CONTROLLING (CO)

An Organizational Unit within a Company, used to represent a closed system for cost accounting purpose.
In FI Organizational Hierarchy, the highest node is Company
In FI we have discussed Enterprise Structure:
Company

Company Code

Segments

Profit Center
In CO organizational hierarchy-the highest node is Controlling Area
Controlling/CO is used for Internal Reporting (Department wise)
Areas to be covered & Purpose of each area in Controlling
1. Basic Settings for Controlling
a. Creation of Controlling Area
b. Maintain Number Ranges for Controlling Documents
c. Maintain Versions for Budgets -Eg: Original Budget / Revised Budget etc.
2. Cost Element Accounting
To update CO records/Sub Modules, Cost Elements are requiredIn FI to update our FI records we
use GL account numbers
 We have 2 types of Cost Elements
1. Primary Cost Elements
2. Secondary Cost Elements
3. Cost Center Accounting
To view department wise Costs-Cost Center accounting is used  in organization there will be
number of departments.
Eg: Production department, Service department etc.,
4. Internal Orders
Internal orders are used to view costs for specific tasks-
5. Profit Center Accounting (Classic)
This is linked with Controlling-this is use8d for old versions
6. Product Costing
This is used for Valuation of Inventories-ie., work in process and finished goods
a. Creation of Cost Estimate with Quantity structure-Standards Costing (Preliminary Costing)
b. Actual costing (Simultaneous Costing)
i. Product Cost by order (Production Order)
ii. Product Cost by period
iii. Product Cost by Sales order
c. Work in Process Calculation
d. Variances Calculation
e. Settlement of Variances to Accounts / Profitability Analysis
7. Profitability Analysis
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This is a Reporting Tool-This is used to view Profitability for Number of Parameters at a time
Eg: Sales order wise, Product wise, Customer wise, Plant wise, Sales Organization wise profitability

Under the Guidance of Mr. Satyanarayana-2012

8. Special Scenarios
i. Splitting Structure
ii. Activity Dependent planning and Activity Independent planning
iii. Direct Activity Allocation and Indirect Activity Allocation
iv. Mixed Costing
v. Joint Product Costing-ie., Main Product/CO-Product/By-Product Costing
vi. Origin Group
vii. Overhead Key and Overhead Group
viii. Additive Cost
ix. COPA Valuation Strategy
x. CO-PA Tables
xi. Scraps in Product Costing
a. Assembly Scrap
b. Component Scrap
c. Operation Scrap
xii. Material Ledger
xiii. Sub Contracting Process
9. ECC6 New Features
i. New General Ledger or Multiple Ledgers
ii. Segment Creation
iii. Difference among Business Area/Segment and Profit Center
iv. Online Reconciliation Ledger (Real Time Integration of Controlling with FI)
v. Document Splitting
10. Material Management (MM) Module to Financials (FI) Module Integration
11. Sales & Distribution (SD) Module to Financials (FI) Module Integration
12. Production Planning (PP) Module to Controlling (CO) Module Integration
13. Capital Work in Progress-Line Item Settlement
14. Central Excise and Sales Tax (CIN-COUNTRY INDIA VERSION)
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Under the Guidance of Mr. Satyanarayana-2012

 Basic Settings for Controlling:
1. Maintain Controlling area (The highest Node in Controlling Area)
In FI area In CO
Company Controlling Area

Company Code

Segments

Profit Centers Cost Centers

When we combine FI and CO we will have 2 scenarios

1st Scenario: Controlling area at Company Code Level

Company

Company Code  Controlling Area

Segments

Profit Centers
Cost Centers
-Profit Center will be assigned in Cost Centers
-Each company Code will have separate Controlling Area

2nd Scenario Controlling Area at Company (Group) Level

Company  Controlling Area

Company Code

Segments

Profit Centers
Cost Centers
-Profit Center will be assigned in Cost Centers
-Number of Company Codes will have only One Controlling Area
‘1’ Profit Center will have number of Departments

a) When Management wants to view number of Company Codes Cost Centers Data at a time
1. It is not possible in First Scenario
2. It is Possible in Second Scenario
b) When Management wants to view number of Cost Centers data of a Company Code
1. It is directly possible in First Scenario
2. Also it is possible in Second scenario by creating Cost Center Groups
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c) When the Company Codes Activities are same-Go for Second Scenario
d) When the Company Codes Activities are Different- Go for First Scenario Eg: Steel, Cement (Different)

Under the Guidance of Mr. Satyanarayana-2012

In the beginning we go for first scenario i.e., Controlling Area at Company Code Level
1) When we use 1st Scenario-Company Code should be same as the Controlling Area Code
Company Code : BIL (Birla Industries Limited)
Controlling Area Code also we have to create: BIL
When we use 2nd scenario-Controlling Area Code can be any Code
Path : SPROControllingGeneral ControllingOrganizationMaintain Controlling Area
Double Click on Maintain Controlling Area (OKKP)
Select Position button
Give Controlling Area: BIL ⏎
Select Controlling Area BILSelect Details button
Double click on Assignment of Company Code
Double click on Activate Components / Control Indicator folder
2) Maintain Number Ranges for Controlling Documents
SPROControllingGeneral ControllingOrganizationMaintain Number Ranges for Controlling Documents
(KANK)
CO through postings from FI (Business Transaction-COIN)
Eg: Posting of Transaction in FI –FB01L
Salaries A/c Dr 500000 --Cost Center: DEPT - A
To Bank A/c 500000
When we save the document in FB01L (FI)
‘1’ FI Document will be created manually
‘1’ CO Document will be created automatically
In FI In CO
Document Type- SA

No. Range 01 COIN (Default program given by SAP for CO Doc’s)

No. Range Interval 1-100000 1-100000 (Automatic Postings)

(Manual Posting-FB01L)

Repost CO Line Items (Business Transactions-RKU3)

Eg: Posting of transaction in FIFB01L (Salaries Paid)
When the person who is posting the transaction, he doesn’t know which cost center to be assigned-So he assigns
‘Common’ Cost Center
Salaries A/c Dr 500000-Cost Center: Common
To Bank 500000
‘1’ FI Document will be created manually
‘1’ CO Document will be created automatically
Later we Can Transfer Document wise transaction
Like 300000-Cost Center DEPT A
150000-Cost Center DEPT B
50000 - Cost Center DEPT C
After Transfer Document Wise – one more CO document will be posted
Total Documents posted are
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‘1’ FI Document
‘2’ CO Documents will be posted

Under the Guidance of Mr. Satyanarayana-2012

Repost can be Document Wise or Line Item wise
Eg: Transfer of Line item wise
Suppose we have line items like
Salaries A/c Dr 500000-Cost Center-Common (need to be transfer to other departments)
Rent A/c Dr 100000-Cost Center –Dept A (this is correct cost center which is assigned)
To Bank 600000
In above scenario 2 line item is correct and 1st line item need to be transfer-This means Transfer Line Item wise
nd

Repost Costs-Business Transaction-RKU1

This is used when we split the Cost Center into number of Cost Centers or wrong Cost Center postings
-No FI document will be generated-Only CO document will be generated
Here Transfer Cost Element wise (GL Account wise)
Eg: we have cost center Dept A-we have posted expenditure up to 30th June, 2012-we have decided to split the cost
center into Dept A and Dept X from 1st of July, 2012

Documents posted in Dept A up to June

Cost Center : Dept A Dept X

30.04.2012 400100 Salaries 200000

31.05.2012 400100 Salaries 225000
30.06.2012 400100 Salaries 250000
400100 TOTAL 675000- 30.06.2012 400100 Salaries 200000 (Transfer to Dept X)
30.04.2012 400101 Wages 300000
31.05.2012 400101 Wages 325000
30.06.2012 400101 Wages 350000
400101 TOTAL 975000 – 30.06.2012 400101 Wages 400000(Transfer to Dept X)

30.04.2012 400300 Rent 100000

31.05.2012 400300 Rent 100000
30.06.2012 400300 Rent 100000
400300 TOTAL 300000 -30.06.2012 400300 Rent 50000 (Transfer to Dept X)
Planning Primary Costs-(Business Transactions RKP1)
Budgeting Cost Center wise
We are giving number ranges
Steps for maintaining Number Ranges:
SPROControllingGeneral ControllingOrganizationMaintain Number Ranges for Controlling Documents
Give Controlling Area : BIL Select Maintain Groups button
We can see different ways...Where we can generate CO documents
From menu bar select  GroupInsert
Give Text: CO No. Range Interval for BIL
From Number To Number
1 100000 
 CO No. Range Interval for BIL
Double click on COIN (CO through postings from FI)
RKU3 (Repost CO Line Items)
RKU1 (Repost Costs)
RKP1 (Planning Primary Cost)
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From menu bar—Select EditAssign Element Group —Ignore

Under the Guidance of Mr. Satyanarayana-2012

3) Maintain Versions (OKEQ)
Versions are nothing but Budgets
Budget for the whole year Version 0 Original Budget
Change Budget Figures Version 1 Revised Budget
Change once again Budget Figures Version 2 Re-Revised Budget
Afterwards we can compare
Original Budget (Version 0)
Actual  with Revised Budget (Version 1)
Re-Revised Budget (Version 2)
SPROControllingGeneral ControllingOrganizationMaintain Versions
Controlling Area Settings
Select “0” Plan / Actual Version
Double click on Settings for Each Fiscal Year Folder
Give Controlling area BIL
By Default it opens for 5 years
If we want to create meansSelect New EntriesGive Fiscal Year 2017
We have to Give Exchange Rate Type::B (Bank Selling Rate) -though it is not required we should give
----
Select Create Request Button Short Description: CO Customization for BIL 

COST ELEMENT ACCOUNTING

To update CO Records / Sub modules Cost Elements are required
2types of Cost Elements  [Link] Cost Elements
 2. Secondary Cost Elements
Primary Cost Elements Secondary Cost Elements
Primary Cost Elements Are Nothing But Our GL Secondary Cost Elements are other than GL Accounts
Expenditure Accounts
Eg: 400100 Salaries Account Created In FI To Update
CO Records 400100 Account Will Be Created As Cost
Element. Postings to secondary Cost Elements is Not possible-
They are used for Allocations
Postings To Primary Cost Elements possible

Example for Allocation

Say, we have
Cost Center Dept C Dept A Dept B
(Service Dept) (Production Departments)
Salaries 200000
Wages 500000
Power 10000
710000
In the month end we allocate Dept C costs to Dept A and Dept B by using Secondary Cost Element
When we create Cost Element-We have to specify Cost Element Category
2types of Cost Element Categories 1. Primary Cost Element Category
2. Secondary Cost Element Category
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Under the Guidance of Mr. Satyanarayana-2012

1. Primary Cost Element Categories:
(1). Primary Cost/Cost Reducing Revenues
This is used for Expenditure Accounts Eg: 400100 Salaries A/c-When we create as primary cost element
(3). Accrual/Deferral Per Surcharge
This is used for month end provisions only in CO
(11). Revenues
This is used for Income Accounts
Eg: 300000 Sales A/c-When we create as primary cost element
(12). Sales Deduction
This is used for expenditure accounts like: Trade Discounts/Sales Commission where profitability Analysis
(CO-PA) module is implemented
(22). External Settlement
This is used when we allocate Costs from Internal orders to GL Accounts or Assets-(CO to FI)
2. Secondary Cost Element Categories:
 (21). Internal Settlement
This is used when we allocate costs from Internal Orders to Cost Centers (within CO-CO to CO)
(31). Order/Project Results Analysis
This is used for Valuation of work in Process in Product Costing
(41). Overhead Rates
This is used for Calculation of Raw material Overhead Rate/Production Overhead Rate in Product Costing
(42). Assessment
This is used for Allocation of Primary Cost Postings and Secondary Cost Allocations from one Cost Center to
another Cost Centers
(43). Internal Activity Allocation
This is used for Calculation of Activity Types
Eg: Machine Hour Rate/Labor Hour Rate
COST CENTER ACCOUNTING
This is used to View Department wise Costs
In organizations we will have number of Departments i.e., Cost Centers
Eg: Production Dept, Service Dept etc.,
 When we create Cost Centers we have to specify Cost Center Category i.e., whether it is a production
Department or Service Department
 Cost Centers are to be created under Cost Center Standard Hierarchy
 When we want to see number of Cost Centers Data at a time –create a Cost Center Group and assign the
respective cost centers
 We can plan Cost Center wise-We can see the Variance Report after actual postings
 In the month end Service Department Cost are allocated to production Department-Basis of Allocation can be
amount basis/Percentage basis/Ratio Basis/Statistical key figures basis/Activity Type basis
SAP has given 4 Allocation Methods
1. Assessment
2. Distribution
3. Periodic Reposting
4. Indirect Activity Allocation
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Under the Guidance of Mr. Satyanarayana-2012

Steps for postings to Cost Centers:
1. Creation of primary Cost Elements(at 4 levels)
i. At FI area
ii. At CO Area
iii. Automatic Creation of Primary Cost Elements at CO implementation
iv. Automatic Creation of Primary Cost Elements after CO implementation
2. Display Cost Elements Created
3. Creation of Field Status Group by making Cost Center Required Entry Field-OBC4
4. Assign New Field Status Group in GL Expenditure Accounts-FS00
5. Creation of Cost Centers
6. Creation of Cost Center Groups
7. Creation of Cost Elements Group
8. Enter Exchange Rate for Type : ‘M’ for INR to EUR
9. Posting of Transaction in FI
10. To View Cost Center Report
11. To View CO Documents
Customization
1. Creation of Primary Cost Elements
1(i). Creation of Primary Cost Element at FI area
In some implementations FI core Team member while creating GL Accounts he Creates Primary Cost Element-
Eg: 400100 Salaries Account to Create as Primary Cost Element to update CO Records
 Use Transaction Code-FS00
GL Account : 400100
Co Code : BIL 
Select Edit Cost Element button
Cost Element : 400100
Valid From : 01.04.2012 to 31.12.9999
Name comes automatically
GL Short Text = Cost Element Name
GL Long Text = Cost Element Description
--Cost Element Category-Expenditure Accounts we use ‘1’ (Primary Cost / Cos-reducing revenues) ----

1(b). Creation of Primary Cost Element at CO Area

In some implementations FI Core Team member will create GL account-He will inform to CO Core Team member
GL Account with Description-Then CO Core Team member will create Primary Cost Element at CO Area

Eg: 400300-Rent Account Created by FI Core Team member-to Create Primary Cost Element at CO area by CO
Core Team member

Path : AccountingControllingCost Element AccountingMaster DataCost ElementIndividual

ProcessingKA01-Create Primary

We can create in only one place either FI or CO

If we have not created GL account it won’t accept to create Cost Element
Give Cost Element : 400300
Valid From : 01.04.2012
Name & Description comes automatically
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Select Cost Element Category: ‘1’ ----

Under the Guidance of Mr. Satyanarayana-2012

1(c). Automatic Creation of Primary Cost elements at the time of CO implementation
A company has gone for SAP – FI in 2007-This year (2012) they want to implement CO
All expenditure accounts are to be created as Primary Cost Elements in CO to update CO Records
Say, we have 1000 Expenditure Accounts-All 1000 Accounts are to be created as Primary Cost Elements
Steps:
 Make Default Settings
Path : SPROControllingCost Element AccountingMaster DataCost ElementsAutomatic Creation of
Primary and Secondary ElementsMake Default Settings (OKB2)
Give Chart of Accounts: BIL
Account From Account To Cost Element Category
400301 499999 1  ---- 
Create Batch Input Session
Path : SPROControllingCost Element AccountingMaster DataCost ElementsAutomatic Creation of
Primary and Secondary ElementsCreate Batch Input Session (OKB3)
Give Controlling Area : BIL
Valid From : 01.04.2012
Valid to : 31.12.9999
Session Name : BIL (Text Field)
Batch Input User : SAPUSER (Comes Automatically)Execute
We can see the accounts which are to be created Cost elements
 Execute Batch Input Session
Path : SPROControllingCost Element AccountingMaster DataCost ElementsAutomatic Creation of
Primary and Secondary ElementsExecute Batch Input Session (SM35)
Select Session Name: BILSelect Process buttonSelect  Display Errors onlySelect Process button
Ignore message and select Exit Batch input button (All Elements are created)
1(d). Automatic Creation of Cost Elements after CO implementation

Some companies all expenditure accounts to update CO records-IN make default settings they give the
range 400301-499999-and they Change in Chart of Accounts (OB13)-Automatic Creation of Cost Elements

 FI person is creating a New Account -400350(Vehicles Repairs) in FS00-Once he saves the Account -
Automatically Primary Cost Element 400350 will be created.

Steps

 Make Default Settings-OKB2

Check for Account No’s Range 400301-499999

 Go to Chart of Accounts Creation-OB13

Select Chart of Accounts: BILSelect Details button

Integration
Controlling Integration : Select Automatic Creation of Cost Elements ----
 Creation of GL Master 400350-Vehicle Repairs- FS00
Give GL Account: 400350
Co Code : BILwith template Give GL Account: 400300
Co Code : BIL
Change Short Text & Long Text: Vehicle Repairs ----
Select Edit Cost Elements Button—we can see cost element created automatically
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 Go to Chart of Accounts Creation-OB13

Select Chart of Accounts : BIL  Select Details Button
Controlling Integration : Select Manual Creation of Cost Elements ----
Under the Guidance of Mr. Satyanarayana-2012
2. Display Cost Elements Created
PathAccountingControllingCost Element AccountingMaster DataCost ElementIndividual Processing
KA03-Display
Select Drop down button beside Cost Element
Give Controlling Area : BIL
We can see the Cost Elements which are created in FI area, CO area, automatically created
3. Creation of Field Status Group by making Cost Center-Required Entry Field-OBC4
 Now onwards when we post to expenditure – it has to ask Cost Center-We have to make Cost Center Field as
Required
We have Created Accounts:
400100 Salaries Account-Assigned Field Status Group-G001
100000 Equity Share Capital-Assigned Field Status Group-G001 (General Balance Sheet Account)
If we make Cost Center Required Field for G001-For Equity Share Capital also it will ask Cost Center which cannot
be given
SAP has given G004-Cost Accounts
For this group we make Cost Center required and assign in all Expenditure Accounts
 Use the Transaction Code-OBC4-Select Field Status Variant: BIL
Double Click on Field Status Group Folder
Double Click on G004-Cost Accounts
Double Click on General Data--  Text (Required)
 Cost Center (Required)
 Profit Center (Optional)  ----
When we post in Cost Center-Profit Center will be updated because-we assign Profit Center to Cost Center
4. Assign New Field Status Group in GL Expenditure Accounts-FS00
Give GL Account: 400100
Co Code : BIL GL Account Change
Select Create/Bank/Interest tab
Change Field Status Group: G004 (Cost Accounts) ----
Give GL Account: 400300
Co Code: BIL GL Account Change
Change Field Status Group: G004 (Cost Accounts) ----
5. Creation of Cost Centers (Departments)
Path: AccountingControllingCost Center AccountingMaster DataCost CenterIndividual-
Processing KS01 Create
Give Controlling Area : BIL
Give Cost Center : DEPTA (Text Field)
Valid From : 01.04.2012
Give Name : Department A
Description : Cost Center Department A
Person Responsible : Mr A
Cost Center Category : ‘1’ Production
Hierarchy Area : Select BILHIER
Currency : INR
Profit Center : STEEL ------
Page10

Create one more Cost Center

Give Cost Center : DEPTB
Valid From : 01.04.2012
Under the Guidance of Mr. Satyanarayana-2012
 Reference
Cost Center : DEPTA
Controlling Area : BIL --
Change the Name and Description : Department B
Person Responsible : Mr B ----
Create one more Cost Center
Give Cost Center : DEPT C
Reference
Cost Center : DEPTA
Controlling Area : BIL 
Change Name and Description: Department C
Person Responsible : Mr C
Cost Center Category : ‘2’ Service Cost Center ----
6. Creation of Cost Center Groups (Number of Cost Centers together)
 Under Controlling Area (BIL) suppose we have Different Cost Centers like

Cost Centres Dept A Dept B Dept C Dept X Dept Y Dept Z

Category Production Production Service Production Production Service
Profit Center Steel Steel Steel Cement Cement Cement
If we want to see All Cost Centers Data-we give BILHIER
If we want to see only Production Cost Centers Data-Create Cost Center Group and Assign Dept A, Dept B,
Dept X, and Dept Y
 If we want to see only Steel Division Cost Centers Data-Create a Cost Center Group and Assign Dept A, Dept B
and Dept C
If we want to see Steel division Production Cost Centers Data- Create a Cost Center Group and Assign Dept A
and Dept B
Path: Accounting ControllingCost Center AccountingMaster DataCost Center Group KSH1 Create
Give Cost Center Group : BILPRODN (Text Field) 
BILPRODN : PRODUCTION COST CENTERS FOR BIL STEEL DIVISION
Select Insert Cost Center Button (Shift +F4)
Select the Cost Centers Dept A
Dept B ----
7. Creation of Cost Element Groups (Number of Cost Elements or Accounts Together)
In FI we have Account Groups: Personnel Cost : 400100-400199
400100 Salaries CO Requirement
400101 Wages
400102 Bonus If we want to see Dept A- Administration
400103 Staff Welfare Cost – Create cost Element Group ADMIN
Account Group : 400300-400399 and Assign 400300-400399
400300 Rent
 If we want to see Dept B- Personnel
400301 Exchange Loss
Cost- Create Cost Element Group
400302 Telephone Expenses
PERSONNEL and assign 400100-400199
400303 Petrol Expenses
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Under the Guidance of Mr. Satyanarayana-2012

In CO Reports
Cost Center  Dept A Dept B
Or
Cost Center Group  BILHIER

Cost Element 400300 400100

Or
Cost Element Group  ADMIN PERSONNEL ADMIN
Admin Cost Personnel Cost Administration Cost Data for
Data for Dept A Data for Dept B All Cost Centers
Path: Accounting ControllingCost Center AccountingMaster DataCost Element Group KAH1-Create
Give Cost Element Group : BILADMIN (Text)
Give Description : Administration Expenses for BIL
Select Insert Cost Element Button (Shift+F4)
Give the Range : 400300 to 400399 ----

8. Enter Exchange Rate for Type ‘M’ from INR to EUROMandatory

Use transaction Code - OB08
Select New Entries
Exchange Rate Type Valid From From Direct Quotation To
M 01.04.2012 INR .02 EUR ----
9. Posting of Transaction in FI-FB01L
Give Doc Date : Today’s Type : SA Co Code : BIL
Posting Key : 40 Account: 400100(Salaries) 
We can see Cost Center required
Give Amount : 500000
Cost Center : Select Dept A
Text : Salaries Posting
Posting Key : 40(one more Debit) Account : 400300(Rent)
Amount : 100000
Cost Center : Dept A
Text : Rent Posting
Posting Key : 50 Account: 200105(SBI Current A/c)
Amount : ‘*’
Profit Center : Steel (We give Profit Center for balance sheet item only-not for 1&2 line items because –
for 1And 2 line items we assign Cost Center-Profit Center is assigned to Cost Center
Text : Expenditure Posting
DocumentSimulate ----
We can see the Profit Center & Segment is updated automatically for 1st and 2nd line item also. Because we have
given Profit Center in Cost Center
10. To View Cost Center Report
Path: AccountingControllingCost Center AccountingInformation SystemReports for Cost Center
AccountingLine ItemsCost Centers: Actual Line Items-KSB1
Give Cost Center : Dept A (Select)
Posting Period : Comes automatically for one period
Page12

--Execute--
Keep Cursor on Salaries Account Line Item Select Document Button (Shift+F2) (we can see the FI document)
Select – Back Arrow

Under the Guidance of Mr. Satyanarayana-2012

Select – Change Layout button
From the Column Set : Activate - Document Number
-Reference Document Number
-Business Transaction -
We can see the CO Document Number and Business Transaction-how the document has been posted.
11. To View CO Documents
Path : AccountingControllingCost Center AccountingInformation SystemReports for Cost Center
AccountingLine ItemsCO Documents: Actual Costs-KSB5
Give Document Number 1 to 100000 Execute
Select Document Number ‘1’ Folder  “+” (to see the entry)
(2) Repost CO Line Items (Business Transaction)
We have Posted Document in FI-Automatically CO document is generated
FI Document No: 58
001 – 400100 Salaries 500000 Dept A 150000 Cost Center Dept B
002 - 400300 Rent 100000 Dept A 50000 Cost Center Dept C
003 – 200105 SBI Current A/c 600000
Transfer Line Item wise
‘1’ CO Document
Path : AccountingControllingCost Center AccountingActual PostingsRepost Line ItemsEnter-KB61
Accounting Document Number : Select 58
Company Code : BIL
Fiscal Year : 2012 Execute
We can see both line items
To Transfer Double Click on Line Item 001’
New Account Assignment
Amount : 150000
Cost Center : Dept B
Select Next Item (Shift +F11)
Select Next Button  we want to transfer to Cost Center C - So,
New Account Assignment
Amount : 50000
Cost Center : Dept C  ---- (we can see the message-Document No.2 is generated-Only in CO)
To View Cost Center Report - KSB1
Give Cost Center : Dept A  Execute
Activate Business Transaction Column
We can see all the documents
To View Cost Element wise Total -
Select Cost Element Column  Select Sub Totals button (Ctrl+Shift+F6)
We can see Total amount of
To See the Summary – Each Element Wise Select Cab button
(3). Repost Costs (Business Transaction – RKU1)
Path: AccountingControllingCost Center AccountingActual PostingsManual Reposting of Costs
 Enter-KB11N
We transfer Element wise
Give Cost Center (Old) Cost Element Amount Cost Center (New)
Page13

Dept A 400100 100000 Dept C

Dept A 400300 25000 Dept C
----We can see Document 3 is generated
Under the Guidance of Mr. Satyanarayana-2012
(4). Period Lock
In FI, we have Open Posting Periods - whatever Periods we open we can post only for those periods
In CO, We have Period Lock - by default all the periods will be opened-we don’t want to post to any period-it has to
be locked(that period has to be locked)
FI Periods CO Periods
1 .Transaction which effects Both FI and CO
Eg: COIN Postings  To Open Not to Lock
2. Transactions which effect only CO
Eg: RKU3/RKU1 Postings  No Check Not to Lock
3. Transactions which effect only FI
Eg: Balance Sheet Postings  To Open No Check

Example:
In FI, we have opened the Periods from August, 2012 to March, 2013-In CO we have locked August, 2012 period-
Now we want to post to Salaries Account in FI for August, 2012-System will not allow us to post –since CO period
is locked.

