings = Revenue affecting
net income Actual revenue = 300
n The following values are shown in CO-PA:
Calculated revenue 1,500
Cost of sales (actual costs) 1,000
----------------------------------------------------------
Profit 500
n The settlement generates in FI the following posting:
WIP against Inventory-Change Account of 300.
n The inventory account is closed against the profit&loss account. Therefore the profit&loss account
shows on the profit side 1,200 of actual revenues plus the revenues which could be capitalized of 300
and on the loss side actual costs of 1,000. In FI and CO-PA a profit of 500 is shown.
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SAP AG AC515 6-35
SAP AG 2003
Settlement Settlement
Settlement Settlement
Profitability Analysis
R(PA) 2700
C(PA) 1800
Profit 900
CO CO- -
PA PA
Financial Accounting
Profit/Loss
3000 1800
300
FI FI
Revenue
Surplus
Expense
300 300
Sales Order Item Results Analysis
POC= 1800/2000 = 90 %
Plan Actual
Revenue 3000 3000
Cost 2000 1800
Revenue 2700
Cost of sales 1800
Reserves 300
Example: Cost-Based POC Valuation Method (III)



n You have actual costs of 1,800 and actual revenues of 3,000. In results analysis, the system
calculates the following data:
Costs affecting net income in the amount of the actual costs of 1,800
Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned
costs x planned revenue of 2,700
A revenue surplus of 300 because the actual revenue exceeds the calculated revenue
n The following values are shown in CO-PA:
Calculated revenue 2,700
Cost of sales (actual costs) 1,800
----------------------------------------------------------
Profit 900
n The settlement generates in FI the following posting:
Expense against Reserve Account of 300
n The expense account is closed against the profit&loss account. Therefore the profit&loss account
shows on the profit side 3,000 and on the loss side actual costs of 1,800 plus 300 for the expenses for
the revenue surplus. In FI and CO-PA a profit of 900 is shown.
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SAP AG AC515 6-36
SAP AG 2003
Percentage of Completion: Status Released
Remarks:
10: Inventory Determination,
without Plan Cost, without Partial Billing
Method:
n No revenues, all expenses could be capitalized
n Revenues posted, all expenses are cost of good sold
n R(a) = 0: POC = 0 => WIP = C(a) C(PA) = 0
n R(a) > 0: POC = 1 => WIP = 0 C(PA) = C(a)
n No plan costs needed
n Reserves cannot be created
n Follow-up costs are directly cost of sales



n If you use this method, the calculated cost of sales are zero as long as your actual revenue is zero.
The capitalized costs are equal to the actual costs during this time.
n If the actual revenue is not zero, the calculated cost of sales are equal to the actual costs. The
capitalized costs is canceled as soon as actual revenues are received. When you invoice, it is no
longer possible to capitalize capitalized costs.
n The capitalized costs are canceled no later than status TECO.
Features
You cannot create reserves.
This method is not suitable for milestone billing because such billings result in final cancellation
of the capitalized costs.
There is no proportionality between the cost of sales and revenue:
- As soon as revenue has been received, the actual costs are considered cost of sales in full. That
is, the cost of sales are not proportional to the actual revenues, as with the revenue-based
method, nor are they proportional to the quantity sold, as with the quantity-based method. This
method provides you with the following advantage: it does not require planned values.
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SAP AG AC515 6-37
SAP AG 1999
Profit basis
Plan value of object and dependent objects
Sales order cost estimate
Standard price of material for sales order
Valuation level
Valuation at totals level
Valuation at line ID level
Expert mode
Result analysis method
Result Analysis with status
Cancel inventory with status
Cancel inventory/reserves with status
Status Control
REL Released
FNBL Finally billed
TECO Technical completed
01
Revenue-Based Method - With Profit Realization
Controlling Area 1000 Version 0 Result analysis key MTO1
Valuation Method
Status Dependency
of Valuation
Valuation Method:
01 Revenue-Based Method
03 Cost-based POC Method
04 ...
Method Based Customizing



n Which results analysis method you choose depends on your business requirements. A company will
normally run different types of processing and therefore use different methods of results analysis
simultaneously. Results analysis methods contain the rule for calculating the results analysis data.
The standard system contains a number of different results analysis methods. Decide which results
analysis method you want to use.
n A sales order item passes through a number of stages that lead to different results in results analysis.
In the standard system there are three relevant system statuses:
REL (released)
FNBL (final billing)
TECO (technically completed)
n In Customizing for Product Cost by Sales Order under Period-End Closing, you specify which status
allows the following activities:
At which status results analysis can be performed
At which status the work in process is canceled (optional)
At which status the work in process and reserves are canceled
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SAP AG AC515 6-38
SAP AG 2003
Original cost
elements
Work in process/
Reserves for unrealized costs
Posting rules
400000 400000
415000 415000
DK
610000 610000
620000 620000
PC
660000 660000
662000 662000
OH
672110
673110
672130
673130
672120
673120
Requirement Requirement
to to capitalize capitalize
891000 (P/L)
791000
(balance sheet)
Option to Option to
capitalize capitalize
891005 (P/L)
791005
(balance sheet)
Assignment to Cost Elements for Work in Process
and Reserves



n Results analysis updates the results analysis data for the sales order item under secondary cost
elements. You define in Customizing what cost elements are updated.
n To be able to pass the WIP and reserves to Financial Accounting, you must define posting rules in
Customizing that assign this data to G/L accounts.
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SAP AG AC515 6-39
SAP AG 1999
Results Analysis at Group Level
Material
- WIP
- Reserves
Material
- WIP
- Reserves
Labor
- WIP
- Reserves
Labor
- WIP
- Reserves
Results Analysis
Cost of Sales Material
= POC x Planned Cost Material
Sales Order Item
Material 1000 1100
Labor 500 600
Overhead 100 120
Plan Actual
Cost of Sales Labor
= POC x Planned Cost Labor
Cost of Sales Overhead
= POC x Planned Cost Overhead
Overhead
- WIP
- Reserves
Overhead
- WIP
- Reserves



n If you choose Line ID level', results analysis calculates separate values for each line ID. Under
certain conditions this method can result in one line ID showing work in process while the other line
IDs show reserves.
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SAP AG AC515 6-40
SAP AG 1999
C(PA) = POC * Planned Costs Total
Results Analysis
Cost of Sales
Work in Process
Reserves
Sales Order Item
Material 1000 1100
Labor 500 600
Overhead 100 120
Plan Actual
Material
Labor
Overhead
Material
Labor
Overhead
Material
Labor
Overhead
Apportionment
rules !?
Results Analysis at Totals Level



n If you choose Totals Level', the system calculates work in process, reserves for unrealized costs,
reserves for complaints and commissions, and reserves for imminent loss for each order. These
values are then distributed to line IDs according to a method of apportionment specified in the
valuation method.
n The standard setting for apportionment is:
Capitalized costs / Work in process: Cumulative actual costs
Reserves for unrealized costs: Difference between planned costs and cumulative actual costs
Reserves for costs of complaints and commissions: Difference between plan costs and cumulative
actual costs
Reserves for imminent loss: Display of credit for inventory with prohibition to capitalize and
inventory with option to capitalize.
n If a method of apportionment cannot be used, the system looks for an alternative method of
apportionment. The system searches in the following order:
apportionment numbers (according to the number defined under Update for Results Analysis')
cumulative actual costs
planned costs
apportionment numbers with apportionment numbers per line ID = 1
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SAP AG AC515 6-41
SAP AG 1999
Sales Order Item
Results Analysis
Revenue 1200
Cost of sales 800
WIP 200
Apportionment of WIP
Plan Actual
Revenue 3000 3000
WIP Actual Actual
Group Total
Material 200 x 600 / 1000
Labor 200 x 200 / 1000
Overhead 200 x 200 / 1000
Material 1000 600
Labor 500 200
Overhead 500 200
Total Costs 2000 1000
Material 120
Labor 40
Overhead 40
Apportionment of WIP Based on Actual Costs



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SAP AG AC515 6-42
SAP AG 1999
Settlement
SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager



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SAP AG AC515 6-43
SAP AG 2003
Settlement
Which are the
settlement
receivers?
Is settlement
necessary?
Which settlement
techniques could
be used?



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SAP AG AC515 6-44
SAP AG 1999
Integration of Settlement
Reserves
WIP
Stock change
Expenses
Financial Accounting
Profit Center Accounting
Division
Product
Product-
group
Profitability Analysis
Revenues
Cost of sales
Profit
Sales Order Item
Results Analysis Data
n Revenues
n Cost of Sales
n Work in Process
n Reserves
Valuation
Plan Actual
Revenue 3000 1200
Cost 2000 1000
Settlement Costs ...
Settlement Revenues ...
Debit
Credit



n You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA):
Inventory values
Reserves for unrealized costs
Reserves for imminent loss
Reserves for complaints and commissions
The cost of sales if you are using a nonvaluated sales order inventory and are balancing in
Financial Accounting with the cost-of-sales accounting method
n You can settle the following to Profitability Analysis (CO-PA):
Cost of sales or calculated revenue
Reserves for imminent loss and complaints
The line item to CO-PA could be valuated with the cost component split of the sales order cost
estimate or with the cost component split of a standard cost estimate.
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SAP AG AC515 6-45
SAP AG 1999
Sales Order 4712 10
Actual Settlement
Distribution Rule
Cat Receiver Receiver-Short Text Perc. Equivl. Amount Type Source from Per
PSG 17302 100 PER
Description
Settlement Profile SD1
Settlement Structure 30
PA Transfer Structure 30
Source Structure
Sales Order 4712 10
Parameters
Settlement
techniques
Settlement
receiver
Maintain Settlement Rule



n If CO-PA is active, the settlement rule and the profitability segment are automatically generated.
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SAP AG AC515 6-46
SAP AG 2003
Settlement Profile
n Settlement structure
n Source structure
n PA transfer structure
Default Values
n Profitability Segment
n Sales Order
n Project
n ...
Valid receivers
Indicators
n Percentage Settlement
n Amount Settlement
n Equivalence Numbers
Settlement Profile
Settlement Structure
Source Structure
PA Transfer Structure
n Cost element group
n Settlement cost element/
Indicator by cost element
n Debit cost elements
n Settlement cost element/
Indicator by cost element
n Cost element group
n Value field
n Must be settled in full
n Can be settled
n Must not be settled
Actual Costs/ Costs of Sales



n If CO-PA is inactive, you can specify in the settlement profile that the sales order must not be
settled. Settlement will still generate a posting to FI in accordance with the posting rules.
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SAP AG AC515 6-47
SAP AG 1999
Customizing the Settlement Structure
Settlement Settlement
Assignment Assignment: 001 : 001
Settlement Settlement
Assignment Assignment: 002 : 002
Settlement Settlement
Assignment Assignment: 003 : 003
Source
$
Settlement cost elements
Receiver Receiver
Cost center Cost center
Prof. Prof. segment segment
Order Order
Fixed asset Fixed asset
. . . . . .
Cost center Cost center
Prof. Prof. segment segment
Order Order
Fixed asset Fixed asset
. . . . . .
By cost element By cost element Settlement cost Settlement cost el. el.
Cost center Cost center
Prof. Prof. segment segment
Order Order
Fixed asset Fixed asset
. . . . . .

