Product Cost by Order in SAP S4 Hana Controlling

Product Costing

Product costing is used for the calculation of cost of goods manufactured. COGM is comprised of

· Material Cost

· Activity Cost (Direct Overhead)

· Indirect Overhead Cost

Product Costing is divided into three main phases

· Planning (Standard Cost Estimation)

· Cost Object Controlling

· Material Ledger Actual Costing

Different types of cost estimation can be calculated in product costing like

· Base Planning Object (BPO)

· Cost Estimations without Quantity Structure

· Cost Estimation with Quantity Structure

Quantity structure is comprised of BOM & Routing / Master Recipe. In the Bom we specify the material those will be used for the manufacturing of finished goods. In routing we specify the activities which will be performed on raw material or semi-finished goods to convert them into final product.

Standard Cost Estimation (Planning)

Costing Variant:

In the costing variant we specify the process for the calculation of material cost estimate. Following components are used for creating costing variant.

· Costing Type

In the costing type we specify which type of cost we are calculating. Different types of costing variants can be created to calculate different types of costs like standard cost, quotation cost etc.

· Valuation Variant

In the valuation variant we specify how the cost will be calculated. Followings are the components of valuation variants.

o Material Valuation

o Activity Types / Processes

o Subcontracting

o External Processing

o Overhead

§ Costing Sheet

· Date Control

In date control we specify the validity of the date.

· Quantity Structure Control

In quantity structure control we specify Bom application area and routing selection ID.

· Transfer Control

In the transfer control we specify that the cost of the material will be transferred from single plant or from cross plant too.

· Reference Variant

Cost Object Controlling

In cost controlling we specify

Costing Variant for plan cost

Costing Variant for actual cost

WIP (Result Analysis Key)

Variance (Variance Key)

Settlement

Product Costing Scenarios

Product Cost by Order

o Production Order

o Process Order

o CO Order

Product Cost by Period

Sales Order Costing

Costing Sheet

Costing sheet is used to allocate the overheads from cost center to the product cost.

Cost Component Structure

Cost component structure will display the breakup of the cost how the total cost will be calculated?

It will be comprised of material cost, activity cost & indirect overhead cost.