Path : AccountingControllingCost Center AccountingEnvironmentPeriod LockChange-OKP1

We can change Actual as well as Plan
Give Controlling Area : BIL
Fiscal Year : 2012  Select Actual button
We can see the Different Business Transactions where we post documents
Instead of locking one by one we can lock all at once
Select ‘02’ Period Select Lock Period button All Business Transactions will be locked for the month of ‘02’
(5). Set Controlling Area
This is required in Training institutes-To make our Controlling area as Default Controlling Area
Path: AccountingControllingConst Center AccountingEnvironmentSet Controlling Area-OKKS
Give your Controlling Area

Page14

Under the Guidance of Mr. Satyanarayana-2012

(6). Online Reconciliation Ledger (or) Real Time Integration of Controlling with Financial Accounting
(ECC6 New Feature)
nd
This is used in 2 Scenario i.e., Number of Company Codes having one Controlling Area
All Company Codes Should have Same Chart of Accounts
Due to Online Reconciliation Ledger-A Document will be generated in FI
Eg:
Controlling Area  BIL

Cost Centers Dept A Dept B Dept X Dept Y

Company Codes BIL BIL BSL BSL

We have posted Salaries in Dept A

Salaries A/c Dr 100000 Dept A
To Bank 100000
To View GL Account -FAGLB03
Company Code: BIL Company Code: BSL
Salaries A/c Salaries A/c
100000 Dr NIL
To View Cost Center Report-KSB1
Company Code: BIL Company Code: BSL
Dept A Dept X
Salaries-100000 Dr NIL

Dept A Staff are working for Dept X also-Transfer Cost Rs.30000 (Repost Cost)
To Dept X-Repost Cost KB11N
After transferringReposting
No FI Document will be generated
Only CO Document will be generated
After Transfer (Repost) View GL Account-FAGLB03
Company Code: BIL Company Code : BSL
Salaries A/c Salaries A/c
100000 Dr NIL
After Transfer (Repost) View Cost Center Report-KSB1
Company Code: BIL Cost Center Dept A Company Code : BSL Cost Center Dept X
Salaries A/c Salaries A/c
Salaries 100000 Dr Salaries from Dept A 30000 Dr
Transfer to Dept X 30000 Cr
70000 Dr 30000 Dr
Due to Online Reconciliation FI Document will be generated automatically
FI Entry: BIL Accounts BSL Accounts
BSL A/c Dr 30000 Salaries A/c Dr 30000
To Salaries 30000 To BIL 30000
To View GL Account-FAGLB03
Company Code: BIL BSL
Page15

Salaries A/c Salaries A/c

100000 Dr 30000 Cr 30000 Dr

Under the Guidance of Mr. Satyanarayana-2012

To View cost Center Report KSB1
Company Code: BIL Cost Center Dept A BSL Cost Center Dept X
Salaries 100000 Dr Salaries from Dept A 30000 Dr
Transfer to Dept X 30000 Cr
70000 Dr 30000 Dr
In Old Versions also SAP has given this feature-Earlier we used to run in the month end as a batch (Period End) –
In ECC6 it does Online-Automatically (Transaction wise)

FI-Customization
1. To Copy BIL Company Code Customization including Accounts to Company Code BSL
Path : SPROEnterprise StructureDefinitionFinancial AccountingEdit, Copy, Delete, Check Co Code
Double Click on Copy, Delete, Check Company Code-EC01
From menu bar select Organizational ObjectCopy Organizational Object (F6)
Give From Company Code : BIL
Give To Company Code : BSL
If all company Codes should same chart of Accounts – Select YES buttonfor the message to Copy the GL
Account Company Code Data
Select NO button-For the message to allocate a different Local Currency
We get a message Certain Data was not CopiedIgnore the messages 
All the data will be copied (Only Customization and Accounts will be copied)
Select-Create Request buttonShort Description: Customization for BSL 
Go on Selecting Enter ‘ ‘  till we get the message: “Company Code BIL Copied to BSL without 93 number
range objects”
Eg: TDS, Central Excise numbers will not be copied
Select Back Arrow
Double click on Edit Company Code Data
Select Position button
Give Company Code: BSL 
When we copy the name of the BIL will be copied to BSL – So to change the name- Select Details button- Change
the Company Name to BIRLA STEELS LIMITED
Select Address button (Shift+F5)
Change the Name : BIRLA STEELS LIMITED  ----
2. Assign Company Code to Company
Path: SPROEnterprise StructureAssignmentFinancial AccountingAssign Company Code to Company
Select Position button
Give Company Code: BSL 
For BSL assign Company Group: BGP ----
3. Document Type ‘SA’ should allow Inter Company Postings-OBA7
Use the Transaction Code: OBA7
Select Type ‘SA’ Details
Control Data+
 Inter-Company Postings ----
Page16

Under the Guidance of Mr. Satyanarayana-2012

4. Creation of GL Master-FS00
BIL Accounts BSL Accounts

[Link]/FI Reconciliation A/c- Under any Expenditure [Link]/FI Reconciliation A/C-Under Any Expenditure
Group which should not be a Cost Element Group which should not be a Cost Element

No Postings in this Accounts  No Postings in this Accounts

400150-CO/FI Reconciliation A/c-Personnel Cost 400150-CO/FI Reconciliation A/c-Personnel Cost

2. BIRLA STEELS LIMITED-under Current Assets, 2. BIRLA INDUSTRIES LIMITED-Under-Current

Loans &Advances Assets, Loans & Advances

200160-BIRLA STEELS LIMITED 200161-BIRLA INDUSTRIES LIMITED

When we follow Same Chart of Accounts for Number of Company Codes – Account Numbers and the
Description should be same-the remaining can be changed according to the Company Code
If we Create 200160 Account Number in Company Code BSL-It takes Description BIRLA STEELS LIMITED-
We cannot create our Own Account in our books
If we Create 200161 Account number in Company Code BIL-It takes Description BIRLA INDUSTRIES
LIMITED- we cannot create our Own Account in our Books
Go to FS00
Give GL Account: 400150
Company Code : BIL  with Template  Give GL Account : 400100(Salaries)
Co Code : BIL
Change the Description (Short text & Long text) to : CO/FI Reconciliation Account
Select Create/Bank / Interest tab
Field Status Group : ICCF CO< - >FI Reconciliation Posting ----
Another Account
Give GL Account : 200160
Company Code : BIL  with Template  Give GL Account : 200120 (Inventory RM)
Co Code : BIL
Change the Description (Short text & Long text) to : Birla Steels Limited
Select Create/Bank/Interest tab
Field Status Group : G067 (Reconciliation Accounts) ----
GL Account Creation in BSL
Give GL Account: 400150
Company Code : BSL  With Template  Give GL Account : 400150
Co Code : BIL
Give GL Account: 200161
Company Code : BSL  With Template  Give GL Account : 200160
Co Code : BIL
Change the Description (Short text & Long text) to : Birla Industries Limited
Page17

Under the Guidance of Mr. Satyanarayana-2012

5. Prepare Cross Company Code Transactions
Path : SPROFinancial AccountingGeneral Ledger AccountingBusiness Transactions
Prepare Cross-Company Code Transactions-OBYA
Company Code 1 : BIL
Company Code 2 : BSL 
Posted in : BIL
Cleared Against : BSL
Receivables Payable
Debit Posting Key : 40 Credit Posting Key : 50
Account Debit : 200160 Account Credit : 200160
Company Code 2
Posting in : BSL
Cleared Against: BIL
Receivables Payable
Debit Posting Key : 40 Credit Posting Key : 50
Account Debit : 200161 Account Credit : 200161
----
6. To make Text Field Optional to Field Status Group-G004 i.e., Cost Accounts-OBC4
It is going to post automatically – so we keep ‘TEXT’ Field as optional
Select Field Status Variant: BIL Double Click on Field Status Group Folder
Double Click on G004 (Cost Accounts)
Double Click on General Data
 Text (Optional Entry) ---- 
CO Customization Part
1. Maintain Controlling Area OKKP
Select Controlling Area : BIL Select Details button
Assignment Control
Co code->Controlling Area: Select Cross Company Code Cost Accounting
Reconciliation Ledger
Document Type: SA
Double Click on Activate Componenets/Control Indicators folder
Select - Company Code Validation
Double Click on Assignment of Company Codes Folder
Select Company Code BIL  Select Copy As button
Change the Company Code to BSL  Ignore
Now BIL & BSL are part of Controlling Area: BIL
2. Activate Reconciliation Ledger
Path : SPROControllingCost Element AccountingReconciliation LedgerActivate/Deactivate
Reconciliation Ledger
Double Click on Activate Reconciliation Ledger
Give Controlling Area: BIL  Select Execute button  Ignore
3. Define Adjustment Accounts for Reconciliation Posting
Path : SPROControllingCost Element AccountingReconciliation LedgerDefine Adjustment Accounts
for Reconciliation Posting
Double click on Define Accounts for Automatic Postings
Page18

Select Change Account Determination button  ----

Give Account  400150 (CO/FI Reconciliation Account)  ---- 

Under the Guidance of Mr. Satyanarayana-2012

 ECC6 Customization
1. Define Variants for Real Time Integration
Path: SPROFinancial Accounting (New)Financial Accounting Global Settings (New) Ledgers
Real-Time Integration of Controlling with Financial AccountingDefine Variants for Real-Time Integration
Select New Entries
Variant for Real Time Integration  B1
 Real Time Integration: Active Key Date : Active From : 01.04.2012
 Account Détermination: Active
Document Type: SA
Text : Real Time Integration Variant for BIL
Selection of Document Lines for Real-Time Integration
 Cross Company-Code  Cross-Profit-Center
 Cross-Segment
----
2. Assign Variants for Real Time Integration to Company Codes
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New) Ledgers
Real-Time Integration of Controlling with Financial AccountingAssign Variants for Real Time Integration to
Company Code.
Select New Entries
Company Code Variant for Real Time Integration
BIL B1
BSL B1  ----
 End User Area
1. Creation of Cost Center Dept X-KS01
Give Cost Center : Dept X
Valid From : 01.04.2012
Reference
Cost Center : Dept A
Controlling Area : BIL
Change Name & Description to Department X
Company Code : BSL
Profit Center : Steel 1  ----
2. Repost Cost - KB11N
Cost Center (Old) Cost Element Amount Cost Center (New)
Dept A 400100 30000 Dept X  ----
Now FI & CO document will be generated
To view FI documents use transaction Code – FB03
Select Document List  Give Company Code : BIL
Entry Date : Todays  Execute
Double Click on Document Number – 59 (we can see the FI document is created)
Select back arrow Change the Company Code to BSL  Execute
Double Click on Document Number ‘1’ (FI documents is Created)
Page19

Under the Guidance of Mr. Satyanarayana-2012

 CROSS COMPANY CODE TRANSACTIONS (FI TOPIC)
Company Codes : BIL BSL
Outstanding Expenses of BSL paid by BIL
Entry:
BSL A/c Dr 5000 Outstanding Exp A/c Dr 5000
To Bank 5000 To BIL 5000
While Posting of the Transaction in FB01L
In SAP: Paying Company Code i.e., BIL
Credit -Bank BIL 5000
Debit -Outstanding BSL 5000  ----
 Use Transaction Code-FB01L
Document Date : Today’s Type : SA Company Code : BIL (Paying company)
Posting Key : 50 Account : 200105 (SBI Current A/c)
Amount : 5000
Profit Center : Steel
Text : Outstanding Exp Payment on behalf of BSL
Posting Key : 40 Account : 100500 (Outstanding Exp) New Co. Code : BSL
Amount : ‘*’
Profit Center : Steel 1
Text : ‘+’
DocumentSimulate (4 line items will be created) ----
We get a message: with Cross Company Code Document Number: 0000000060BIL 12
This means
1. If the Postings are made by BIL
Document No: 0000000060BIL 12Fiscal Year
2. If the Postings are made by BSL
Document No: 0000000002BSL 12 Document Number
Select Continue button
Page20

Under the Guidance of Mr. Satyanarayana-2012

 ACCRUAL ORDERS (IMPUTED COST CALCULATION)Derived Cost
This is used for month end provisions only in CO – This is used for making provisions for irregular expenses like
Bonus/Gratuity/Leave Encashment etc., these will not be paid every month

Cost Element Category Should be ‘3’-Accrual/Deferral Per-Surcharge

Due to Accrual Orders Run only CO Document will be Generated-Define CO Number Range Interval for the
business Transaction- KAZI ie., Actual Cost Center Accrual

Accrual-For Current-Month End Provision

Defferal-Upto Future-Up to Year 100000 (Insurance) 1000(Jan), 1000(Feb), 10000(March)…
The whole year expenditure, we are differing the expenditure to each month
In FI we have discussed month end provisions
Option-1 ACCRUAL /DEFERRAL DOCUMENTS
1. Bonus Provision on 30.04.2012
Bonus A/c Dr 10000 Cost Center – Dept A
To Outstanding Exp 10000
2. In the Month End allocate the expenses to Production Order
Dept A
Bonus 10000 Allocation to Production Order 1 10000
Cost Center Dept A value will be zero
Our Stock Valuation (Finished Goods Valuation) is correct
3. Reversal of Provision on 01.05.2012
Outstanding Exp A/c Dr 10000
To Bonus 10000 Cost Center-Dept A
4. Bonus Provision on 31.05.2012
Bonus A/c Dr 20000 Cost Center-Dept A
To Outstanding Exp 20000
Dept A
31.05.2012 Bonus 20000 01.05.2012 Bonus 10000
Allocation to Production Order 2 10000
Cost Center Dept A value will be zero
Option: 2 Open Item Management
1. Bonus Provision on 30.03.2012
Bonus A/c Dr 10000 Cost Center Dept A
To Outstanding Exp 10000
2. In the Month End Allocate the Expenses to Production Order
Dept A
Bonus 10000 Allocation to Production Order 1 10000
 Cost Center Dept A value will be zero
 Our Stock Valuation (Finished Goods Valuation) is correct

3. Bonus Provision for 31.05.2012

Bonus A/c Dr 10000 Cost Center Dept A
To Outstanding Exp 10000
4. In the month end allocate the Expenses to Production Order
Dept A
Page21

Bonus 10000 Allocation to Production Order 2 10000

 Cost Center Dept A Value will be zero

Under the Guidance of Mr. Satyanarayana-2012

Option: 3 Month End Provisions only in CO-Accrual Orders
1. Number of Companies will not prepare Profit & Loss Account and Balance Sheet every month. They will
not make Provisions in the Accounts
So, In this case Expenditure will be less from April to February- because we are not taking month end
provision-the total expenditure is calculated at year end i.e., March, 2013
2. Companies to Follow Accrual Basis of Accounting (Mercantile Basis)- In the Year end they have to make
Provisions in the Accounts-Expenditure for March will be more
3. In SAP when we take Production Entries will be generated Automatically based on Product Cost for the
Month Stock Valuation from April to February will be less stock Valuation for March will be more
4. SAP has given Accrual Orders-It is similar to Cost Sheet
We create Overhead Structure
Salaries A/c Dr 100000
Bonus- Calculated on Salaries (10%) 10000
 we debit the above Entry to- Cost Center Dept A & Credit to Cost Center Dummy-
So, No FI Document will be generated
Dept A
30.04.2012 Bonus 10000 Allocation to Production Order 1 10000
Cost Center Dept A Value will be Zero
Stock Valuation is Correct
Dept Dummy
30.04.2012 Bonus 10000

5. In the Year End Dept Dummy Values will be

Dept Dummy
30.04.2012 Bonus 10000
31.05.2012 Bonus 10000
30.06.2012 Bonus 10000
 
31-03.2012 Bonus 10000
120,000
6. Bonus Provision in FI in the Year End
31.03.2012
Bonus A/c Dr 120000 Cost Center Dummy
To Outstanding Exp 120000
Dept Dummy
30.04.2012 Bonus 10000
31.05.2012 Bonus 10000
30.06.2012 Bonus 10000
 
31.03.2013 Bonus 120000 31-03.2012 Bonus 10000
120,000 120,000
Dept Dummy Value will be Zero
Customization
1. Creation of GL Master – Bonus Account - FS00
Give GL Account No : 400105
Company Code : BIL  With Template  Give GL Account No: 400100
Company Code : BIL 
Change Short Text & Long Text : Bonus Account 
Page22

Select Edit Cost Element button

Valid From: 01.04.2012
Cost Element Category : ‘3’ (Accrual/Deferral per Surcharge 
Under the Guidance of Mr. Satyanarayana-2012
2. Creation of Cost Center dummy-KS01
Cost Center : Dept Dummy
Valid from : 01.04.2012
Reference Cost Center : Dept A
Controlling Area : BIL
Change Name & Description: Dept Dummy----
3. Define CO No. Range Interval for the business Transaction KAZI i.e., Actual Cost Center Accrual
Use Transaction Code: KANK
Give Controlling Area: BIL
Select Maintain Groups button
Double Click on KAZI
 CO No. Range Interval for BIL
From Menu bar  EditAssign Element Group---- Ignore
4. Maintain Overhead Structure
Path : SPROControllingCost Element AccountingAccrual CalculationPercentage Method
Maintain Overhead Structure-KSAZ
Select Create Overhead Structure (F7) button
Give Overhead Structure: BIL1 (Text Field)
Description : Bonus Calculation for BILSelect  button
Row Base
10 B1 
Give Description for B1: Name Salaries  Select Create button
Row Overhead Rate
20 B2
Name : Bonus
Dependency : Select KRS1 Controlling Area Select Create button (bonus has to be calculated on Salaries so)
From To Credit
10 10 B3
Select Create button  Select  Ignore
Keep Cursor on Overhead Structure: BIL1 Select Assignments button (F5)
Controlling Area: BIL
Select  Actual Accrual
Select – Continue button
Valid From Valid To Overhead Structure
1 2012 12 2012 BIL1 -- ----
Double Click on Overhead Structure BIL1
Keep Cursor on Base – B1From menu bar: GotoCalculation Base
From Cost Element
400100 ----
Keep Cursor on Overhead Rate B2
From menu bar: GotoOverhead Rate
Valid From Valid To Actual Overhead Rate
1 2012 12 2012 10 -- ----
Keep Cursor on Credit B3
Page23

Under the Guidance of Mr. Satyanarayana-2012

From menu bar Goto  Credit
Co Code Valid To Cost Element Cost Center
BIL 12 2012 400105 (Bonus) DeptDummy ----
Give Credit to Cost Center Dept Dummy
End User Area
1. Posting of Salaries -FB01L (for August No Postings are there in this period)
Give Doc Date: 31.08.2012 Type : SA Co Code: BIL
Posting Date : 31.08.2012
Posting Key : 40 Account : 400100
Give Amount : 100000
Cost Center : Dept A
Text : Salaries Posting
Posting Key : 50 Account : 200105
Amount : ‘*’
Profit Center : Steel
Text : ‘+’  DocumentSimulate----
2. Accrual Calculation
Path : AccountingControllingCost Element AccountingActual Postings KSA3-Accrual Calculation
Give Cost Center: Dept A
Period : 5 (August)
Fiscal Year : 2012
 Test Run
 Detail Lists  Execute
Select Next List Level button
It shows – 10000(NO FI entry – only Co document)
3. To View Cost Center Report-KSB1
Cost Center : Dept A
Posting Date : 01.08.2012 to 31.08.2012  Execute
we can see in Dept A- Bonus 10000 –KAZI (Accrual-From CO)
Select Back arrow- Change the Cost Center: DeptDummy Execute
4. Bonus Provision in the Year End-in FI-FB01L
Give Doc Date: 31.03.2013 Type : SA Co Code : BIL
Posting Date : 31.03.2013
Posting Key : 40 Account: 400105 (Bonus Account)
Amount : 10000(we are running only for one month so we give 10000)
Cost Center : DeptDummy
Text : Bonus Provision for the year 2012-13
Posting key : 50 Account: 100500(outstanding exp)
Amount : ‘*’
Profit Center : Steel
Text : ‘+’ DocumentSimulate----
[Link] View Cost Center Report-KSB1
Give Cost Center: DeptDummy
Posting Date : 01.04.2012 to 31.03.2013 (whole year) Execute
We can see the ‘zero’ value
Page24

Under the Guidance of Mr. Satyanarayana-2012

 STATISTICAL KEY FIGURES (SKF)
This is used as a Basis of Allocation of Costs from One Cost Center to Other Cost Centers
Eg: Employee, Area, Telephone Calls etc.,
Eg:
Cost Center Dept C (Service Dept) Dept A Dept B
Salaries 100000 Based on Number of Employees
Wages 200000
Rent 50000 Based on Square Meter Area
Telephone Exp 10000 Based on Number of Telephone Call
we allocate the Service Dept (Dept C) Costs to Dept A & Dept B based on Statistical Key figures
SKF Categories
1. Fixed Values
2. Total Values(Variable)
Fixed Values Total Values
If we select Fixed Values Radio Button If we Select Total Values Radio button-we have to
The Values are common for all the months Enter Values for Each and every month in the year
In the year if we don’t Change in between
Eg: Employees/Area Eg: Telephone Calls
Employees : No. of Employees No. of Employees No of Telephone Calls
April, 2012 1000 1000 5000
May, 2012 “ “ 3500
June, 2012 “ “ 5500
July, 2012 “ “ 4000
Aug, 2012 “ “
Sep, 2012 “
Dec, 2012 “ “
Jan, 2013 “ 1500
Feb, 2013 “ “
March, 2013 “ “

In above examplewe have selected Fixed Values so-Even we don’t give to remaining periods also-it considers
as previous Values- If we enter in between (1500) it takes from that period
When we Select Total Values-We need to enter values for each month like (each month telephone calls will be
differ for each month)
Customization
1. Define CO No Range Interval for the Business Transaction-RKS i/e, Enter Statistical Key Figures-KANK
Give Controlling Area: BIL
Select-Maintain Groups button
Double Click on RKS
CO No Range Interval for BILFrom menu bar-EditAssign Element Group-- Ignore
End User Area
1. Create Statistical Key Figure
Path : AccountingControllingCost Center AccountingMaster DataStatistical Key FiguresIndividual
ProcessingKK01-Create
Give Controlling Area: BIL
Statistical Key Figure : EMP (Text)
Page25

Give the Name : Employee

Statistical Key Figure Unit of Measurement : EA (Each)
Key Figure Category :  Fixed Values ----
Under the Guidance of Mr. Satyanarayana-2012
2. Enter Statistical Key Figures
Path : AccountingControllingCost Center AccountingActual PostingsStatistical Key Figures
KB31N-Enter’
Received Cost Center Statistical Key Figure Total Quantity
Dept A EMP 200
Dept B EMP 100 ----

ACTIVITY TYPES
Activity types are Activities provided by a Cost Center-they are measured in Units of Time or Quantity
-Activity quantities are Valued using a price
Eg: Activity Types are used to allocate Costs from one Cost Center to Other Cost Centers or Production orders
it may be Machine hour rate or Labour hour rate
Eg1: Allocation from one Cost Center to other Cost Centers
Cost Center Dept X- (Labour Cost Center)
100 workers-working for 3 shifts (24 hrs)-30 days working
Labour Hours Available {100 workers x 24 hours x 30 days} = 100 x24 x30=72000 hours
Expenditure in Cost Center Dept X
Wages : 500000
Bonus : 50000
Overtime Wages : 170000
720000
Labour hours supplied by Dept X to other Production Cost Centers in the Month End we check
Dept A (Production Dept) Dept B (Production Dept)
Hours Supplied by Dept X  50000 hrs 22000 hrs
Labour Hour Rate in Dept X  720000/72000 =10 Rs per hour
Activity Type Cost Allocation
50000 x 10 = 50000 22000 x10 = 22000
PLANNING COST CENTER WISE
1st Option 2nd Option
Activity Independent Planning Activity Dependent Planning
When we do planning it does not refer when we do planning it refers to a specific -
To a specific Activity Type Activity type
We can Plan only Fixed Costs  we can Plan Fixed and Variable Costs
1. Activity Independent Planning
a) Creation of Secondary Cost Element i.e., Activity Allocation
Path : AccountingControllingCost Center AccountingMaster DataCost ElementIndividual
ProcessingKA06 –Create Secondary
This should be other than GL Account
Give Cost Element: 900000
Valid From : 01.04.2012 to 31.12.9999 
Give Name & Description Activity Allocation
Cost Element Category : 43 (Internal Activity Allocation) ----
b) Creation of Activity Type i.e., Labour Hours
Path : AccountingControllingCost Center AccountingMaster DataActivity TypeIndividual
ProcessingKL01-Create
Page26

Give Activity Type : BIL1 (Text Field)

Valid From : 01.04.2012 to 31.12.9999

Under the Guidance of Mr. Satyanarayana-2012

Give Name & Description: Labour Hours
Activity Unit : ‘H’ Hour
Cost Center Categories : ‘*’ All Cost Center Categories
Activity Type Category : ‘1’ Manual Entry Manual Allocation
Allocation Cost Element: ‘900000’ Activity Allocation (Created already)
Price Indicator : ‘1’ Plan Price, automatically based on Activity
Actual Price Indicator : ‘5’ Actual Price, automatically based on Activity
------
c) Creation of Cost Center Group & Assign Dept C (Labour Cost Center)-KSH1
Give Cost Center Group: BILGRPC (Text)
Description : Cost Center Group BILGRPC
Select  Insert Cost Center button (shift +F4)
Cost Center  Select Dept C ----
d) Planning Cost Center wise
Path : AccountingControllingCost Center AccountingPlanningCost and Activity Inputs
KP06-Change
Version: Select ‘0’ (Plan / Actual Version
From Period :6
To Period :6
Fiscal Year : 2012
Cost Center : Dept C
Cost Element : 400100 (Salaries)
To Cost element: 499999 (Optional we can give)
Select  Form-Based
Select Over Screen button (F5)
For 400100-Planned Fixed Cost – 720000 ----
Note
 Free  Form Based
If we select Free – the Cost Element If we select form based radio button
List will not be available on Screen the cost Elements list is available on screen-plan
At the time of planning-we have to against the cost elements
Select from drop down menu and plan
For the Cost Elements
e) Planning for Labour Hours
Path : AccountingControllingCost Center AccountingPlanningActivity output/PricesKP26-Change
Give Version : ‘0’
From Period : 6 (Sep)
To Period : 6 (Sep)
Fiscal Year : 2012
Cost Center : Dept C
Activity Type : BIL1 (Labour Hours-Created Already)
Select Form Based
Select Over View Screen button
Give Plan Activity
72000 ----
Page27

Under the Guidance of Mr. Satyanarayana-2012

f) Calculation of Plan Labour Hour Rate
Path : AccountingControllingCost Center AccountingPlanningAllocations KSPI-Price Calculation
Select Cost Center Group  Select BILGRPC (Created already)
--Execute--
----- Ignore

2. Activity Dependent Planning (We can plan Fixed and Variable Costs)
a) Planning Cost Center wise for October-KP06
Version : ‘0’’
From :7
To Period :7
Fiscal Year : 2012
Cost Center : Dept C
Activity Type : BIL1
Cost Element : 400100
Select  Form Based
Select Over view Screen button
Give Plan Fixed Costs Plan Variable Costs
120000 600000 ----
b) Planning for Labour Hours-KP26
Version : ‘0’
From Period :7
To Period :7
Fiscal Year : 2012
Cost Center : Dept C
Activity Type : BIL1
Select  Form Based
Select Overview Screen button
Give Plan Activity
72000 ----
c) Calculation of Plan Labour Hour Rate-KSPI
Select Cost Center Group : Give BILGRPC’
--Execute---
From menu bar: Select Go toFormatPrice Unit’1’
Eg: Total Fixed Price Variable Price
Cost 720000 120000 600000
Hours 72000
Price 10Rs. 1.67 8.33
Page28

Under the Guidance of Mr. Satyanarayana-2012

DIRECT ACTIVITY ALLOCATION AND INDIRECT ACTIVITY ALLOCATION
Eg1: Direct Activity Allocation
Cost Center Dept C-Labour Cost Center
(100 workers-working for 3 shifts (24 hours)-30 days working)
Labour hours available (100 workers x 24 hours x 30 days)
100 x 24 x 30=72000 hours
Expenditure in Cost Center Dept C
Wages 500000
Bonus 50000
Overtime wages 170000
720000
Labour Hours supplied by Dept C to other Production Cost Centers in the month end we check
Dept A (Production Dept) Dept B (Production Dept)
Hours Supplied by C 50000 hours 22000 hours
Labour Hour Rate in Dept C- 720000/72000=10 Rs Per hour
Activity Type-Cost Allocation
Dept A-50000 x 10 = 500000 Dept B-22000 x 10 =220000
Eg2: Indirect Activity Allocation
Cost Center: Dept D (Quality Cost Center)
They Do quality check of Production Cost Centers Production Quantity
Costs:
Salaries : 100000
Wages : 150000
Power : 10000
260000 ---Total Hours Spent  13000 hours
In the month End Dept D
Dept A Dept B
Production Quantity 10000 kgs 3000 kgs
We cannot identify how many hours are spent by Dept D for Dept A Production and Dept B Production Quantity
Check- We allocate Costs based on Dept A and Dept B Production Quantity-This is Called Indirect Activity
allocation.