Material ( Material (external external) )


400000 400000
400100 400100
400200 400200
Material ( Material (internal internal) )
410000 410000
410100 410100
Labor Labor
420000 420000
421000 421000

650000
650000
811000
651000
651000
811000
652000
652000
811000
Results analysis cost
element for cost of
goods sold have to
be included



n To use the settlement structure, you must first create cost element groups that aggregate the primary
and secondary cost elements used for debit postings to your orders. Within Customizing, you link the
cost element group to the settlement structure with a settlement assignment. For each settlement
assignment, you stipulate by receiver type whether the settlement will use the original posted cost
elements or a designated settlement cost element.
n You might use settlement cost elements:
To separate out costs allocated from orders to the receiver and to describe their purpose, such as
Repairs or Maintenance.
To reduce data volumes by combining several debit cost elements under one settlement cost
element.
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SAP AG AC515 6-48
SAP AG 1999
Profitability Analysis Transfer Structure
10
10
Value Field Value Field Assignment Assignment
Cost Cost Elements Elements
for results analysis for results analysis
20
20
30
30
Costs
Costs
Revenues
Revenues
Res.Loss
Res.Loss
Costs of Sales
671110
671120
...
Costs of Sales
671110
671120
...
Revenues
675500
..
Revenues
675500
..
Reserves for
imminent Loss
673212
...
Reserves for
imminent Loss
673212
...



n You must define a PA settlement structure if you want to settle the costs and revenues for a sales
order item to a profitability segment.
n The PA settlement structure defines what costs and revenues are settled to Profitability Analysis. It
groups the debit cost elements according to PA settlement assignments and assigns the PA settlement
assignments to the value fields of an operating concern.
n The PA settlement structure consists of one or more items called PA settlement assignments. It is
used to assign a cost element group to a PA settlement assignment.
n Note the following when defining the PA settlement structure:
Each debit cost element must be represented in the PA settlement structure
The debit cost elements have the category cost elements
n If you do not carry out results analysis, the actual costs and actual revenue will be settled to the
profitability segment for the sales order item. The PA settlement structure must contain all cost
elements under which costs and revenue can be updated on the sales order item.
n Once you have carried out results analysis, the results analysis data (valuated actual revenue, cost of
sales, and reserves for imminent loss) is settled to the profitability segment. The PA settlement
structure must contain all results analysis cost elements under which data used in Profitability
Analysis is updated.
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SAP AG AC515 6-49
SAP AG 1999
Valuation using Material Cost Estimate
Set Up Valuation Using Material Cost Estimate
Define Keys for Accessing Material Cost Estimate
Assign Costing Keys to Material Types
Assign Costing Keys to Any Characteristics
Assign Costing Keys to Products
Assign Value Fields



n In Profitability Analysis (CO-PA), you can valuate documents by reading the cost of goods
manufactured in the material cost estimates from Product Cost Planning. You do this by defining
costing keys.
n Which costing key is used for a particular document can depend on when the document is valuated in
CO-PA (the "point of valuation"), the record type, the product sold, the material type of that product,
or any other characteristic in your operating concern.
n The following steps in Customizing are necessary to set up valuation using material cost estimates in
your system:
When you maintain costing keys, you determine which cost estimates the system should read in
Product Cost Accounting in order to valuate the data in CO-PA.
Once you have done this, you can assign these costing keys to a product or material type.
Alternatively, you can use the flexible assignment function to assign costing keys to any
characteristics in your operating concern for valuation.
You then need to use value field assignment to determine for each operating concern and at each
point of valuation how the cost components in the cost component split are to be assigned to the
value fields in CO-PA. This must be done for each relevant cost component split.
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SAP AG AC515 6-50
SAP AG 1999
Define Key for Accessing Material Cost Estimate
Determine material cost estimate
Transfer Standard Cost Estimate
Transfer sales order cost estimate
Control Data for standard Cost Estimate
Additional Data for CO-PA
Exclusive access to sales order cost estimate
Error message if no cost estimate is found
Additional Data for CO-PC
Transfer aux. Cost compoment split
Transfer cost compoment split in cont. area curr.
Costing Data
Costing Variant PPC1 Standard Cost Estimate
...
Plant used for reading costing data
...
Set Up Valuation Using Material Cost Estimate
Define Keys for Accessing Material Cost Estimate
Assign Costing Keys to Material Types
Assign Costing Keys to Any Characteristics
Assign Costing Keys to Products
Assign Value Fields
Costing Key



n Product Cost Planning is used to determine the planned cost of goods manufactured for a product. In
Profitability Analysis (CO-PA), you can access these material cost estimates to value the data in CO-
PA. This includes cost estimates both with and without quantity structures.
n With this function, you determine which cost estimates from Product Cost Planning should be used
to value actual or planning data in CO-PA. You do this by defining costing keys. A costing key is a
set of access parameters which are used in valuation to determine which data in Product Cost
Planning should be read.
n Normally you need at least 2 costing keys. You use one costing key to value a Make-to-Stock
process with a standard cost estimate and another to value a Make-to-Order process with a sales
order cost estimate.
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SAP AG AC515 6-51
SAP AG 1999
Assign Value Fields
Set Up Valuation Using Material Cost Estimate
Define Keys for Accessing Material Cost Estimate
Assign Costing Keys to Material Types
Assign Costing Keys to Any Characteristics
Assign Costing Keys to Products
Assign Value Fields
Table Lookup for Requirement Type
from the sales order item
1
Determine Process
2
Assignment Costing Key
Assigment Rule of temporay field to
costing key
Assign Requirement Type to
temporary field



n The steps Assign Costing Keys to Products or Assign Costing Keys to Material Types let you
assign costing keys to individual products or material types. In the case of using make-to-stock and
make-to-order scenarios in parallel the product-dependent or material-dependent call-up of material
cost estimates in Product Cost Accounting is not flexible enough. To meet this or other
requirements, you can determine the costing keys using your own "strategy" for the "flexible
assignment of costing keys".
n This "strategy" is taken to determine the costing keys, generally using user-defined assignment
tables. As in characteristic derivation in CO-PA, you can also work with table lookups or your own
customer enhancements when setting up the "strategy".
n You can use the following Step Methods to define a strategy:
Table Lookups
A table lookup allows you to access individual data records in any SAP table and to transfer the
contents of individual table fields to Target Fields of the type USERTEMP. The USERTEMP
fields that have been filled by a table lookup can then be used in a subsequent strategy step as
source fields for an assignment rule. In our scenario we look up the requirement type of the sales
order item to determine the process.
User-Defined Assignment Tables
As with the predefined assignment tables for products and material types, these user-defined
assignment tables let you assign costing keys separately for each point of valuation, record type
and plan version. We specify an user-defined assignment table to assign the requirement type to a
costing key.
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SAP AG AC515 6-52
SAP AG 1999
Assign Value Fields
Set Up Valuation Using Material Cost Estimate
Define Keys for Accessing Material Cost Estimate
Assign Costing Keys to Material Types
Assign Costing Keys to Any Characteristics
Assign Costing Keys to Products
Assign Value Fields
Cost Component Fix/Var Value Field
10 Raw Materials Sum MATERIAL
20 Production Labor Var PROD_VAR
30 Production Labor Fix PROD_FIX
... ... ... ...



n Here you can assign the components of a cost component structure from Product Cost Controlling to
the value fields of your operating concern. Note that you need to maintain separate value field
assignments for each point of valuation in Profitability Analysis (CO-PA).
n You can divide the cost components into fixed and variable parts before transferring them to CO-
PA. For each cost estimate, you can transfer any number of cost components to the same value field
(n:1 relationship). The values from these cost components are then added together in the value field.
n If you valuate using multiple material cost estimates simultaneously, this means that the values of
different cost components within the same cost estimate are aggregated and then entered in one CO-
PA value field.
n However, value fields that already contain data from a previous cost estimate are not overwritten by
a later cost estimate. Consequently, you should assign value fields in Customizing so that the values
of different cost estimates are entered in different sets of value fields.
n You can assign up to six different value fields from your operating concern to each cost component
in the cost component structure. These assignments are indicated by the value fields entered in the
columns Field name 1 through Field name 6.
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SAP AG AC515 6-53
SAP AG 1999 SAP AG 1999
l Overview Business Scenario
l Controlling by order
n Template Allocation, Overhead
n WIP (Work in Process)
n Variance Analysis
l Controlling by sales order
n Results Analysis
n Settlement
l Schedule Manager
Schedule Manager



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SAP AG AC515 6-54
SAP AG 2003
Schedule Manager: Benefits
Benefits provided by the Schedule Manager
l The closing process is more transparent
and easier to handle
l Monitoring the complete process is convenient
l Event driven processing means that the R/3 System
automatically performs the necessary steps
l Worklist driven error analysis and integrated error handling
procedures reduce the time needed for error correction
l Total processing time is minimized by
optimized worklist processing



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SAP AG AC515 6-55
SAP AG 1999
Schedule Manager: Scheduling
1999
October
Task Task list list
Daily Daily overview overview: : October October 31, 1999 31, 1999
Define sequences
of background jobs for
automatic processing
Send mail:
Closing process started
Set period lock
Periodic reposting
of personnel costs
Internal Orders:
Overhead, WIP, Variances,
settlement
Cost Centers: Overhead
PA and settlement
User
Miller
Miller
Smith
Jones
Jones
Time Description
8:00 Mail sent
8:15 Actual period lock
8:30 Periodic reposting
9:45 Production Orders
11:30 Sales Orders: Closing
Status
Convenient management
of period-end closing with
the Schedule
Manager



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SAP AG AC515 6-56
SAP AG 1999
Schedule Manager: Monitor
Task Task list list Status Status
Mssg Text
202 VBP 1000/10 Trade fair Lisbon
205 Maintain the settlement rule of the sender
202 VBP 1011/20 Trade fair Atlanta
205 Cost Center 12345 does not exist on 10/31/99
202 VBP 1071/10 Special Events
217 Cost element 600199 does not exist on 10/31/99
202 VBP 1071/10 Marketing
Start date
End date
User name
Job status
Business transaction
Activity
The monitor
provides you with all
necessary information
Spool list
Basic list
Details Details Parameters Parameters Add. Info Add. Info
Messages Messages
Actual period lock
Periodic reposting
Sales Orders: Closing
Actual Overhead
Results Analysis
Actual Settlement
User decision
Detail list
Job log



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SAP AG AC515 6-57
SAP AG 1999
Schedule Manager: Worklist Monitor
Error analysis
and error handling
are convenient with
the worklist monitor
Object list Object list Worklist Worklist
Object Object Messages Messages
Processing steps
Prod. Orders: Closing
Actual Overhead
Actual Settlement
User decision
Objects
5000
Proc.
4987
4980
Object Mssg Text
ORD100070 205 Maintain the settlement rule of the sender
ORD100071 205 CCtr 12345 does not exist on 10/31/99
ORD100358 217 CEl 600199 does not exist on 10/31/99
ORD100700 162 Credit C01 for 10/31/99 not defined
Object Ovh Stlm
ORD100070
ORD100071
ORD100358
ORD100700
ORD101065
ORD109999
Text
P-1001
P-1500
H-1701
P-1399
P-5609
P-3450
Err.
13
7



n Note: The Worklist Monitor is implemented for Sales Order Items as of Release 4.6c.
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SAP AG AC515 6-58
SAP AG 2003
Period End Closing: Summary
You are now able to:
l Explain how to carry out the period-end closing in
controlling by order and controlling by sales order.
l Understand which alternative valuation methods you
can use in results analysis.
l Maintain settlement rules and execute sales order
settlement.



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SAP AG AC515 6-59
Period-End Closing: Exercises


Unit: Period-End Closing

At the conclusion of this exercise, you will be able to:

Carry out the period-end closing activities for sales order controlling.
Understand the difference between the revenue-based and cost-based
valuation methods in results analysis.
Understand when work in process (WIP) or reserves are cancelled
during results analysis.

In plant 1000 you have to carry out period-end closing activities. To
simulate different phases of the process, you proceed with production and
delivery of the order from the previous section and post the period-end
closing activities (especially the results analysis transaction) more than
once.

1-1 Calculate the overhead costs for the sales order item.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Overhead

Enter the following data:
Sales Document: Your sales order number (previous section)
Item: 10
Period: Current period
Fiscal Year: Current fiscal year
Background Processing: Deselect
Test Run: Deselect
Detail Lists: Deselect
Dialog Display: Select
Choose: Execute

How was the costing sheet transferred into the sales order item?
___________________________________________________
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SAP AG AC515 6-60

1-2 At this point, a delivery for 5 pieces has been completed. However, no billing
document has yet been created for the delivery. Carry out results analysis using the
revenue-based valuation method (results analysis version 0) and using the cost-
based valuation method (results analysis version 1). Analyze the different results
and compare them to the actual/planned comparison for the sales order. Why are
the results different for the two different methods? Save the results of the results
analysis calculations.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Results Analysis Execute Individual Processing

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

Save your results.

Repeat the same procedure for the cost-based method, but use the results analysis
version 1.
Access the logs to obtain information regarding the results analysis calculation and
the configuration of results analysis key SDOR1.

Display the logs to obtain additional information on results analysis calculation and
the configuration of the results analysis key SDOR1.

1-3 Create the billing document for the partial delivery of 5 pieces from the previous
section.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Billing Document

Enter the following data:
Document: Your delivery number (previous section)
Choose: Save

From the document flow, display the billing document and review the financial
accounting document and the cost accounting document.

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SAP AG AC515 6-61
1-4 Now that billing has been completed for the 5 pieces, carry out results analysis
again using results analysis version 0. Does any work in process remain? Why or
why not? Have reserves been calculated?

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

1-5 Return to the production control menu, and create the final confirmation for your
production order for R-F1##. Confirm the remaining 5 pieces.

Menu path:
Logistics Production Production Control Confirmation Enter For
Order

Enter the following data:
Order: Your production order number for material R-F1##
Choose: Enter

Select Aut.fin.confirm (Automatic final confirmation) and save the production
order confirmation.

1-6 Complete the delivery for the remaining 5 pump assemblies for your sales order
item. Create the delivery document and post the goods issue.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Outbound Delivery

Enter the following data:
Shipping point: 1000
Selection date: Todays date plus 10 days
Order: Your sales order number
Choose: Enter

Enter a picked quantity of 5.

