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Basics of SAPTraining
Standard
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created by Hrusikesh Dalai on Nov 15, 2013 5:36 PM, last modified by Hrusikesh Dalai on Sep 30, 2014 8:01 PM
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There is a lot of forum question answers and content available in SCN about Standard Costing
Note-This is a beginner's and basic guide to understand cost estimate and various settings behind it.
This document is intended to explain the cost flows to a standard cost estimate. Explaining various settings in
background. I will try to explain this from backward from Cost estimate to configuration. This will answer some basic
questions like Material Cost, Overhead Cost, Labor etc. in a standard cost.
When you take a look at a material cost estimate what you will understand the Quantity Structure, Valuation, Costing
Dates etc.
Standard cost of a material looks like in T-Code- CK13n (you can view this from costing-2 view in material master
too T-Code-MM03.)
I will try to walk through these 6 tabs below explaining basic configurations and data flows from different
configuration to Standard Cost estimate.

Screenshot-1
For our analysis purpose I have selected standard layout 1SAP02-Costing items (overview)
there are several layout available in standard SAP and user can define their own too.

Communications

Actions

Screenshot-2

Screenshot-3
1-Costing DataIt contains data like Costing variant, Costing Version, Lot Size and Transfer Control. Lets talk about Costing Messages
and Costing status later on.

Screenshot -4

Costing variant-Configuration Costing Variant in T-code OKKN- (Will cover in more detailed way in part 2.)
-Assign various Control parameters like Costing Type, Valuation variant, Date Control QTY structure Control, Transfer
Control etc.
-Maintain parameters different Tabs like Control, Qty Structure, Addictive Cost, Assignment and Misc.

Screenshot 5
Costing Version configuration using T CODE- OKYD
-Number that serves to differentiate between cost estimates for the same material.

Screenshot 6
Lot Size
- The costing lot size in the material master record is usually used as a basis for costing all materials, however one can
manually change the lot size during cost estimate.
Transfer Control-Configure in T-code OKKM usually used the standard.

Screenshot 7
- This controls how costing with quantity structure searches for existing cost estimates when existing costing data are
transferred to another cost estimate. In this example we assigned PC02 in TCODE OKKN.
2-Costing Dates-we will learn more about date control in Costing variant

Screenshot 8
-Costing Date from -Date from which the cost estimate is valid.
-Costing Date to- This date determines the date up to which the cost estimate is valid
-Qty Structure Date-Date with which the quantity structure is selected for the cost estimate with quantity structure.
-Valuation Date-Date on which the materials and activities in a cost estimate are valuated.
3-Qty Structure-It contains BOM and Routing data. ( Usually PP functionality)

Screenshot 9
Bill Of Material (BOM)- T CODE- SET up CS01 , To view T-code -CS03

Screenshot 10
If you go back and refer my screenshot 3 the detailed cost (M) comes from this settings.
Note- we will have to do cost component settings too will cover the point in net part.
Routings- Create Routings T-Cod-CA01 ( PP functionality) to view CA03
- A routing shows operations in a sequence. This form the basis for
Lead time scheduling. Product costing, capacity planning, Refer screenshot 3 Cost Internal Activity (E) comes
from this settings. We will understand more detail in my next part about assigning work center, activity and
activity planning.

Screenshot 11

4- Valuation- It contains the currency, Costing sheet and Overhead key.


T CODE-KZS2-Creating and maintaining Costing Sheet,
T CODE-KOOK-Defining and changing Overhead key

Screenshot 12
if you refer to screenshot 3 Overhead cost (G) flows from this settings from costing sheet and overhead key.
Costing Sheet-It controls the calculation of Overhead basically we use one costing sheet for each object for which
system is to determine overhead costs. ( will see more detail in my next part)
The Overhead Key-The overhead key is used to determine order-specific or material-related overhead rates. The
overhead amounts depend on the plant and the overhead key. The overhead depends primarily on the overhead
key. If an overhead key is not maintained for the material or the order, overhead is to be determined in relation to
the plant.
After defining a costing sheet that points to two condition tables. In the first table, the overhead amount
depends on the overhead key. In the second table, the overhead amount depends on the plant. An access
sequence determines which conditions have priority.
5- HISTORY- It contains the user and costing run date data.