All steps are done before-the continuation steps are as follow

c). Posting of Expenditure-FB01L

Give Document Date: 10.10.2012 Type : SA Co Code : BIL

Posting Date : 10.10.2012
Posting Key : 40 Account: 400100
Give amount : 720000
Cost Center : Dept C
Text : Salaries for October
Posting Key : 50 Account: 200105
Amount : ‘*’
Profit Center : Steel
Text : ‘+’ DocumentSimulate ----
Page29

Under the Guidance of Mr. Satyanarayana-2012

d). Activity Price Calculation
We have 3 ways For Price Calculation
i) Planning Activity hours (KP26) and Calculate Activity Price (KSPI) (Already Covered)
ii) Enter Activity Price Manually 
iii) Automatic Calculation of Activity Price by System-When we confirm Actual hours in Product
Costing will be covered in Product Costing
Enter Activity Price Manually
Path : AccountingControllingCost Center AccountingActual PostingsActual PriceKBK6-Enter
Variables
Period :7
To Period :7
Fiscal Year : 2012
Cost Center : Dept C
Activity Type : BIL1
Form Based  Select Overview Screen button
Fixed Activity Price Area Currency
10 ----
e). Define CO Number Range interval for the Business Transaction (RKL-Actual Activity Allocation)
Transaction Code : KANK
Give Controlling Area : BIL
Select Maintain Groups button
Double Click on RKL
Select  CO Number Range Interval for BIL
From Menu bar—EditAssign Element Group ---- Ignore
f). Enter Activity Allocation
Path: AccountingControllingCost Center AccountingActual PostingsActivity AllocationKB21N-Enter
Give Document Date : 31.10.2012 (because we have posted in October)
Posing Date : 31.10.2012
Sender cost Center Sender Activity Type Receiving Cost Center Total Quantity
Dept C BIL1 Dept A 50000
Dept C BIL1 Dept B 22000 ------
g). View Cost Center Report-KSB1
Give Cost Center : Dept A
Posting Date : 01.10.2012 to 31.10.2012 --Execute--
We can see the Cost Center is debited with 220000
We have allocated Dept C costs to Dept A & Dept B based on the Hours
 Indirect Activity Allocation Steps
1. Creation of Activity Type-KL01
Give Activity Type : BIl2
Valid From : 01.04.2012 to 31.12.9999 
Give Name & Description : Labour Hours
Activity Unit : ‘H’ Hours
Cost Center Categories : ‘*’
Activity Type Category : ‘3’ Manual Entry, Indirect Allocation
Allocation Cost Element: 900000
Page30

Price Indicator : ‘7’ (Manually determined for actual allocations) ----

Under the Guidance of Mr. Satyanarayana-2012

2. Posing of Salaries for November-FB01L
Give Document Date: 10.11.2012 Type: SA Co Code : BIL
Posting Date: 10.11.2012
Posting Key : 40 Account: 400100
Give Amount : 260000
Cost Center : Dept C
Text : Salaries Posting
Posting Key : 50 Account: 200105
Amount : ‘*’
Profit Center : Steel
Text : ‘+’  Document  Simulate ----
3. Enter Activity Price-KBK6
Period :8
To Period :8
Fiscal Year : 2012
Cost Center : Dept C
Activity Type : BIL2
Select  Form Based --- Select Overview Screen button
Fixed Activity Price Area Currency
20 ------
4. Define CO Number Range Interval for Business Transactions-RKN: Actual Non-Allocation Activities
RKIL: Actual Inverse Activity Allocation
Transaction Code : KANK
Give Controlling Area : BIL
Select Maintain Groups button
Double Click on RKN & RKIN
Select  CO Number Range Interval for BIL
From Menu bar—Select---EditAssign Element Group ------Ignore
5. Enter Sender Activities
Path : AccountingControllingCost Center AccountingActual PostingsSender ActivitiesKB51N-Enter
Give Document Date: 10.11.2012
Posting Date: 10.11.2012
Sender Cost Center Sender Activity Type Total Quantity
Dept C BIL2 13000
6. Creation of Statistical Key Figure-KK01
Statistical Key Figure : PROD
Name : Production
Statistical Key Figure Unit of Measurement: ‘KG’ Kgs
Key Figure Category : Total Values (Every month the Production will be changing) ------
7. Enter Statistical Key Figures-KB31N
Give Document Date: 30.11.2012
Posting Date: 30.11.2012
Receiver Cost Center Statistical Key Figure Total Quantity
Dept A PROD 10000 kgs
Dept B PROD 3000 kgs ------
Page31

Under the Guidance of Mr. Satyanarayana-2012

8. Define Indirect Activity Allocation Cycle
Path : AccountingControllingCost Center AccountingPeriod End ClosingCurrent Settings
Define Indirect Activity Allocation –S_ALR_87005792
Give Cycle: BIL1
Start Date: 01.04.2012
By default it takes year-we can change
Give Text : Indirect Activity Allocation Cycle for BIL----
Select Attach Segment button
Give Segment Name : Segment1 - Segment1 for BIL
Variable Portion Type : Actual Statistical Key figures(because we have to allocate according to PROD key figure)
Select Senders/Receivers tab
Sender
Cost Center : Dept C
Activity Type : BIL2
Receiver To
Cost Center : Dept A Dept B
Select Receiver Tracing Factor tab
Statistical Key Figure : PROD ----
9. Execution of Indirect Activity Allocation Cycle
Path : AccountingControllingCost Center AccountingPeriod End ClosingSingle Functions
AllocationsKSC5-Indirect Activity Allocation
Period :8
Fiscal Year : 2012
Test Run
 Detail Lists
Cycle
Select BIL1  Execute
Select Receiver button
☛we can see the allocation based on the Quantity
10. To View Cost Center Report-KSB1
Give Cost Center : Dept A
Posting Period : 01.11.2012 to 30.11.2012  Execute
We can see the cost allocated to Dept A-200000
Dept B-60000
Page32

Under the Guidance of Mr. Satyanarayana-2012

 PERIOD END CLOSING
In the month end we allocate Cost from one Cost Center to Other Cost Centers-The basis of allocation between
Amount basis, Percentage basis, Statistical Key basis, or Activity Type basis
Cost Center Dept C Dept A Dept B
Salaries 100000  Allocation-Based on Number of Employees (SKF)
Wages 200000
Rent 50000  Allocation based on –Percentage Basis
350000
SAP has given 4 Allocation methods
1. Assessment
a. We can Transfer Primary Cost Postings and Secondary Cost Allocations
Eg
Dept X Dept C Dept A Dept B
Wages 75000 Salaries 100000 Wages 400000 Wages 300000
Wages 200000
Rent 50000
Less Add Add Add
Allocation Allocation Allocation Allocation
Dept C -75000 Dept X 75000 Dept C 38500 Dept C 42500
Less
Allocation
A-90% -382500
B-10% -42500
Total- 0 0 782500 342500
In Dept C- Direct Postings i.e., Primary Cost Postings
-Salaries, Wages and rent
-Secondary Cost Allocations –Transfer From X
b. Receiving Cost Center Cannot Track the Original cost elements
Dept A Received from Dept C 382500
It cannot show how much is Salaries portion/wages portion/rent portion
c. Define CO NO. Range Interval for the Business Transaction RKIU (Actual Overhead Assessment)
d. Sender should be a Cost Center
2. Distribution
a. We can Transfer only Primary Cost Postings
b. Receiving Cost Center can Track the Original Cost Elements
c. Define Co No. Range Interval for the Business Transaction RKIV (Actual Overhead Distribution)
d. Sender should be a Cost Center
3. Periodic Reposting
a. We can Transfer only Primary Cost Postings
b. Receiving Cost Center can Track the Original Cost Elements
c. Define CO No. Range Interval for The Business transaction RKIB (Periodic Reposting)
d. Sender can be a Cost Center or Order
4. Indirect Activity Allocation
a. We can Transfer only Primary Cost Postings
b. Receiving Cost Center can Track the Original Cost Elements
Page33

c. Define CO No. Range Interval for the Business Transaction RKIL (Actual Inverse Activity allocation)
d. Sender should- be a Cost Center
e. Transfer Quantities as well as values
Under the Guidance of Mr. Satyanarayana-2012
Whichever method we follow we have to create Cycles-where allocation of Cost Elements in a Cost Center is
different- we have to create Number of Cycles or Create Number of Segments in a Cycle
Cost Center Dept C DeptA Dept B
Salaries 100000 Based on Number of Employees (SKF)
Wages 200000
Rent 50000 Percentage basis
Option:1
Create Number of Cycles

Cycle 1 Cycle 2
(Overhead Cost Allocation) (Overhead Cost Allocation)

Segment 1 Segment 2
(Salaries & Wages Allocation) (Rent Allocation)
400100-Salaries 400300-Rent
400101-Wages

Option: 2
Create Number of Segments in a Cycle
Cycle 1
(Overhead Cost Allocation)

Segment 1 Segment 2
(Salaries and Wages Allocation) (Rent Allocation)
400100-Salaries 400300-Rent
400101-Wages
Companies will follow Option 2
Customization
1. Assessment
a. Creation of Secondary Cost Element i.e., Assessment Cost Element-KA06
Give Cost Element Number: 1000000
Valid From : 01.04.2012 to 31.12.9999
Give Name & Description-Assessment Cost Element
Cost Element Category : “42” ----

b. Define CO Number Range Interval for the Business Transaction-RKIU (Actual Overhead Assessment)
Use Transaction Code : KANK
Give Controlling Area : BIL  Select Maintain Groups button
Double Click on RKIU—Select  CO Number Range for BIL
From Menu bar : EditAssign Element Group  - Ignore
Page34

Under the Guidance of Mr. Satyanarayana-2012

c. Creation of Assessment Cycle
Path : Accounting ControllingCost Center AccountingPeriod-End ClosingCurrent Settings
Define Assessment-S_ALR_87005742
Give Cycle : BIL2
Start Date : 01.04.2012
Give Text : BIL Assessment Cycle
 Iterative -----
Iterative
Cost Center Dept C
Salaries 100000 Dept A 175000 18125
Wages 200000 Allocation to Dept B 105000 10875
Rent 50000 Dept X 70000 7250
350000 350000 36250
Less: Alloc -350000
0
Add All from X 36250
36250
Less All -36250
0
Cost Center Dept X
Wages 75000 Dept Y 40% 50000
Add Dept Z 35% 50750
All from C 70000 Dept C 25% 36250
145000
Less Alloc -145000
0
Add Alloc Fro- C 7250

We have to run number of times till both cost center values become zero-if we select iterative check box system will
run number of times till they become zero
Contd…
Select Attachment Segment button
Give Segment Name : Segment 1 Salaries Allocation
Assessment Cost Element : 1000000
Sender Rule : Posted Amounts
Share in % : 100
Select  Actual Value origin (100% of Actual Cost of Dept C has to allocated)
Receiver Rule : Variable Portions
Variable Portion Type : Actual Statistical Key Figures
Select Senders/Receivers tab
Sender
Cost Center : Dept C
Cost Element : 400100
Receiver Group
Cost Center : BILPRODN (Dept A & Dept B)
Page35

Select Receiver Tracing Factor tab

Statistical key figure : EMP

Under the Guidance of Mr. Satyanarayana-2012

Select Receiver Weighting Factors tab
We can change the weight  -
Select Attachment Segment button
Under one Cycle we create different Segments
Segment Name : Segment2 Rent Allocation
Assessment Cost Element : 1000000
Sender Rule : Posted Amounts
Share in % : 100.00%
 Actual Value Origin
Receiver Rule : Fixed Percentages
Select Senders/Receivers tab
Sender
Cost Center : Dept C
Cost Element : 400300
Receiver Group
Cost Center : BILPRODN
Select Receiver Tracing Factor tab
Give Percentage : Dept A : 20
Dept B : 80 ----

4. To View Cost Center Report-KSB1

Give Cost Center: Dept C
Posting Date : 01.09.2012 to 30.09.2012 Execute
Dept C Dept A Dept B
Salaries 150000 SKF-(EMP) 200 100
100000 50000
Rent 25000 Fixed % 20% 80%
5000 20000
175000
e. Execution of Assessment Cycle
Path : AccountingControllingCost Center AccountingPeriod End ClosingSingle Functions
AllocationsAssessment-KSU5
From Period : 6 (Sep)
Fiscal Year : 2012
 Test Run
Detail Lists
Cycle
BIL2  Execute
Select Receiver button – we can see the allocations
Page36

Under the Guidance of Mr. Satyanarayana-2012

PLANNING CREATION BY USING ACTUAL COST OF CURRENT YEAR-WITH REVALUATION
Example
Actual Salaries for 2012-13  100000
Copy as plan Figures for 2013-14 increased by 10%
Then the Planned Salaries for 2013-14 – 110000
[Link] Coping Allowed Check box for Fiscal Year 2012
In fiscal year 2012 the salaries should be copied
Path : SPROControllingGeneral ControllingOrganizationMaintain Versions
Select Version ‘0’ Plan/Actual version
Double Click on Settings for Each Fiscal Year folder
Give Controlling Area : BIL
For 2012 – Select  Coping Allowed- 
[Link] Actual to Plan
Path : AccountingControllingCost Center AccountingPlanningPlanning AidsCopy
KP98-Copy Actual to Plan
Give Controlling Area: BIL
We can copy all cost centers data
Select Cost Center : Dept A
Target (Plan)
Period :6 Versions :0
Fiscal Year : 2012 Period :6
Fiscal Year : 2013
Select Actual Data
Select Selection button
If we want to copy Primary Costs
 Test Run
 Details  Execute
[Link] Plan Revaluation
Path : SPROControllingCost Center AccountingPlanningPlanning AidsDefine Revaluation
Double Click on Create Plan Revaluation-KPU1
Give Revaluation : BIL (Text)
Fiscal Year : 2013
Version : ‘0’
Give Text : BIL Revaluation
From
Cost Center Dept A
Cost Element 400100
Select Definition button
Percentage Per Period
From To Costs
6 6 10 ----
Page37

Under the Guidance of Mr. Satyanarayana-2012

[Link] Revaluation
Path: AccountingControllingCost Center AccountingPlanningPlanning AidsRevaluateKSPU-Costs
Version : ‘0’
Period :6 to 6
Fiscal Year : 2013
 Test Run
 Detail List
Revaluation
BIL (Created already)Execute
We can see message-Processing completed without any errors
[Link] Cost Center Report-KSB1
Give Cost Center : Dept A
Give Cost Element : 400100
Posting Date : 01.09.2012 to 30.09.2012  Execute
Open one more Session with KP06 (Planning Cost Center wise)
Give Version : ‘0’
From Period :6
To Period :6
Fiscal Year : 2013
Cost Center : Dept A
Cost Element : 400100
 Form-Based
Select Overview Screen button

Page38

Under the Guidance of Mr. Satyanarayana-2012

 INTERNAL ORDERS
This is used to view Costs for a specific Task
Eg1: Vehicle wise Costs-
In a Company they have 10 vehicles-Management has to take a decision regarding a particular vehicle whether to
sell or keep the vehicle in the company.
The decision can be taken based on Petrol Expenses and Repairs
FI- in FI we create Petrol Expenses account and Vehicles repairs separately- we will not create separate vehicle
wise petrol expenses and vehicle repairs account-we cannot get directly vehicle wise Petrol Expenses and repairs
CO Cost Center: Generally Vehicle Petrol Expense and Repairs will be posted in Administration Cost Center- in GL
we create only Petrol Expenses and Vehicle Repairs Account and not Vehicle wise-In Cost Center also we get all
vehicles petrol expenses and vehicle repairs, we won’t get separately
In this case, We Create Vehicle Order and Get the costs
Eg2: Telephone wise Expenses
In a company they have 50 Telephones-they give Reimbursement to Number of Employees-Management wants to
know Telephone wise expenses
In FI: we cannot get Telephone wise- we create only one Account ☛ Telephone Expenses Account
In CO Cost Centers: Telephone Expenses will be Accounted in Administration Cost Center-In Cost Center also we
Get all Telephones Expenses and Not Telephone wise
In this case, We Create Telephone Order and get the Costs
Eg3: Production Order wise Costs
In a month number of Orders will be produced-Some Orders Consume More Material and Some Orders consume
less material.
In FI-we have only Rawmaterial Consumption-we cannot get order wise cost in FI
In CO also we cannot get Order wise Costs
In this case, we create Production Order and Capture the Costs
Eg4: Exhibition Costs
Suppose, Company is participating in an Exhibition
Sales men salaries will go to Salaries Account
Conveyance to Sales men will go to Conveyance Account (Transport)
Advertisement for the Exhibition will go to Advertisement Account
Discounts given in Exhibition to Customers will go to Discounts Account
If, Management wants to know the amount spent for the Exhibition-we cannot get in FI and CO Cost Centers also-
In this case, We Create Exhibition Order and get the Costs separately
Real Order
We have Orders
Statistical Order
Real Order Statistical Order
Settlement is possible-which means Allocation of Costs Settlement is not possible – they are used for
from Order to Other Objects is called Settlement information/decision making purpose
Eg: Objects Cost Center, Production, FI-GL

Internal Settlement (CO to CO)-to Cost Centers

From Order we can settle
the Costs
External Settlement (CO to FI)-to GL Accounts, Assets etc.,
Page39

When we post to Number of Cost Objects – One will be real and other will be statistical

Under the Guidance of Mr. Satyanarayana-2012

Eg: Posting of Telephone Expenses

Telephone Exp A/c Dr 10000  Cost Center: Dept A

 Order: TEL133434
To Bank A/c 10000
In the month End we allocate Costs from Objects to Production Order to get Stock Valuation-If we allocate
Rs.10000 from Cost Center Dept A and Rs.10000 from Order TEL133434- Stock Valuation will be wrong
we have to allocate only one- i.e., either from Cost Center or Order - 10000

At the time of Order Creation there is a Field Called Statistical Order

1. If we select Statistical Order Check box  Order is Statistical

Cost Center is Real
Costs will be allocated from Cost Center to Pdtn Order
2. If we Deselect Statistical Order Check box  Order is Real
 Cost Center is Statistical
 Costs will be allocated from Order to Pdtn Order
(1) Statistical Orders
Telephone Orders we create as Statistical Orders
Telephone Exp A/c Dr 10000 Cost Center : Dept A
To Bank 10000 Orders : TEL123423 –Statistical Order

Cost Center Dept A

Telephone Exp 10000 Allocation to Production Order 10000
Cost Center Value will he zero

Order TEL123423
Telephone Exp 10000
Management Can see at any point of time Telephone wise expenses

 If we create as Real Order:

Telephone Exp A/c Dr 10000 Cost Center : Dept A
To Bank 10000 Orders: TEL123423 –Real Order

Cost Center Dept A

Telephone Exp 10000

Order TEL123423
Telephone Exp 10000 Allocation to Production Order 10000
Order Value will be zero

Management cannot see telephone wise expenses afterwards

Customization
1. Define Order Types
Path : SPROControllingInternal OrdersOrder Master DataDefine Order Types-KOT2_OPA
Select New Entries
Page40

Select Order Category : ‘01’-Internal Orders (Controlling)

Give Order Type : BILT (Text) - Telephone Order Type for BIL

Under the Guidance of Mr. Satyanarayana-2012

Planning Profile : Select ‘000001’-General Budget/Plan Profile
Object Class : Overhead Costs
 Release immediately (if we don’t select-order will be created but it will not be posted) ----
we get a warning message-Number range not processed -Ignore 
Select Assign/Change Intervals button-beside Number Range Interval
External-We can give our own
Internal-create only one number
Double Click on Order Type BILT
 Motor pool A-ZZZZZZZZZZZZ (External)
From menu bar-Select EditAssign Element Group
We can see our exp is assigned to motor pool----
2. Define Field Status Group-by making Order Required Entry Field along with Cost Center-OBC4
OBC4-Select Field Status Variant : BIL
Double Click on Field Status Group folder
We cannot used G004-for Order-because we assign Salaries A/c-for Salaries no order is assigned
Select G004-Cost AccountsSelect Copy As button
Change The Field Status Group –G002 –Cost Accounts (CC & IO) Required 
Double Click on G002
Double Click on Additional Account Assignments
Cost Center- Required
 CO/PP Order –Required--- (Controlling/Production Planning)
3. Creation of GL Master Telephone Expenses-FS00
Give GL Account Number : 400305
Company Code : BIL  With Template  Give GL Account : 400300
Co Code : BIL
Change Short Text and Long Text : Telephone Expenses
Select Create/Bank/Interest tab
Field Status Group : G002 ----
Select Edit Cost Element Button-
Give Cost Element Category : ‘01’- ----
4. Creation of Telephone Order
Path : AccountingControllingInternal OrdersMaster DataSpecial FunctionsOrderKO01-Create
Give Order Type : BILT (Created Already)
External range: we can give Telephone Number
Give Order : BIL66626246
Description : Telephone Number 66626246
Give Company Code : BIL
Select Control Data tab
 Statistical Orders ----
 We can see the System Status- REL-Which means we can release and Post
Creation one more Order
Order Type : BILT
Give Order : BIL66611984
Description : Telephone Number 66611984
Company Code : BIL
Page41

Select Control Data tab

 Statistical Order ----

Under the Guidance of Mr. Satyanarayana-2012

5. Creation of HYD Telephone Order Group
If we want to see only HYD Telephone Group-to view in Report
Path : AccountingControllingInternal OrdersMaster DataOrder GroupKOH1-Create
Give Order Group Name : BILHYDTEL (Text)
Description : BIL HYD Telephone Order Group
Select Insert Order button (Shift+F4)
Select the Orders : BIL66611984
BIL66626246 ----
6. Posting of Transaction in FI-FB01L
Give Document Date : Today’s Type : SA Co Code : BIL
Type : 40 Account: 400305 (Telephone Exp)
Amount : 10000
Cost Center : Dept A Order : Select BIL66626246
Text : Telephone Expenses
Posting Key : 50 Account: 200105
Amount : ‘*”
Profit Center : Steel
Text : ‘+” DocumentSimulate ----
7. View Order Report
Path : AccountingControllingInternal OrdersInformation SystemReports for Internal Orders
Line ItemsKOB1-Orders: Actual Line Items
Give Order : BIL66626246 –Execute—
We can see the expenses for the month
Keep the cursor on Telephone Exp Line Item-Select-Document button
8. Repost Costs-KB11N
Example: Payment to Number of Telephone Numbers (Eg: 100 Telephones numbers) it is not possible to post
So we post to one telephone number and Repost the Cost to all 100 Telephone at a time
From One Internal Order to another Internal Order
-No FI Document will be generated-only CO document will be generated
Screen Variant : Select Cost Center/Order
Order Old Cost Element Amount Order New
BIL66626246 400305 3000 BIL66611984 ----
8. Planning Order wise
Path : AccountingControllingInternal OrdersPlanningCost and Activity InputsKPF6-Change
Give Version : “0”
From Period : ‘6
To Period : ‘6
Fiscal Year : 2012
Order : BIL66626246
Cost Element : 400305
 Form-Based
Select Overview Screen button
Give Total Plan Cost-9000- (for period 6)----
Page42

Under the Guidance of Mr. Satyanarayana-2012

9. To View Variance Report Order wise
Path : AccountingControllingInternal OrdersInformation SystemReports for Internal Orders
Plan/Actual Comparisons S_ALR_87012993-Orders: Actual/Plan/Variance
Give Controlling Area : BIL
Fiscal Year : 2012
From Period : “6
To Period : “6
Plan Version : “0”
Selection Groups
Order Value : BIL66626246 –Execute—
We can see-Actual, Planned and Variance Report
(2) Real Orders
Vehicle Orders Some companies create as Real Orders
Posting of transaction “Petrol Expense incurred on 16.09.2012

Petrol Expenses Dr 5000 Order: AP9S56780-Statistical

To Bank 5000

In the month end; we settle

Order AP0S5678
Petrol Expenses 5000 Settlement To Dept A 2500
Settlement to Dept B 2000
Settlement to Dept C 500
5000 5000

We can settle on amount basis/percentage basis/ratio basis-In the month end Order Value will be zero-Management
cannot see afterwards vehicle wise running Expenses
(OR)
Petrol Expenses Dr 5000 Order: AP9S56780-Statistical
Cost Center: Admin
To Bank 5000

In the month End- We Allocate

Cost Center Admin
Petrol Expenses 5000 Allocation to Dept A 2500
Allocation to Dept B 2000
Allocation Dept C 500
5000 5000

Cost Center value will be zero

Order AP9S5678
Petrol Expenses 5000

Management can see at any point of time vehicle wise running

Allocation to other Departments- is already covered
Page43

Under the Guidance of Mr. Satyanarayana-2012

Real Orders
1. Creation of Field Status Group by making only Order Required Entry Field-OBC4
Select Field Status Variant : BIL
Double Click on Field Status Group folder
Select G002 – Select Copy As button
Change-Field Status Group- G010-Text: Cost Accounts (IO) Required ----
For – G010-  Cost Center (Optional) ----
2. Creation of GL Master-Petrol Expenses-FS00
Give GL Account Number: 400310
Company Code : BIL With Template  GL Account: 400300
Co Code: BIL
Chang Short text & Long text to : Petrol ExpensesZ `
Field Status Group : G010 ----
Select Edit Cost Element button 
Basic Data
Cost Element Category : “01” ----
3. Creation of Secondary Cost Element-“Settlement” Cost Element –KA06
Give Cost Element : 1000001 (Other than GL Account)
Give Name & Description : Settlement Cost Element
Basic Data
Cost Element Category : “21” Internal Settlement –within CO Settlement-Orders to Cost Center”
4. Maintain Allocation Structures
Path : SPROControllingInternal OrdersActual PostingsSettlementMaintain Allocation Structures
Select New Entries
Allocation Structure Text
B1(Text) BIL CO Allocation Structure ----
Select B1
Double Click on Assignments Folder
Select New Entries
Assignment Text
1 Vehicle Expenses Allocation ----
Select “1”
Double Click on Source folder
From Cost Element
400310 (Petrol Exp)
Double Click on Settlement Cost Elements folder
Select New Entries
Receiver Category Settlement Cost Element
CVR (Cost Center) 1000001 ----
In above, Vehicle Expenses i.e., 400310 (Petrol Expenses) will be allocated to Cost Center by Using Settlement
Cost Element “1000001”
5. Maintain Settlement Profiles
Path : SPROControllingInternal OrdersActual PostingsSettlementMaintain Settlement Profiles
Double click on Maintain Settlement Profiles
Select New Entries
Page44

Settlement Profile : BIL1 - BIL Settlement Profile

Actual Costs/Cost of Sales
 To Be Settled in Full
Under the Guidance of Mr. Satyanarayana-2012
Default Values
Allocation Structure : B1 (Created before)
Default Object Type : CTR (Cost Center)
Indicators
 % Settlement (Percentage)
 Equivalence Numbers (Ratio)
 Amount Settlement (Amount)
 All the 3 options making available based on percentage or amount settlement
Valid Receivers
Cost Centers : Settlement Required
Other Parameters
Max. No. distribution rules : 999
Residence Time : 12 months ----
Maximum Number of Distribution Rules  999-Residence Time 12 months
In live Environment Cost Accountant will prepare settlement rules-he will take his [Link]’s approval before
settlement-He can Create Number of Distribution rules upto 999 (Max) Store in the system for 12 months (Max)
Rule: 1-Amount Basis
Order AP9S5678
Petrol Expenses 5000 Settlement To Dept A 2500
Settlement to Dept B 2000
Settlement to Dept C 500