Select Post Goods Issue.

Write down the delivery number.

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SAP AG AC515 6-62
1-7 Create the billing document for the delivery.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Billing Document

Enter the following data:
Document: Your delivery number
Choose: Save

From the document flow, display the billing document and review the financial
accounting document and the cost accounting document.

1-8 Calculate the overhead costs for the sales order item.

Enter the following data:
Sales document: Your sales order number (previous section)
Item: 10
Period: Current period
Fiscal year: Current fiscal year
Background processing: Deselect
Test run: Deselect
Detail lists: Deselect
Dialog display: Select
Choose: Execute

1-9 Now that billing is complete, execute results analysis using version 0. Does any
work in process or reserves remain? Why or why not?

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

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SAP AG AC515 6-63
1-10 No further costs are anticipated for the sales order item. From the sales order, set
the status of the sales order item to Technically completed. What affect could this
have on results analysis?

Menu path:
Logistics Sales and Distribution Sales Order Change
Select Enter.
Select the sales order item, then
Goto Item Status

Select the status icon Change.
Select Technically completed and save the sales order.

1-11 Carry out results analysis with results analysis version 0. Check if there are still
reserves for unrealized costs. Save the results analysis data.

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

Save the results analysis.

1-12 Carry out sales order settlement. Display the settled amounts by selecting Detail
lists. From the display, you can select Receiver, Sender or Accounting documents to
review the corresponding data.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Settlement

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
Background processing: Deselect
Test run: Deselect
Detail lists: Select
Choose: Execute

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SAP AG AC515 6-64

1-13 Go to make-to-order reports, and display the order profit for the sales order.
To view the profit:

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System Reports
for Product Cost by Sales Order Detailed Reports For Sales Order
Change the layout by adding the item Profit as a new column.


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SAP AG AC515 6-65
Period-End Closing Activities: Solutions


Unit: Period-End Closing Activities


1-1 Calculate the overhead costs for the sales order item.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Overhead

Enter the following data:
Sales Document: Your sales order number (previous section)
Item: 10
Period: Current period
Fiscal Year: Current fiscal year
Background Processing: Deselect
Test Run: Deselect
Detail Lists: Deselect
Dialog Display: Select
Choose: Execute
The costing sheet is assigned to the sales order item using the requirement class.
1-2 Carry out results analysis using the revenue-based valuation method (results
analysis version 0). Save the results. Carry out results analysis using the revenue-
based valuation method (results analysis version 1). Analyze the different results.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Results Analysis Execute Individual Processing


Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

Save your results.
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SAP AG AC515 6-66

In a different R/3 session, repeat the same procedure for the cost-based method,
using results analysis version 1.
The results are different because results analysis version 0 is a revenue-based
method, and results analysis version 1 is a cost-based method. At this point, no
actual revenue has been realized using RA version 0, therefore, the percentage of
completion (POC) is 0%. All of the actual costs for the product are considered WIP,
or inventory from which revenue can be generated. The overhead allocation is
considered cost of sales (COS). The results analysis version 1 is a cost-based
method. Using this basis for determining the POC, the calculated revenue is
determined by multiplying the POC with the planned revenue. All of the actual
costs, which include both product and overhead costs, are considered COS.
Display the logs to obtain additional information on results analysis calculation and
the configuration of the results analysis key SDOR1.
1-3 Create the billing document for the partial delivery of 5 pieces from the previous
section.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Billing Document

Enter the following data:
Document: Your delivery number (previous section)
Choose: Save

From the document flow, display the billing document and review the financial
accounting document and the cost accounting document.
1-4 Carry out results analysis with results analysis version 0. Does any work in process
remain? Have reserves been calculated?

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

Billing has been completed for 5 pieces, which means that the POC = R(a)/R(p).
C(c) are then determined. At this point, C(c) > C(a), so there is no WIP. All actual
costs for both the product and overhead are considered COS.
Reserves for unrealized costs are created if the calculated costs exceed the actual
costs. (C(c) - C(a) = C(r)).
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SAP AG AC515 6-67
1-5 Return to the production control menu, and create the final confirmation for your
production order for R-F1##. Confirm the remaining 5 pieces.

Menu path:
Logistics Production Production Control Confirmation Enter For
Order

Enter the following data:
Order: Your production order number for material R-F1##
Choose: Enter

Select Aut.fin.confirm (Automatic final confirmation) and save the production
order confirmation.
1-6 Complete the delivery for the remaining 5 pump assemblies for your sales order
item. Create the delivery document and post the goods issue.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Outbound Delivery

Enter the following data:
Shipping point: 1000
Selection date: Todays date plus 10 days
Order: Your sales order number
Choose: Enter

Enter a picked quantity of 5.

Select Post Goods Issue.

Write down the delivery number.

______________________

1-7 Create the billing document for the delivery.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent Functions
Billing Document

Enter the following data:
Document: Your delivery number
Choose: Save

From the document flow, display the billing document and review the financial
accounting document and the cost accounting document.

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SAP AG AC515 6-68
1-8 Calculate the overhead costs for the sales order item.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Overhead

Enter the following data:
Sales document: Your sales order number (previous section)
Item: 10
Period: Current period
Fiscal Year: Current fiscal year
Background Processing: Deselect
Test Run: Deselect
Detail Lists: Deselect
Dialog Display: Select
Choose: Execute

1-9 Now that billing is complete, execute results analysis using version 0. Does any
work in process or reserves remain?

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Results Analysis Execute Individual Processing

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute

No WIP remains, as WIP is cancelled after final billing, since no further deliveries
are expected. However, reserves may remain if actual costs are less than calculated
costs.
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SAP AG AC515 6-69

1-10 No further costs are anticipated for the sales order item. From the sales order, set
the status of the sales order item to Technically completed. What affect could this
have on results analysis?

Menu path:
Logistics Sales and Distribution Sales Order Change
Select Enter.
Select the sales order item, then
Goto Item Status
Select the status icon Change.

Select Technically completed and save the sales order.

1-11 Carry out results analysis with results analysis version 0. Check if there are still
reserves for unrealized costs. Save the results analysis data.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Results Analysis Execute Individual Processing

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Full log: Selected
Choose: Execute
Since the sales order status is set to technically complete, no further postings are
expected on the sales order. This will cancel reserves for unrealized costs.

Save the results analysis.
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SAP AG AC515 6-70

1-12 Carry out sales order settlement. Select Detail lists to display the settled amounts.
From the display, you can select Receiver, Sender or Accounting documents to
review the corresponding data.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing Single
Functions Settlement

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
Background processing: Deselect
Test run: Deselect
Detail lists: Select
Choose: Execute

1-13 Go to make-to-order reports, and display the order profit for the sales order.

To view the profit:

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System Reports
for Product Cost by Sales Order Detailed Reports For Sales Order
Change the layout by adding the item "Profit" as a new column.







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SAP AG AC515 7-1
SAP AG 1999
Sales Order Controlling without Manufacturing
l Handling Services or Assembly on Customer side
l Resource-related billing
Contents:



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SAP AG AC515 7-2
SAP AG 1999
At the conclusion of this unit, you will be able to:
l Explain the quantity and value flow in this scenario
l Understand when to use resource-related billing
l Identify the necessary settings in customizing
Sales Order Controlling without Manufacturing:
Objectives



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SAP AG AC515 7-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 7-4
SAP AG 1999
Sales Order Controlling without Manufacturing:
Business Scenario
l You have to implement a business process to handle
a service at a customer site.
l Since you have management responsibility for this
process, you need to understand the flow of costs
onto a sales order without manufacturing.



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SAP AG AC515 7-5
SAP AG 1999
Roadmap: Sales Order Controlling without
Manufacturing
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning Costs
n Actual Posting
l Customizing



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SAP AG AC515 7-6
SAP AG 1999
Sales Order Controlling for Services
Resources
used
Labor
Material
Travel
Overheads
SD-Order
Costs
CO CO- -
PA PA
SD SD
Cost Object - SD Order Item
Billing based on
resources used
Revenues
Settlement



n This example shows the provision of a service or on-site assembly. This means that the service has
been provided and the customer is to pay for the service received. Standard customer pricing
conditions can be taken into account on the billing document.
n It traces the following process:
Costs are charged to the order through goods issues, posting internal activities, travel expense
reporting, etc.
The billing process is run. The revenues are calculated in SD pricing on the basis of the billed line
items.
The sales order is settled to Profitability Analysis (CO-PA)
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SAP AG AC515 7-7
SAP AG 2003
Resource-Related Structure
Collection of expenses
Generation and display of dynamic
items by the system
Creation of billing request from the
dynamic items
2
Resource-related billing
3
Create billing document
1
Confirm services
SD-Order
SD SD
Invoice
SD SD
Billing
Request
SD SD



n During billing, the system generates so-called dynamic items from the information regarding the
expenses involved (for example, costs for material and personnel). Before a billing request is created,
you are brought to a modifiable overview screen that enables you to determine what the billing
request should look like. You generate the billing request from this overview screen. You can work
on this screen for example, to simulate prices or save the screen itself. This is where you determine
which data the system copies to the billing request after you have finished working with the
overview screen.
n There are two aggregation levels:
First level: The system aggregates the data records for the overview screen into dynamic items.
Second level: The system generates a billing request using the data from the dynamic items. If
necessary, the data is reaggregated based on the assigned materials. Aggregation depends on the
settings in the dynamic item processor profile.
n If you do not want to bill a customer for a dynamic item, you can enter your reason (for example,
warranty) in the overview screen for dynamic items as an apportionment reason. The reason will
only be used for internal purposes such as calculating profits.
n You follow the same procedure as above when creating a quotation from a service order.
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SAP AG AC515 7-8
SAP AG 1999
Dynamic Item Processor
Source Data
Dynamic
Items
l Flexible tool for creation of dynamic items
l Use:
n Resource-related billing
n Flat-rate billing document with list of the actual effort
n Resource-related creation of quotations
n Flat-rate quotation with list of the planned effort
l Control using Dynamic Item Processor Profile
(DIP profile)
Billing request/
Quotation



n The dynamic item processor is a tool that the system uses to summarize data on dynamic items
during resource-related quotation creation and billing (for example, line items that arise through the
posting of goods movements, completion confirmations or surcharges). Further entries are made
according to use. The Dynamic Item Processor profile (DIP profile) controls how the system
summarizes data on dynamic items.
n You can use the DIP profile for creating quotations and billing (both resource-related and flat-rate).
n Assignment to the DIP profile is performed in the service order header or in the sales order item.
You can enter the default profile when making customizing settings for service order types or sales
document item types.
n You will find the customizing settings for quotation creation and billing in the IMG under Plant
Maintenance and Customer Service -> Maintenance and Service Processing -> Basic Settings.
n You have the following customer exits at your disposal: AD010001 (Change object list and its
hierarchy), AD010002 (Delimit selection and/or filter data that is determined), AD010003 (Create
user-defined DI characteristics), AD010005 (Creat user-defined sources), AD010006 (Menu exit:
Change DI value), V46H0001 (Enter additional item data and insert a partner for the item).
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SAP AG AC515 7-9
SAP AG 1999
Customer Order Processing
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning Costs
n Actual Posting
l Customizing



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SAP AG AC515 7-10
SAP AG 1999
Planning Options with Unit Costing
Item Categories
M Material
E Internal Activity
V Variable Item
N Service
B Base Planning Object
G Overhead
...
Unit Cost Estimate



n You can plan the costs of a service with a unit cost estimate. You use them like spreadsheets to make
costing decisions and to access information on material costs, internal activity prices, purchasing
costs, overhead, and process costs. For existing cost estimates, you can refer to these and copy the
relevant items into the unit cost estimate.
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SAP AG AC515 7-11
SAP AG 1999
Item Categories in Unit Costing (1)
ITEM CATEGORY...
ITEM CATEGORY...
YOU ENTER...
YOU ENTER...
THE SYSTEM CALCULATES ...
THE SYSTEM CALCULATES ...
E (internal activity)
M (material)
P (process manual)
B (base planning object)
the price, unit of measure, text, cost element, and item value
N (service)
L (subcontracting)
F (external service)
process, quantity
name and quantity
cost center, (work center), quantity, activity type
material, plant, quantity
service, quantitiy
info record (normal), plant, purchasing org.
info record (subcontracting), plant, purch.org.



n To support the full integration between unit costing and product costing, the new item categories
F (external service) and L (subcontracting) are available in unit costing with Release 4.0.
n The item category P (process manual) is used if you want to include business processes in a unit
costing manually and not using the process template.
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SAP AG AC515 7-12
SAP AG 1999
Item Categories in Unit Costing (2)
ITEM CATEGORY...
ITEM CATEGORY...
YOU ENTER...
YOU ENTER...
THE SYSTEM CALCULATES ...
THE SYSTEM CALCULATES ...
G (overhead)
O (operation)
S (total)
formula
the sum of the item values
overhead surcharge,
cost element
the result of the formula
T (text) description
V (variable item) quantity, price the item value
created automatically
X (process) created automatically
Quantity, price, unit of measure
text, cost element, and item value
Y (customer exit)



n The item category X is created automatically when using a process template to calculate process
quantities.
n The item category Y (customer exit) can be acitivated as enhancement KKEK0001, if customers
require their own calculation logic.
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SAP AG AC515 7-13
SAP AG 2003
Functions in Unit Costing
Unit Cost Estimate
l Revaluation
l Referencing
l Exploding
l Fixed/variable split
l Lot size reference
l Foreign currencies
l Copying



n Within unit costing you can calculate totals, sub-totals, and formulas for mathematical operations. As
the information in the cost estimate becomes out of date, you can use the revaluation function to
determine the latest material or activity prices for the items in the cost estimate.
n If the unit costing includes a material item with a cost estimate, you can explode this cost estimate to
display the items that make up the material cost. Likewise, if you enter a base-planning object as an
item, you can explode its cost estimate.
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SAP AG AC515 7-14
SAP AG 1999
Actual Postings
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning Costs
n Actual Posting
l Customizing



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SAP AG AC515 7-15
SAP AG 2003
Sales Order Controlling: Planning
Cost Object 4711/10
Plan Revenue Actual
Revenue
500
Plan Costs Actual Costs
Material-X 200
Labor 300
Sales Order 4711
Item 10 Service 1 PC
SD SD
Unit Cost Estimate



n You create a sales order and plan the cost with unit costing.

