Product cost by period scenario

Products with certain quantities per period

Product remains unchanged over a period of time

Steady flow of production

Here we use product cost collectors

Product cost by period with work in progress scenario

In case a product here is standardized one, we use this scenario.

The process of setting generally uniform characteristics for a particular good or service. Product
standardization among the goods provided by different businesses operating in technology-
based industries can be useful for consumers since it permits competition among the
various suppliers.
Here there is a change in the format of the design for Red bull packing. The ingredients
used for the preparation of Red bull are same. In this case, we use work in progress for
month end process, if the products are manufactured in a lot and ultimately packed in one
box.

Creation of material – MM01

Creation of Bill of material – CS01
Enter and save.

Creation of Work Center – CR01

Enter and save.

Creation of Rate routing – CA21

Click on operations

Create Production version for material – MM02

Click on continue button

Click on prodversions button.

Click on check button.
For rate based planning and Alternative BOM and BOM usage the status is green, then we can
proceed to save the material.

Save.

Define Cost-Accounting-Relevant Default Values for Order Typ

Click on copy

Ignore the warning message and enter.

Change plant from 1000 to stfc and enter

Enter and save.

Check Control Data for Repetitive Manufacturing Profiles

Select 0004 and click on details.

Create new version - OKEQ

Click on new entires.

Save.
WORK IN PROGRESS CALCULATION

Define result analysis keys

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  Work in progress  Define result analysis keys.

T Code : OKG1

Define result analysis versions

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  Work in progress  Define result analysis versions.

T Code : OKG9

Click on new entries.

Save and enter.

Define valuation method

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  Work in progress  Define valuation method

T Code : OKGD

Click on new entries.

Select target costs and enter.

Enter and save.

Define line id is same as product cost by order

Define assignment

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  Work in progress  Define assignment

T Code : OKG5

Enter and save.

Define update

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  Work in progress  Define update.

T Code : OKG4
Enter and save.

Rest of the settings same as product cost by order.

Variance calculation

Define target cost versions.

SPRO  Product cost controlling cost object controlling  product cost by period  period
end closing  variance calculation  Variance calculation for product cost collectors  Define
target cost versions

T Code: OKV6
Creation of standard cost estimate – CK11N
Marking and release – CK24
Creation of product cost collectors – KKF6N

Click on
Click on confirm button.
Save

Click on yes button.

Backflush – MFBF

Enter

Select button.
Enter and save.

Enter

Click on button.
Click on button.

Double click on
Click on

Double click on accounting document

The entry generated is

Inventory FG A/C ---Dr

To COGS A/C.

Here Raw material is directly consumed while issuing material for repetitive manufacturing.
Hence no entry is generated for Raw Material consumption.

WORK IN PROGRESS – KKAS

Click on execute button.

In this scenario variance calculation is not done, since only design changes are made as
discussed at the start of the document.

THANK YOU

Product cost by period with production order

Define order types

SPRO  IMG  Production  Shop floor control master data  Order  Define
order types.
Ignore the message and enter.
Define order type dependent parameters

SPRO  IMG  Production  Shop floor control master data  Order  Define
order type dependent parameters

Click on button.
Enter and save.

Define checking control

SPRO  IMG  Production  Shop floor control  Operations  Availability Check 

Define checking control.
Enter and save.

Define scheduling parameters

SPRO  IMG  Production  Shop floor control  Operations  Scheudlling 

Define scheduling parameters for production orders.
Click on copy button.
Define confirmation parameters

SPRO  IMG  Production  Shop floor control  operations  Confirmations 

Define confirmation parameters.
click on copy button.

Change the plant to Belu. Enter and save.

Creation of finished material in material master – MM01

Material 2308 created.

Creation of Bill of materials – CS01

Creation of routing – CA01

Standard cost estimation – CK11N

Marking and release – CK24
Click on button.

Creation of product cost collectors – KKF6N

click on button.
Click on button.

Click on button.

Click on yes button.

Creation of production order – CO01
Click on button.

Save

Raw material issues to production – MB1A

Confirmation of production order – CO11N
Click on save button.

Production receipt against production order – MB31

Click on save button.

Make the order technically complete – CO02

Functions -> Restrict processing  Complete technically.
Click on yes button.

Click on button.

Calculation of variances – KKS6

Actual costs – Rs.5

Target Costs – Rs.10

Settlement of variances to accounts – KK87
Goto  detail lists

Click on button.

This is how variance is calculated in “Make to production order” scenario.

THANK YOU