Rule: 2-Percentage Basis

Order AP9S5678
Petrol Expenses 5000 Settlement To Dept A 40%
Settlement to Dept B 35%
Settlement to Dept C 25%

Rule: 3-Ratio Basis

Order AP9S5678
Petrol Expenses 5000 Settlement To Dept A 3:
Settlement to Dept B 5:
Settlement to Dept C 2:

6. Maintain Number Ranges for Settlement Documents

Path : SPROControllingInternal OrdersActual PostingsSettlementMaintain Number Ranges for
Settlement Documents-SNUM
Select Maintain Groups button
We can see our controlling are is not assigned
Double Click on BIL
 Standard Accounting Document
From Menu bar -EditAssignment Element Group----Ignore
7. Define Order Type –KOT2_OPA
Select New Entries
Give Order Category: “01” – Internal Order (Controlling)
Page45

Give Order Type : BILV (Text)-Vehicle Order Type for BIL

General Parameters
Settlement Profile : BIL1 (Created already)
Under the Guidance of Mr. Satyanarayana-2012
Budget Profile : “000001” General Budget Profile
Object Class : Overhead Costs
 Release Immediately ----
We get a message ‘Number Range not Processed’ Ignore 
Select Assign/Change Intervals button(beside Number Range Interval)
Vehicles also we are going to assign External Numbers
Double Click on BILV
 Motor Pool A-ZZZZZZZZZZ (External)
From menu bar – Edit  Assign Element Group ----
8. Define CO Number Range Interval for KOAO (Actual Order Settlement) -KANK
When we settle Order to CO Co document will be generated
Give Controlling Area : BIL
Select Maintain Groups button
Double Click on KOAO
 CO Number Range Interval for BIL
From menu bar - EditAssign Element Group----
End User Area
1. Define Vehicle Order-KO01
Give Order Type : BILV
Order : AP9S5678 (Vehicle Number)
Description : Vehicle Number AP9S5678
Assignment
Company Code : BIL
Select Control Data tab
We are not going to select  Statistical Order Check box
Select Settlement Rule button
we can settle the way we want-Percentage-Ratio-Amount basis
Category Settlement Receiver %
CTR Dept A 40
CTR Dept B 35
CTR Dept C 25
----Ignore
2. Posting of Petrol Expenses-FB01L
Document Date : Todays Type : SA Company Code : BIL
Posting Key : 40 Account: 400310 (Petrol Exp)
Amount : 5000
Order : AP9S5678
Text : Petrol Expenses
Posting Key : 50 Account: 200105
Amount : “*”
Profit Center : Steel
Text : “+” DocumentSimulate----
Page46

Under the Guidance of Mr. Satyanarayana-2012

3. Order Settlement
In the month end we came to know that the expenses are of a particular department
Path : AccountingControllingInternal OrdersPeriod-End ClosingSingle FunctionsSettlement
KO88-Individual Processing
Give Order : AP9S5678
Parameters
Settlement Period :6
Fiscal Year : 2012
 Test Run
 Check Transaction Data –Execute—
Select Detail Lists button
We can see that based on the percentage it has been allocated

Process Posted Order AP9S5678 and given the Amount-5000

Created Order AP9S5678 with Type BILV and in the Settlement Rule given Percentages

In Order Type BILV assigned Settlement Profile BIL1 (BIL Settlement Profile)

In Settlement Profile BIL1- we have given Allocation Structure B1 and kept Settlement options
Open for Percentage Basis, Amount Basis, Ratio Basis – also specified Receiver should be Cost Center

In Allocation Profile B1-Vehicle Expenses 400310 Petrol Expenses to Allocate to Cost Centers
by using Secondary Cost Element 1000001 i.e., Settlement Cost Element

BUDGETING AND AVAILABILITY CONTROL

Planning Budgeting
1. Planning is made cost element wise in the Order 1. Budgeting is made Order wise
2. Planning will be made Period wise in the Year 2. Budgeting will be made Year wise
3. Micro Level 3. Macro Level
Eg: Each Cost element wise- like in Vehicle Order Eg: whole Order Wise
Petrol, Depreciation etc

Order AP9S5678
Budget Amount : 60000

Option 1 Option 2 Option 3

Message to User Message to User & Error Message
Inform to Budget Manager

1. If Actual Amount Exceeds 90% of Budget i.e., 54000

Or
2. If Variance Amount Exceeds Rs.20000 i.e., 80000
Or
3. Both –whichever Activity Comes First i.e., 54000 (Comes first)

Page47

Some Companies
1. If Actual Amount Exceeds 60% of Budget Option 1
2. If Actual Amount Exceeds 90% of Budget Option 2
Under the Guidance of Mr. Satyanarayana-2012
 3. If Actual Amount Exceeds 100% of Budget Option 3
When we do Budgeting-It automatically generates CO Document
SAP has given Number Range “04” for Budgeting-This is Hardcoded by SAP-this is given at Client Level (Not at
controlling area Level)-
This is not year Specific-for all years it will be applicable
Customization
1. Maintain Number Ranges for Budgeting
Path : SPROControllingInternal OrdersBudgeting and Availability ControlMaintain Number Ranges
for Budgeting-OK11
Select Change Intervals button
“04” Already Number Ranges are given-at Client Level-for all Controlling Areas it will be applicable
Just we check Number Range Interval for ‘04”
2. Define Tolerance Limits for Availability Control
Path : SPROControllingInternal OrdersBudgeting and Availability ControlDefine Tolerance Limits for
Availability Control
Select New Entries
Controlling Usage
Profile Transaction Group Action
Area in %
"000001" “++” “2”-warning with Mail to
BIL 90
(General Budget Profile) (All Activity Groups) Person Responsible

----
3. Specify Exempt Cost Elements from Availability Control
Path : SPROControllingInternal OrdersBudgeting and Availability Control Specify Exempt Cost
Elements from Availability Control
 Order AP9S5678
Budget Amount : 100000
We have considered in the budget amounts:
Driver’s Salary 50000
Petrol Exp 30000
Repairs 10000
Insurance 4000
Depreciation 6000
Giving warning message to user and inform to budget manager-if it exceeds 90% of budget i.e., 90000
Suppose, on 31st March-we are booking Driver’s Salary of Rs.5000 with Order No. AP9S5678 – the actual amount
exceeds Rs.90000 with this posting.
Driver’s Salary is a Fixed Cost or known cost –we can give a condition – if we post to Salaries account with Order-
AP9S5678-if it exceeds 90% of budget also- Don’t give any message.
Select New Entries
Controlling Area Cost Element
BIL 400100 ----
4. Maintain Budget Manager
Path : SPROControllingInternal OrdersBudgeting and Availability Control Maintain Budget Manager
Select New Entries
Controlling Area Order Type Object Class User Name
BIL BILV OCOST – Overhead SAPUSER ----
End User Area
Page48

1. Budgeting Order wise

Path : AccountingControllingInternal OrdersBudgetingOriginal BudgetKO22-Change
Controlling Area : BIL

Under the Guidance of Mr. Satyanarayana-2012

Order : BILV-AP9S5678
Budget
Overall 60000
For Period 2012 60000
we can give overall budget for whole years the total to be controlled
From the Menu bar-ExtrasAvailability ControlActivate ----
We can see the budget is saved with the number range “04”
2. Posting of Petrol Expenses-FB01L
Budget Amount 60000
If it exceeds 90% of budget 54000
Less: Already posted for this order
At the time of Real Order Testing -5000
-If we post above 49000 – then it gives message and informs to Budget Manager
Give Document Date : Today’s Type : SA Company Code : BIL
Posting Key : 40 Account: 400310(Petrol Exp)
Amount : 50000
Order : AP9S5678
Text : Petrol Expenses
Posting Key : 50 Account: 200105 (SBI Current A/c)
Amount : “*”
Profit Center : Steel
Text : “+” --DocumentSimulate
We can see a Warning Message-that only 5000 is available for the budget
Ignore message
3. To View Budget Manager Inbox
Path : OfficeSBWP-Work Place
Select Inbox Folder
We can see the message about the Order-AP9S5678
Page49

Under the Guidance of Mr. Satyanarayana-2012

 CLASSIC PROFIT CENTER ACCOUNTING
In earlier Versions use Classic Profit Center Accounting-This is part of Controlling
In ECC6, SAP suggests going for New GL Profit Center Accounting-This is Part of FI
Difference between Classic Profit Center Accounting and New GL Profit Center Accounting
Classic New GL
1. This is part of CO 1. This is part of FI
2. Need to activate profit Center Accounting in 2. Need not Activate Profit Center Accounting
Maintain Controlling Area Settings in Maintain Controlling Area Settings
3. Creation of Dummy Profit Center is a must 3. No Need to Create Dummy Profit Center
4. Here we can get only Profit & Loss Account 4. Here we can get Profit & Loss and Balance
items Sheet Profit Center wise
5. Create Derivation Rules 5. No Need to Create Derivation Rules

2- Scenarios
1st HYD Location Business Area
And
Steel Division Cement Division Pharma Division Profit Center

2nd
HYD BGL MUMBAI Business Area
Or
Steel Division Cement Division Pharma Division Profit Center
ST
1 Scenario
Here Profit Center will be derived through Derivation Rules-
In Case of Expenditures  Through Cost Centers
Revenues  Automatic Account Assignment
Balance Sheet Accounts a. By Selecting Profit Center Manually
b. In Case of Vendors and Customers by Executing Balance sheet Adjustment in the
month end
we have to Create Dummy Profit Center-At the time of posting for any Account if Derivation Rule is not there it
updates Dummy Profit Center-we Transfer Values from Dummy Profit Center to Respective Profit Centers-we
Create Derivation rules-so that future transactions will go to respective profit centers and not to dummy profit center

Customization for Old Version

1. Maintain Controlling Area Settings-0KE5 (Already Completed)
In that window-we can see the option of Dummy Profit Center
2. Creation of Dummy Profit Center
Path:SPROControllingProfit Center AccountingMaster DataProfit CenterCreate Dummy Profit Center

Double Click on EC-PCA: Create Dummy Profit Center (Enterprise Controlling)

Give Controlling Area : BIL
Give Dummy Profit Center : BILDUMMY (Text)
Select Basic Data button
Give Name : BIL Dummy
Description : Dummy Profit Center for BIL
Profit Center Group : BIL ----
3. Set Control Parameters for Actual Data
Page50

Path : SPROControllingProfit Center AccountingBasic SettingsControlling Area SettingsActivate

Direct PostingsSet Control Parameters for Actual Data-1KEF
Select New Entries
Under the Guidance of Mr. Satyanarayana-2012
From Year Line Items Online Transfer (to update the profit Center online)
2012  
When we post in FI it updates FI as well as CO
4. Maintain Plan Versions
Path : SPROControllingProfit Center AccountingBasic SettingsControlling Area SettingsActivate
Direct PostingsPlan VersionsMaintain Plan Versions
Select Version ‘0’
Double Click on Settings for Profit Center Accounting folder
Select New Entries
Year Online Transfer Line Items Exchange Rate Type
2012   B ----
5. Define Number Ranges for Local Documents
Cost Center : Dept A
Dept A is working for Profit Center – Steel
Steel Profit Center will be assigned in Cost Center Dept A-so, whenever we post in Dept A automatically it updates
the Profit Center-steel also
Suppose, we have not assigned Steel Profit Center in Cost Center Dept A-and we have posted the transaction in
Dept A-the transaction
Salaries A/c Dr 100000 Dept A
To Bank 100000
When we post there is no Derivation rule in Cost Center Dept A-So, it updates Profit Center Dummy
Transfer Values from BILDUMMY to Profit Center-Steel
No FI Document will be generated (because already posted)
No CO Document will be generated (because updated already in Dept A)
Only Profit Center (Local) Document will be generated
Path : SPROControllingProfit Center AccountingActual PostingsBasic Settings: ActualDefine
Number Ranges for Local Documents
Select Maintain Groups button
 Actual Document from Direct Posting with GB01
From menu bar –Interval  Maintain
Give Company Code : BIL
Select Insert Interval button
Year From To
2012 1 100000  ----Ignore
Select Back Arrow
 Plan Document from Direct Posting with GB01
From Menu bar -- IntervalMaintain
Give Company Code : BIL
Select Insert Interval button
Year From To
2012 100001 200000  ----Ignore
6. Creation of Profit Center
Path : AccountingControllingProfit Center AccountingMaster DataProfit CenterIndividual
ProcessingKE51-Create
Give Profit Center : Cement-1 (which are not already created)
Page51

Copy from
Profit Center : Cement
Controlling Area : BIL
Under the Guidance of Mr. Satyanarayana-2012
Name : Cement-1
Long Text : Profit Center Cement-1
Person Responsible : Mr B
Profit Center Group : BIL
Segment : blank (for old version we use Business Area)
Select Activate button
Create one more Profit Center
Profit Center : Pharma-1
Copy From
Profit Center : Cement-1
Controlling Area : BIL
Name : Pharma-1
Long Text : Profit Center Pharma-1
Select Activate button
7. Creation of Account Group
Path : AccountingControllingProfit Center AccountingMaster DataAccount GroupKDH1-Create
Give Account Group : PLACCOUNTS (All Profit & Loss Accounts)
Give Description : P&L Accounts for BIL
Select Insert Account button
From Account To Account
300000 499999 ----
Select back arrow
Give Account Group : BSACCOUNTS (All Balance Sheet Accounts)
Give Description : Balance Sheet Accounts for BIL
Select Insert Account button
From Account To Account
100000 299999 ----
8. Creation of Business Area
Path : SPROEnterprise StructureDefinitionFinancial AccountingDefine Business Area
Select New Entries button
Business Area Description
BILH Hyderabad Business Area
BILB Bangalore Business Area
----
9. Creation of Cost Centers-KS01
Give Cost Center : Dept 10
Reference
Cost Center : Dept A
Controlling Area : BIL
Names
Name : Department 10
Description : Cost Center Department 10
Basic Data
Business Area : BILH
Profit Center : Cement-1 ----
Page52

Create one more Cost Center

Give Cost Center : Dept 11

Under the Guidance of Mr. Satyanarayana-2012

Reference
Cost Center : Dept 10
Controlling Area : BIL
Name : Department 11
Description : Cost Center Department 11
----
10. Creation of Sales Account as Revenue Element-FS00
FS00- Give GL Account : 300000 (Sales A/c)
Company Code : BIL
Select Edit Cost Element button
Cost Element Category : ‘11’ (Revenues) ----
11. Maintain Automatic Account Assignment of Revenue Elements
Path : SPROControllingProfit Center AccountingActual PostingsMaintain Automatic Account
Assignment of Revenue Elements-OKB9
Select New Entries button
Company Code Cost Element Account Assignment Detail
BIL 300000 ‘2’-Business Area is Mandatory ----
Select Company Code BIL
Double Click on Detail Per Business Area/Valuation Area folder
Select New Entries
Business Area Profit Center
BILH Cement-1
BILB Pharma-1 ----
2nd Scenario
HYD BGL MUMBAI Business Area
Or
Steel Division Cement Division Pharma Division Profit Center
300000 Sales –Steel
HYD Business Area-Update Profit Center –Steel
300001 Sales-Cement HYD Business Area-Update Profit Center – Steel
HYD Business Area-Update Profit Center -Cement BGLR Business Area-Update Profit Center – Cement
Mumbai Business Area-Update Profit Center -Pharma
300002 Sales-Pharma
HYD Business Area-Update Profit Center- Pharma
To make Business Area field required and Profit Center Field Optional for Field Status Group G001 and G005
OBC4 G001  Business Area (Required)
 Profit Center (Optional)
G005 Business Area (Required)
 Profit Center (Optional)
1. Posting of Sales Invoice-F-22
Give Doc Date : Todays Type: DR Co Code: BIL
Posting Key : 01 Account: 3100000
Amount : 200000
Business Area : BILH
Text : Sales Invoice Posting
Posting Key : 50 Account: 300000 (Sales)
Page53

Amount : ‘*’
Business Area : BILH
Text : ‘+’ DocumentSimulate
Under the Guidance of Mr. Satyanarayana-2012
Posting of Sales Invoice F-22
Customer A/c Dr 200000 -Business Area: BILH
To Sales A/c 200000- Business Area: BILH
If we post to GL Account 300000 (Sales A/c) with BILH Business Area – It automatically updates Profit Center
Cement-1
 Deselect  Document Splitting
2. To Calculate Balance Sheet Adjustment (F.5D)
Path : AccountingFinancial AccountingGeneral LedgerPeriodic ProcessingClosingReclassify
ReclassifyBalance Sheet AdjustmentCalculate-F.5D
Give Company Code: BIL
--Execute--
3. Transfer Payables and Receivables
Path : AccountingControllingProfit Center AccountingActual PostingsPeriod-End Closing
Transfer Payables/Receivables – 1KEK
Give Controlling Area : BIL
Period :6
Fiscal Year : 2012
 Test Run
 Line Items
Degree of Detail in Log- Select Detail Log
--Execute--
4. Expenditure Posting-FB01L
Doc Date : Today’s Type : SA Co Code : BIL
Posting Key : 40 Account: 400100 (Salaries A/c)
Amount : 150000
Cost Center : Dept 10
Text : Salaries Posting
Posting Key : 50 Account: 200105
Amount : ‘*’
Business Area : BILH
Profit Center : Cément-1
Text : ‘+’ DocumentSimulate
5. Activate Document Splitting
Path : SPROFinancial Accounting (New)General Ledger Accounting (New)Business Transactions
Document SplittingActivate Document Splitting
 Document Splitting----
6. Make Business Area Optional and Profit Center required for Field Status Group for G001 & G005
OBC4—
G001 G005
Business Area (Optional) Business Area (Optional)
Profit Center (Required) Profit Center (Required)
Page54

Under the Guidance of Mr. Satyanarayana-2012

7. Transfer Values from One Profit Center to other Profit Center
Path : AccountingControllingProfit Center AccountingActual PostingsProfit Center Document
9K30-Enter
Layout: 8A-001
--Execute—
Company Code : BIL
Select Screen Overview button Profit Center Amount Amount
Cement-1 400100 25000-
Give Profit Center-Cement-1 Pharma-1 400100 25000

Page55

Under the Guidance of Mr. Satyanarayana-2012

 INTEGRATION (MM & SD)
1. Enterprise Structure (or) Organization Structure
Company

Company Code

FI MM SD
Segments Plants Factory/Branch/Port Sales Organization- Company Code as a
whole region/location
Profit Centers Storage Raw Material
Locations Finished Goods
Stores/Packing Material

Distribution Channels Direct Sales through

agents

Divisions Steel/Cement Division

Why to Create ‘Port’ as Plant?
Eg:
In case of Export Sales-we have Terms of Delivery of (FOB-Free on Board)-Ownership in the goods will be
transferred to customer once Material is kept on Ship- then Ownership or Title in the goods will be transferred
From Hyderabad to Chennai
Factory Plant Port
Delivery  No Ownership transferred

If the material is damaged in Transit-Customer is not responsible-BIL is responsible (Ownership is not transferred)
In SD Module-Combination of Sales Organization, Distribution Channel and Division they call it as One Sales area.
Eg:
Sales Area-1 Sales Ares-2
HYD Sales Organization HYD Sales Organization

Direct Sales Direct Sales

Steel Cement
2. Movement Types
These are similar to Posting Keys in FI (144 Movement Types)
a) Movement Type - 101- Material Receipt against Purchase Order / Production Order
b) Movement Type -102/122Reversal of 101
c) Movement Type - 201- Issue to Cost Centers
d) Movement Type - 202- Reversal of 201
e) Movement Type - 261- Issue to Order
f) Movement Type - 262- Reversal of 261
g) Movement Type - 241- Issue to Asset
h) Movement Type - 242- Reversal of 241
i) Movement Type - 301- Plant to Plant Transfer
j) Movement Type - 309- Material to Material Transfer
k) Movement Type - 521- Production Receipt without Production Order
l) Movement Type - 522- Reversal of 521
m) Movement Type - 551- Scrapping of Material
n) Movement Type - 561- Opening Stocks taking (Data Take over)
Page56

o) Movement Type - 562- Reversal of 561

p) Movement Type - 601- Delivery (Sales)
q) Movement Type - 602- Reversal of 601

Under the Guidance of Mr. Satyanarayana-2012

Difference between Movement Type 201 and 261
Cost Centers Dept A Dept B Dept C
Issue RM Pdtn Order 1 Pdtn Order 1 Pdtn Order 1
We use 261-Order
Pdtn Order 2 Pdtn Order 3 Pdtn Order 4

Issue Stores to Machines in Dept A—we use 201-Cost Center

When Material is identifiable for a particular Production Order we use 261
When Material is not identifiable for a particular Production Order - use 201
3. Transaction / Process key
a) BSX - Inventory Postings
b) WRX - Goods Receipt/Invoice Receipt (GR/IR)Clearing
c) PRD - Price Differences/Production Order Differences
d) GBB - Offsetting entry for Inventory Postings
a. VBR - Consumption
b. VNG - Scrapping
c. BSA - Opening Stock Taking
d. ZOF - Production Receipt without Production Order
e. AUF - Production Receipt with Production Order
f. VAY - Delivery where Sales Account is Created as Revenue Element
g. VAX - Delivery where Sales Account is not Created as Revenue Element
h. AUA - Production Order Differences

Eg: Local Rawmaterial Consumption

400000 -Rawmaterial Consumption (Local) A/c Dr
200120 - To Inventory RM (Local) A/c
 For GBB –VBR- Assign 400000 i.e., Rawmaterial Consumption (Local)
 For BSX - Assign 200121 i.e., Inventory Raw Material (Local)
4. Valuation Classes
Valuation Class determines the GL Accounts to be posted Automatically
a) Raw Material
i. Local Purchases
ii. Imported Purchases
4 Valuation Classes
iii. Inter Unit Purchases
iv. Inter Company Purchases
b) Stores & Spares
i. Local Purchases
2 Valuation Classes
ii. Imported Purchases
c) Finished Goods
i. Own Manufacturing 1 Valuation Class

5. Material Types: Price Control

a) Raw Material (ROM) V-Moving Average Price-Purchase Cost
b) Stores and Spares (ERSA) V-Moving Average Price-Purchase Cost
c) Packing Material (VERP) V-Moving Average Price-Purchase Cost
d) Finished Goods (FERT) S-Standard Price+Rawmaterial Cost+Overhead
e) Semi Finished Goods (HALB)
i. Purchased V-Moving Average Price-Purchase Cost
ii. Produced S-Standard Price+Rawmaterial Cost+Overhead
f) Traded Goods (HAWA) V-Moving Average Price-Purchase Cost
g) Services (DIEN)
Page57

Under the Guidance of Mr. Satyanarayana-2012

Difference between Semi Finished Goods Purchased and Produced
Eg:
Issue RM Dept A Dept B Dept C Dept D
Finished Goods
15 days Cycle Time

Consider a case where issue of RM leads to processing in Department A, Department B, Department C and
they require 15 days to process. Once they are processed they are sent to Department D which takes care of finished
goods.
Semi Finished Goods Purchased
Suppose, Sales Dept got an Order-Material to be Delivered to customer within 3 days-Our processing
requires 15 days, so we purchase Material (here we call Semi-Finished Goods) where processing of A,B and C
departments job is completed. Only do the D department processing and take finished goods.
Semi Finished Goods Produced
Sales Dept got an Order-Customer wants Material after ‘B’ processing-Take production after B’ processing
and sell-Semi Finished Goods Produced
Traded Goods
Sales Dept got an order-Customer wants goods today itself-so, buy finished goods from market and sell
finished goods without doing any processing at factory
Services
Plant is having Operating Capacity-No Sales Orders-So, instead of closing down factory we do job work for
others-we get job work charges or Conversion Charges –Material doesn’t belongs to us-that’s why price control is
not mentioned for services.
Work in Process
Here we issued Raw Material to Dept A for processing, it has to go through Dept B and Dept C also-there
may occur Overheads in every department for some portion- normally at every month end value in all departments
is calculated in order to get the value of WIP.
Note:
Material Types are similar to account groups in FI
There we create GL Masters in FI, but here we create Material Masters
GL Masters are created under Account Groups
Material Masters are created under Material Types
Material Masters are created at Plant Level-when number of Plants are using the Same Material, it will be
extended (copied) to other plants
In Material Management, for Material postings only two periods can be opened at a time-Material Periods we can
Open only 2 periods at a time
Eg: August, September—when we open October Period in MM-August will be closed automatically
When we create Material Master there will be Number of Tabs i.e., Views
 Basic Data
 Purchasing Data
 Sales Data
 MRP Data (Material Requirement Planning)
 Production Data
 Warehouse Management Data
 Quality Data
 Plant/Storage Location Data
 Accounting Data
 Costing Data
Page58

Under the Guidance of Mr. Satyanarayana-2012

6. Valuation Grouping Code/Valuation Modifier/Valuation Modification Key
Company Codes BIL BSL BCL
Chart of Accounts : BIL
Plants HYD BGL HYD MUM MUM BGL
Local Raw Material RM1 RM2 RM2 RM1 RM3 RM1
when we purchase Raw Material Local-it has to go to Account Number 200121 Inventory RM Local
Earlier we have discussed-when Number of Company Codes are using same Chart of Accounts-Account Number
and Description will be same.

Interview Question
Can we have Plant wise Separate Accounts or What is the use of Valuation Modifier
Ans: Yes, we can have Plant wise Separate Accounts by using Valuation Modifier.

Valuation
Valuation Chart of Company
Grouping
Area Accounts Code
Code
HYD BIL BIL X
BGL BIL BIL Y
HYD BIL BSL Y
MUM BIL BSL X
MUM BIL BCL Y
BGL BIL BCL X

In Case of Local Raw Material Purchases:

For X-We assign Account 200121 Inventory RM Local
For Y-We assign Account 200122 Inventory RM Local
Companies follow
Valuation
Valuation Chart of Company
Grouping
Area Accounts Code
Code
HYD BIL BIL X
BGL BIL BIL X
HYD BIL BSL X
MUM BIL BSL X
MUM BIL BCL X
BGL BIL BCL X
In case of Local Raw Material Purchases:
For X-We assign Account 200121 Inventory RM Local
7. Material Management Flow
i. Material Requisition
From Production Department to Stores Department
ii. Purchase Requisition
From Stores Department to Purchase Department
iii. Purchase Department-Call for Enquiries, get Quotations and Do Price Comparisions
iv. Create Purchase Order-By Purchase Department
Purchase Order Consist of: Vendor Number, Material Number RM1, Quantity 1kg, Rate 100Rs, Delivery terms, and
payment terms.
v. Release Procedure-Optional
It works trough workflow
Eg:
Page59

1. If Purchase Order Value is less than Rs..10000 -To be released by Manager (Purchases)
2. If PO Value is 10000 and above and less than -To be released by GM (Purchases)
Rs.100000
Under the Guidance of Mr. Satyanarayana-2012
 3. If PO Value is 100000 and above -To be released by Director
Once the Purchase Order is saved it goes to the Inbox of the Authorized person-till he releases we cannot
take Goods Receipt.
vi. Raw Material Receipt-Against Purchase Order
Automatic Entry
Inventory RM Local A/c Dr 100 - Balance Sheet-Current Assets -BSX
To GR/IR Clearing RM Local 100 - Balance Sheet-Current Liability -WRX
(Quantity in Goods receipt x Rate as per PO)- 1kg x 100 Rs.

vii. Invoice Verification-Against Purchase Order

GR/IR Clearing RM Local A/c Dr 100 - Balance Sheet-Current Liability -WRX
To Vendor 100 - Balance Sheet-Current Liability -Vendor [Link]
(Sundry Creditors RM) taken from Purchase Order
viii. Rawmaterial Consumption
Automatic Entry
Rawmaterial Consumption Local A/c Dr100 - P&L Account Debit -GBB VBR
To Inventory RM Local 100 - Balance Sheet-Current Assets -BSX
ix. Wages Payment
Wages A/c Dr 10 - P&L Account Debit
To Bank 10 - Balance Sheet-Current Assets
x. Production Receipt at Product Cost
Automatic Entry
Inventory Finished Goods A/c Dr 110-Balance Sheet-Current Assets -BSX
To Increase/Decrease in Stocks FG 110-P&L Account Credit -GBB ZOF
In case of No Production Order/GBB AUF in case of Production Order
(Cost of Good Manufactured/Factory Output of Production)
SD Steps
xi. Delivery – At Product Cost
Automatic Entry
Increase/Decrease in Stocks FG Dr 110 - P&L Credit -GBB VAY-If Sales A/c is Credit as
(Cost of Goods Sold/Factory Output of Pdtn) revenue Element/GBB VAX if Sales
account is not created as Revenue Element
To Inventory FG 110 - Balance Sheet-Current Assets – BSX
xii. Sales
Customer A/c Dr 150 - Balance Sheet-Current Assets-Customer number is taken
(Sundry Debtors) from Sales Order
To Sales 150 - P&L Credit - ERL
(Quantity Sold x Selling Price—1kg x 150 Rs.)