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SAP AG AC515 7-16
SAP AG 2003
Goods Issue for Material Needed for Service
Stock: Quantity/Valuation
MM MM
SEMI-I
Material-X
Expense Stock change
Customers
Sales
Revenue
Credit Stock
FI FI
Cost Object 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
Material-X 200 210
Labor 300
Sales Order 4711
Item 10 Service 1 PC
SD SD



n You post the goods issue for the material needed for the service.

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SAP AG AC515 7-17
SAP AG 2003
Posting Internal Activities
Cost Center
Direct activity allocation
Cost Object 4711 / 10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
Material-X 200 Material 210
Labor 300 Labor 400
Cross Application
Timesheet
CATS CATS
Sales Order 4711
Item 10 Service 1 PC
SD SD



n You may use the cross application timesheet (CATS) to post the internal activities to the sales order
item or you may post the activities with a direct activity allocation.
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SAP AG AC515 7-18
SAP AG 2003
Results Analysis/Settlement (I)
FI FI
Expense WIP change
Price
Differences
Credit WIP
Customers
Work in
Process
Work in
Process
Cost Object 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
Material-X 200 Material 210
Labor 300 Labor 400
WIP 610
Sales Order 4711
Item 10 Service 1 PC
SD SD



n You can use results analysis to calculate the value of the costs that can be capitalized for each sales
order item. You can capitalize the costs if you settle to Financial Accounting (FI).
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SAP AG AC515 7-19
SAP AG 1999
Invoices with Resource Related Billing
FI FI
Expense Stock change
Sales
revenues
Credit Stock
Invoices
Customers
Item 10 Material-X 1 PC 400
Item 20 Service-Hour 5 h 800
Debit Memo
Item 10 Material-X 1 PC 400
Item 20 Service-Hour 5 h 800
Cost Object - 4711 / 10
Plan Revenue Actual Revenue
500 1,200
Plan Costs Actual Costs
Material-X 200 Material 210
Labor 300 Labor 400
Sales Order - 4711
Item 10 Service 1 PC
SD SD



n You create a debit memo based on the CO line items.

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SAP AG AC515 7-20
SAP AG 2003
Results Analysis/Settlement (II)
FI FI
Expense WIP change
Reserves
Sales
revenues
Credit WIP
Profit. Segment
Revenue 1,200
Cost of Sales 610
CO CO- -
PA PA
Cost Object 4711/10
Plan Revenue Actual Revenue
500 1,200
Plan Costs Actual Costs
Material-X 200 Material 210
Labor 300 Labor 400
WIP - 610
Sales Order 4711
Item 10 Service 1 PC
SD SD



n When a sales order item is finally billed, this means that no more revenue is expected for that sales
order item. Only debit memos and credit memos can be entered. For this reason you can normally
cancel all capitalized inventories.
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SAP AG AC515 7-21
SAP AG 1999
Customizing
SAP AG 1999
l Overview Business Scenario
l Customer Order Processing
n Planning Costs
n Actual Posting
l Customizing



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SAP AG AC515 7-22
SAP AG 2003
Customizing - Requirement Class
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id
Costing Method 2
Costing Variant POC4
Costing Sheet COGS
Copy Costing Sheet
CndTypLineItemes
CndTypLineItFix
Account Assgt. Category B
Valuation
Without Val.-Strategy
Settlement Profile SD1
Result Analysis Key KUND
Cost Object Controlling on
Sales Order without Sales
order related Manufacturing
Costing Method
Unit Costing



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SAP AG AC515 7-23
SAP AG 1999
Account Assignement Category B
Consumption Posting
Account Modification
Ind.Account Assigment Screen
Special Stock
Detailed Information
Acc.assigt.changeable
Acc.ass.change on IR
Derrive acct. assigt.
VKB
1
E Acc. Via Sales Order
Account Assignment Category B
Product Cost by
Sales Order
No Special stock



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SAP AG AC515 7-24
SAP AG 1999
Method Based Customizing
Profit basis
Plan value of object and dependent objects
Sales order cost estimate
Standard price of material for sales order
Valuation level
Valuation at totals level
Valuation at line ID level
Expert mode
Result analysis method
Result Analysis with status
Cancel inventory with status
Cancel inventory/reserves with status
Status Control
REL Released
FNBL Finally billed
TECO Technical completed
14
Derive Cost of Sales from Resource-Related Billing of Dynamic Items
Controlling Area 1000 Version 0 Result analysis key MTO1
Valuation Method
Parameter only for special methods
DIP-Profil 000001
Cost of sales is derived from
the resource-related billing.
Cost of sales is the sum of
the billed line items.



n The cost of sales is derived from the resource-related billing.
n Definitions:
Revenues = Sum of the revenues of the billed line items
Cost of Sales = Sum of the costs of the billed line items
Work in Process = Actual Costs Cost of Sales
The revenues are calculated in SD pricing on the basis of the billed line items.
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SAP AG AC515 7-25
SAP AG 2003
Customizing DIP-Profile
Material determination
Selection criteria
Quotations or billing
Sales document types, warranty check
Usage
Sources
Selection criteria
Characteristics
What fields are relevant?
Summarization based on characteristics
Presentation in the overview screen
Profile
Based on which characteristic values are
items created?
How are material numbers determined?
Which material numbers are found for
which characteristic values?
How are dynamic items determined?



n You can use the DIP profile to create quotations as well as for billing purposes. You decide on the
type of sales documents that are to be generated (quotation, billing request and credit memo request)
per usage. In addition, you can determine if the system should perform a warranty check during
billing. All other data should be entered when you are creating a document.
n Characteristics relevant to the determination of dynamic items are fixed for each usage. In addition,
various characteristic attributes, and the way in which they are presented during the processing of the
billing request, are defined. You can define your own characteristics and enter values for these
characteristics using the customer exit AD010003.
n The sources define the data used to determine dynamic items (for example, the actual costs of line
items or totals records, planned costs and so on). You can also select the characteristic values from
which dynamic items should be determined (that is, exclusion of other characteristic values from
billing). Selection is performed using the sets to be determined for this purpose. You can define your
own sources using the customer exit AD010005.
n You can define which service materials are determined from characteristic values for billing request
items or quotations. The selection criteria here are also entered in the form of sets.
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SAP AG AC515 7-26
SAP AG 2003
Sales Order Controlling without Manufacturing:
Unit Summary
You are now able to:
l Explain the quantity and value flow in this scenario
l Understand when to use of resource-related billing
l Identify the necessary settings in customizing



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SAP AG AC515 7-27
Sales Order Controlling Without Manufacturing: Exercises


Unit: Sales Order Controlling Without
Manufacturing

At the conclusion of this exercise, you will be able to:

Create a unit cost estimate to determine the costs of a service.
Carry out resource-related billing.


In plant S300, you offer consulting services. When you receive a sales
order requesting consulting services, you use unit costing to plan costs for
the sales order item. In addition, you can use the Cross-Application Time
Sheet to post the actual consulting time required for the sales order item.
The services are invoiced using resource-related billing.
Note: Use controlling area S300 for this exercise.
1-1 Start by creating a sales order and estimating the cost of the consulting task.
1-1-1 Create a sales order for a consulting item:

Enter the following data:
Order Type: ZSP1 (SP. Service order)
Sales Organization: S300
Distribution Channel: S3
Division: S3
Choose Enter

Enter the following data:
Sold-to party: 3221
Material: ISP-CONSLT
Order quantity: 10 days
Choose Enter

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SAP AG AC515 7-28

1-1-2 Create a unit cost estimate to determine the consulting costs.
Menu path:
Extras Costing

Enter the following data in the dialog box that appears:
Costing Variant: PCO4
Base Object: Consulting
Choose: Enter
Adjust the default settings. You estimate 20 hours for senior management
(MANG2), and 60 hours for consulting CONS1N. You do not include any
other costs.
Choose: Save

1-1-3 Save the sales order.
Make a note of the sales order number displayed in the status bar when you
save your data.

______________________________________________________
1-2 Actual Postings
1-2-1 Employee 515991## will enter their time for activity CONS1N in the
Cross-Application Time Sheet. Record their time in the Cross-Application
Time Sheet. Remember to release your entries before saving.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet CATS Classic Record Working Times


Enter the following data:
Data Entry Profile: ISP_SD (or CO2)
Personnel Number: 515991## (if unavailable: 9910751)
Select Enter times (F5)

Enter the following data:
Sales order: Your sales order number
Sales order item: 10
Quantity: 5 hours each day
for the last 3 days
Confirm your entries.
Choose: Release view
Select the indicator next to the line with your time entries.
Select: Release
Choose: Save

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SAP AG AC515 7-29
1-2-2 Use the CATS to approve the time entered, so that it can be transferred to
accounting. Select the time entries using your personnel number 515991##
as a reference.
Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet Approval Approve Working Times
Use personnel number to make a selection
Select the posting Up to today.
Enter your Personnel number.
Select Execute.
If no entries have to be approved, Customizing is set so that no times in the
CATS required approval. Continue with the next subtask.
If there are entries that require approval:
Select your personnel number from the General Hierarchy Display. The
approval screen appears.
Menu path:
Edit Select All
Choose Approve.
Save your entries.

1-2-3 Transfer the CATS to Accounting.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet Transfer Accounting

Enter the following data:
Personal no.: 515991##
Choose: Execute

1-2-4 Enter an activity allocation for the activity MANG2 for your sales order. Set
the controlling area to S300 using the menu item Extras Set Controlling
Area.
4 hours have been consumed from the sender cost center S-3310. Use the
screen variant Sales Order/Cost Object, to process this activity allocation.
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SAP AG AC515 7-30

1-2-5 Go to the information system for Product Cost by Sales Order and review
the planned to actual cost report for your sales order.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Detailed Reports For Sales
Order

Choose the layout Plan/Actual Comparison layout
Enter the following data:
Sales order: Your sales order number
Item: 10
Choose: Execute
1-3 Period-end closing before billing
1-3-1 Carry out results analysis and review the results. Write down the COS and
revenue in excess of billings.

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Select: Execute
Save the results analysis.

1-3-2 Carry out sales order settlement. To view the settled amounts, display the
detail lists. Note that the amounts settled to PA reflect the COS and revenue
calculated by results analysis.


Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
Background processing: Deselect
Test Run: Deselect
Detail Lists: Select
Check trans. data: Deselect
Choose Execute
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SAP AG AC515 7-31

1-4 Resource-related billing
1-4-1 Create a debit memo request for the consulting activities.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Resource-Related Billing Document

Enter the following data:
Sales Order number: Your sales order number
Sales order item: 10
Choose: Save Billing Request

Confirm the prompt Do you really want to create a billing request? and
save your entries.


1-4-2 Create a billing document based on the debit memo request. Note that the
invoice value matches the revenue in excess of billing calculated during
results analysis.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Billing Document

Choose: Save

1-4-3 Go to the information system for product cost by sales order and review the
planned to actual cost report for your sales order. Check whether the
revenues for the invoices were updated on the corresponding sales order
item.