Screenshot 13
Cost By/Marked By/released By- The user names who performed respective costing run task.
Some large companies have different person to mark the cost and different person to release the cost as it rectifies the
human errors if any. But in my experience i have seen mostly it is performed by the same person.
Costing run - usually this data updated when we use T-code CK40n to do standard costing in case of individual material
costing using CK11n this field will not populate. So we can always go and check that costing run data to verify the
settings at that point of time.

6-Costs-Baiscally it is summarization and cost component view


TCODE-OKTZ setting up cost component Structure (we will see in detail in part 2 of this document)
If you refer back screenshot 8 breaking out cost like overhead, labor and material based on these settings here.In
Product Cost Controlling, the cost component structure determines how the results of material costing are updated.
The cost component structure groups the costs for each material according to cost component (such as material
costs, internal activities, external activities, and overhead). If the material is used in the production of another
material, the cost component split (which breaks down the costs according to material costs, internal activities,
external activities, overhead, and so forth) remains in the system when the costs are rolled up

Screenshot 14
Error Log- Identifies the messages if costed with error or without error.

Intention of creating this document is to reach out to the beginners and those who wanted to know and understand the
flow of Standard Costing. i will update the document as n when some more points needs to be included .
This is my first document and I should thank
Ajay , Forum members,and SCN
SAP ERP Financials - Controlling
I was nervous to put together the basics in a document and publish it in SCN. I will continue edit it for improvement.
The next part of document will update the more detailed configuration and steps to understand Basics of Standard
costing
Refer to next part here

http://scn.sap.com/docs/DOC-49167

Best Regards
Hrusikesh Dalai

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97 Comments
Prasad Swain Nov 15, 2013 7:13 PM

Simplified!!!!
Well done!!Congratulation for writing this document. I like the flow of this document specialy starting
with Cost estimate, i was always wondered when i start working in FICO how does a cost estimate and
these values flowing from where and though there are several threads about this but i was never able
to put together to understand it. it took me longtime to understand the basics and various settings
behind it. I think for non financial folks like me it will be easier to understand the standard cost estimate
screen now.
i like the first screenshot of circles
document yet incredible Kudos

where you broke different parts and later explained. Simple


. i will wait for your next document.

Thanks
Prasad.
Like (4)

Hrusikesh Dalai Nov 15, 2013 9:44 PM (in response to Prasad Swain)

Prasad,
Thank you for your comment and encouraging words, it is always good to receive the first
positive feedback.
Thanks
Hrusikesh
Like (2)

arturo senosain Nov 16, 2013 5:14 AM

Its very nice see ppl sharing!


Like (2)

Hrusikesh Dalai Nov 17, 2013 3:59 PM (in response to arturo senosain)

Arturo,
Appreciate your comments and it feels nice to recieve feedback from you.
Thank you

Hrusikesh
Like (0)

Rajneesh Saxena Nov 16, 2013 6:27 AM

Dear Hrushi
As expected, good work.
Regards
Rajneesh Saxena
Like (1)

Hrusikesh Dalai Nov 17, 2013 4:00 PM (in response to Rajneesh Saxena)

Rajneesh,
I appreciate your comments. I am one of your followers in the forum too.
Thank you
Hrusikesh
Like (1)

Pankaj K Agrawal Nov 16, 2013 9:34 AM

Dear Hrusikeshji,
Great start, good to see your valuable knowledge transfer doc.
Much much appreciated for your great effort.
Eagerly waiting for the new documents to be out soon.
Thanks a lot
Kind Regards
pankaj
Like (1)

Hrusikesh Dalai Nov 17, 2013 4:01 PM (in response to Pankaj K Agrawal)

Pankaj,
Thank you for your wOrds it really means a lot.
Loading...
Regards
Hrusikesh
Like (0)

Narasimhulu Konnipati Nov 17, 2013 2:25 PM

Hi,
Your presentations on Costing are really helpful and we expect many more like this to understand
better.
Thanks for sharing
NSK
Like (1)

Hrusikesh Dalai Nov 17, 2013 4:04 PM

NSK,
It motivates me further when people like you start appreciating our work.
Thank you
Hrusikesh
Like (0)

David Feng Nov 18, 2013 3:57 PM

exceptionaly written!! well done


Like (1)

Hrusikesh Dalai Nov 18, 2013 10:06 PM (in response to David Feng)

Thank You David for your motivating words and a positive rating too

. It feels good
Like (1)

veenu gulati Nov 18, 2013 10:00 PM

Hrushi,

Great Work..Keep it up.