Profit & Loss Account

viii. RM Consumption Local 100 xii. Sales 150
ix. Wages 10 x. Inc/Dec-FG 110
xi. Inc/Dec-Fg -110 0

Net Profit 40
Page60

150 150

Under the Guidance of Mr. Satyanarayana-2012

 Balance Sheet
Surplus in P&L 40 xii. Sundry Debtors 150
vii. Sundry Creditor RM 100 ix. Bank -10
vi. Inventory RM Local 100
vi. GR/IR clearing RM Local 100
vii. Inventory RM Local -100 0
vii. GR/IR Clearing RM Local -100
0
x. Inventory FG 110
xi. Inventory FG -110 0
140 140

8. Intégration Rules
1. In Material Master we Specify Valuation Class
2. For Valuation Class we Assign GL Accounts based on the Nature of Transaction
3. At the time of Material Receipt/Issue Stores Person Enters Movement Type, Material Number and Quantity-Our
Accounts will be updated Automatically-based on Accounts Assignment to Valuation Class which is specified in
Material Master.
Example
Valuation Inventory
Material Number Class Postings GR/IR Clearing Consumption
BSX WRX (GBB VBR)
400000 RM
3000 RM 200121 Inventory 100520 GR/IR Consumption
RM1 (Local) Local RM Local Clearing RM Local Local
100521 GR/IR 400001 RM
3001 RM 200122 Inventory Clearing RM Consumption
RM2(Imported) Imported RM Imported Imported Imported
400201 STR
3002 STR 200123 Inventory 100522 GR/IR Consumption
STR1(Local) Local Store Local Clearing STR Local Local
Local Purchase Scenario
1. Purchase Order Creation –Vendor No: 1234
Material RM1Quantity 100 KgsRate 5Rs.PO No.1(Purchase Order)
2. Good Receipt - PO No.1
Movement Type - 101 Debit – BSX
Credit – WRX
Material No. RM1 3000
Quantity 60 kgs ----
When we Save 2 documents will be generated
a. Material Document No. 100001
b. FI Document No. 200001
Entry
Debit-200121-Inventory RM Local 300
Credit-100520-GR/IR Clearing (RM Local) 300
(Quantity in Goods Receipt x Rate as per PO) 60 kgs x 5 Rs
3. Raw material Consumption
Debit – GBB VBR
Movement Type - 201/261
Credit – BSX
Page61

3000
Material No. RM1
Quantity 10 Kgs----

Under the Guidance of Mr. Satyanarayana-2012

 When we Save 2 documents will be generated
a. Material Document No. 100002
b. FI Document No. 200002
Entry
Debit-400000 RM Consumption Local 50
Credit-200121 Inventory RM Local 50
(Quantity Issued x Moving Average Price)=10 Kgs x 5 Rs
Imported Raw Material Purchases
4. Purchase Order Creation – Vendor No.4567
Material RM2Quantity 1kg-Rate 100 RsPO No.2
5. Good Receipt-PO No.2
Movement Type - 101 Debit – BSX
Credit – WRX
3001
Material No. RM2
Quantity 1kg----
When we Save 2 documents will be generated
a. Material Document No. 100003
b. FI Document No. 200003
Entry
Debit-200122-Inventory RM Imported 100
Credit-100521-GR/IR Clearing (RM Imported) 100
(Quantity Received x PO Price)=1kg x 100 Rs
6. Material Return-Material Documents No. 100003
Movement Type - 102/122 Debit – WRX
Credit – BSX
3001
Material No RM2
Quantity 1kg ----
When we Save 2 documents will be generated
a. Material Document No. 100004
b. FI Document No. 200004
Entry
Debit-100521-GR/IR Clearing RM Imported 100
Credit-200122-Inventory RM Imported 100
(Quantity Returned x Moving Average Price)=1kgx 100 Rs.
Page62

Under the Guidance of Mr. Satyanarayana-2012

 PRICE DIFFERENCES
Price Differences

Batch Method Moving Average Method

Stocks Fully Stocks Partly Stocks Not

Available Available Available
1st Scenario-Batch Method
Material RM1PO Price 10 Rsbut Bill Came for Rs.12

Batch Quantity Rate Amount Entries

1. Raw Material Inventory RM Local Dr 1000 BSX
1 100 10 1000
Receipt To GR/IR Clearing RM Local 1000 WRX
2. Raw Material Inventory RM Local Dr 2000 BSX
2 50 40 2000
Receipt To GR/IR Clearing RM Local 2000 WRX
150 3000

RM Consumption Local A/c Dr 100 GBB VBR

1 10 10 100 RM Consumption
To Inventory RM Local 100 BSX
140 2900
180 Invoice Verification GR/IR Clearing RM Local A/c Dr 1000 WRX
140 3080 Inventory RM Local A/c Dr 180 BSX (90x2)
Price Diff RM Local A/c Dr 20 PRD (10x2)
Break Up To Party A/c 1200 Party No is taken
1 90 12 1080 from PO
2 50 40 2000

Presentation in Accounts:
Rawmaterial Consumption=
Rawmaterial Consumption Local (400000) 100
+/- Price Diff RM Local (400001) 20
120
Some consultants for PRD-they assign account No.400000-others assign for PRD 400001-just to know the price
variance in separate account.
2nd Scenario-Moving Average Method-Stocks Fully Available
Material RM1PO Price 10 Rsbut Bill Came for Rs.12
Moving Average Method is also called as Weighted Average Method

Material
RM1 Quantity Rate Amount Entries
1. Raw Material Inventory RM Local Dr 1000 BSX
Bill Qnty 100 10 1000
Receipt To GR/IR Clearing RM Local 1000 WRX
2. Raw Material Inventory RM Local Dr 2000 BSX
50 40 2000
Receipt To GR/IR Clearing RM Local 2000 WRX
150 3000

RM Consumption Local A/c Dr 600 GBB VBR

30 20 600 RM Consumption
To Inventory RM Local 600 BSX
120 2400
200 Invoice Verification GR/IR Clearing RM Local A/c Dr 1000 WRX
Avail Qty 120 2600 Inventory RM Local A/c Dr 200 BSX (1200-1000)
Moving Average Price=Amount/Quantity To Party A/c 1200
Party No is taken
3000/150=20 from PO
2600/120=21.67
Page63

Even when we have consumed Rawmaterial Quantity 30- the remaining stock is 120- then the bill has come and
there is Price difference.

Under the Guidance of Mr. Satyanarayana-2012

3rd Scenario-Moving Average Method-Stocks Partly Available
Material RM1PO Price 10 Rsbut Bill Came for Rs.12

Material
RM1 Quantity Rate Amount Entries
1. Raw Material Inventory RM Local Dr 1000 BSX
Bill Qnty 100 10 1000
Receipt To GR/IR Clearing RM Local 1000 WRX
2. Raw Material Inventory RM Local Dr 2000 BSX
50 40 2000
Receipt To GR/IR Clearing RM Local 2000 WRX
150 3000

RM Consumption Local A/c Dr 2200 GBB VBR

110 20 2200 RM Consumption
To Inventory RM Local 2200 BSX
40 800
80 Invoice Verification GR/IR Clearing RM Local A/c Dr 1000 WRX
Avail Qty 40 880 Inventory RM Local A/c Dr 80 BSX (40X2)
Moving Average Price=Amount/Quantity Price Diff RM Local Dr 120 PRD (1200-1000-80)
3000/150=20 To Party A/c 1200 Party No is taken
880/40=22 from PO

In Batch Method-we have Checked Batch wise for the Material-But in this Method, we have checked Material
wise.
4th Scenario-Moving Average Method-Stocks Not Available
Material RM1PO Price 10 Rsbut Bill Came for Rs.12

Material
RM1 Quantity Rate Amount Entries
Inventory RM Local Dr 1000 BSX
Bill Qnty 100 10 1000 1. Raw Material Receipt
To GR/IR Clearing RM Local 1000 WRX
Inventory RM Local Dr 2000 BSX
50 40 2000 2. Raw Material Receipt
To GR/IR Clearing RM Local 2000 WRX
150 3000

RM Consumption Local A/c Dr 3000 GBB VBR

150 20 3000 RM Consumption
To Inventory RM Local 3000 BSX
Avail
0 0
Qnty
Invoice Verification GR/IR Clearing RM Local A/c Dr 1000 WRX
Price Diff RM Local Dr 200 PRD (1200-1000)
Moving Average Price=Amount/Quantity To Party A/c 1200 Party No is taken
3000/150=20 from PO

In the above scenario-the total Raw material is consumed (Qty - 150) – so, when the bill has come with 12 Rs. The
difference amount (1000-1200=200) is going to be posted as Price Difference RM Local.

5th Scenario
In some situations, along with Material the Bill comes
If there is an increase in Bill Price-Before taking Goods Receipt-Change Purchase Order Price with New Date.
When we take Good Receipt it takes the increased Rate from Purchase Order-then no Price Differences

6th Scenario
When we do invoice Verification-SAP has given the Options-Difference Amount can be posted in invoice
verification screen.
Page64

Material Add or Deduct Material

GL Account Debit or Credit
Both  Partly to Material and Partly to GL Account
Under the Guidance of Mr. Satyanarayana-2012
 SALES & DISTRIBUTION (SD) - Integration
1. Inquiry and Quotation
Sales Department will get inquiries from different Customers-Based on inquiries Sales Department will send the
Quotations to Customers
2. Customer Raises Purchase Order
3. Sales Department will Raise Sales Order
In Sales Order we haveCustomer Number, Material Number, Quantity, Rate, Delivery Terms, Payment Terms etc.
4. Delivery – With Reference to Sales Order
a. Delivery without Post Goods Issue (Delivery without PGI)-Ownership is not transferred
b. Delivery with Post Goods Issue (Delivery with PGI)-Ownership is transferred
a. Delivery without PGI
No ownership Transfer-Title in the Good will not be Transferred
Eg: Export Sale-Terms of Delivery-FOB (Free on Board) – Ownership will be Transferred once the Material is kept
on ship
HYD Factory Plant Chennai Port Customer
Delivery without PGI Delivery with PGI (Ownership Transfer)
If the good are damaged in Transit BIL is responsible
No Accounting Document – Only Material Document
will be generated
Accounting Document
&
Material Document
Material Document

Accounting Document-at Product Cost

Increase/Decrease in Stocks FG Dr -GBB VAY if Sales A/c is created as Revenue Element
-GBB VAX if Sales A/c is not created as Revenue Element
To Inventory FG -BSX
b. Delivery with Post Goods issue (Delivery with PGI)
Eg: Local Sales-Terms of Delivery-EX-Works (Once it is moved from Factory Ownership transfers to Customer)

HYD Factory Plant Customer

Delivery with PGI
Accounting Document
&
Material Document

5. Sales Billing-With Reference to Delivery

Entry
Customer A/c Dr - Customer Number is taken from Sales Order
To Sales - ERL
In SD Module – Pricing Procedure
Eg1: Local Sales Billing
Basic Price (A) X
Excise Duty (B) %on A
Basic + Excise (C=A+B) X
Sales Tax (D) %on C
Bill Amount (E=C+D) X

Eg2: Export Sales Billing

Page65

Basic Price (A) X

Under the Guidance of Mr. Satyanarayana-2012

FI Consultant Job: Assignment of Accounts
SAP has given 2 condition types
KOFI-Account Assignment through FI
KOFK-Account Assignment thorough CO (Sales Order Costing where Sales Order is a Cost Object)

Assignment of Accounts
1 2 3 4 5 6 7 8
Account Account
Assignment Assignment
Application Condition Chart of Sales Group for Group for
Area Type Accounts Organization Customer Materials Account Keys GL Accounts
V-Sales & 300005-Sales Local Own
Distribution KOFI BIL HYD 01 03 ERL Goods
V-Sales & 300006-Sales Exports Own
Distribution KOFI BIL HYD 02 03 ERL Goods
V-Sales & 300007-Sales Local Traded
Distribution KOFI BIL HYD 01 01 ERL Goods
V-Sales & 400320-Freight Local Own
Distribution KOFI BIL HYD 01 03 ERF Goods
V-Sales &
Distribution KOFI BIL HYD 02 04 ERL 300008-Sales Export Waste
01-Domestic 01-Traded ERL-Sales
Revenues Goods Revenue
02-Foreign ERF-Freight
02-Services
Revenues Revenue
03-Affiliated ERB-
03-Finished
Company Rebates(Trade
Goods
Revenues Discounts)
ERS-Sales
04-Waste Deduction
(Commission)

400320-Freight Local Own Goods

Bank 2000 Dr Collection from Customer 2000 Cr
First we make the payment for Freight Charges-After the customer is going to repay the Freight charges-so we show
as an Expense.

Waste Sale Rawmaterial Consumption -- Finished Goods -- Waste

Scrap Sale Packing Material Purchase -- Tins/Cartons -- FI Entry (Manual)

MM-CUSTOMIZATION
MM Consultant Job
1. Define Plants
Path : SPROEnterprise StructureDefinitionLogistics-GeneralDefine, Copy, Delete, Check Plant
Double Click on Define Plant
Select New Entries
Give Plant : BILP (Text)
Name1 : BIL HYD Factory Plant
Factory Calendar : B1 (or) 01
----
Name
Name : BIL HYD Factory Plant
Country : IN
Create New Request- MM Customization for BIL----
2. Define Division
Page66

Path : SPROEnterprise StructureDefinitionLogistics-GeneralDefine, Copy, Delete, Check Division

Double Click on Define Division
Select New Entries

Under the Guidance of Mr. Satyanarayana-2012

Division Name
BD (Text) Steel Division ----

3. Maintain Storage Location

Path : SPROEnterprise StructureDefinitionMaterials ManagementMaintain Storage Location
Under Plant we give Storage Location
Give Plant : BILP
Select New Entries
 Raw Materials Godown
stores godown
Storage Location Description
HYD HYD Storage Location ----
4. Maintain Purchasing Organization
Path : SPROEnterprise StructureDefinitionMaterials ManagementMaintain Purchasing Organization
Select New Entries
Purchasing Organization Purchasing Organization Description
BILR (Text) BIL Purchasing Organization
----
5. Assign Plant to Company Code
Path : SPROEnterprise StructureAssignmentLogistics-GeneralAssign Plant to Company Code
Select New Entries
Co Code Plant
BIL BILP  ----
6. Assign Purchasing Organization to Company Code
Path : SPROEnterprise StructureAssignmentMaterial ManagementAssign Purchasing Organization to
Company Code
Select Position button
Give Purchasing Organization : BILR
For Purchasing Organization BILRAssign Company Code-BIL----
7. Assign Purchasing Organization to Plant
Path : SPROEnterprise StructureAssignmentMaterial ManagementAssign Purchasing Organization to
Plant
Select New Entries
Purchasing Org Plant
BILR BILP -- ----
8. Maintain Company Codes for Materials Management
Path : SPROLogistics-GeneralMaterial MasterBasic SettingsMaintain Company Codes for Materials
Management
Select Position
Give Company Code: BIL
Year Period ABP
For BIL 2012 6 
---- 
for MM we can open 2 periods
 ABP Check Box-ABP Stands for Allow Back Period Postings
Page67

9. Define Attributes for Material Types

Path : SPROLogistics-GeneralMaterial MasterBasic SettingsMaterial TypesDefine Attributes for
Material Types
ROM-Rawmaterial
Under the Guidance of Mr. Satyanarayana-2012
Select Material Type : ROH Rawmaterial
Double Click on Quantity/Value Updating folder
Select Position
Give Valuation Area : BILP
Valuation Area Quantity Updating Value Update
BILP  
 Quantity and Value has to be updated-when we purchase and consume
----
Select Back Arrow
Select Material Type : FERT-Finished Product
Double Click on Quantity/Value Updating folder
Select Position
Give Valuation Area : BILP
Valuation Area Quantity Updating Value Update
BILP  
----
in live stores and material everything they do
10. Define Material Groups
Raw Materials
Dyes Chemicals
D1 C1
Materials D2 C2
D3 C3
when we create material masters-we create that the material master group-so we can see all easily under group
Path : SPROLogistics-GeneralMaterial MasterSettings for Key FieldsDefine Material Groups
Select New Entries
Material Group Material Group Description
BILC (Text) Chemicals
----
11. Create Purchase Groups
Path : SPROMaterials ManagementPurchasingCreate Purchasing Group
Select New Entries
Purchasing Group Description of Purchasing Group
BIL BIL Purchasing Group
----
 Rawmaterial Purchasing group
Stores purchasing group
12. Set Tolerance Limits for Price Variance for Purchase Order
Path: SPROMaterials ManagementPurchasingPurchase OrderSet Tolerance Limits for Price Variance
Mandatory Area- PE-Price Area – Purchasing
SE-Max. Cash Disc. Deduction (Purchasing)
Rawmaterial - 10 Rs
Rawmaterial -1000 (if 20% of change in price show warning message)
Select Tolerance Key PE & SE for Company Code 1000
Select Copy As button
Change Company Code to BIL for PE
Page68

Change Company Code to BIL for SE ----

13. Plant Parameters
Path : SPROMaterials ManagementInventory Management and Physical InventoryPlant Parameters
Under the Guidance of Mr. Satyanarayana-2012
Select Plant 1000-Select Copy As button
Give our Plant : BILP --

14. Define Number Assignment for Material and Physical Inventory Documents
Path : SPROMaterials ManagementInventory Management and Physical InventoryNumber Assignment
Define Number Assignment for Material and Physical Inventory Documents
Select Maintain Groups button
Select  Material Documents for Goods Receipt
From Menu bar - IntervalMaintain
Its Client Level
Keep Cursor on any Year (2011)
From Menu bar-EditInsert Year
Year From Number To Number
2012 Select Drop down 100000 (Interval) Ignore
Select Back Arrow
Select  Material Documents for Goods Movement and Inventory Differences
From Menu bar – Interval  Maintain
Keep cursor on any Year
From menu bar - EditInsert Year
Year From Number To Number
2012 Select Drop (330001) 3400000 (100000 Interval)  ----
15. Set Tolerance Limits for Goods Receipt
Path : SPROMaterials ManagementInventory Management and Physical InventoryGood Receipt
Set Tolerance Limits
Select B1, B2 & VP for company Code 1000
Select Copy As button
Change Company Code to BIL for B1
BIL for B2
BIL for VP
16. Maintain Default Values for Tax Codes
Path : SPROMaterials ManagementLogistics Invoice VerificationIncoming InvoiceMaintain Default
Values for Tax Codes
Select New Entries
Company Code : BIL ---- (we are not giving any code-in the invoice we give the code)
17. Set Tolerance Limits for Invoice Verification
Path : SPROMaterials ManagementLogistics Invoice VerificationInvoice BlockSet Tolerance Limits
Select Tolerance Key-BD & ST for Company Code 1000
Select Copy As button
Change Company Code to BIL for BD
Change Company Code to BIL for ST ----
18. Define Automatic Status Change
Path : SPROMaterials ManagementLogistics Invoice VerificationInvoice Verification in Back Ground
Define Automatic Status Change
Select New Entries
Company Code
BIL ----
Page69

19. Group together Valuation Areas

Path : SPROMaterials ManagementValuation and Account AssignmentAccount Determination
Account Determination without WizardGroup Together Valuation Areas
Under the Guidance of Mr. Satyanarayana-2012
When number of plants –we can have plant wise separate accounts
Select Position
Give Valuation Area - BILP
For Valuation Area BILP - Valuation Grouping Code
X ----
20. Define Valuation Classes
Path : SPROMaterials ManagementValuation and Account AssignmentAccount Determination
Account Determination without WizardDefine Valuation Classes
Select Valuation Class button
Select Valuation Class – 3000 and 7920
Select Copy As button
Change the Valuation Class 3000 to – BIL1-Change the Description to – Rawmaterials Local
Change the Valuation Class 7920 to – BIL2-Change the Description to- Finished Goods ----

FI CONSULTANT JOB
1. Creation of GL Masters-FS00
a. Inventory RM Local - Current Assets, Loans & Advances
b. Inventory Finished Goods - Current Assets, Loans & Advances
c. GR/IR Clearing RM Local - Current Liabilities & Provisions
d. RM Consumption Local - Rawmaterial Consumption
e. Inc/Dec in Stocks-Finished Goods - Inc/Dec in Stocks
Go to FS00
GL Account : 200121
Co Code : BIL  with template GL Account : 200120
Co Code : BIL
Change Short Text & Long Text: Inventory RM Local
Select Create / Bank / Interest tab
Select Field Status Group - G006 (Material Accounts)
 Post Automatically Only
----
GL Account : 200122
Co Code : BIL  with template GL Account : 200121
Co Code : BIL
Change Short Text & Long Text: Inventory FG
----
GL Account : 100520
Co Code : BIL  with template GL Account : 100500
Co Code : BIL
Change Short Text & Long Text: GR/IR Clearing RM Local
Select Control Data tab
Tax Category : “*” All Tax Types Allowed
Select  Posting without Tax Allowed
Sort Key : “014” Purchase Order
Select Create/Bank/Interest Tab
Field Status Group : G045 – Goods/Invoice Received Clearing Accounts
----
Page70

GL Account : 400000

Co Code : BIL  with template GL Account : 400100
Co Code : BIL
Account Group : Rawmaterial Consumption
Under the Guidance of Mr. Satyanarayana-2012
Change Short Text & Long Text: RM Consumption Local
Select Create / Bank / Interest tab
Field Status Group - G003 (Material Consumption Accounts)
----
Select Edit Cost Element button
Valid From 01.04.2012
Basic Data
Cost Element Category : ‘1’
----
GL Account : 300200
Co Code : BIL  with Template GL Account : 300100 (Exchange Gain)
Co Code : BIL
Account Group : Inc/Dec in Stocks
Change Short Text & Long Text: Inc/Dec in Stocks FG
Select Create / Bank / Interest tab
Select Field Status Group - G030 (Change in Stock Accounts)
----

2. Assignment of Accounts for Automatic Postings

Path : SPROMaterials ManagementValuation and Account AssignmentAccount Determination
Account Determination without WizardConfigure Automatic Postings
Select Cancel button
Select Account Assignment button – OBYC(MM to FI Entries Automatic postings)
Double Click on BSX (Transaction-Inventory Postings)
Give Chart of Accounts : BIL
Select  Valuation Modifier
Select  Valuation Class
----
Valuation Modifier Valuation Class Account
X BIL1 (RM Local) 200121 (Inventory RM Local)
X BIL2 (RM FG) 200122 (Inventory FG)
----
All BSX Account Assignments-Select  Post Automatically while creating the accounts in –FS00
Select back arrow
Double Click on WRX (Transaction – GR/IR Clearing Account)
Select  Valuation Modifier
Select  Valuation Class
----
Valuation Modifier Valuation Class Account
X BIL1 (RM Local) 100520 (GR/IR Clearing RM Local)
----
Select back arrow
Double Click on GBB (Transaction-Offsetting Entry for Inventory Posting)
Select  General Modification
Select  Valuation Modifier
Select  Valuation Class
Page71

----
Valuation Modifier General Modificaiton Valuation Class Account

Under the Guidance of Mr. Satyanarayana-2012

 X VBR (Consumption) BIL1 (RM Local) 400000 (RM Consumption Local)
X ZOF (Pdtn Receipt without BIL2 (Finished Goods) 300200 (Inc/Dec Stocks FG)
Pdtn Order)
X AUF (Pdtn Receipt with BIL2 (Finished Goods) 300200 (Inc/Dec Stocks FG)
Pdtn Order)
X VAY (Delivery-Sales-Revenue) BIL2 (Finished Goods) 300200 (Inc/Dec Stocks FG)
X VAX (Delivery-Sales-Non-Rev)BIL2 (Finished Goods) 300200 (Inc/Dec Stocks FG)
----
3. Document Types and Number Ranges-OBA7

Type No Ranges
WE Goods Receipt 50
WA Goods Issue 49
RE Gross Invoice Receipt 51

Give Number Range Intervals to No Ranges (100000 Interval)

Page72

Under the Guidance of Mr. Satyanarayana-2012

End User Area
MM End User Job
1. Creation of MM Vendor – XK01
Give Company Code : BIL
Purchasing Organization: BILR
Account Group : BIL2 (MM Vendors for BIL)
Name
Name : BIL MM Vendor
Country : IN
Select Next Screen button 3 times
Accounting Information
Reconciliation Account : 100501 (Sundry Creditors RM) Sort Key : 012 (Vendor Number)
Select Next Screen button
Payment Data
Payment Terms : 0001
Select Next Screen 3 times
Conditions
Order Currency : INR
Terms of Payment : 0001 (MM Invoice Verification)
Control Data
 GR-Based Invoice Verification
----
2. Creation of Raw Material- Material Master
Path: LogisticsMaterials ManagementMaterial MasterMaterialCreate (General)MM01-Immediately
Give Material Number : BILRM1 (Text)
Industry Sector : Mechanical Engineer
Material Type : Rawmaterial (Select)
Press Select Views button
Select Basic Data1, Purchasing, General Plant Data/Storage1, Accounting1 and Costing1
Select Organizational Levels button
Give Plant : BILP
Storage Location : HYD
Material Master should be created at plant level
Material Description : Rawmaterial 1
General Data
Base Unit of Mesure : KG Material Group : BILC (Chemicals)
Division : BD (Steel Division)
Select Purchasing Tab
General Data
Purchasing Group : BIL
Select Accounting1 Tab
 in the material master we assign the valuation class
Currency Valuation
Valuation Class : BIL1 (RM Local)
Price Control : “V” Moving Average Price
Page73

Moving Price : 100 Rs. (Quantity is zero so it will not effect at present)
Select Costing 1 Tab