1-5 Period-end closing after billing
1-5-1 Carry out results analysis again, review the logs and analyze the results.
Since all costs have been billed, the revenue in excess of billings should be
zero.
Enter the following data:
Order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Select: Execute
Save the results analysis.

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SAP AG AC515 7-32
1-5-2 Carry out sales order settlement. Display the settled amounts by double
clicking the sender.

Enter the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal Year: Current fiscal year
Background processing: Deselect
Test Run: Deselect
Detail Lists: Select
Check trans. data: Deselect
Choose Execute




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SAP AG AC515 7-33
Sales Order Controlling Without Manufacturing: Solutions


Unit: Sales Order Controlling Without
Manufacturing


Note: Use controlling area S300 for this exercise.
1-1 Start by creating a sales order for the consulting task.
1-1-1 Create a sales order for a consulting item:

Menu path:
Logistics Sales and Distribution Sales Order Create

Enter the following data:
Order Type: ZSP1 (SP. Service order)
Sales Organization: S300
Distribution Channel: S3
Division: S3
Choose: Enter

Enter the following data:
Sold-to party: 3221
Material: ISP-CONSLT
Order quantity: 10 days
Choose: Enter

1-1-2 Create a unit cost estimate to determine the consulting costs.

Menu path:
Extras Costing

Enter the following data in the dialog box:
Costing Variant: PCO4
Base Object: Consulting
Choose: Enter
Adjust the default settings. You estimate 20 hours for senior management
(MANG2), and 60 hours for consulting CONS1N. Delete the entry for
travel costs.

Choose: Save

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SAP AG AC515 7-34
1-1-3 Save the sales order.

Choose: Save

Make a note of the sales order number displayed in the status bar when you
save your data.

______________________________________________________

1-2 Actual Postings
1-2-1 Confirm the internal activity by recording the consulting time in the
Cross-Application Time Sheet . Remember to release your entries before
saving:

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet CATS Classic Record Working Times


Enter the following data:
Data Entry Profile: ISP_SD (or CO2)
Personnel Number: 515991##
Select: Enter times (F5)

Enter the following data:
Sales order: Your sales order number
Sales order item: 10
Quantity: 5 hours each day
for the last 3 days
Confirm your entries.
Choose: Release view
Select the indicator next to the line with your time entries
Choose: Release
Choose: Save
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SAP AG AC515 7-35

1-2-2 Use the CATS to approve the time entered so that it can be transferred to
accounting. Select the time entries using your personnel number 515991##
as a reference.
Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet Approval Approve Working Times
Use personnel number to make a selection
Select the posting Up to today.
Enter your Personnel number.
Execute
If no entries have to be approved, Customizing is set so that no times in the
CATS required approval. Continue with the next subtask.
If there are entries that require approval:
Select your personnel number from the General Hierarchy Display. The
approval screen appears.
Menu path:
Edit Select All
Choose Approve.
Save your entries.

1-2-3 Transfer the CATS to Accounting.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Time
Sheet Transfer Accounting

Enter the following data:
Personal no.: 515991##
Choose: Execute

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SAP AG AC515 7-36

1-2-4 Enter an activity allocation for your sales order.
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Actual Postings Activity
and Business Process Allocation Enter
In Extras Set Controlling Area, set the controlling area to S300.

Doc. Date: Todays date
Postg Date: Todays date
Scrn Var. (Screen variant): Sales order/cost object
Quantity: 4 hours
Send. CCtr (Sending cost center): S-3310
SAtyTyp (Activity type): MANG2
RecSaleOrd (Receiver sales order): Your sales order number and item
number
Save your entries.

1-2-5 Go to the information system for Product Cost by Sales Order and review
the planned to actual cost report for your sales order.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Detailed Reports For Sales
Order
Choose the layout Plan/Actual Comparison

Enter the following data:
Sales order: Your sales order number
Item: 10
Choose: Execute
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SAP AG AC515 7-37

1-3 Period-end closing before billing
1-3-1 Carry out results analysis, review the logs, and analyze the results. Write
down the COS and revenue in excess of billings.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing
Single Functions Results Analysis Execute Individual Processing

Enter data the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Select: Execute
Save the results analysis.
Choose: Save
Note the debit for the materials ISP-CONS1N and ISP-MANG02. These
materials were derived from the configuration of the DIP profile, based on
the cost element assigned to the activities CONS1N and MANG2. The sales
price is established for these materials. The COS value reflects the cost of
the consulting activities that have been posted to the sales order. No other
actual costs have been posted to the sales order. The WIP value reflects the
revenue that can be generated based on the sales price of ISP-CONS1N and
ISP-MANGE02. In the revenue overview, you can see the revenue not yet
billed. At this point, billing has not been executed for this sales item.
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SAP AG AC515 7-38

1-3-2 Carry out sales order settlement. To view the settled amounts, display the
detail lists. Note that the amounts settled to PA reflect the COS and revenue
calculated by results analysis.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing
Single Functions Settlement

Enter data the following data:
Sales document: Your sales order number
Sales document item: 10
Settlement period: Current period
Fiscal Year: Current fiscal year
Background processing: Deselect
Test Run: Deselect
Detail Lists: Select
Check trans. data: Deselect
Choose: Execute
To view the settled amounts, select Detail List
Select the settlement line, and choose either Sender, Receiver or Accounting
documents to review the settlement values.

1-4 Resource-related billing
1-4-1 Create a debit memo request for the consulting activities.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Resource-Related Billing Document

Enter the following data:
Sales document: Your sales order number
Sales document item: 10
Choose: Save Billing Request

Confirm the prompt Do you really want to create a billing request? and
save your entries.

1-4-2 Create a billing document based on the debit memo request. Note that the
invoice value matches the revenue in excess of billing calculated during
results analysis.

Menu path:
Logistics Sales and Distribution Sales Order Subsequent
Functions Billing Document

Choose: Save

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SAP AG AC515 7-39
1-4-3 Go to the information system for Product Cost by Sales Order and review
the planned to actual cost report for your sales order. Check whether the
revenues for the invoices were updated on the corresponding sales order
item.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Detailed Reports For Sales
Order
Choose the layout Plan/Actual Comparison
Enter the following data:
Sales order: Your sales order number
Item: 10
Choose: Execute
The revenue has been updated to the sales order item.

1-5 Period-end closing after billing.
1-5-1 Carry out results analysis again, review the logs, and analyze the results.
Since all costs have been billed, the revenue in excess of billings should
be zero.
Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing
Single Functions Results Analysis Execute Individual Processing

Enter data the following data:
Order: Your sales order number
Item: 10
Period: Current period
Fiscal year: Current fiscal year
RA version: 0
Select: Execute
Save the results analysis.
Choose: Save
Note that the WIP value in the cost overview is zero. Zero also remains to
be billed in the Revenue Overview.

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SAP AG AC515 7-40

1-5-2 Carry out sales order settlement. Double-click the sender to display the
settled amounts.
Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Period-End Closing
Single Functions Settlement

Enter data the following data:
Sales order: Your sales order number
Item: 10
Period: Current period
Fiscal Year: Current fiscal year
Background processing: Deselect
Test Run: Deselect
Detail Lists: Select
Check trans. data: Deselect
Choose: Execute
To view the settled amounts, select Detail Lists
Select the settlement line, and choose either Sender, Receiver or Accounting
docs to review the settlement values.




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SAP AG AC515 8-1
SAP AG 1999
Information System
l Structure of the information system
l Sales order selection with ABAP List Viewer
l Overview standard reports for effective controlling
Contents:



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SAP AG AC515 8-2
SAP AG 2003
Information System: Objectives
At the end of this unit, you will be able to:
l Explain the structure of the information system
l Use the standard reports for effective controlling
l Understand the techniques used by the
information system
l Customize the information system to suit
your needs



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SAP AG AC515 8-3
SAP AG 1999
Course Overview
Introduction
Overview Product Cost Controlling
Make-to-Order Scenarios
Make-to-Order without Sales Order Controlling
Make-to-Order with Sales Order Controlling
Period-End Closing
Sales Order Controlling without Manufacturing
Information System



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SAP AG AC515 8-4
SAP AG 2003
Information System: Business Scenario
l You have a new employee who will be responsible
for reporting.
l As an orientation, you are reviewing the delivered
reports and reporting tools with this employee. You
need to discuss:
n What reporting structures are available
n What is the procedure for accessing a report
n How standard reports are processed
l Since reporting requirements are constantly
changing, you will introduce your new staff member
to the functions provided for creating and
maintaining reports.
l You will also address special features which
simplify and speed up report processing, including
giving some guidelines for selecting from the
provided tools.



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SAP AG AC515 8-5
SAP AG 1999
Information System: Roadmap
SAP AG 1999
l Structure of the Info-System
l Info-System Controlling by Sales Order
l Customizing



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SAP AG AC515 8-6
SAP AG 2003
Using CO-PC Info-System
Which reporting
techniques are used?
What can CO-PC-IS
do for me?
How is the info-system
structured?



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SAP AG AC515 8-7
SAP AG 2003
What Can CO-PC-IS Do For Me?
l Whats going on in my plant?
l Can I support
n my regular decisions based on periodic reporting?
n my day-to-day activities effectively?
l Can I really concentrate on the critical 5%?
l Do I have enough reporting flexibility to meet all my
specific requirements?
l Can I get the right reports to the right places?
l Can I enhance the standard reporting system with
my own reports?



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SAP AG AC515 8-8
SAP AG 2003
How Is The Info-System Structured?

...
l Summarized Analysis
n Reports which show summarized data (such as a plant)
n Branch to detailed reports
l Object Lists
n List of objects according to the selection criteria
n Branch to detailed reports
l Detailed Reports
n Reports for specified objects
l Comparison Reports
n Object comparisons
l Other Reports
n Special reports (such as line items)



n The report categories subdivide the application report trees on the first level according to the most
common reporting needs. For consistency and convenience, each application tree is structured
according to the same report categories.
n The report category is structured according to the report contents. The detailed reports for Product
Cost by Period, for example, is subdivided into the following report contents:
Variance analysis
Work in process
Planned costs
Actual costs
Under these headings, you will find either the corresponding reports or further subdivisions.
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SAP AG AC515 8-9
SAP AG 2003
Which Reporting Techniques Are Used?
A
L
V
A
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V
R
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T
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Report W
riter
Product
Drilldown
Hierarchy G
raphics
R
/3
C
O
-P
C
How do I
handle this??
l Report Trees
l Different Report Tools used
n ABAP List Viewer
n Hierarchy Graphics
n Product Drilldown
n Report Writer



n In the Information System CO-PC, different Report Tools are used.
n Every report tool has its own features and range of applications.
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SAP AG AC515 8-10
SAP AG 2003
Online Documentation
Information
System
CO-PC
l Separate documentation for the CO-PC
Information System
l Contents:
n Structure of the Information System
n Purpose and output of the reports
n Concept of the summarized analysis
n Interactive product drilldown
n Order hierarchies
n Report tools



n The online documentation was set up completely new in Rel. 4.0 and has been continuously
improved since then.
n You can find it in the R/3 Library: -> Financials -> Controlling -> Product Cost Controlling ->
Product Cost Controlling Information System (CO-PC-IS) .
n The documentation provides you with information about the structure of the Information System. In
Report Contents, you will find a description of reports that are standard for the application report
trees in the Information System for Product Cost Controlling.
n Context sensitive help is not supported.
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SAP AG AC515 8-11
SAP AG 1999
Reporting Features
l Exception reporting
l Drilldown
l Use flexible
n Filters
n Sorting criteria
n Grouping criteria
l Display variants
l Download functions



n Exception Reporting
Exception conditions specify whether an object deserves special notice. You can enter this
information in a key figure in a line or a column. Those fields of note will be colored so that you can
quickly recognize items such as variances that are above a certain value.
n Drilldown reporting is an interactive information system that helps you evaluate the data collected in
your application. This information system is capable of analyzing data according to any of the
characteristics that describe the data. You can also use key figures to categorize your data.
n Download functions
Spreadsheet
Word processing
HTML formats
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SAP AG AC515 8-12
SAP AG 1999
Info-System Controlling by Sales Order
SAP AG 1999
l Structure of the Info-System
l Info-System Controlling by Sales Order
l Customizing



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SAP AG AC515 8-13
SAP AG 1999
Info-System Controlling by Sales Order
Line Items
Line Items
Sales Order Selection
Cockpit
Detailed
Reports
Sales Order/ -Item
- Plan/Actual Comparison for Sales Order
- Work in Process
- Profit Results for Sales Orders
- Reserves for Imminent Loss
- Reserves for Unrealized Costs
- Plan Costs
- Actual Costs
- Funds commitment
Production Order
- Plan/Actual Comp.
- Target/Actual Comp.
- Target/Actual/Prod. Variance
- Plan Costs
- Actual Costs
- Work in Process
- Variance Categories
Sales Order with Assigned Orders