Regards
Veenu
Like (1)

Hrusikesh Dalai Nov 18, 2013 10:15 PM (in response to veenu gulati)

Veenu,
Thank you for looking at it, I appreciate your feedback
Best regards
Hrusikesh
Like (0)

Prerna Rathore Nov 20, 2013 12:55 PM

Hi Hrusikesh,
Thanks for sharing..I can get some basic idea about FICO...
Appreciate your efforts..
Keep Sharing ...
Like (0)

Hrusikesh Dalai Nov 20, 2013 5:32 PM (in response to Prerna Rathore)

Prerna,
I appreciate your comments and glad it helped you in someway,
Best Regards
Hrusikesh
Like (0)

Dawood Khalid Nov 25, 2013 7:02 AM

Very well written Hrusikesh !!!


Like (2)

Hrusikesh Dalai Nov 25, 2013 8:30 PM (in response to Dawood Khalid)

Thank You Dawood


Like (1)

Sampat Kumkar Nov 25, 2013 10:56 AM

Hi Hrushikesh
This is very good document prepared...
thanks to clerify the conept
Regards
sampat
Like (1)

Hrusikesh Dalai Nov 25, 2013 8:31 PM (in response to Sampat Kumkar)

Thank You Sampat for your appreciation.


Like (1)

fransisco lozana Nov 25, 2013 8:29 PM

Hrusikesh,
Bravo!!Outstanding job, The concept is so clear and well formatedIt is nice to see people sharing for
community.
Thanks
Fransisco
Like (0)

Hrusikesh Dalai Nov 25, 2013 8:32 PM (in response to fransisco lozana)

Gracias Fransisco
I sincerely appreciate your comment it gives me further motivation to share more and learn
more.
BR
Hrusikesh

Like (1)

Naresh Krishnamoorthy Nov 28, 2013 9:19 AM

Useful one...Thanks.
BR,
Naresh K.
Like (1)

Hrusikesh Dalai Dec 2, 2013 4:14 PM (in response to Naresh Krishnamoorthy)

I am glad you like it. i appreciate your comments and Thank you
Best regards
Hrusikesh
Like (0)

Srinivas Salpala Nov 29, 2013 5:09 AM

Hrushi,
Good job!!! CO area is becoming strong with quality content. Keep up the best work....!
BR, Srinivas Salpala
Like (1)

Hrusikesh Dalai Dec 2, 2013 4:16 PM (in response to Srinivas Salpala)

Hello Srinivas,
I really appreciate your comments. Thanks for looking at it.
BR
Hrusikesh
Like (0)

Lakshmi Sama Nov 29, 2013 11:45 AM

Hello Hrusikesh,
Nice effort and i am waiting for your new docs on costing and controlling concepts.
Keep Sharing
Thanks & Regards,
Lakshmi S
Like (1)

Hrusikesh Dalai Dec 2, 2013 4:18 PM (in response to Lakshmi Sama)

Hello Lakshmi,
Thanks for appreciating my effort and reading the document. Yes there is couple of other
documents already i posted i will try to finish the Costing in next couple of parts.
i hope it may helpful to you and other community members.
BR
Hrusikesh
Like (1)

ACR RUBEN Dec 3, 2013 7:41 AM

Hi Hrushikesh Dalal,
Very well documented. Explained in a well mannered way so that we can understand easily.
Great work.
Keep up.
Regards
ACR.Ruben
Like (1)

Hrusikesh Dalai Dec 3, 2013 8:08 PM (in response to ACR RUBEN)

ACR.Ruben,
Thank you for your kind words, i appreciate you read and rated the document.
Thank You
Hrusikesh
Like (0)

Mohsin Abbasi Dec 6, 2013 11:50 PM

Such a nice Presentation...............:D


Best Regards
Mohsin Abbasi
Like (1)

Hrusikesh Dalai Dec 10, 2013 5:02 PM (in response to Mohsin Abbasi)

Thank you Mohsin,


BR
Hrusikesh
Like (0)

Balaji M Dec 10, 2013 12:06 PM

Good Blog for freshers...