Under the Guidance of Mr. Satyanarayana-2012

General Data
 Material Origin
Profit Center : Steel
----
3. To Open Material Periods for October
Path: LogisticsMaterials ManagementMaterial MasterOtherMMPV-Close Period
From Company Code : BIL
Enter Next Period (Including Fiscal Year)
Period :7
Fiscal Year : 2012
 Check and Close Period
--Execute—
we can see message-Converted
4. Purchase Order Creation
Path : LogisticsMaterials ManagementPurchasingPurchase OrderCreateME21N-Vendor/Supplying
Plant Known
Select Standard PO Vendor : BIL MM Vendor (2000301)
Purchasing Organization : BILR
Purchasing Group : BIL
Company Code : BIL
Select Item Overview folder
Item Material PO Quantity Net Price Plant
10 BILRM1 2000 (Kgs) 75 BILP ----
the Order Number: 4500017090
5. Good Receipt
Path : LogisticsMaterials ManagementInventory ManagementGoods MovementGoods Receipt
For Purchase OrderMIGO-PO Number Known
GR should be against purchase order
Select Purchase Order
Select Goods Receipt : Select Purchase Order - 4500017090
We can see the parameters
We just confirm storage location and quantity
Storage Location : HYD
Select  Item OK

Select Quantity Tab

Quantity in Delivery Note : 2000
----
Select Display in the same screen
Select Document Info Tab
Select FI Documents button

We can see the Entry posted

200121- Inventor RM Local - Steel 150000BILRM1-BIL1-BSX
100520- GR/IR Clearing RM Local - Steel -150000BILRM1-BIL1-WRX
Page74

 Quantity in Goods Receipt x Rate as per PO (2000 x 75 Rs)

6. Invoice Verification
a. Assign Tax Procedure to Country IN-BILTAX
Under the Guidance of Mr. Satyanarayana-2012
Path : SPROFinancial AccountingFinancial Accounting Global SettingsTax on Sales/Purchases
Basic SettingsAssign Country to Calculation Procedure
Select Position
Country : IN
For Country IN assign Tax procedure : BILTAX (Created Already)
----
IN live this step is not required
b. Invoice Verification
Path: LogisticsMaterials ManagementLogistics Invoice VerificationDocument EntryMIRO-Enter Invoice
Invoice Date : 01.10.2012 Reference : 12345 (Bill Number)
Select  Calculate Tax
Tat Code : V0 (0% Input Tax)
Text : Invoice Verification
PO Reference
Give Purchase Order : 4500017090
if the bill amount is same
We give amount 150000
We can see that the amount can be posted- no balance
----
From Menu bar- Invoice Document  Display
Select Follow-On Documents button
We can see the FI document is generated
2000301- BIL MM Vendor 150000- Vendor Number is taken from PO
100520 - GR/IR Clearing RM Local -150000-BIL1-WRX
7. Rawmaterial Consumption
Path : LogisticsMaterials ManagementInventory ManagementGoods MovementMB1A-Goods Issue
From Menu bar- Movement TypeConsumptionTo Cost CenterFrom Warehouse
Automatically the Movement type 201 comes
Defaults for Document Items
Movement Type : 201
Plant : BILP
Storage Location : HYD
Give Cost Center : Dept A
Material Qty
BILRM1 100----

From menur bar- /Goods issue Display

Select Accounting Documents button
3 documents will be generated
Select Accounting Document Number
We can see the entry
200121- Inventory RM Local -7500 - BILRM1-BIL1-BSX
400000- RM Consumption Local 7500 - BILRM1-BIL1-GBB VBR
Quantity Consumed x moving Average Price – 100kgs x75 Rs
8. To View Stock Register
Page75

Path : LogisticsMaterials ManagementInventory ManagementEnvironmentStock

MB5B-Stock for Posting Date
Give Material : BILRM1

Under the Guidance of Mr. Satyanarayana-2012

Company Code : BIL
Plant : BILP
Selection Date : 01.04.2012 to 31.03.2013
Stock Type
 Valuated Stock
--Execute--
we can see the report of stocks available and consumed

FI- END USER

Requirement
We have received 2000kgs BILRM1
We have completed the invoice verification for 2000kgs
Also we have received 200 kgs BILRM2
We have not received invoice
Interview question
How to View Good Received/Bills not received list or what is automatic Clearing or GR/IR Clearing

100520 GR/IR Clearing A/c

Open Items
Vendor -BIL RM1 2000kgs 150000 Inventory RM-BILRM1 2000kgs 150000
Inventory RM-BILRM2 200kgs 20000

We want to see only Material Received-Bill Not received

SAP has given Automatic Clearing Run this Program in the month end
In 100520-GR/IR Clearing-Sort key-014 (Purchase Order)
When we run the program account will appear like

100520 GR/IR Clearing A/c

Open Items

Inventory RM-BILRM2 200kgs 20000

Cleared Items

Vendor -BIL RM1 2000kgs 150000 Inventory RM-BILRM1 2000kgs 150000

a. To View GR/IR Clearing RM Local Account -FAGLL03

Give Account Number : 100520 (GR/IR Clearing Account)
Company Code : BIL
 Open Items
--Execute—
We see that the items are appearing as Open items thought the verification is over-the net amount is zero
Path-for automatic Clearing
AccountingFinancial AccountingGeneral LedgerPeriodic ProcessingAutomatic Clearing
F.13-Without Specification of Clearing Currency
Give Company code : BIL
 Select GL Accounts
GL Accounts : 100520
De-Select  Test Run
Page76

--Execute—
Warning message-The Program Run Is Production Run -- Ignore
We can see purchase order number in assignment field and item 10
Under the Guidance of Mr. Satyanarayana-2012
Now the Items will be cleared-to View-FAGLL03
Open Items in this Account-Material Received, Bills Not Received
We can see that the Document will be generated for Automatic Clearing

Page77

Under the Guidance of Mr. Satyanarayana-2012

SD INTEGRATION
SD Consultant Job
1. Insert Region-(Region means State-for Sales Tax)
Path : SPROSAP Net WeaverGeneral SettingsSet CountriesInsert Regions
Select New Entries
Country Region Description
IN AP Andhra Pradesh
----
Select Create Request button
Short Description : SD Customization for BIL 
2. Define Sales Organization
Path : SPROEnterprise StructureDefinitionSales and DistributionDefine, Copy, Delete, Check Sales
Organization
Double Click on Define Sales Organization
Select New Entries
Sales Organization : BILS (Text)-BIL HYD Sales Organization
Detailed Information
Statistics Currency : INR
----Ignore
Name
Name : BIL HYD Sales Organization
Country : IN 
3. Define Distribution Channel (Direct Sales / Sales Through Agents)
Path : SPROEnterprise StructureDefinitionSales and DistributionDefine, Copy, Delete, Check
Distribution Channel
Double Click on Define Distribution Channel
Select New Entries
Distribution Channel Name
BD Direct Sales
----
4. Define Shipping Point (Delivering Point)
Path : SPROEnterprise StructureDefinitionLogistics ExecutionDefine, Copy, Delete, Check Shipping
Point
Double Click on Define Shipping Point
Select New Entries
Shipping Point : BISH - BIL HYD Shipping Point
----
Name
Name : BIL HYD Shipping Point
Country: IN 
5. Assign Sales Organization to Company Code
Path : SPROEnterprise StructureAssignmentSales and DistributionAssign Sales Organization to
Company Code
Select Position button
Sales Organization : BILS
For Sales Organization BILSAssign Company Code BIL
Page78

----

Under the Guidance of Mr. Satyanarayana-2012

6. Assign Distribution Channel to Sales Organization
Path : SPROEnterprise StructureAssignmentSales and DistributionAssign Distribution Channel to
Sales Organization
Select New Entries
Sales Organization Distribution Channel
BILS BD
----
7. Assign Division to Sales Organization
Path : SPROEnterprise StructureAssignmentSales and DistributionAssign Division to Sales
Organization
Select New Entries
Sales Organization Division
BILS BD
----
8. Setup Sales Area
Path : SPROEnterprise StructureAssignmentSales and DistributionSetup Sales Area
Select New Entries
Sales Organization Distribution Channel Division
BILS BD BD
----
Combination of Distribution Channel, Division and Sales organization is Sales Area
9. Assign Sales Organization-Distribution Channel-Plant
Path : SPROEnterprise StructureAssignmentSales and DistributionAssign Sales Organization-
Distribution Channel-Plant
Select New Entries
Sales Organization Distribution Channel Plant
BILS BD BILP
----
10. Assign Shipping Point to Plant
Path : SPROEnterprise StructureAssignmentLogistics ExecutionAssign Shipping Point to Plant
Select Find button (Ctrl+F)
Find : BILP (Plant)
Select Plant BILP
Select Assign button
Select  BISH ----
HYD shipping point is part of HYD Plant
11. Define Common Distribution Channels
Path : SPROSales and DistributionMaster DataDefine Common Distribution Channels
Select Position button
Sales Organization : BILS
already we have assigned Direct Sales
For condition type and Customer master same type we assign
Distribution Channel – Condition Distribution Channel for Customer Master
BD BD4
----
Page79

12. Define Common Divisions

Path : SPROSales and DistributionMaster DataDefine Common Divisions
Select Position

Under the Guidance of Mr. Satyanarayana-2012

Sales Organization : BILS

For Sales Organization Type Division for Condition Type Division for Customer Master
BILS BD BD
----
13. Maintain Pricing Procedures
Path : SPROSales and DistributionBasic FunctionsPricingPricing ControlDefine and Assign Pricing
Procedures
Double Click on Maintain Pricing Procedures
Select Procedure RVAA01 – Standard
Double Click on Control Data folder
First Step-915-Condition type Required
MWST (Output Tax) 
Taxes will be covered separately
----Ignore
14. Define Pricing Procedure Determination
Path : SPROSales and DistributionBasic FunctionsPricingPricing ControlDefine and Assign Pricing
Procedures
Double click on Define Pricing Procedure Determination
Select New Entries
Sales Org Distribution Channel Division Document Procedure Customer Pricing Procedure
BILS BD BD A-Standard 1 -Standard
Pricing Procedure Condition Type
RVAA01-Standard PR00
----
15. Define Tax Determination Rules
Path : SPROSales and DistributionBasic FunctionsTaxesDefine Tax Determination Rules
Select Position
For Tax Country IN-For Sequence 1-Tax Category – UTXJ-Tax Jurisdiction Code
For Tax Country IN-For Sequence 2-Select Delete button
----
16. Setup Partner Determination
 In SD Module-Partner Function-Mandatory area
Customer No Customer No
SP Sold to Party 1 1 Not Modifiable
SH Ship to Party 1 2 Modifiable
BP Bill to Party 1 2 Modifiable
PY Payer 1 2 Modifiable
when we sale to one party we may transfer to of goods will be to the same party, bill will be raised to the same
party and the payment made by the same party
Customer No 1 : RIL
Customer No 2 : RIL Group of Companies
Path : SPROSales and DistributionBasic FunctionsPartner DeterminationSetup Partner Determination
Double Click on Set up Partner Determination for Customer Master
Double Click on Partner Functions folder
Select Position button
Page80

Give Partner Function : SP (Sold to Party)

Select SP (Sold to Party)
Double Click on Account Groups-Function Assignment folder

Under the Guidance of Mr. Satyanarayana-2012

Select New Entries

Partner Function Account Group

SP BIL2 (SD Customers BIL)
SH BIL2
BP BIL2
PY BIL2
----Ignore  
Contnd..
Double Click on Partner Determination Procedures folder
Select New Entries
Partner Determination Procedure Name
BIL (Text) BIL Partner Determination Procedure
----Ignore
Select BIL which we created now
Double Click on Partner Functions in Procedure folder
Select New Entries
Partner Function Not Modifiable Mandatory Function
SP (Sold to Party)  
SH (Ship to Party) 
BP (Bill to Party) 
BY (Payer) 
----
Contnd..
Double Click on Partner Determination Procedure Assignment folder
Select Position
Give Account Group - BIL2
For Group BIL2-Partner Procedure Select- BIL- Created already
----
17. Assign Shipping Points
Path : SPROLogistics ExecutionShippingBasic Shipping FunctionsShipping Point and Goods
Receiving Point DeterminationAssign Shipping Points
Select New Entries
Shipping Conditions Loading Group Plant Proposed Shipping Point
01-As soon as possible 0003-Manual BILP BILH
----
 When create a sales order it proposes shipping point
FI CONSULTANT JOB
1. Creation of GL Master-Sales Local Own Goods-FS00
Give GL Account : 300005
Company Code : BIL  with template  GL Account : 300000 (Sales)
Co Code: BIL
Change Short Text & Long Text: Sales Local Own Goods
Select Create/Bank/Interest tab
Page81

Field Status Group : G029 (Revenue Accounts)

----
Select Edit Cost Element button
Under the Guidance of Mr. Satyanarayana-2012
Valid From : 01.04.2012
Cost Element Category : “11” Revenues
----

2. Assignment of Accounts for Automatic Postings

Path : SPROSales and DistributionBasic FunctionsAccount Assignment/CostingRevenue Account
DeterminationAssign GL Accounts-VKOA-SD-FI Integration
Double Click on Table 1
Select New Entries
Account Account
Assignment Assignment
Application Condition Chart of Sales Group for Group for
Area Type Accounts Organization Customer Materials Account Keys GL Accounts
V-Sales & 300005-Sales Local Own
Distribution KOFI BIL BILS 01 03 ERL Goods
01-Domestic 01-Traded ERL-Sales
Revenues Goods Revenue
02-Foreign ERF-Freight
Revenues 02-Services Revenue
03-Affiliated ERB-
Company 03-Finished Rebates(Trade
Revenues Goods Discounts)
ERS-Sales
Deduction
04-Waste (Commission)

----
SD End User Area
1. Creation of SD Customer Master -XD01
Account Group : SD Customers for BIL
Company Code : BIL
Sales Area
Sales Organization : BILS
Distribution Channel : BD
Division : BD
Give Name : BIL SD Customer
Country : IN Region : AP (State)
Select Company Code Data button
Accounting Information
Reconciliation Account : 200110 (Sundry Debtors) Sort Key: 031 (Customer Number)
Select Payment Transactions tab
Payment Data
Terms of Payment : 0001
Select Sales Area Data button
Pricing/Statistics
Customer Pricing Procedure : ‘1’-Standard
Select Shipping tab
Shipping
Delivery Priority : ‘02’-Normal
Shipping Conditions : ‘01’ As soon as possible
Delivering Plant : BILP
Page82

Select Billing Documents tab

Select  Price Determination
Inco terms : EXW-From Plant (Terms of Delivery) – once it go the ownership will transfer

Under the Guidance of Mr. Satyanarayana-2012

Term of Payment: 0001
Accounting
Account Assignment Group : ‘01’ – Domestic Revenues
 for 01 domestic revenues goods-we have assigned 300005 sales account-it automatically goes to this account
Tax Classification
‘’1” – Liable for Tax
----Customer Number – 3100101
2. Creation of Finished Goods Material Master-MM01
Give Material : BILFG (Text)
Industry Sector : Mechanical Engineering
Material Type : Finished Product
Press Select Views button
Select : Basic Data1,
Sales: Sales Org. Data1,
Sales: Sales Org. Data2,
Sales: General/Plant Data,
MRP1,
General Plant Data/Storage1,
Accounting1
Costing1
Select Organizational Levels button
Organizational Levels
Plant : BILP
Storage Location : HYD
Sales Organization : BILS
Distribution Channel : BD
Description : Finished Product
General Data
Base Unit of Measurement : KG
Division : BD
Dimensions/EANs
Gross Weight : 1 (kg)
Net Weight : 0.99
Select Sales: Sales Org.1 tab
Tax Classification : ‘1’ – Taxable
Select Sales: Sales Org.2 tab
Grouping Items
Account Assignment Group : ‘03’ Finished Goods
Select Sales: General/Plant tab
General Data
Availability Check : ‘KP’-No Check
Shipping Data
Transportation Group : ‘0003’ Container
Loading Group : ‘0003’ Manual
Select MRP1 tab
MRP Procedure
MRP Type : ‘ND’ No Planning
Page83

Select Accounting1 tab

Current Valuation
Valuation Class : ‘BIL2’-Finished Goods
Under the Guidance of Mr. Satyanarayana-2012
Price Control : ‘S’-Standard Price
Standard Price : 300
Select Costing1 tab
General Data
 Material Origin
Profit Center : Steel -----
3. Creation of Condition Records
Path: LogisticsSales and DistributionMaster DataConditionsSelect Using Condition TypeVK11-Create
Select Condition Type : PR00-Price
Select Key Combination button
Select  Material with Release Status
Sales Organization : BILS
Distribution Channel : BD
Material Amount
BILFG 500
----
when we make sale order-it proposes this price
Select Back arrow
Select Condition Type : ‘UTXJ-Tax Jurisdiction Code
Select Key Combination button
Select  Domestic Taxes
Country : IN
Tax Classification for Customer Master Tax Classification for Material Tax Code
‘1’-Liable for Tax ‘1’-Taxable A0’-0% Output Tax
----

Page84

Under the Guidance of Mr. Satyanarayana-2012

 PROFITABILITY ANALYSIS (CO-PA)
CO-Controlling
PA-Profitability Analysis
This is used to view Profitability for Number of Parameters at a time
Eg: Product wise, Customer wise, Sales Order wise, Plant wise, Sales Organization wise Profitability
-Account based Profitability Analysis (or) Costing Based Profitability Analysis (or) both-In India we use both

PP Module
MM Module Product Costing SD Module CO-PA
CO Module
FI Module

We Define Operating Concern

-Operating Concern can be equal to Controlling Area or above Controlling Area
-Earlier we have discussed – Controlling Area Can be Equal to Company Code or Above Company Code
Interview Question:
Enterprise Structure Hierarchy

Option1 Operating Concern

Controlling Area

Company Code

Option2
Company Code = Controlling Area = Operating Concern
Here we use the term called-Data Structure-It consists of
Characteristics and Value Fields
a. Customer
b. Product
c. Sales Order -Revenues
d. Plant -Cost of Goods Sold
e. Sales Organization -Net Profit
f. Sales Employee
g. Industry

We can see the customer wise, product wise revenues, cost of goods sold and net profit like wise
Profitability Segment
To View Number of Characteristics Values at a time-
Here we have Segment Level Characteristics and Non-Segment wise Characteristics
Segment Level Characteristics Non-Segment wise Characteristics
1. If we select Segment Level Characteristics the fields 1. If we select Non-Segment level Characteristics the
are available at the time of drilldown reporting fields are available for line item reporting.
2. If we select more number of Characteristics as
Segment Level Characteristics system performance will
be slow
Page85

Under the Guidance of Mr. Satyanarayana-2012

We have Discussed SD Flow:
1. Inquiry and Quotation
2. Customer Raises Purchase Order
3. BIL Raises Sales Order-Sales order Consist of Customer Number, Product, Plant, Sales Organization, Quantity,
Rate, Delivery Terms, and Payment Terms
4. Delivery - with Reference to Sales Order
a. Delivery without Post Good Issue (Delivery without PGI)-Ownership not Transfer
b. Delivery with Post Goods Issue (Delivery with PGI)-Ownership Transfer
5. Sales Billing -with Reference to Delivery

In SD Module In CO-PA
Condition Types Value Fields
PR00-Price VV010-Revenues
VPRS-Cost VV140-Cost of Goods Sold
(Cost is taken from Material Master
Standard Price-Product Costing Price
at COGM Level)
Admin Expenses and
Upto COGM Level
Selling Expenses
From (CO) + From (FI)

Costing Based and Account based (Both)

Afterwards we Map PR00=VV010

VPRS=VV140
Once the Billing takes place-Automatically COPA Data will be updated
We are not SD Consultants-we don’t know SD condition Types- SAP has given in Client 800-Operating
Concern-IDEA-Assigned Controlling Area 1000- Company Code 1000
In IDEA they have given all SD Condition Types and Equivalent CO-PA Value Fields-So, It is Reference for CO
Consultants
Product Costing-We Create Cost Sheet-BILFG Finished Goods Stock Valuation or
Raw Material xx Production Valuation – As per AS2
Raw Material Overheads xx (Accounting Standard-2) 
Production Cost Manufactured xx Cost or Market Price whichever is
Lower-Cost Means up to COGM Level
COGM xx
or COGM + Portion of Admin Exp
Administration Exp xx
 Companies Value at COGM Level
Selling & Distribution Exp xx
Cost of Goods Sold (COGS) xx Because the Selling Exp are Post
Manufacturing exp so we will not
consider it.
Page86

Under the Guidance of Mr. Satyanarayana-2012

Customization
1. Maintain Characteristics
Characteristics are nothing but those aspects on which we want to Breakdown the Profit Logically
Eg: Customer, Product etc.
We have 2 types of Characteristics Fixed & Non-Fixed Characteristics
Fixed Characteristics Non-Fixed Characteristics
-Predefined Characteristics -We can add up to 50 Non-Fixed Characteristics to our
Operating Concern
-Along with Package it comes
-User Defined Characteristics-It should start with WW-
-19 Fixed Characteristics
Length-Max 5 and Min4 (Including WW)

Create User Defined Create User Defined

Characteristics with Characteristics without
Reference Tables Reference Tables (Through
CO-PA Derivation Rules)

Path : SPROControllingProfitability AnalysisStructuresDefine Operating ConcernMaintain

Characteristics-KEA5
Select  All Characteristics
Select Display button
Select Display<->Change button
Ignore Message
Select Create button
Select  User Defined
New Characteristic
Char. : WWRE6 (Max 5) -Region
 With Own Value Maintenance
Texts
Short Text : Region
Heading : Region
ABAP Dictionary
Data type : CHAR –Length: 2
----
Ignore Message and Select Automatic button
Select Activate button

2. Maintain Value Fields

Value Fields are nothing but the values associated with these Characteristics -we can create Value Fields in 2 ways

SAP Defined Value Fields User Defined Value Fields

-User Defined Value Fields should start with VV
-Max 5 and Min 4 (Including VV)

Value Fields are 2 Types

Page87

Value Based (Amount Quantity Based (Quantity

Value Field) Value Field)

Under the Guidance of Mr. Satyanarayana-2012

Path : SPROControllingProfitability AnalysisStructuresDefine Operating ConcernMaintain Value
Fields-KEA6
 Check availability Value fields-the availability numbers.
 Value Field VV600
Select Create/Change
Ignore warning message
Text
Description : Quantity
Short Text : Quantity
Other Attributes
 Quantity
Select Activate button
Ignore Messages
Select Create button
Value Field - VV601-Revenues
 Amount
Texts
Short Text : Revenues
Select Activate button
Ignore Messages
Select Create button
Value Field - VV602-RM Cost
 Amount
Texts
Short Text : RM Cost
Select Activate button
Ignore Messages
Select Create button
Value Field -VV603-RM Overheads
Amount
Texts
Short Text : RM OH
Select Activate button
Ignore Messages
Select Create button
Value Field -VV604-Production Costs
Amount
Texts
Short Text : PROD Costs
Select Activate button
Ignore Messages
Select Create button
Value Field -VV605-Cost of Goods Sold
Amount
Texts
Page88

Short Text : COGS

Select Activate button
Ignore Messages
Under the Guidance of Mr. Satyanarayana-2012
3. Maintain Operating Concern
Path : SPROControllingProfitability AnalysisStructuresDefine Operating ConcernMaintain
Operating Concern-KEA0
4 characteristics
Operating Concern : BIL1
Select Create button
Ignore warning message
Give Description : Operating Concern for BIL
Type of Profitability Analysis
 Costing-Based
 Account-Based
Select Attributes
Operating Concern Currency : INR
Company Code Currency 
Fiscal Year Variant : V3
----
Select Data Structure tab
Data Structure
Select Create button
 SAP has 19 default characteristics-we need to activate fields
Transfer From
Characteristic
Select KUNWE-Ship-to-Party
WWRE6-Region
Select Left arrow
Select Value Fields tab
Select Value Fields VV600
VV601
VV602
VV603
VV604
VV605
Select Left Arrow
----
Select Activate button
 we get a message that “All Fields are Activated”
Select back arrow
Select Yes- button for the message- To Generate Operating Concern Environment
Ignore Message
We can see the status- in Green symbol-(now we can use)
4. Assign Controlling Area to Operating Concern
Path : SPROEnterprise StructureAssignmentControllingAssign Controlling Area to Operating Concern
Select Position button
Give Controlling Area : BIL
For Controlling Area BIL : Assign Operating Concern BIL1
----
Page89

5. Define Number Ranges for Planning Data

Path : SPROControllingProfitability AnalysisPlanningInitial StepsDefine Number Ranges for
Planning Data
Give Operating Concern : BIL1
Under the Guidance of Mr. Satyanarayana-2012
Select Maintain Groups button
Select  Generated Group
From Menu bar- Select IntervalMaintain
From Number To Number
1 9999999999 (10- 9’s)
----Ignore

5. Maintain Versions
Path : SPROControllingProfitability AnalysisPlanningInitial StepsMaintain Versions
Select Version ‘0’ – Plan/Actual Version
Double Click on Settings in Operating Concern folder
Operating Concern : BIL1
Select Yes button for the message (Transfer Version to Operating Concern)
----
6. Assign Quantity Fields
Path : SPROControllingProfitability AnalysisPlanningInitial StepsAssign Quantity Fields
Select New Entries
SD Quantity Field CO-PA Quantity Field
FKIMG (Billed Quantity) VV600 (Quantity)
what ever we update in quantity field it has to update VV600
----
7. Set up Planning Framework
It consists of 4 Elements
a. Planning Levels: we use the Planning Level to determine the level at which Planning is to occur-we do
this by specifying the characteristics for planning
b. Planning Package: we specify the Characteristic Values in a Planning Package- here we determine the
market segment for which planning is to take place for a particular period
c. Planning Methods: Planning Methods are functions with which planning data can be entered and
changed
d. Parameter Set: Parameter Set Contains All the settings necessary for Executing a planning method
Path : SPROControllingProfitability AnalysisPlanningPlanning FrameworkSet up Planning
Framework-KEPM
Keep cursor on Planning Levels
Press Right mouse
Select Create Planning Level
Planning Level : BIL1 (text)- BIL Planning Level
From Characteristic List Column
Activate : Company Code
Customer
Plan
Product
Sales Organization
Click on Selection Tab
Characteristic From To
Period/Year 07.2012 07.2012 (Planning for Oct to Oct)
Record Type ‘F’ (Billing Data)
Page90

Version ‘0’ (Plan/Actual Version)

Company Code BIL
----
Under the Guidance of Mr. Satyanarayana-2012
Keep Cursor on BIL1 (BIL Planning Level)
Press Right mouse
Select Create Planning Package
Planning Package - BIL1 (text)- BIL Planning Package
Double Click on BIL1 (BIL Planning Package)
We get a message No errors were found
Keep cursor on Enter Planning Data at bottom
Select Right Mouse
Select Create Parameter Set
Give Parameter Set : BIL1 (text)- BIL Parameter Set
Give the Layout: BIL1 (Text)
Select Create Button-Beside Layout
Give Layout Description- BIL Layout
Header Lead Column
Company Code 
Customer 
Plant 
Product 
Sales Organization 
Select Value Fields tab
Select Page Left button to bring all value fields to selected options
The Row should be in the following sequence
1. Quantity
2. Revenues
3. RM Cost
4. RM Overhead
5. Production Costs
6. Cost of Goods Sold
----
Control Data for Manual Planning
Currency : INR
----
Double Click on BIL1 (Planning Package)
Double Click on Enter Planning Data
we get a layout BIL1
Double Click on BIL1 (Layout) – BIL Parameters
Plant Sales Organization Customer Product Quantity Revenue RM Cost
BILP BILS 3100101 BILFG 10 (kgs) 4500 1500
RM Overhead Production Cost Cost of Goods Sold
300 (Rs) 1400 3200
----
 we can give the planning plant wise, product wise etc.
8. Define Number Ranges for Actual Postings
now onwards it generates a document in Profitability Analysis also
Path : SPROControllingProfitability AnalysisFlows of Actual ValuesInitial StepsDefine Number
Page91