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SAP AG AC515 8-14
SAP AG 2003
Sales Order Selection I
Exceptions Exceptions
Filter Filter
Order Customer Plan Actual
Order Customer Plan Actual
4711 ZZ-Low 1,000 1,200
3459 XYZ 1,200 1,250
3986 CBA 900 850
4679 MNO 950 1,800
4711 ZZ-Low 1,000 1,200
3459 XYZ 1,200 1,250
3986 CBA 900 850
4679 MNO 950 1,800
l Powerful Exception Reporting
l List with Key Figures
n sales order header
n sales order items
l Display Variants
n Standard display variants
n Customer specific
n User specific
l Different Views:
n Sales Document Items
n Sales Documents and Items
n Sales Documents



n Sales Order Selection provides you with powerful means to build up a list of sales orders which
interest you. In conjunction with exceptions and filters, a variety of selection criteria supports your
efforts to analyze only the critical sales orders. The number of selection criteria regarding the sales
order items was enhanced again in 4.6C.
n You receive a list of sales orders according to your selection criteria and you get a first impression
by looking at key indicators. Having identified those critical sales orders that you want to examine
more closely you can navigate to detailed cost element reports to view the critical sales orders.
n You can use the features of the ABAP List Viewer. The list can easily be suited to your needs. It is
therefore recommended that you define your own display variants.
n You can also go to different views without having to make a new selection.
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SAP AG AC515 8-15
SAP AG 2003
Sales Order Selection II
Sales Document Item Material Plant Actual Revenue Actual Costs Actual %
COPC-FINI-1 10 1000 12,000.00 10,000.00 20 4571
COPC-CONFIG-1 20 1200 24,000.00 26,000.00 8- 4571
COPC-FINI-2 10 1000 30,000.00 29,500.00 2 4621
COPC-FINI-1 10 1000 24,000.00 20,000.00 20 4627
COPC-CONFIG-1 20 1200 35,000.00 30,000.00 16 4627
COPC-CONFIG-1 30 1200 40,000.00 36.000,00 11 4627
COPC-FINI-1 10 1000 24,000.00 23,500.00 2 4665
COPC-FINI-2 20 1000 28,000.00 27,200.00 3 4665
COPC-FINI-1 10 1200 24,000.00 20,000.00 20 4721
COPC-FINI-2 10 1200 40,000.00 36,000.00 11 4731
COPC-CONFIG-1 10 1200 30,000.00 36,000.00 17- 4745
COPC-CONFIG-2 20 1200 40,000.00 36,000.00 11 4745
COPC-FINI-1 10 1000 12,000.00 10,000.00 20 4763
COPC-FINI-1 10 1000 25,000.00 24,700.00 4767
Subtotals
Select or save
display variant
Sort
Use of filters
Totaling of line
items
Main Features:



n The ABAP List Viewer standardizes and simplifies the operation of lists in the R/3-System. A
standardized interface and list format is made available to you for all lists. It contains convenient
features for dynamic creation of display variants. Some of the important functions for the ABAP List
Viewer are:
Create your own layout
By changing the report layout, you can change the format of your list.
Sort
You can have the lines sorted in ascending or descending order according to column value.
Set filter
You can choose to have only those lines displayed that meet certain criteria.
Total and subtotal values
Within a list, you can calculate totals and subtotals over one or more chosen columns.
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SAP AG AC515 8-16
SAP AG 2003
Report Tools ABAP List Viewer
l Presentation Tool for Lists with Generic
Functionality
l Dynamic Creation of Display Variants
l Predefined Standard Variants
l Only Presentation Removed from
Selection
l Combination of Characteristics and Key
Figures possible
l View Changeable in the Report Without
a New Selection



n The ABAP List Viewer standardizes and simplifies the operation of lists in the R/3 System. A
standardized user interface and list layout is available for all lists. It contains features for dynamic
creation of display variants.
n In the standard many Report Writer reports have already been substituted by ALV reports.
n ABAP List Viewer is used in CO-PC for the following reports:
Sales Order Selection
List of Existing Product Cost Estimates
Line Items in Cost Estimate for Product
Analysis of a Costing Run
Line Item Reports
Order Selection
...
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SAP AG AC515 8-17
SAP AG 2003
ALV: Defining Display Variants
Supply of fields
Column content Lgth
Displayed fields
Column content
Pos Lgth Sum
Material 1 12
Plant 3 4
Mat. description 2 39
...
Costing version 7
10
Costs
Costing version
8
7 4
5
...
...
Costs
Save as a display variant



n Using display variants, you can change the format of your list.
n You can choose which fields will be displayed.
n You can change the sequence of fields
n You can modify the column widths to suit your needs.
n There are two types of layouts:
Customer specific layouts
accessible to all users.
User specific layouts
accessible only to the user who created the layout.
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SAP AG AC515 8-18
SAP AG 2003
Customize Your ABAP List Viewer Reports
Choose the selection
characteristics you want
to use
Define Your Own
Selection Layout
Choose the key figures
and characteristics you
want to use
Define Your Own Display
Layout
Selection Presentation
Assign your selection layout to the report tree
starting the report with your defined display layout
Report Tree



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SAP AG AC515 8-19
SAP AG 2003
Use of Extract in Different Report (I)
Save as
Extract
Sold-to party
Sales document
Selection by header data
First Step:
Selection
Use Background
Processing!
Extract
Database



n To reduce runtimes, you can generate extracts when accessing reports. An extract is a saved dataset
containing the report data selected at the time the extract was generated.
n You generate an extract when you execute a report with reference to the report selection
parameters. It is possible to generate multiple extracts if you execute the report with different
selection criteria.
n When you display the report data in the extract, you have the same navigation and formatting
functions as with online execution of the report.
n If you make changes in the data structure in Customizing for the Information System (especially the
field selection for order selection or for the selection of classification characteristics), inconsistencies
may arise between the current data structure and the structure in the extract. The data of the extract
can then no longer be displayed.
n Note, that an extract is normally only valid for the duration of one Release. This means that after a
release upgrade you usually cannot access extracts generated in a previous release. Therefore after a
release upgrade you should generate new extracts with the desired selection criteria.
n You can generate extracts in the order selection, the sales order selection and the report Analyze
Costing Run.
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SAP AG AC515 8-20
SAP AG 2003
Use of Extract in Different Report (II)
Read
Extract
Sales Order Revenue Costs
12,000.00
10,000.00
4571
24,000.00 26,000.00
30,000.00 29,500.00
24,000.00 20,000.00
4671
4781
4981
Second Step:
Presentation
Save as
Extract
Sold-to party
Sales document
Selection by header data
First Step:
Selection
Extract
Database



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SAP AG AC515 8-21
SAP AG 1999
Summarization Hierarchy for Sales Orders
Controlling Area
Sales Organization
Material
Fields from
Master data
tables



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SAP AG AC515 8-22
SAP AG 2003
Summarization of Different Object Types
n Production orders
n Process orders
n Product cost collectors
n QM-Orders
n Sales Orders with or
without dependent orders
n Projects
n Internal orders
n Maintenance and service
orders
Object Types
Data
Collection
Controlling Area
Sales Organization
Material
Summarization
Hierarchy



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SAP AG AC515 8-23
SAP AG 2003
Sales Order Selection
Detailed
Reports
Sales Order/ -Item
-Plan/Actual Comparison for Sales Order
- Work in Process
- Profit Results for Sales Orders
- Reserves for Imminent Loss
- Reserves for Unrealized Costs
- Plan Costs
- Actual Costs
- Funds commitment
Sales Order with Assigned Orders
Cockpit
Line Items
Sales Order with Assigned Orders (I)
Production Order
- Plan/Actual Comp.
- Target/Actual Comp.
- Target/Actual/Prod. Variance
- Plan Costs
- Actual Costs
- Work in Process
- Variance Categories



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SAP AG AC515 8-24
SAP AG 1999
Sales Order with Assigned Orders (II)
4711 / 10: P-100 1,800 1,950
4711 / 20: P-200 1,500 1,450
4711 / 30: P-300 1,320 1,400
Order 346
Order 98452
Plan Actual
Plan Actual
Sales Order 4711
+
+
-
l Sales Order with
Assigned Orders
n Set-Structure in Sales Order
n Showing all assigned
Production Orders and
Internal Orders
n Sales Order Hierarchy
l Use Exceptions
l Features of Hierarchy
Graphics
l Drilldown to Cost Element
Reports
+
+



n A sales order hierarchy report gives you an impression of the structure of an individual sales order. It
gives you a structure of the sales order items and the related production or internal orders.
n The report shows predefined views:
Plan/Actual Costs
Plan/Actual Quantities
Planned Costs fixed/variable
Actual Costs fixed/variable
Planned/Actual Revenues
n You can create display variants with the figures you are most interested in.
n Sets of Sales Orders are supported in the report.
n By drilling down, you access detailed cost element reports for the sales order, for the sales order
items, or for the assigned orders.
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SAP AG AC515 8-25
SAP AG 2003
Report Tools Hierarchy Graphics
l Uses Tree Graphic
l For Presentation of structural Information
l Predefined View with corresponding figures
l Expand/Collapse nodes
l Set Currency
n CO-Area Currency
n Company Code Currency
l Display Variants
n Standard display variants
n Customer specific
n User specific



n The following reports use hierarchy graphics in CO-PC:
Sales Order with assigned Orders
Multilevel Costed BOM
Order Hierarchy
Cost Object Hierarchy
Collective Order
Partner Cost Component Split
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SAP AG AC515 8-26
SAP AG 1999
Detailed Reports
Sales Order Selection
Detailed
Reports
Sales Order/ -Item
- Plan/Actual Comparison for Sales Order
- Work in Process
- Profit Results for Sales Orders
- Reserves for Imminent Loss
- Reserves for Unrealized Costs
- Plan Costs
- Actual Costs
- Funds commitment
Sales Order with Assigned Orders
Cockpit
Production Order
- Plan/Actual Comp.
- Target/Actual Comp.
- Target/Actual/Prod. Variance
- Plan Costs
- Actual Costs
- Work in Process
- Variance Categories
Line Items


The following detailed reports could be used:
n Plan/Actual Comparison for Sales Order:
Compares the planned and actual data of one or more items in a sales order that are relevant to
account assignment.
n Work in Process:
Shows WIP and Reserves for unrealized costs updated by results analysis.
n Profit Results for Sales Orders:
Analyzes the results analysis data for sales order/-item.
n Reserves for Imminent Loss:
Shows the reserves for imminent loss updated by results analysis under the corresponding results
analysis cost elements.
n Reserves for Unrealized Costs:
Shows the reserves for unrealized costs updated by results analysis under the corresponding results
analysis cost elements.
n Plan Costs:
Shows the updated planned costs and figures and can serve as an analysis of the planning state.
n Actual Costs:
Shows the updated actual costs and figures and can serve as an analysis of the cost situation in your
actuals.
n Funds commitment:
Contractual or scheduled commitment, that is not yet reflected in financial accounting, but that will
lead to actual expenditures in the future.
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SAP AG AC515 8-27
SAP AG 2003
Funds Commitment
Cost
Element
Planned
Cost
Purchase
Requisition
Stock
Actual
Costs
Revenues
Steel
Purchase
Order
Electrical
Subcontr.
Purchase
Fin. Goods
- 1000,-
800,-
Total - 200,-
250,-
100,-
200,-
200,-
250,- 100,- 200,- 200,-
required,
not ordered yet
ordered,
not delivered
yet
Sales order
stock



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SAP AG AC515 8-28
SAP AG 1999
Information System: Customizing
SAP AG 1999
l Structure of the Info-System
l Info-System Controlling by Sales Order
l Customizing



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SAP AG AC515 8-29
SAP AG 2003
Customizing
S
t
o
p
l You have to customize the
Information System.
l If it is not customized, you will
not see anything in the
Information System.



n The following steps are necessary
Product Drilldown: Import/transport reports
Order selection and summarization
Define Selection Profiles
Define Selection Screens for Order List
Define Exception Rules
Create Order Hierarchies
Product Cost by Order
Import Reports for Product Cost by Order
Generate Reports for Product Cost by Order
Product Cost by Sales Order
Import Reports for Product Cost by Sales Order
Generate Reports for Product Cost by Sales Order
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SAP AG AC515 8-30
SAP AG 1999
Customizing
Maintain Report Parameters for CO-PC
[+] Product Cost Planning
[+] Settings for Summarized
Analysis / Order Selection
[+] Product Cost by Period
[+] Product Cost by Order
[+] Product Cost by Sales Order
[+] Cost of Intangible Goods & Serv.
[-] Cost Object Controlling
[+] Actual Costing / Material Ledger
[+] User-Defined Reports
Information System
Customizing the CO-PC Information System



n All settings for the Information System are grouped together.
n They are structured by component.
n Changes to the component hierarchy are reflected in Customizing.