Regards,
M.Balaji.
Like (1)

Hrusikesh Dalai Dec 10, 2013 5:03 PM (in response to Balaji M)

Thank You Balaji.


BR
Hrusikesh
Like (0)

Srikanth Goud Tigulla Dec 16, 2013 7:39 AM (in response to Hrusikesh Dalai)

Very well documented......


Thanx for sharing friend
Like (0)

Hrusikesh Dalai Dec 16, 2013 5:02 PM (in response to Srikanth Goud Tigulla)

Hello Srikanth,
Appreciate for your kind words.
BR
Hrusikesh
Like (0)

milk bike Dec 17, 2013 3:14 AM

Hi Hrusikesh
Thank you for the nice documentation and your time on it. One question, I'm trying to define an
overhead key. It seems transaction code KOOK doesn't exist?
Milk
Like (1)

Abhinav Malik Dec 17, 2013 9:43 AM (in response to milk bike)

Hi Hrusikesh,
The document is very explanatory and helpful. Great job
Hi Milk,
You can define the Overhead Key using T.code: OKOG
The link is very helpful
http://wiki.scn.sap.com/wiki/display/ERPFI/Product+Costing+Transaction+Codes
Regards
Like (2)

milk bike Dec 18, 2013 3:02 AM (in response to Abhinav Malik)

Thank you Andy!


Like (0)

Hrusikesh Dalai Dec 17, 2013 4:08 PM (in response to milk bike)

Milk,
I appreciate your feedback. See below Andy already responded to your question here.

Thanks Andy for your appreciation and answering the question.


BR
Hrusikesh
Like (1)

milk bike Dec 18, 2013 3:10 AM (in response to Hrusikesh Dalai)

One more question please - if I make a change to the costing variant or costing
sheet and anyway it leads to a change to the standard price released. What would
be the impact to the existing open sales orders (or purchase orders)?
Like (0)

Hrusikesh Dalai Dec 18, 2013 3:51 AM (in response to milk bike)

Hi milk,

Lets not discuss the questions here,I will request you to open a new
thread in question answer forum,which will be appropriate and also
consider the SCN forum rules.
Now to answer your question In simple terms just by changing costing
variant and costing sheet will not update already released standard
cost.however it will revalue your inventory once you do the costing run and
the impact- inventory will be debited with new std and consumption will be
credited with old std. and difference will post to price difference.
Thanks
Hrusikesh
Like (0)

milk bike Dec 18, 2013 4:11 AM (in response to Hrusikesh Dalai)

OK thank you Hrusikesh


Like (0)

Jose Reddy Dec 18, 2013 5:12 PM

Hi Hrusikesh...
Nicely framed documentation.
Regards...
Jose
Like (1)

Hrusikesh Dalai Dec 18, 2013 8:23 PM (in response to Jose Reddy)

Thanks Jose
Like (0)

Nishan Dev S Dec 18, 2013 7:29 PM

Good work Hrusikesh,'


Best
Like (1)

Hrusikesh Dalai Dec 18, 2013 8:23 PM (in response to Nishan Dev S)

Thank you Nishan


Like (0)

narin kamuni Jan 15, 2014 11:03 AM

Good Document, thanks for sharing....


Regards,
Narin Kamuni
Like (1)

Hrusikesh Dalai Jan 15, 2014 6:34 PM (in response to narin kamuni)

Narin,
I appreciate your comment
Thank You
Hrusikesh
Like (0)

Nilima Gupta Jan 15, 2014 12:27 PM

Costing analysis purpose, Its very well


I am very much intresting for SAP CO process
plz share if you have valuvable concept
nilima.sap@gmail.com
Like (1)

Hrusikesh Dalai Jan 15, 2014 6:36 PM (in response to Nilima Gupta)

Nilima,
Thanks for comment and i am glad to know you are keen on learning CO process. SCN is
good platform to learn.
Thank You
Hrusikesh
Like (0)

BABU Y Jan 24, 2014 6:21 PM

Thanks a lot
Hrusikesh Dalai for the valuable info on std cost estimation...
SAP Standard Cost estimate- Understanding the flow of cost settings-Part 1

Basics of
Like (1)