Ranges for Actual Postings

Operating Concern : BIL1
Select Maintain Groups button
Under the Guidance of Mr. Satyanarayana-2012
Select  Generated Group
From Menu bar-IntervalMaintain
From Number To Number
1 9999999999 (10-9’s)
----Ignore
9. Maintain Assignment of SD Conditions to CO-PA Value Fields
Path : SPROControllingProfitability AnalysisFlows of Actual ValuesTransfer of Billing Documents
Assign Value Fields
Double Click on Maintain Assignment of SD Conditions to CO-PA Value Fields
Operating Concern : BIL1
Costing - based
Select New Entries
Sd condition and Value field we map-o
Once we do billing automatically it updates COPA
Condition Type Value Field Transfer +/-
PR00 (Price) VV601 (Revenues) 
VPRS (Cost) VV605 (Cost of Goods Sold) 
----
Interview Question
Why Transfer +/- is required for Assignment of Condition Types to CO-PA Value Fields
If we don’t select +/-:
Sales1 CO-PA
Condition Type PR00 100 Value Field VV601 100
Sales Return -100 100
0 200
If we select +/- it takes condition Net Value
Sales1 CO-PA
Condition Type PR00 100 Value Field VV601 100
Sales Return -100 -100
0 0
10. Direct Postings from FI/MM
i) If we use Account Based Profitability Analysis:
We give Conditions like
-If we post to 300000 to 399999 directly update VV601-Revenues
-If we post in 400000 to 499999 directly update VV605-Cost of Goods Sold
ii) If we use both (Costing based and Account based)
-If we are posting to Selling Expenses A/c-400350-, if we post directly to Accounts 400000 to 499999 update
VV605 Cost of Goods Sold
Up to Cost of Goods Manufactured-it comes from CO
 Selling Expenses are from FI because they are post manufacturing Expenses
Path : SPROControllingProfitability AnalysisFlows of Actual ValuesDirect Postings from FI/MM
Maintain PA Transfer Structure for Direct Postings
Select Structure - FI (Financial Accounting  CO-PA)
Double Click on Assignment Lines folder
Give Controlling Area : BIL
Page92

Select Assignment – 20 (Direct Revenues from FI)

Double Click on Source Folder
Cost Element

Under the Guidance of Mr. Satyanarayana-2012

From : 300000 to 399999
Source
 Costs/Revenue
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field ‘1’-Fixed Amounts VV601 – Revenues
if we post 30000 to 399999 update Revenues
----
Double Click on Assignment Lines folder
Select Assignment-10 (Direct Cost from FI)
Double Click on Source folder
Cost Element
From : 400000 to 499999
Source
Costs/Revenue
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field ‘1’-Fixed Amounts VV605 Cost of Goods Sold
----
11. Activate Profitability Analysis
Path : SPROControllingProfitability AnalysisFlows of Actual ValuesActivate Profitability Analysis
Select Position button
Controlling Area : BIL
For Controlling Area BIL - Activate Status- ‘4’ Component Active for both types of Profitability Analysis
Accounting based and Costing based
----
Once the Sales Person makes Billing – the CO-PA will be updated automatically
SD End User Area
1. Sales Order Creation
Path : LogisticsSales and DistributionSalesOrderVA01-Create
Order Type : Select -OR (Standard Order)
Organizational Data
Sales Organization : BILS
Distribution Channel : BD
Division : BD

Sold to Party : 3100101

PO Number : ‘1’ PO Date : Today’s
Sales
Required Delivery Date : Today’s Delivery Plant : BILP
Payment Terms : 0001
Item Material Order Quantity
10 BILFG 10 
Page93

Ignore Message (Change in Invoice Date: The billing date is re-determined)

Select Item-10

Under the Guidance of Mr. Satyanarayana-2012

From Menu bar-Go toItemConditions
It is proposing 500 because in Condition type 500
The Product Cost shows 300 (because in Material Master)
The Profit Automatically it calculates
From Menu bar-Select EditIncompletion Log (If any errors we can see)
If any errors are there it shows
----
We get an Order Number-117671

Page94

Under the Guidance of Mr. Satyanarayana-2012

2. Production Receipt

Production Receipt without Production Receipt with

Production Order Production Order

Production Receipt without Production Order

Path : LogisticsMaterials ManagementInventory ManagementGoods MovementGoods Receipt
MB1C-Other
521 Goods Receipt without Production Order
Give Movement Type : 521
Plant : BILP
Storage Location : HYD
Material Quantity
BILFG 1000
----Ignore
Stores person uses the movement type, material and quantity
Automatically the Entries will be generated
From Menu bar-Other Goods ReceiptDisplay
We can see the material Document
Select Accounting Documents button to see FI document
Select Accounting Document Number
200122 - Inventory FG A/c Dr 300000 - BILFG-BIL2-BSX
300200 - Inc/Dec in Stocks FG -300000 - BILFG-BIL2-GBB ZOF
Quantity Produced x Standard Price
1000 kgs x 300 Rs

3. Delivery with Reference to Sales order

Path : LogisticsSales and DistributionSalesOrderSubsequent FunctionsVL01N-Outbound Delivery
Shipping Point : BISH
Sales Order Data
Order : 11767
Item Overview
Actual Goods Issue Date : Today’s
Select Item 10
Select Picking tab
How much we are delivering
Picked Quantity
10
Select Post Goods Issue (Ownership will be transferred)
From Menu bar-Outbound DeliveryDisplay
From Menu bar-EnvironmentDocument Flow
Each Sales order wise we can see the details
Keep cursor on GD goods issue delivery document number
Select Display Document button (For Delivery Movement type 601 comes automatically)
Select Accounting Document Number
Page95

Entry
when we make delivery the Stock should be reduced
200122 -Inventory FG 3000- - BILFG-BIL2-BSX
Under the Guidance of Mr. Satyanarayana-2012
300200 –Inc/Dec in Stock FG 3000 - BILFG-BIL2-GBB VAY
Quantity Delivered x Standard Price
10 kgs x 300 Rs
4. Sales Billing – with Reference to Delivery
Path : LogisticsSales and DistributionSalesOrderSubsequent FunctionsVF01-Billing Document
The Delivery Document Number comes Automatically
Select Delivery Document Number
--Execute—
----
From Menu bar-Billing DocumentDisplay
Billing Document Number comes Automatically
Select Accounting button
Select Accounting Document Number
Entry
3100101 -BIL SD Customer 5000 -Customer Number Taken from Sales Order
300005 -Sales Local Own Goods 5000- -ERL
Quantity Sold x Selling Price
10 kgs x 500 Rs

5. Report Painter Report- Report to View Customer wise, Product wise, Plant wise, and Sales Organization
Profitability- Plan-Actual-Variance
a) Create Profitability Form
Path : SPROControllingProfitability AnalysisInformation SystemReport ComponentsDefine Forms
Define Forms for Profitability Reports
Double Click on Create Form
Operating Concern : BIL1
Cost Based - KE34
Form : BILFORM (Text) - BIL Form (Description)
Structure
 Two Axes (Matrix)
Select Create button
 Operating Concern Currency
Double Click on Row 1
Value Fields with Characteristics
Value Field Select - Quantity
Select Confirm button
Double Click on Row 2
 Value Field with Characteristics
Value Field VV601- Revenues
Select Confirm button
Double Click on Row 3
 Value Field with Characteristics
Value Field : Select - VV605-Cost of Goods Sold
Select Confirm button
Double Click on Row 4
Page96

 Formula
(Net Profit=Revenues-Cost of Goods Sold)
Select Y002 – Revenues
Under the Guidance of Mr. Satyanarayana-2012
Select “-“
Select Y003 Cost of Goods Sold
Short Text : Net Profit
Select Copy Short text button
Double Click on Column 1
 Characteristics
From the Available Characteristics
Select  Plan/Actual Indicator – Select Left Arrow
From
Plan/Act. Indicator ‘1’ (Planning Data)
Select Confirm button
Double Click on Column 2
 Characteristics
From
Plan/Act. Indicator ‘0’-Actual Data
Select Confirm button
Double Click on Column 3
 Formula
 (Variance=Plan Data-Actual Data)
Select X001- Planning Data
Select “-“
Select X002- Actual Data
Short Text : Variance
Select Copy Short Text button
----
From Menu bar- EditGeneral Data SelectionGeneral Data Selection
From Available Characteristics
Select  -Record Type
-Period/Year
Select Left arrow
From To
Record Type ‘A’-Incoming Sales Order ‘I’
Data may come from FI/ CO
Variable ON/OFF Variable ON/OFF
Period/Year  
Local Variable: 1 Local Variable: 2
Select Confirm button
From Menu bar-ExtrasVariablesVariables Definition
Description
For Name 1- Period/Year From Period/Year
For Name 2- Period/Year To Period/Year
----
b) Create Profitability Report
Same path
Page97

Double Click on Create Profitability Report

Give Report Name : BILREPORT -BIL PROFITABILITY REPORT
Report Type

Under the Guidance of Mr. Satyanarayana-2012

 Report with Form - BILFORM (Created Already in first step)
Select Create button
From Characteristics list
Select  Customer, Plant, Product and Sales Organization
Select Left Arrow
Select Output Type tab
 Classic Drill Down
 Available on Selection Screen
----Ignore Message
--Execute—
Report Selections
From Period/Year : 01.2012
To Period/Year : 12.2012
Output Type
 Classic Drill Down Report
--Execute—Ignore Message – Select Yes button
Customer wise we can see now
To view Product wise Profitability
From Menu bar- NavigateSwitch Drill down
Double Click on Product
From Menu bar- NavigateChoose Next Level
Double Click on Customer
we can see for that particular product each customer wise profit we get.

Page98

Under the Guidance of Mr. Satyanarayana-2012

 ECC6. NEW FEATURES
1. New General Ledgers or Multiple Ledgers
What ever we assigned to our company code-Leading Ledger
According to requirement we create New ledgers-Non Leading Ledgers (for different fiscal years according to the
countries)
Example
Company Code BIL-Assigned Fiscal Year Variant –V3  automatically it updates- 0L-Leading Ledger
☛ Suppose BIL Shares Quoted in US Stock Exchange
US-Fiscal Year- Jan to Dec – Fiscal Year Variant- K4  B1-Non Leading Ledger-1 for BIL
☛ Suppose BIL Group is in UK
UK-Fiscal Year-July to June-Fiscal Year Variant- V6  B2-Non Leading Ledger-2 for BIL
-When we Create Ledger-B1- A Ledger Group B1 will be created and Ledger B1 will be Assigned to the Ledger
Group B1 automatically
-When we Create Ledger B2- A Ledger Group B2 will be Created and Ledger B2 will be Assigned to the Ledger
Group B2 automatically
-At the time of posting we have to specify the Ledger Group
-If we don’t specify the Ledger Group at the time of posting- It updates all the Ledgers automatically
-When we want to Post to only Ledger B1- We give the Ledger Group B1
-When we want to Post to only Ledger B2- We give the Ledger Group B2
☛If we want to Post to Ledgers 0L and B1 – we create Ledger Group say B3 and assign 0L and B1
☛If we want to Post to Ledgers 0L and B2- we create Ledger Group say B4 and assign 0L and B2

-When the Ledger Group consists of 0L and B1 or B2- 0L should be the Representative Ledger-at the time of
posting system checks whether Representative Ledger Periods are Opened or not—Even the periods are not opened
in other Ledgers like B1 or B2-it doesn’t matter-automatically it posts to those ledgers also

-When the Ledger Group Consists of B1 and B2 B1 or B2 can be representative Ledger

-When we Post the Entries- Documents will be generated in Non-Leading Ledgers also
-In Live Environment for all Document Types of Non-Leading Ledgers we use one number range-when we give
number range interval for that number range it is available for all document types
B1-Non-Leading Ledger
Document Types - SA/KR/DR/AA/WE - No. Range - 81- 2000001-2100000
B2-Non-Leading Ledger
Document Types - SA/KR/DR/AA/WE -No. Range -82- 2100001-2200000
Customization
1. Activate New General Ledger Accounting
Path : SPROFinancial AccountingFinancial Accounting Global SettingsActivate New General Ledger
Accounting
If it is activated it gives an error message
If it is not activated
Select  New General Leger active
----
2. Define Ledgers for General Ledger Accounting
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New)Ledgers
LedgerDefine Ledgers for General Ledger Accounting
Select New Entries
Ledger Ledger Name Totals Table Leading
Page99

D1 (Text) Non-Leading Ledger-1 for BIL FAGLFLEXT 

D2 (Text) Non-Leading Ledger-2 for BIL FAGLFLEXT 
 Totals Tables: The Total Data will be stored in this table
Under the Guidance of Mr. Satyanarayana-2012
 Deselect Leading Check box
---- Save in GL Customization
we get a message- D1 Ledger group is created with D1 Leger
Ignore
3. Define and Activate Non-Leading Ledgers
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New)Ledgers
LedgerDefine and Activate Non-Leading Ledgers
Ledger : D1
Select New Entries
Company Code Fiscal Year Variant Posting Period Variant
BIL K4 BIL
----
Select Back arrow
Give Ledger- D2
Select New Entries
Company Code Fiscal Year Variant Posting Period Variant
BIL V6 BIL
----
4. Define Ledger Group
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New)Ledgers
LedgerDefine Ledger Group
Select New Entries
Ledger Group Description
D3 Ledger Group for BIL
----
Select Ledger Group-D3
Double Click on Ledger Assignement folder
Select New Entries
Ledger Representative Ledger
0L 
D1 
----
5. Define Document Types for Entry View in a Ledger
Path : SPROFinancial Accounting (New) Financial Accounting Global Settings (New)Document
Document TypesDefine Document Types for Entry View in a Ledger

Give Ledger : D1

Select New Entries
Type Number Range
SA 81
KR 81
DR 81
DZ 81
AA 81
WE 81
WA 81
WL 81
RE 81
Page100

RV 81
----
Select Back arrow

Under the Guidance of Mr. Satyanarayana-2012

Give Ledger : D2
Select New Entries
Type Number Range
SA 82
KR 82
DR 82
DZ 82
AA 82
WE 82
WA 82
WL 82
RE 82
RV 82
----
6. Define Document Types for General Ledger View
Path : SPROFinancial Accounting (New) Financial Accounting Global Settings (New)Document
Document TypesDefine Document Types for General Ledger View
Give Ledger : D1
Select New Entries
Type Number Range
SA 83
KR 83
DR 83
DZ 83
AA 83
WE 83
WA 83
WL 83
RE 83
RV 83
----
Select back arrow
Give Ledger : D2
Type Number Range
SA 84
KR 84
DR 84
DZ 84
AA 84
WE 84
WA 84
WL 84
RE 84
RV 84
----
7. Define Document Number Ranges for Entry View
Path : SPROFinancial Accounting (New) Financial Accounting Global
Settings(New)DocumentDocument Number RangesDocuments in Entry ViewDefine Document Number
Ranges for Entry View
Give Company Code : BIL
Select Change Intervals button
Select Insert Interval button
No. Range Year From Number To Number
81 2012 1200001 1300000
Page101

Select Insert Interval button

No. Range Year From Number To Number
82 2012 1300001 1400000

Under the Guidance of Mr. Satyanarayana-2012

----Ignore
8. Define Document Number Ranges for General Ledger View
Path : SPROFinancial Accounting (New) Financial Accounting Global Settings (New)Document
Document Number RangesDocuments in General Ledger ViewDefine Document Number Ranges for
General Ledger View
Give Company Code : BIL
Select Change Intervals button
Select Insert Interval button
No. Range Year From Number To Number
83 2012 2500001 2600000
Select Insert Interval button
No. Range Year From Number To Number
84 2012 2600001 2700000
----Ignore
End User Area
1. Posting of Transaction-FB01L
Document Date : Today’s Type : SA Company Code : BIL
Posting Date : Today’s
Ledger Group : Blank
Posting Key : 40 Account: 200105
Amount : 100000
Profit Center : Steel
Text : Equity Share Capital Receipt
Next Line Item
Posting Key : 50 Account: 100000
Amount :’*’
Profit Center : Steel
Text : ‘+”
DocumentSimulate----
2. Posting of one more Transaction-FB01L-With Leading Ledger Group-D3
Document Date : Today’s Type : SA Company Code : BIL
Posting Date : Today’s
Ledger Group : D3
Posting Key : 40 Account: 200105
Amount : 20000
Profit Center : Steel
Text : Equity Share Capital Receipt
Next Line Item
Posting Key : 50 Account: 100000
Amount :’*’
Profit Center : Steel
Text : ‘+”
DocumentSimulate----
3. To View Account Balances-FAGLB03
Give Account Number : 100000
Page102

Company Code : BIL

Fiscal Year : 2012
Select Choose Ledger button
Under the Guidance of Mr. Satyanarayana-2012
Give Ledger : D1
--Execute—
D1-Jan-Dec-
We have posted in October-so it updates in 10th month
Select back arrow
Select Choose Ledger button
Give Ledger : D2
--Execute—
Accounting Year-July to June- October is 4th period

Page103

Under the Guidance of Mr. Satyanarayana-2012

 SEGMENTS
Classic Profit Center Accounting
In earlier Versions use Classic Profit Center Accounting-This is part of Controlling
In ECC6, SAP suggests going for New GL Profit Center Accounting-This is Part of FI
Difference between Classic Profit Center Accounting and New GL Profit Center Accounting
Classic New GL
1. This is part of CO 6. This is part of FI
6. Need to activate profit Center Accounting in 7. Need not Activate Profit Center Accounting
Maintain Controlling Area Settings in Maintain Controlling Area Settings
7. Creation of Dummy Profit Center is a must 8. No Need to Create Dummy Profit Center
8. Here we can get only Profit & Loss Account 9. Here we can get Profit & Loss and Balance
items Sheet Profit Center wise
9. Create Derivation Rules 10. No Need to Create Derivation Rules

2- Scenarios
1st HYD Location Business Area
And
Steel Division Cement Division Pharma Division Profit Center

2nd
HYD BGL MUMBAI Business Area
Or
Steel Division Cement Division Pharma Division Profit Center

In ECC6 Version SAP has given Segments:

2- Scenarios
1st HYD Location Segment
And
Steel Division Cement Division Pharma Division Profit Center

2nd
HYD BGL MUMBAI

Only Profit Center

Steel Division Cement Division Pharma Division
 In Second Scenario-Only Profit Center can be used
The disadvantage is Business Area Concept is –Automatically Generated Line Item (Like Sales Tax/Central Excise)
It will not pick up Business Area-Business Area wise Balance Sheet will not match- we have to Run Business Area
Clearing-When we run it goes to Business Area Clearing Account and not to the respective Accounts
SAP Note : No Further Developments on Business Area
In Profit Center- Segment will be assigned-when we post to Profit Center –Segment will be updated automatically-
Due to Document Splitting the Tax Line Items will pick up Profit Center Automatically.
Page104

Under the Guidance of Mr. Satyanarayana-2012

 DOCUMENT SPLITTING
Document Splitting allows the Documents to split according to the selected dimensions.
Eg : Profit Center/ Segment
We can get Financial Statements Profit Center wise or Segment wise
3 types
a. Active Document Splitting
b. Passive Document Splitting
c. Zero Balance Splitting (Sub Sequent Document Splitting)
a. Active Document Splitting
Sales to Customer- 2 products

Customer ‘X’ A/c Dr 100000

To Sales-Steel 80000 Profit Center-Steel Hyd Segment
To Sales-Cement 20000 Profit Center-Cement Hyd Segment

 Before Documents Splitting-we cannot see the balance sheet profit center wise and segment wise-because it is
not going to update the profit center to the customer
Due to Documents Splitting
Documents View

Customer ‘X’ A/c Dr 100000

To Sales-Steel 80000 Profit Center-Steel Hyd Segment
To Sales-Cement 20000 Profit Center-Cement Hyd Segment

General Ledger View

Sundry Debtors Dr 80000 Profit Center-Steel Hyd Segment

Sundry Debtors Dr 20000 Profit Center-Cement Hyd Segment
To Sales-Steel 80000 Profit Center-Steel Hyd Segment
To Sales-Cement 20000 Profit Center-Cement Hyd Segment

 Due to Active Document Splitting-The Customer X account is going to be active and spitted
 Now we can see the Balance Sheet and Profit and Loss account Profit Center wise and segment wise
based on line item the line item is going to be activated
[Link] Document Splitting
based on earlier transaction it splits automatically
Eg:-Receipt of Amount from Customer

Bank A/c Dr 800000 Profit Center-Steel Hyd Segment

Bank A/c Dr 20000 Profit Center-Cement Hyd Segment
To Customer-With Clearing 100000

When we clear the Original Item (Sales Item)-Based on 1st item it takes profit Center Steel and Cement
Document View

Bank A/c Dr 800000 Profit Center-Steel Hyd Segment

Bank A/c Dr 20000 Profit Center-Cement Hyd Segment
To Customer-With Clearing 100000
Page105

Under the Guidance of Mr. Satyanarayana-2012

General Ledger View

Bank A/c Dr 80000 Profit Center-Steel Hyd Segment

Bank A/c Dr 20000 Profit Center-Cement Hyd Segment
To Sundry Debtors 80000 Profit Center-Steel Hyd Segment
To Sundry Debtors 80000 Profit Center-Cement Hyd Segment

based on earlier transaction i.e. Sales account-it is going to be split-

c. Zero Balance Clearing(Sub Sequent Document Splitting)
Suppose we have posted an Entry

SBI Current A/c Dr 25000 Profit Center-Steel Hyd Segment

To Equity Share Capital 25000 Profit Center-Cement Hyd Segment

Now the both line items profit Centers are different-So Profit Center wise the balances will not match-because
there are no Credit to SBI Current Account and no Debit to Equity share capital-so the balances will not match
Due to Zero Balance Clearing – System Posts Entry

SBI Current A/c Dr 25000 Profit Center-Steel Hyd Segment

Zero Balance Clearing A/c Dr 25000 Profit Center-Cement Hyd Segment

To Equity Share Capital 25000 Profit Center-Cement Hyd Segment

To Zero Balance Clearing 25000 Profit Center-Steel Hyd Segment

Now the profit center wise the balances will match
Customization
1. Creation of GL Masters-FS00
a. Sales-Steel
b. Sales-Cement
c. Zero Balance Clearing Account
GL Account : 300010
Company Code : BIL with template  GL Account : 300000
Co Code: BIL
Change Short & Long Text : Sales-Steel
Select Create/Bank/Interest tab
Field Status Group : G029
----
Select Edit Cost Element button
Valid From : 01.04.2012
Cost Element Category : “11”-Revenues
----
GL Account : 300011
Company Code : BIL with template  GL Account : 300010
Co Code: BIL
Change Short & Long Text : Sales-Cement
----
Select Edit Cost Element button
Valid From : 01.04.2012
Cost Element Category : “11”-Revenues
Page106

----
GL Account : 200170
Company Code : BIL with template  GL Account : 200120

Under the Guidance of Mr. Satyanarayana-2012

 Co Code: BIL
Change Short & Long Text : Zero Balance Clearing
Select Create/Bank/Interest tab
Field Status Group : G067
----
2. Classify GL Accounts for Document Splitting (done already earlier in basic settings)
3. Define Zero Balance Clearing Account
Path : SPROFinancial Accounting (New) General Ledger Accounting (New) Business Transactions
Document SplittingDefine Zero-Balance Clearing Account
Select Account Key “000”
Double Click on Accounts folder
Give Chart of Accounts : BIL
Select New Entries
GL Account
200170
----
4. Define Document Splitting Characteristics for General Ledger Accounting
Path : SPROFinancial Accounting (New) General Ledger Accounting (New) Business Transactions
Document SplittingDefine Document Splitting Characteristics for General Ledger Accounting
Zero Balance
Profit Center 
Segment 
----
different debit and different credit-it matches with zero balance clearing account
5. Activate Document Splitting (already completed)
Path : SPROFinancial Accounting (New) General Ledger Accounting (New) Business Transactions
Document SplittingActivate Document Splitting
End User Area
1. Sales Invoice Posting -F-22
Document Date : Today’s Type : DR Company Code : BIL
Posting Key : 01 Customer Account: 3100101
Give Amount : 100000
Text : Sales Invoice Posting

Posting Key : 50 Account : 300010(Sales-Steel)

Amount : 80000

Text : “+”

Select Rignt  button for Profitability Segment

Give Profit Center : Steel

Select Continue button

Posting key : 50 Account : 300011
Amount : 20000
Text : “+”
Select Right  button for Profitability Segment
Page107

Give Profit Center : Cement

Select Continue button
From Menu bar-DocumentSimulate

Under the Guidance of Mr. Satyanarayana-2012

We can see 3 line items
From Menu bar-DocumentGeneral Ledger
We can see 4 line items
Go back ----
2. Incoming Payment (Passive Documents Splitting)-F-28
Document Date : Todays Type : DZ Company Code : BIL
Clearing Text : Incoming Payment
Bank Account
Account : 200105
Amount : 80000 Profit Center : Steel
Text : Incoming Payment
Open Item Selection
Account : 3100101
Select Process Open Items button
Double Click on Receivable Amount-100000
Select Document Overview button
Posting Key : 40 :Account : 200105
Amount : “*”
Profit Center : Cement
Text : “+”
From Menu bar-DocumentSimulate
when we are clearing it takes from Original line item in 1st step-Sales account
From Menu bar-DocumentSimulate General Ledger (we can see 4 line items)
Go back and ----
3. Zero Balance Clearing Testing (Sub Sequent Document Splitting) : FB01L
Document Date : Today’s Type : SA Company Code : BIL
Posting Key : 40 Account : 200105
Amount : 25000
Profit Center : Steel
Text : Equity Share Capital Receipt
Posting Key : 50 Account: 100000
Amount : “*”
Profit Center : Cement
Text : “+”
DocumentSimulate
We can see 2 line items
DocumentSimulate General Ledger
We can see 4 line items—Go back and ----
Notes
1. Document is entered with a Document Type and Account (GL or vendor account)
2. System Identifies Business Transaction though Document Type
3. From Business Transaction defined in Splitting rule-System identifies the Category of the Transaction
Eg: Expenses/Revenue/Tax on Sales
4. A Transaction Category within Business Transaction of Splitting Rule consists of base item categories-base
item categories refers to Item Categories that are used for Active Splitting.
Page108

Active Splitting Works based on Splitting Rule. We do only Active Splitting but Passive and Sub Sequent
splitting- System does automatically

Under the Guidance of Mr. Satyanarayana-2012

 CAPITAL WORK IN PROGRESS-LINE ITEM SETTLEMENT
Example
Machine Purchase on 01.10.2012 -Debit to Capital Work in Progress

Transportation Charges on 02.10.2012 -Debit to Capital Work in Progress

Commissioning Charges on 16.10.2012 -Debit to Capital Work in Progress

On 16.10.2012 the Machine is commissioned as Machine No-8 in Dept A

Settle Line Item wise from Capital work in Progress to Machine No-8
Steps
1. Define Settlement Profiles
Path : SPROFinancial AccountingAsset AccountingTransactionsCapitalization of Assets under
ConstructionDefine/Assign Settlement Profiles
Double Click on Define Settlement Profile-OKO7
Select Settlement Profile AI-Settlement Assets under Construction
Select Details button
 To be settled in Full
Default Values
Allocation Structure : A1
Default Object Type : FXA (Asset)
Indicators
 %-Settlement
 Equivalence Numbers
 Amount Settlement
Valid Receivers
Fixed Assets : Select-Settlement Required
Other Parameters
Document Type : “AA”-Asset Posting
[Link] Distribution rules : “999”
Residence Time : “12”months
----
Select back arrow 2 times
Double Click on Assign Settlement Profile to Company Code
Select Position button
Give Company Code : BIL
For Company Code BIL assign Settlement profile : “AI”
----in Asset Customization Request
End User Area
1. Creation of Capital work in Progress Asset Master-AS01
Asset Class : BIL4000 (Capital Work in Progress-General)
Company Code : BIL
Page109