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SAP AG AC515 8-31
SAP AG 2003
Information System: Summary
You are now able to:
l Explain the structure of the information system
l Use the standard reports for effective controlling
l Understand the techniques used by the information
system
l Customize the information system to suit
your needs



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SAP AG AC515 8-32
Information System: Exercises


Unit: Information System

At the conclusion of this exercise, you will be able to:

Use the sales order selection report
Create a user-specific display variant for this report


You have to report the results analysis figures for a range of sales order
items. Your report must contain the following columns:
Sales Order Number
Sales Order Item
Revenue Affecting Net Income
Cost of Sales
Work in Process (WIP)
Reserves for Unrealized Costs
1-1 The sales order selection report is written using the SAP List Viewer. You use the
SAP List Viewer to create a user-specific display variant with the column order
specified above.
1-1-1 Start the sales order selection report.

Enter the following data:
Controlling Area: 1000
Sold-to party: 1171
Choose: Execute

1-1-2 Create a user-specific display variant that displays the fields: Revenue
affecting net income, Cost of sales, WIP, and Reserves for unrealized costs.

1-1-3 Save the user-specific that you just created.

Layout: AC515-##
User-specific: x
Name: Overview Results Analysis

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SAP AG AC515 8-33

1-1-4 Execute the report again, entering the new display variant AC515## on the
initial screen. The reports initial screen now displays your new display
variant.

Sold-to party: 1171
Display variant: AC515-##
Choose: Execute





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SAP AG AC515 8-34
Information System: Solutions


Unit: Information System


1-1 The sales order selection report is written using the SAP List Viewer. You use the
SAP List Viewer to create a user-specific display variant with the column order
specified above.
1-1-1 Start the sales order selection report.

Menu path:
Accounting Controlling Product Cost Controlling Cost Object
Controlling Product Cost by Sales Order Information System
Reports for Product Cost by Sales Order Object List Sales Order
Selection

Enter the following data:
Controlling Area: 1000
Sold-to party: 1171
Choose: Execute

1-1-2 Create a user-specific display variant that displays the fields: Revenue
affecting net income, Cost of sales, WIP, and Reserves for unrealized costs.

Select Change Layout.

Remove the following columns from the current display variant: Material,
Plant, Plan Profit Percent (Base: Plan Costs), Actual Profit Percent (Base:
Actual Costs), Actual Revenue (with Sales Deduction), Actual Costs.

Change the field group to Results analysis. In the list, select the columns
Revenue affecting net income, Cost of sales, WIP, and Reserves for
unrealized costs.

Select Transfer to confirm the selection.
The report data is updated to display the requested fields.

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SAP AG AC515 8-35
1-1-3 Save the user-specific layout that you just created.

Select Save Layout.

Display variant: AC515-##
User-specific: x
Name: Overview Results Analysis
Choose: Continue
1-1-4 Execute the report again, entering the new display variant AC515-## on the
initial screen for sales document items. The reports initial screen now
displays your new display variant.


Follow the instructions outlined in 1-1-1.


Sold-to party: 1171
Display variant: AC515-##
Choose:
Execute







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SAP AG AC515 9-1
SAP AG 1999
Appendix
l This section contains supplementary material to be
used as reference
l This material is not part of the standard course
l Therefore, the instructor might not cover this during
the course presentation



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SAP AG AC515 9-2
SAP AG 2003
At the conclusion of this unit, you will be able to:
l Explain the quantity and value flow in a Make-to-
Order Scenario with unvaluated Sales Order Stock
l Identify the necessary setting in customizing
MTO with Unvaluated Sales Order Stock:
Objectives



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SAP AG AC515 9-3
SAP AG 1999
Roadmap: MTO with Sales Order Controlling
SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances



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SAP AG AC515 9-4
SAP AG 2003
MTO with Unvaluated Sales Order Stock
Controlling by
Sales Order
Sales
Order Stock
Valuated
Unvaluated
Without With
Not
supported
X X
X
l When to Use?
l Complete Cost Overview
n Estimated costs
n Special sales costs
n Funds commitment
n Cost situation of related
production orders
l Results Analysis
n Automatic creation of reserves
n Control of Goods in Transit



n Sales Order Controlling is recommended if the following information is essential to your business:
How high is my profit margin with this special sales order?
How can I control my special sales efforts?
How high is my fund commitment? Is this sales order performing well from a costing point
of view?
Where did late customer changes effect my production costs heavily?
n In this scenario you have the ability to:
allocate sales overhead to the sales document item
allocate process costs to the sales document item
assign special direct costs of sales and distribution to the sales document item
n Moreover you can use results analysis to:
Automatically create reserves for expected losses
manually add reserves for foreseen risk
calculate Goods in Transit when goods are already shipped but not yet invoiced
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SAP AG AC515 9-5
SAP AG 2003
Unvaluated Sales Order Stock
Cost Object Controlling by Sales Order Item
is necessary
l The quantity flow is separated from the
value flow
n The quantity flow (goods receipts, goods
issues) is made via individual customer
stock segments.
n The value flow is made via the sales order
item and all assigned orders.
l Costs are not posted to the sales order
item until order settlement or until the
invoice is received
l No variance calculation on assigned
production orders



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SAP AG AC515 9-6
SAP AG 1999
Separated Quantity and Value Flow for Sales Order
Stock
Material Management
Material $ 110
Labor $ 180
Settlement $ 290
Material: Product-X
Sales Order Stock
Item Quantity
4763 30 3
4783 20 2
4711 10 1
4815 10 1
Cost Object
Sales Order 4815 / 10
Settlement $ 290
Debits
SD Order 4815
SD Order 4815
10 Product-X 1 pc
10 Product-X 1 pc
Goods receipt
Production Order
Debits:
Credits:
Material: Product-X
Sales Order: 4815/10



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SAP AG AC515 9-7
SAP AG 1999
Customer Order Processing
SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances



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SAP AG AC515 9-8
SAP AG 2003
What Is the Data and How is It Updated?
How is the sales order
item updated?
l Product Costing
n Cost component split
n Cost itemization
n Sales Order Item
w Cost elements
w (Planned Costs)
l Unit Costing
n Cost itemization
n Sales Order Item
w Cost elements
w (Planned Costs)
Rule of thumb:
Planned costs are updated
the same way as the actual
costs are posted.



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SAP AG AC515 9-9
SAP AG 2003
Example: Cost Elements On Sales Order Item
SD Order 4711
Item 10 FIN-1 1 PC
SD SD
SEMI-I 0 $
RAW-C 10 $
ACTIVITY 40 $
OVERHEAD 10 $
Itemization
FIN-I 4711 / 10
RAW-I 0 $
ACTIVITY 40 $
OVERHEAD 10 $
Itemization
SEMI-I 4711 / 10
Purchase order
RAW-I 4711/10 50 $
MM MM
BOM
FIN-I
SEMI-I RAW-C
RAW-I
PP PP
CO Object
Plan Revenue
500$
Plan Costs
RAW-C 10$
ACTIVITY 40$
OVERHEAD 10$
RAW-I 50$
ACTIVITY 40$
OVERHEAD 10$
Costing sheet/
Sales Order item
All itemizations of the individual
requirement materials are pulled
up to the sales order item level
including surcharges.



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SAP AG AC515 9-10
SAP AG 2003
Example: Surcharges in Detail
SD Order 4711
Item 10 FIN-1 1 PC
SD SD
SEMI-I 0 $
RAW-C 10 $
ACTIVITY 40 $
OVERHEAD 10 $
Itemization
FIN-I 4711 / 10
RAW-I 0 $
ACTIVITY 40 $
OVERHEAD 10 $
Itemization
SEMI-I 4711 / 10
Purchase order
RAW-I 4711/10 50 $
MM MM
CO Object
Plan Revenue
500$
Plan Costs
RAW-C 10$
ACTIVITY 40$
OVERHEAD 10$
RAW-I 50$
ACTIVITY 40$
OVERHEAD 10$
OVERHEAD
SALES 20,-
Costing sheet/
Sales Order item
Costing Sheet
in valuation method of
costing variant for
manufacturing
overheads
Costing Sheet in the
requirement class for
sales overhead



Recommendation:
n Overheads for sales and administration are calculated with the costing sheets of the requirement class
n Overheads for goods manufactured are calculated with the costing sheet of the valuation variant of
the costing variant
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SAP AG AC515 9-11
SAP AG 1999
Customer Order Processing
SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances



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SAP AG 1999
Example: Unvaluated Sales Order Stock
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
Material:
- FIN-I : Finished Good Individual requirement
- SEMI-I : Semi-Finished Good Individual requirement
- RAW-I : Raw Material Individual requirement
- RAW-C: Raw Material Collective requirement
Material:
- FIN-I : Finished Good Individual requirement
- SEMI-I : Semi-Finished Good Individual requirement
- RAW-I : Raw Material Individual requirement
- RAW-C: Raw Material Collective requirement
BOM
FIN-I
SEMI-I RAW-C
RAW-I
PP PP



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SAP AG AC515 9-13
SAP AG 2003
Sales Order Controlling: Planning
Cost Object - 4711/10
Plan Revenue
500
Plan Costs
RAW-I 60
Special Costs 10
Actual Revenue
Actual Costs
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
BOM Routing
Product Cost
Estimate
Unit Cost Estimate



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SAP AG AC515 9-14
SAP AG 2003
Materials Requirements Planning
Plan Costs
SEMI-I 150
RAW-C 10
ACTIVITY 40
Actual Costs
PP Order 1 PC
FIN-I 4711/10
PP Order 1 PC
SEMI-I 4711/10
Purchase order
RAW-I 4711/10
MM MM
PP PP
BOM
FIN-I
SEMI-I
RAW-C
RAW-I
PP PP
Plan Costs
RAW-I 0
ACTIVITY 100
Actual Costs
Components with individual
requirements are not costed when
using the unvaluated sales order stock
Components with individual
requirements are not costed when
using the unvaluated sales order stock
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n MRP (Material Requirement Planning) creates 2 production orders and 1 purchase order. This
example is only using the planned costs of the production order. There is no sales order estimate.
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SAP AG AC515 9-15
SAP AG 2003
Goods Receipt/Invoice Receipt Raw Material
Stock change
Customers Vendors
GR/IR Expense
FI FI
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC
Goods Receipt
1 PC RAW-I 60
Invoice Verification
1 PC RAW-I 60
RAW-C
100 PC 10
SEMI-I
FIN-I
Purchase order
RAW-I 4711/10
MM MM
RAW-I
4711/10 1 PC 60
Stock: Quantity/Valuation



n The purchase order goods receipt creates a debit to the sales order. The inventory is stored as sales
order stock, however it is not valued. If price differences occurs for the material, (during invoice
receipt), the price difference will be posted to the sales order.
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SAP AG AC515 9-16
SAP AG 2003
Goods Issue Raw Material
RAW-C
100 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC
MM MM
Plan Costs
ACTIVITY 100
Actual Costs
PP Order 1 PC
SEMI-I 4711/10
PP PP
Expense Stock change
Customers
Sales
Revenue
Credit Stock
FI FI
SEMI-I
FIN-I
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Since the raw material inventory (RAW-I) does not have value, the goods issue of the unvaluated
raw material does not create an accounting entry.

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SAP AG AC515 9-17
SAP AG 2003
Goods Receipt Semi-Finished Material
Expense Stock change
Customers
Sales
Revenue
Credit Stock
Plan Costs
ACTIVITY 100
Actual Costs
ACTIVITY 120
PP Order 1 PC
SEMI-I 4711/10
PP PP
RAW-C
100 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC
MM MM
SEMI-I
4711/10 1 PC
FI FI
FIN-I
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Since the sub-assembly is non valuated sales order stock, no accounting entry is created during the
goods receipt of the sub-assembly. The actual costs will remain on the production order until
settlement.