Hrusikesh Dalai Jan 24, 2014 6:36 PM (in response to BABU Y)

Hello Purna,
I appreciate for your comments
Thanks
Hrusikesh
Like (0)

praneeth mamidi Jan 26, 2014 10:49 AM

The document flow is simple yet very informative and easy to understand.
Thanks......
Like (1)

Hrusikesh Dalai Jan 27, 2014 7:28 PM (in response to praneeth mamidi)

Praneeth,
I appreciate your comment.
Thank You
Hrusikesh
Like (0)

John More Jan 27, 2014 7:23 PM

Hrusikesh,
Thanks for the time and efforts you put into publishing this valuable information. It takes courage to
do so as some might critique your work but I found this to be exceptionally beneficial and well
presented.
Like (1)

Hrusikesh Dalai Jan 27, 2014 7:30 PM (in response to John More)

John,
Thanks for highly motivated words, its my pleasure to write these documents and i will
continue to do so in coming days.
I appreciate your sincere feedback and comment.
Best regards
Hrusikesh
Like (0)

Sushma Reddy Jan 27, 2014 9:13 PM

Hrusikesh
A well directed for new person like me, Do you provide training for Costing in SAP?
What will be most things i need to know for good understanding about SAP Product costing?
Any suggestion?
Thanks

Sushma
Like (1)

Hrusikesh Dalai Jan 28, 2014 2:40 PM (in response to Sushma Reddy)

Sushma,
I appreciate your comment, There is very rich content available in SCN forum to learn SAP
costing. Follow Ajay n Big Choi and some of other folks out there to get their contents when
they participate.
Thanks
Hrusikesh
Like (0)

Shashi C Jan 28, 2014 1:10 PM

Hi Hrusikesh,
Presenting in screen shots its easy to understand,Thank you for sharing the document.
Rgds
Shashi
Like (1)

Hrusikesh Dalai Jan 28, 2014 2:41 PM (in response to Shashi C)

Shashi,
Thanks for your appreciation and motivational words.
Like (0)

Sushma Reddy Feb 5, 2014 7:16 PM

Hrusikesh,
Awesome documents specially i like the screenshots and detailed explaination. Keep sharing. The way
you explained is different and very easy to follow
Thanks
Sushma
Like (1)

Hrusikesh Dalai Feb 5, 2014 7:28 PM (in response to Sushma Reddy)

Thank You Sushma,


I appreciate your comment and feedback. It motivates me further to contribute and share. I
believe by sharing i learn more than anyone else.
BR
Hrusikesh
Like (0)

Sada Bandla Feb 14, 2014 10:07 AM

Dear
Hrusikesh Dalai thank you for sharing knowledge ..really its useful doc for me..to learn from
beginning.
Regards
Sada Bandla
Like (1)

Hrusikesh Dalai Feb 14, 2014 7:43 PM (in response to Sada Bandla)

Thanks Sada for your valuable comment.


Like (0)

Devendra F Feb 19, 2014 1:24 PM

Hi,
Those are five star series,
Devendra
Like (1)

Hrusikesh Dalai Apr 3, 2014 5:20 PM (in response to Devendra F)

Thanks for the 5 star!


Like (0)

Rohit P Apr 20, 2014 1:21 PM

Hi Hrusikesh,
I started reading this document and I am new to costing concepts and this document is helping me a lot
in gaining the functional knowledge. I am a BPC consultant and keen to learn this. Also is this
something related to "Material cost estimate without cost quantity structure" and Material cost estimate
with cost quantity structure". Actually I am trying to understand Calculation of COGM and COGS and
then I found your document. Any content related to this please post to me.
Really helpful for beginners like me.
Regards,
Rohit
Like (1)

Hrusikesh Dalai Apr 21, 2014 4:53 AM (in response to Rohit P)

Rohit
Sure if you have questions you can ask in forum by opening a thread.I have a series of
document posted related to costing in SAP here in SCN you can go through it.
SCN forum is always there to a post any question you have experts will always answer it
thanks for reading it , I appreciate your comment.
regards
Hrusikesh
Like (0)

Erwin Leitner May 7, 2014 10:44 AM

Hello,
Thank you very much.
all the best Erwin
Like (1)

Hrusikesh Dalai May 7, 2014 4:08 PM (in response to Erwin Leitner)

Thanks Erwin for the 5star rating


Like (1)

Erwin Leitner May 8, 2014 8:42 AM (in response to Hrusikesh Dalai)

Hello,
Nice reading from you.
In my opinion excellent article, and useful for me.
So, please keep on writing.
br erwin
Like (1)

JET YANG May 13, 2014 4:20 AM

Thanks for sharing!