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SAP AG AC515 9-18
SAP AG 2003
Goods Issue: Components to the Finished Good
Plan Costs
RAW-C 10
ACTIVITY 40
Actual Costs
RAW-C 10
PP Order 1 PC
FIN-I 4711/10
PP PP
RAW-C
99 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC
MM MM
SEMI-I
4711/10 0 PC
Expense Stock change
Sales
Revenue
Credit Stock
FI FI
FIN-I
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
Plan Costs
ACTIVITY 100
Actual Costs
ACTIVITY 120
PP Order 1 PC
SEMI-I 4711/10
PP PP
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Goods issues in Materials Management (MM) for dependent requirements of the finished product
result in corresponding debits of the manufacturing orders if the components are collective stock. If
the price control indicator of the material is set to S, the production order is debited with the standard
price; if the price control indicator is set to V, the production order is debited with the current
moving average price. The manufacturing orders therefore always show the full actual costs. Note
that if the price control indicator of the material is set to S, the actual costs are calculated by
multiplying the confirmed quantity by the standard price.
n Goods issues of unvaluated sales order stock do not create an accounting entry.
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SAP AG AC515 9-19
SAP AG 2003
Goods Receipt Finished Good
Expense Stock change
Sales
Revenue
Credit Stock
RAW-C
99 PC 10
Stock: Quantity/Valuation
RAW-I
4711/10 0 PC
MM MM
SEMI-I
4711/10 0 PC
FIN-I
4711/10 1 PC
Plan Costs
RAW-C 10
ACTIVITY 40
Actual Costs
RAW-C 10
ACTIVITY 50
PP Order 1 PC
FIN-I 4711/10
PP PP
FI FI
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Since the finished material is unvaluated sales order stock, there is no accounting entry during the
goods receipt for the finished material. The actual costs will remain on the production order until
settlement.
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SAP AG AC515 9-20
SAP AG 2003
Delivery to Customer
FI FI
Expense Stock change
Sales
revenues
Credit Stock
Delivery
Item 10 FIN-I 1 PC
RAW-C
99 PC 10
MM MM
SEMI-I
4711/10 0 PC
RAW-I
4711/10 0 PC
FIN-I
4711/10 0 PC
Stock: Quantity/Valuation
Customers
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n Since the finished good is not valuated, there is no accounting document created during the delivery
to the customer.
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SAP AG AC515 9-21
SAP AG 2003
Results Analysis/Settlement
FI FI
Expense Stock change
Price
Differences
Credit Stock
Customers
Work in Process
Goods in Transit
Cost Object - 4711/10
Plan Revenue Actual Revenue
500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
WIP 180
Plan Costs
RAW-C 10
ACTIVITY 40
Actual Costs
RAW-C 10
ACTIVITY 50
PP Order 1 PC
FIN-I 4711/10
PP PP
Plan Costs
ACTIVITY 100
Actual Costs
ACTIVITY 120
PP Order 1 PC
SEMI-I 4711/10
PP PP
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n You can use results analysis to calculate the value of the costs that can be capitalized for each sales
order item. You can activate the costs that have an option to capitalize by means of settlement to
Financial Accounting (FI). For manufacturing enterprises, results analysis is recommended when you
want to capitalize goods that have been delivered but not yet invoiced.
n For unvaluated sales stock, you use results analysis to calculate the value of the sales order inventory
at the end of a period. Via the settlement process, this inventory value can be posted to FI. This is
the same concept as WIP calculation.
n You can also use results analysis to calculate the COS value. Since the delivery is made without
updating the COS in Financial Accounting, you can use results analysis and settlement to post the
COS in FI.
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SAP AG AC515 9-22
SAP AG 1999
Invoices
FI FI
Expense Stock change
Sales
revenues
Credit Stock
Invoices
Delivery
Item 10 FIN-I 1 PC
10 FIN-I 1 PC 500
Customers
Cost Object - 4711 / 10
Plan Revenue Actual Revenue
500 500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n The actual revenues are updated on the sales order item by the invoice.
n Billing invoices the customer for the goods and services delivered for a sales order. In Sales and
Distribution, you create an invoice (billing document) on the basis of a reference document. In order-
related billing, the reference document is the standard order or the delivery document with delivery-
related billing.
n The data such as prices and quantities are transferred from the previous documents into the billing
documents. The price can be calculated in the following ways:
Using pricing on the basis of conditions (such as material or customer)
On the basis of the incurred costs if you want to use resource-related billing
n When you enter a billing document, the system proposes a billing type depending on the reference
document. The billing type determines the following:
Which pricing procedure is used for account determination for Financial Accounting
Whether the invoices are passed immediately to Financial Accounting
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SAP AG AC515 9-23
SAP AG 2003
Settlement Production Order
FI FI
Expense Stock change
Reserves
Sales
revenues
Credit Stock
Cost Object - 4711/10
Plan Revenue Actual Revenue
500 500
Plan Costs Actual Costs
RAW-I 60 RAW-I 60
Special Costs 10
Settlement 180
Plan Costs
RAW-C 10
ACTIVITY 40
Actual Costs
RAW-C 10
ACTIVITY 50
-60
PP Order 1 PC
FIN-I 4711/10
PP PP
Plan Costs
ACTIVITY 100
Actual Costs
ACTIVITY 120
- 120
PP Order 1 PC
SEMI-I 4711/10
PP PP
SD SD
SD Order 4711
Item 10 FIN-I 1 PC



n When a sales order item is finally billed, no additional revenue is expected for that sales order item.
Only debit memos and credit memos can be entered. For this reason you can normally cancel all
capitalized inventories. In case of follow-up costs it is possible to build reserves.
n The settlement rule for the production orders will automatically assign the sales order as the receiver.
In this manner, all actual costs from the production order are settled to the sales order item.
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SAP AG AC515 9-24
SAP AG 1999
Customizing
SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances



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SAP AG AC515 9-25
SAP AG 2003
Customizing - Requirement Class
Assembly / Requirements
Costing
Assembly Type
Copy Cost estimate
Automatic planning
Account Assignment
Requirement Class
Costing
Costing-Id B
Costing Method 1
Costing Variant PPC4
Costing Sheet COGS
Copy Costing Sheet
CndTypLineItemes
CndTypLineItFix
Automatic Pre-
Costing of Sales
Order Item
Account Assgt. Category E
Valuation
Val.-Strategy
Settlement Profile SD1
Result Analysis Key SDOR1
Unvaluated Sales Order
Stock with Cost Object
Controlling on Sales Order






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SAP AG AC515 9-26
SAP AG 1999
Account Assignment Category E
Consumption Posting
Account Modification
Ind.Account Assigment Screen
Special Stock
Detailed Information
Acc.assigt.changeable
Acc.ass.change on IR
Derrive acct. assigt.
VKB
1
E
E Acc. Via Sales Order
Account Assignment Category E
Product Cost by
Sales Order
Special stock



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SAP AG AC515 9-27
SAP AG 1999 SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances
Transfer Postings



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SAP AG AC515 9-28
SAP AG 2003
Transfer Postings
Sales Order Stock
4712 /10
Collective Stock
Movement Type 411 / E
Sales Order Stock
4712 /10
Sales Order Stock
6790/30
Movement Type 413 / E
Sales Order Stock
4712 /10
Project Stock
E-1400
Movement Type 415 / E



n In this Slide only 3 typical transfer postings are mentioned, which you could use to move a material
from one sales order stock to another stock.
n Beside these movement types you could also use the following movement types for the reversal
postings:
412/E Transfer Posting sales order to own - reversal
414/E Transfer Posting sales order to sales order - reversal
416/E Transfer Posting sales order to project - reversal
n For the complete list of available transfer postings refer to the MM-Documentation.
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SAP AG AC515 9-29
SAP AG 1999 SAP AG 1999
l Unvaluated Sales Order Stock
n Overview Business Scenario
n Customer Order Processing
w Planning
w Actual Postings
n Customizing
l Transfer Postings
l Customizing WIP, Variances
Customizing WIP, Variances



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SAP AG AC515 9-30
SAP AG 1999
Assignment of WIP
Original Cost
Elements
400000 400000
415000 415000
Mat
610000 610000
620000 620000
Lab
660000 660000
662000 662000
OH
Line
ID
CO-
Area
1000
1000
1000
RA-
Version
0
0
0
Credit
Debit
Variable
fixed
Calc.
motive
RA-
Key
+
+
+
+
+
+
+
+
+
Capitalize %
Req. Opt. not
20



n You must create line IDs in Customizing for each group of original cost elements. You must also
define an additional line ID for the primary cost element under which the credit for the delivery to
stock is updated.
n Under Define assignment you assign the original cost elements to line IDs. For material cost
elements you can define an assignment for each origin group. For internal activities you can define
an assignment for each cost center and activity type. Otherwise you must mask these entries with
four plus signs (++++).
n In the columns ReqToCap, OptToCap and CannotBeCap you specify whether the work in process
for the costs of this line ID can be capitalizedand therefore to which results analysis category the
work in process is assigned.
n You can use indicators, to post
debits, credits
fix and variable cost and
calculation motive (costs and revenues)
to different accounts (because of using different categories in the update of WIP) and different value
fields for reporting - especially in CO-PA.
n You must define posting rules to be able to settle this data to Financial Accounting.
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SAP AG AC515 9-31
SAP AG 1999
Update WIP
Cost element
for reserves
672110
673110
672130
673130
672120
673120
CO-
Area
1000
1000
1000
RA-
Version
0
0
0
RA-
Key
FERT
FERT
FERT
Mat
Lab
OH
Line
ID
Cat.
K
K
K
Inventory:
Reserves:
Inventory:
Reserves:
Inventory:
Reserves:
Apportionment
number %



n When the system calculates the WIP, it may create reserves for unrealized costs for certain orders.
This happens when the actual cost incurred to date for the production order is less than the credit
posting at the time of the goods receipt. The system creates these reserves because higher costs than
the actual costs to date are expected on the basis of the information in the standard cost estimate used
for material valuation.
n Under Define update you specify the cost element under which the work in process is updated for the
line ID (such as 672110 for direct costs, 672130 for production costs and 672120 for overhead). If
the actual costs for the order are less than the credit postings, reserves for unrealized costs can be
created and updated under the appropriate cost elements.
n Example:In the first two periods, work in process is calculated and passed on to Financial
Accounting and Profit Center Accounting as a change to stock. In the third period, the last goods
receipt is entered for the order. The work in process created previously is canceled.

Period Status WIP (cumulative) Inventory change
1 Released 200 200-
2 Released 300 100-
3 Delivered 0 300
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SAP AG AC515 9-32
SAP AG 1999
Posting Rules of WIP
Posting Rules
893000 (Profit/Loss)
793000 (balance
sheet)
Not to be Not to be
capitalized capitalized
893005 (Profit/Loss)
793005 (balance
sheet)
To be To be
capitalized capitalized
CO-
Area
1000
1000
1000
Company
1000
1000
1000
RA-
Version
0
0
0
RA-
Category
WIPR
WIPO
WIPP



n In the step "Define assignment", you define the results analysis category of the data by entering the
line ID in an appropriate column. The work in process for a particular group of costs, for example,
can be assigned by means of an entry in the corresponding column of one of the following
categories:
WIPR Work in process with requirement to capitalize costs
WIPO Work in process with option to capitalize costs
WIPP Work in process with prohibition to capitalize costs
n In Customizing for Product Cost Controlling, you must make sure that the default rule is PP1 (full
settlement) for the order type of the production order. This ensures that a distribution rule is
generated for settlement with settlement type Full settlement.
n The work in process is usually passed on to the accounts for unfinished products (balance sheet) and
stock changes (P&L).
n Reserves for unrealized costs are usually passed on to the accounts for reserves for unrealized costs
(balance sheet) and reserves expense (P&L).
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SAP AG AC515 9-33
SAP AG 2003
Variances Target Cost Versions
Cost estimate which
determines the value of
the goods receipt
Production Order
Planned Costs Target Costs
Production Order
Actual Costs
Product Costing
Other Cost Estimate
Target Version 2
Based on: Plan Quantity
Input Variances
Output Variances
Target Version 1
Based on: Actual Quantity
Input Variances
Target Version 0
Based on: Actual Quantity
Input Variances
Output Variances
WIP
Scrap
Totals
Scheduling Production Alternative Totals
Target Version 3
Based on: Actual Quantity
Input Variances



n The purpose of calculating target costs is to provide a common basis for the calculation of variances
between the actual costs and the planned costs. In the R/3 system you control how the target costs are
calculated by means of a target cost version.
n To calculate the total variances (target cost version 0), the system compares the actual costs of the
production order with the target costs according to the cost estimate, which determines the value for
the goods receipts for the material produced. In make-to-stock production this is the standard cost
estimate. In make-to-order production the cost estimate depends on the valuation strategy. The
planned costs from this cost estimate are converted to the actual order quantity (the quantity
delivered) to calculate the target costs. The results of this target cost version can be settled to
Profitability Analysis.
n To calculate the production-based variances (target cost version 1), the system compares the actual
costs with the target costs of the production order. The planned costs in the order are converted to the
actual order quantity (the quantity delivered) to calculate the target costs.
n To calculate the planning-based variances (target cost version 2), the system compares the planned
costs for the production order with the target costs according to the cost estimate for the material
produced. The planned costs from the standard cost estimate are converted to the planned order
quantity to calculate the target costs.
n To calculate the planning-based variances (target cost version 3), the system compares the actual
costs for the production order with the target costs according to another cost estimate calculated by a
specific costing variant and costing version.