Like (0)

Hrusikesh Dalai May 14, 2014 8:40 AM (in response to JET YANG)

Thanks Jet for reading it.


Like (0)

ANIS ANTIT May 13, 2014 11:21 AM

thanks
Like (0)

Hrusikesh Dalai May 14, 2014 8:41 AM (in response to ANIS ANTIT)

Thanks for reading it


Like (0)

Carolyn Williams Jul 22, 2014 11:24 AM

Hi Hrusikesh, I have read the previous stream of questions/ answers and appreciate you have a good
knowledge of SAP product costing.
I have moved to SAP product costing having used another system and I have a question regarding
purchased goods. Do you know how I can add inbound freight costs to the purchase price to arrive at a
standard cost?
Many thanks in advance

Carolyn
Like (0)

Hrusikesh Dalai Jul 22, 2014 2:54 PM (in response to Carolyn Williams)

There is couple of ways to add that in standard cost either through costing sheet or use
function of addictive cost.
Thanks
Hrusikesh
Like (1)

Carolyn Williams Jul 22, 2014 4:17 PM (in response to Hrusikesh Dalai)

Thank you Hrusikesh - I will explore both options.


Like (0)

Himahshu Mehta Oct 4, 2014 11:39 AM

Dear Friend,
Nice post.
Can you share document flow for inventory accounting considering FIFO method?
Regards
Himanshu
Like (1)

sunil gangaraj Oct 31, 2014 10:20 PM

Great Job Hrusikesh!!! I have gone through your series on Standard Cost Estimate, they are well
explained and documented.
Thanks
Sunil
Like (1)

GBENGA OLAWOYE Nov 2, 2014 7:51 PM (in response to sunil gangaraj)

Thanks for sharing this piece


Like (0)

Hrusikesh Dalai Dec 18, 2014 10:40 PM (in response to sunil gangaraj)

Thanks for the appreciation


Like (0)

Dushantha Perera Nov 17, 2014 11:51 AM

Thanks
Like (0)

Hrusikesh Dalai Dec 18, 2014 10:41 PM (in response to Dushantha Perera)

Thanks for the rating will work hard to get a 5


Like (0)

Eric Chen Nov 26, 2014 9:39 AM

Thanks, Nice document, keep posting.


Like (1)

Hrusikesh Dalai Dec 18, 2014 10:41 PM (in response to Eric Chen)

Thanks Eric
Like (0)

Vinay K Dec 10, 2014 2:20 AM

Very nice document.


Like (1)

Hrusikesh Dalai Dec 18, 2014 10:41 PM (in response to Vinay K)

Thank You Saivinay


Like (0)

Siddharth Bhatt Mar 29, 2015 9:35 AM

thanks a lot, very helpful document in understanding Cost Estimate..


regards,
Siddharth Bhatt
Like (0)

Siddharth Bhatt Mar 29, 2015 11:46 AM

thanks, very nice document on cost estimate.


Like (0)

Hrusikesh Dalai Aug 27, 2015 3:34 PM (in response to Siddharth Bhatt)

Siddharth,
Thanks for the rating and comment
Like (0)

Sherry Liu Apr 10, 2015 9:07 AM

Hello Hrusikesh
Thanks a lot for your great effort to make such a nice instruction! Really helpful for me!
Cheers
Sherry
Like (1)

Hrusikesh Dalai Aug 27, 2015 3:35 PM (in response to Sherry Liu)

Thanks Sherry!
Like (0)

CA kaushal ghedia Aug 23, 2015 9:05 PM

very nice Doc with logical flow .


Like (1)

Hrusikesh Dalai Aug 27, 2015 3:35 PM (in response to CA kaushal ghedia)

Thanks Kaushal
Like (0)

Loc Moisan Oct 5, 2015 2:20 PM

Cool doc..
thanks
Loc
Like (0)

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