General Data
Description : Capital Work in Progress-General
Posting Information
Capitalized on : 01.10.2012
Under the Guidance of Mr. Satyanarayana-2012
Select Time Dependent tab
Cost Center : Dept1
Select Depreciation Areas tab
Depreciation Key
Book Depreciation “0000”No Depreciation & No Interest
----
Note down Asset Number - 500001-0
2. Machinery Purchase Posting-F-90
Document Date : 01.10.2012 Type : KR Company Code : BIL
Posting Date : 01.10.2012
Posting Key : 31 Account: 2000301
Amount : 1000000
Text : Machinery Purchase Posting
Posting Key : “70” Account: 500001-0 Transaction Type: 100
it updates automatically capital work in progress
Amount : “*”
Text : “+”
DocumentSimulate----
3. Transportation Charges Payment-FB01L
Posting Date : 02.10.2012 Type : SA Company Code : BIL
Document Date : 02.10.2012
Posting Key : “70” Account: 500001-0 Transaction Type: 100
Amount : 25000
Text : Transportation Charges Payment
Posting Key : 50 Account: 200105
Amount : “*”
Profit Center : Steel
Text : “+”
DocumentSimulate----
4. Creation of Asset Master-Machine No-8 in Dept A -AS01
Asset Class : BIL2000 (Dept A)
Company Code : BIL
Description : Machine No-8
Capitalized on : Today’s (16.10.2012)
Select Time Dependent tab
Cost Center : Dept A
Select Depreciation Area tab
Dep Key Useful Life Period Ordinary Dep Start Date
Book Depreciation BIL1 15 8 Today’s 16.10.2012
----
Asset Number : 200004-0
today we need to settlement
5. Settlement of Capital work in Progress to Machine No-8
Path : AccountingFinancial AccountingFixed AssetsPostingCapitalize Asset under
ConstructionAIAB-Distribute
Page110

Company Code : BIL

Asset : 500001
Sub Number : “0”
Under the Guidance of Mr. Satyanarayana-2012
--Execute--
We can see 2 line items which need to settle to asset
From Menu Bar- EditSelectSelect All
both items will be selected
Select “Enter” button on top
Category Settlement Receiver “%”
FXA (Asset) 200004-0 (Machine No-8) 100
Select back arrow
----
Select Settlement button-shift+F8
The Asset Number and company code comes automatically
Asset Value Date : Todays 16.10.2012
Additional Specification
Text : CWIP settlement to Asset
Processing Options
 Test Run
 Details List
--Execute—
An FI document will be posted
Select Simulate button

Page111

Under the Guidance of Mr. Satyanarayana-2012

 PRODUCT COSTING
This is used for Valuation of Inventories ie., work in Process and Finished Goods
From PP Module
MM Module
Product Costing
CO Module
FI Module
 SAP Labs- released a book- “Product Costing Made Easy”

When we take Production-

the entries are generated
automatically-based on
Product Cost of the Month

In the Month End we get

Production Valuation at actual Costs-Variance will
Standard Costing be settled to Accounts
(Preliminary Costing) (Simultaneous Costing)

Actual Costing:
We have 2 methods

Make to Stock Make to Order

Produce Against confirmed Sales
Orders)
Product Cost by Period/ Product Cost By Sales Order
Product Cost by Order
(Production Order)
Practically no company will have 100% Sales Order
Most of Implementations they used Product Cost by Order i.e., Production Order
1. Standard Costing (Preliminary Costing)

Sales Planning Production Raw Material Requirement

For next month Planning Planning
(Confirmed Orders +
+ Overheads Planning
Expected Orders) =
Standard Cost of the Product

Cost sheet of BILFG

Raw materials xx 200
Stock Valuation as per AS2-Cost
RM Overhead xx 10 or Market Price whichever is
Production Costs xx 50 lower
Cost of Goods Manufactured (COGM) xx 260 Cost MeansUp to COGM
Level or COGM + Portion of
Admin Exp
Admin Expenses xx
Selling Exp xx
Page112

Cost of Goods Sold (COGS) xx

Under the Guidance of Mr. Satyanarayana-2012

1. How Raw Material Standard Cost will be Arrived At:
In Production Planning Module – Bill of Material (BOM)
BOMto produce BILFG1 what Raw materials are required and how much quantities required
To Produce BILFG1 : BILRM1 - 1 kg
BILRM2 - 1 kg
In Material Management Module-Material Master-Accounting View-Moving Average Price of Rawmaterial
BILRM1 -75 Rs
BILRM2 -125 Rs
Rawmaterial Standard Cost= Quantity in BOM x Rate as per Material master)
(1kg x 75 Rs) + (1kg x 125 Rs) =200

2. How Rawmaterial Overhead Standard Cost will be calculated

Expenses like Freight-when we Receive Rawmaterial we add to Material-when we consume Rawmaterial
Proportion Cost will be taken
Expenses like Loading & Unloading Charges-we directly charge to P&L Account- So, Core Team members will
tell to take 5% of Raw material Cost as Overheads
(Or)
We can take Loading Charges Percentage on Rawmaterial Consumption Value (Based on Last Year)
In above scenario the Rawmaterial Standard cost = 200
200 x 5% =10 Rs
3. How Production Standard Cost will be Arrived At:
In PP Module we have - Work Centers Process Flow
Dept A Dept B Dept C Dept D

To Produce BILFG1 - Process Flow

Dept A Dept B Dept D

Routing (Process Flow)

In Cost Center Accounting we have made planning:
Dept A
Salaries 200000
Wages 400000
Power 120000
720000
Suppose we have – Machines -100 No’s
Working for 3 shifts i.e, -24 hours
No. of Days -30 days
Machine Hours = 100 Machines x 24 hours x 30 days Activity Type
Available = 100 x 24 x 30 = 72000

Machine Hour Rate = 720000 / 72000 = 10 Rs.

Hours required for BILFG1 Production in Dept A =5 hours
Production Cost=
(Hours Required in Dept A x Machine Hour Rate) +
(Hours Required in Dept B x Machine Hour Rate) +
Page113

(Hours Required in Dept D x Machine Hour Rate) = 5 hours x 10 Rs

Under the Guidance of Mr. Satyanarayana-2012

Question
Why cannot we Allocate Overheads based on Production
Production Hours Cost
BILFG1 71999 kgs 1
BILFG2 1kg 71999
72000 72000 720000
If we allocate Overhead based on Production
BILFG1 - 720000 x 71999 / 72000 = 719990
BILFG2 - 720000 x 1 /72000 = 10
720000
If we allocate Overhead based on Hours
Activity based Costing
BILFG1 - 720000 x 1 / 72000 = 10
BILFG2 - 720000 x 71999 72000 = 719990
720000

Customization
CO Consultant Job
1. Creation of Secondary Cost Elements – KA06
a. RM Overhead Rate
b. Activity Allocation
Give Controlling Area : BIL
Cost Element : 1100000
Valid From : 01.04.2012 to 31.12.9999
Names
Name : RM Overhead Rate
Description : RM Overhead Rate
Basic Data
Cost Element Category : “41”-Overhead Rates
RM Overheads, Production Overhead Rates
----
Give Cost Element : 11000001
Valid From : 01.04.2012 to 31.12.9999
Names
Name : Activity Allocation
Description : Activity Allocation
Basic Data
Cost Element Category : “43”-Internal Activity Allocation
2. Creation of Activity Type - Machine Hours - KL01
Activity Type : BIL5
Valid From : 01.04.2012
Name : Machine Hours
Description : Machine Hours
Activity Unit : Hours
Cost Center Cat : “*”
Page114

Activity Type Category : 1

Allocation cost Element : 11000001
Price Indicator : “1”

Under the Guidance of Mr. Satyanarayana-2012

Actual Price Indicator ; “5”
----
3. Creation of 2 Cost Centers - KS01
 For easy understanding purpose we create 2 more
Give Cost Center : Dept G
Reference
Cost Center : Dept A
Controlling Area : BIL
Change Name : Department G
Description : Cost Center Department G
----
Cost Center : Dept H
Reference
Cost Center : Dept A
Controlling Are : BIL
Name : Department H
Description : Cost Center Department H
Cost Center Category : “9” Allocation Cost Center
----
4. Creation of Cost Center Group - KSH1
for labour hour rate Cost Center Group is required so we create a Cost Center Group for only Dept G
Cost Center Group : BILGRPG
Description : Cost Center Group BILGRPG
Insert Cost Center : Department G
----
5. Define Overhead Keys
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadDefine Overhead Keys
Select New Entries
Overhead Key Description
BIL1 (text) BIL Overhead Key
----
6. Define Overhead Groups
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadDefine Overhead Groups
Select New Entris
Valuation Area Overhead Group Overhead Key Name of Overhead Group
BILP (Plant) BIL1 BIL1 BIL Overhead Group
----
Page115

Under the Guidance of Mr. Satyanarayana-2012

Interview Question
Can we have Material wise Separate Overhead Rate?
for giving Overhead Rate-SAP has given 2 scenarios
1st Scenario 2nd Scenario
Overhead Rate at Plant Level Overhead Rate at Material master Level
-At the time of giving Overhead If we want to use 2 Overhead Rates ie., 5% and 6%
Rate we give our Plant and Rate. a) Create Overhead Keys
-BIL1
-BIL2
b) Assign Overhead Keys to Overhead Groups
Plant Overhead Key Overhead Group
BILP BIL1 BIL1
BILP BIL2 BIL2
c) Give Overhead Rate to Overhead Key
Overhead Key Overhead Rate
BIL1 5%
BIL2 6%
d) Assign Overhead Group in Material Master
Material Master Overhead Group
BILFG1 BIL1
BILFG2 BIL2

7. Define Calculation Bases

Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadCosting Sheet: ComponentsDefine Calculation Bases
Select New Entries
Base Name
A1 (text) Rawmaterials
A2 Production Costs
----
Select Base A1
Double Click on Details folder
Give Controlling Area : BIL
Select New Entries
From Cost Element To Cost Element
400000 400099 (Rawmaterial Consumption Range)
----
Select Back arrow 2 times
Select Base A2 (Production Cost)
Double Click on Details folder
Give Controlling Area : BIL
Select New Entries
From Cost Element To Cost Element
Page116

400100 400199 (Personnel Cost)

400200 400299 (Manufacturing Cost)
400500 400599 (Depreciation)
1100001 Activity Allocation
Under the Guidance of Mr. Satyanarayana-2012
In stock valuation we won’t include Interest & Administration Cost
----
8. Define Percentage Overhead Rates
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadCosting Sheet: ComponentsDefine Percentage Overhead Rates
Select New Entries
Overhead Rate Name Dependency
A3 (text) RM Overhead Rate D010
----
if It is Plant Level D020 Overhead Type/Plant
if it is of Material Type D010 Overhead Type/OH Key
Select Overhead Rate A3
Double Click on Details folder
Ignore Message
Select New Entries

Valid From To Controlling Area Overhead Type Overhead Key Percentage

"2" - Planned
01.04.2012 31.03.2013 BIL Overhead Rate BIL1 5
"1"- Actual
01.04.2012 31.03.2013 BIL Overhead Rate BIL1 10

----
9. Define Credits
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadCosting Sheet: ComponentsDefine Credits
Select New Entries
Credit Name
A4 (text) BIL RM Credit Key
----
Select Credit Key A4
Double Click on Details folder
Give Controlling Area : : BIL
Select New Entries

Valid To Cost Element Fixed % Cost Center

31.03.2013 1100000 (RM Overhead Rate) 100 Dept H

----
Page117

Under the Guidance of Mr. Satyanarayana-2012

Note
How Actual Rawmaterial Overhead Rate is calculated?
a. Rawmaterial BILRM1 Receipt

Inventory RM Local Dr 200000

To GR/IR Clearing RM Local 200000
b. Loading and Unloading Charges Paid

Loading and Unloading Charges Dr 400 Cost Center-Dept H

To Bank 400

c. Rawmaterial BILRM2 Receipt

Inventory RM Local Dr 150000
To GR/IR Clearing RM Local 150000
d. Loading and Unloading Charges Paid

Loading and Unloading Charges Dr 600 Cost Center-Dept H

To Bank 600
e. Rawmaterial Issue to Production Order 1

RM Consumption Local Dr (BILRM1) 1000 Production Order 1

RM Consumption Local Dr (BILRM2) 2000 Production Order 2
To Inventory RM Local 1000
To Inventory RM Local 2000
f. Rawmaterial Issue to Production Order 2

RM Consumption Local Dr (BILRM1) 4000 Production Order 1

RM Consumption Local Dr (BILRM2) 3000 Production Order 2
To Inventory RM Local 4000
To Inventory RM Local 3000

In the Month End

The Total RM Consumption -10000
Loading & Unloading Charges -1000
Percentage -10% on RM Consumption
Production Order1 Production Order 2
RM Consumption
BILRM1 1000 4000
BILRM2 2000 3000 3000 7000
RM Overhead Rate
10% 300 700

Cost Center Dept H

Loading & Unloading 400
Loading & Unloading 600
Allocation to Production Order1 300
Allocation to Production Order2 700
1000 1000

Cost Center Dept H Value will be Zero

Page118

Loading & Unloading Charges are Allocated to Production Orders based on RM Consumption Indirectly

Under the Guidance of Mr. Satyanarayana-2012

10. Define Costing Sheet
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingOverheadDefine Costing Sheets
Select New Entries
Costing Sheet Description
BIL BIL Costing Sheet
----
Select Costing Sheet BIL
Double Click on Costing Sheet Rows folder
Select New Entries
Overhead
Row Base Rate Description From To Row Credit
10 A1 Rawmaterials
20 A3 RM Overhead Rate 10 10 A4
30 A2 Production Costs
40 Cost of Goods Manufactured 10 30

----
11. Assign Costing Sheet to Plant
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with
Quantity StructureDefine Costing Variants-OKKN
Select Costing Variant- PPC1 (Standard Cost Estimate for Materials)
Select Details button
Select Valuation Variant button
Select Create button- beside Valuation Variant/Plant
Select New Entries
In Plant : BILP
----
Select back arrow
Select Valuation Variant- 001 with Plant BILP
Select Details button
Select Overhead tab
Costing Sheet - Select - BIL Costing Sheet
Costing Sheet - Select – BIL Costing Sheet
we are assigning BIL Plant for both Costing Sheets
12. Define Cost Component Structure
To get Break up of Product Standard Cost we Use Cost Component Structure
Raw materials xx 200
RM Overhead xx 10
Production Costs xx 50
Cost of Goods Manufactured (COGM) xx 250
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for Material
CostingDefine Cost Component Structure-OKTZ
Select Cost Component Structure -01
Double Click on Cost Components with Attributes folder
Select Cost Component Structure -01- with Cost Component Type- Rawmaterial
Page119

Double Click on Assignment: Cost Component-Cost Element Interval folder

Select New Entries

Under the Guidance of Mr. Satyanarayana-2012

 Cost
Component Chart of From Cost
Structure Accounts Element To Cost Element Cost Component
"010"
01 BIL 400000 400099 (Rawmaterials)

----Ignore 
Double Click on Cost Components with Attributes folder
Select Cost Component Structure-01-With Cost Component -80-Material Overhead
Double Click on Assignment: Cost Component-Cost Element Interval folder
Select New Entries
Cost
Component Chart of
Structure Accounts From Cost Element To Cost Element Cost Component
1100000 (Raw material Overhead 080 (Material
01 BIL Rate) Overhead)

----
Double Click on Cost Components with Attributes folder
Select Cost Component Structure -01- with Cost Component-50-Production Machine
Double Click on Assignment: Cost Component-Cost Element Interval folder
Select New Entries

Cost
Component Chart of From Cost To Cost
Structure Accounts Element Element Cost Component
050-Production
01 BIL 400100 400299 Machine
050-Production
01 BIL 400500 400599 Machine
01 BIL 1100001 (Activity Allocation) 50

----
Double Click on Assignment: Organizational Units-Cost Component Structure

Cost Component
Cost Component Structure
Company Code Plant Structure (Auxiliary CCS)
++++ ++++ 01 Remove 02

Double Click on Cost Component Structure folder

Active
Select Cost Component Structure -01 
----
PP Consultant Job
1. Define MRP Controller
Person Responsible for Material Requirement Planning
Path : SPROProductionMaterial Requirements PlanningMaster DataDefine MRP Controllers
Select New Entries
Plant : BILP
MRP Controller: A - MR A
Page120

----

Under the Guidance of Mr. Satyanarayana-2012

2. Define Floats
Floats means Buffer Days
Buffer days
Production Order Creation - 20.10.2012 -2 days - 22.10.2012
Release - 21.10.2012 -2 days - 23.10.2012
Production Start Date - 22.10.2012 - 2 days - 24.10.2012
End Date - 26.10.2012 - 2 days - 28.10.2012
End Date means-when the Production will be completed-it may complete or may not complete on that particular
date- so we take 2 days of Buffer days
Path : SPROProductionMaterial Requirements PlanningPlanningScheduling and Capacity Parameters
Define Floats (Scheduling Margin Key)
Select New Entries
Opening Float Float Release
Plant Margin Period Before After Period
BILP BIL 2 2 2 2

3. Define Production Scheduler Person who Plans for Production

Path : SPROProductionShop Floor ControlMaster DataDefine Production Scheduler
Select New Entries
Plant Production Sheduler Description
BILP B MR B
----
4. Determine Person Responsible for Work Center
Path : SPROProductionBasic DataWork CenterGeneral DataDetermine Person Responsible
Select New Entries
Plant Person Responsible Person Responsible for Work Center
BILP C MR C
----
CO End User Area
1. Planning Cost Center wise-KP06
Version : “0”
From Period : “7”
To Period : “7”
Fiscal Year : 2012
Cost Center : Dept G
Cost Element : 400100
 Form-Based
Select Overview Screen button
Plant Fixed Costs
720000 (total cost)
----
2. Planning for Machine Hours-KP26
Version : “0”
From Period : “7”
To Period : “7”
Page121

Fiscal Year : 2012

Cost Center : Dept G
Activity Type : BIL5 (Machine Hours)
 Form-Based
Under the Guidance of Mr. Satyanarayana-2012
Select Overview Screen button
Plan Activity
72000 (hours)
----
3. Plan Machine Hour Rate Calculation-KSPI
 Cost Center Group - BILGRPG
Version“ 0
Period : 7 to 7
Test Run
 Details List
--Execute--
If the data is ok
----
MM End User Area
1. Creation of 2 Material Master -MM01
BILRM2 - For Raw Materials
BILFG2 - For Finished Goods
Give Material : BILRM2
Industry Sector : Mechanical Engineer
Material Type : Rawmaterial
Press Select Views button
Select - Basic Data1
-Purchasing
-General Plant Data/ Storage1
-Accounting1
-Costing1
Select Organizational Levels button
Organization Levels
Plant : BILP
Storage Location : HYD
Material Description : Rawmaterial 2
General Data
Base Unit of Measure : KG Material Group : BILC
Division : BD
Select Purchasing tab
General Data
Purchasing Group : BIL
Select Accounting1 tab
Current Valuation
Valuation Class : BIL1
Price Control : “V”-Moving Average Price
Moving Price : 125
Select Costing1 tab
General Data
 Material Origin
Page122

Profit Center : Steel

------

Under the Guidance of Mr. Satyanarayana-2012

Creation of Finished Goods
Material : BILFG1
Industry Sector : Mechanical Engineer
Material Type : Finished Product
Press Select Views button
Select -Basic Data1
-MRP1
-MRP2
-MRP3
-Work Scheduling
-General Plant Data/Storage1
-Accounting1
-Costing1
Select Organizational Levels button
Organizational Levels
Plant : BILP
Storage Location: HYD
Material Description : Finished Product1
General Data
Base Unit of Measure : KG
Division : BD
Select MRP1 tab
MRP Procedure
MRP Type : ‘PD’-MRP
MRP Controller : Select “A” (created already)
Lot Size Data
Lot Size : “EX”-Lot-for-Lot Order Quantity
Select MRP2 tab
Scheduling
In-House Production : “0” days – today we take rawmaterial and start production
Scheduled Margin Key : BIL (Created already)
Select MRP3 tab
Ignore Mess
Availability Check
Availability Check : KP-No Check
Select Work Scheduling tab
General Data
Production Scheduler : Select –B-MR B
Select Accounting1 tab
Current Valuation
Valuation Class : BIL2 (Finished Goods)
Price Control : “S”-Standard Price
Standard Price : “220” (Once we run Product Costing this price will be applicable)
Select Costing1 tab
General Data
Material Origin
Page123

Overhead Group : BIL1 (created already-5% will be Plan cost 10% will be
Profit Center : Steel
----

Under the Guidance of Mr. Satyanarayana-2012

PP End User Area
1. Creation of Bill of Material (BOM)
Path: LogisticsProductionMaster DataBills of MaterialBill of MaterialMaterial BOMCS01-Create
Material : BILFG1
Plant : BILP
BOM Usage : “1”-Production
to product BILFG what stock is required
Item Component Kg
0010 BILRM1 1
0020 BILRM2 1

2. Creation of Work Center

Path: LogisticsProductionMaster DataWork CentersWork CenterCR01-Create
Plant : BILP
Work Center : Dept G
Basic Data
Work Center Category : “0001”-Machine
Work Center –Dept G- Description : Work Center Dept G
General Data
Person Responsable : “C’MR C
Usage : “009” All Task list Types
Standard Value Key
Standard Value Key : SAP1-Normal Production
Select Costing tab
Validity
Start Date : 01.04.2012
Link Btw Cost Center
Cost Center : Dept G
Activities Overview
Activity Type Activity Unit Formula Key
Machine BIL5 H SAP002- Prod: Machine Type

----
3. Creation of Routing
Path: LogisticsProductionMaster DataRoutingsRoutingsStandard RoutingsCA01-Create
Material : BILFG1
Plant : BILP
General Data
Usage : “1”-Production
Status : “4”-Released (General)
Select Operations button
Process flow-first operation in which work center

Operation Work Center Control Key

0010 Dept G "PP01"Inhouse Production

Page124

Double Click on Operation Tab “0010”

Under the Guidance of Mr. Satyanarayana-2012

 Standard Value Unit
Machine 5 (hours) H
----
CO End User Area
1. Creation of Cost Estimate with Quantity Structure
Path : AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial CostingCost
Estimate with Quantity StructureCK11N-Create
Give Material : BILFG1
Plant : BILP
Costing Data
Costing Variant : “PPC1”-Standard Cost Estimate for Materials
in live we give costing date from next month
in training institutes we give from today’s date
Costing Date From : Today’s
Quantity Structure Date : Today’s
Valuation Date : Today’s
We can see the total Cost
From Menu bar-CostDisplay Cost Components
We can see Cost Component Structure wise
----Ignore Mess
Note
BOM Price From
Material Kgs Price Total
BILRM1 1 75 75
BILRM2 1 125 125
200
RM
Overhead 5% 10

Production Cost
Activity Price Routing
10 5hrs 50
Total Cost - 260

2. Marking and Releasing

In Live Environment we Create the Estimate and Store in the System for Next Month-It is called Marking-Marking
Updates Future Price
On 1st of Next Month-we do releasing-Price will be effective from 1st of Next Month-Releasing updates current
Price.
In training Institutes we do Marking and Releasing for the same month.
Path : AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial Costing
CK-24-Price Update
Posting Period : 7 2012
Company Code : BIL
Plant : BILP
Material : BILFG1
Processing Options
Page125

 Test Run
 With List Output
Select Marking Allowance button
Under the Guidance of Mr. Satyanarayana-2012
Select Company Code-BIL-CLICK ON IT
Costing Variant : Select - PPC1-Standard Cost Estimate for Materials
----
Select back arrow
Processing Options
 Test Run
 With List Output
--Execute--
We can see the future price
Select (Click) Material BILFG1
It shows Material Master
Select Costing 2 tab
we can see for future price
Select back arrow 2 times
Select Release button
---Execute---
Select Material BILFG1 (click)
We can see the Standard Price- 260 ( In Accounting1)
Select Costing 2 tab
Now we can see the Standard Price-260 for current month
Stage 2
Actual Costing (Simultaneous Costing)
CO Consultant Job
1. Assign Costing Sheet to Plan Order and Actual Order
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Manufacturing OrdersCheck Costing Variants for Manufacturing Orders (PP)
Select Costing Variant-PPP1-Production Order-Plan
Select Details button
Select Valuation Variant button
Select Create button (beside Valuation Variant/Plant)
Select New Entries
In Plant : BILP
----
Select back arrow
Select Valuation Variant -006-with Plant-BILP
Select Details button
Select Overhead tab
Costing Sheet : Select- BIL Costing Sheet
----
for Plan Order we give our Costing Sheet
Select back arrow
Select Costing Variant-PPP2-Production Order-Actual
Select Details button
Select Valuation Variant button
Page126

Select Create button (beside Valuation Variant/Plant)

Select New Entries
In Plant : BILP
----
Under the Guidance of Mr. Satyanarayana-2012
Select back arrow
Select Valuation Variant -007-with Plant-BILP
Select Details button
Select Overhead tab
Costing Sheet : Select- BIL Costing Sheet
----
2. Define Goods issue Valuation for Order Delivery
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Manufacturing OrdersCheck Costing Variants for Manufacturing Orders (PP)
Select New Entries
Valuation Area Valuation Variant
BILP 007 (Production Order Actual)
----
3. Work in Process Customization
Profit & Loss A/c
RM Consumption 250000
Loading & Unloading Charges 25000

Salaries 160000 Inc/Dec in Stock-FG 260000

(1000 kgs x 260)
435000 260000

here our P&L account will not match because the still production is going on which means work in process
Work in Process = P&L Debits- Production value received
435000-260000 = 175000
Entry
Work in Process Dr 175000 Balance sheet
To Inc/Dec in WIP 175000 P&L Account
Now the P&L account and Balance sheet will mathc
Customization
a. Creation of 2 GL Masters-FS00
GL Account : 200123
Company Code : BIL with template GL Account : 200121 (Inventory RM Local)
Change Text : Work in Process
----
GL Account : 300201
Company Code : BIL with template GL Account : 300200 (Inc/Dec Stocks FG)
Change Text : Inc/Dec in Stock WIP
----
b. Creation of 7 Secondary Cost Elements -KA06
Cost Element : 1200000
Name & Des : Order/Project Result Analysis
Basic Data
Cost Element Category : “31”-Order/Project Result Analysis
----
 “31” is used for work in Process Calculation
Page127

Same way create 6 more cost elements upto 1200001-1200006

everyting is same
c. Define Results Analysis Keys
Under the Guidance of Mr. Satyanarayana-2012
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Results Analysis Keys
Note down the Result Analysis Key – FERT (WIP Calculation for Production Orders)
d. Define Results Analysis Versions
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Results Analysis Versions
Select New Entries
Select Controlling Area-BIL
Technical Results Analysis Cost Element : 1200000
----
e. Define Valuation Method (Actual Costs)
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Valuation Method (Actual Costs)
Select New Entries
POP up comes-Which method should be used to Valuate WIP
Select Actual Costs button
Give Controlling Area : BIL
RA Version : “0”
RA Key : “FERT”
----
f. Define Line ID’s
to get break up of Work in Process we use Line Id’s
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Line ID’s
Line ID’s
Select 1000- EL - Revenues
1000-EL -Direct Costs
1000-FK -Production Costs
1000-ABR -Settled Costs
1000-EK -Direct Costs
Select Copy As button
Change Controlling Area-BIL for All Line ID’s
----
g. Define Assignment
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Assignment
In this we cannot give the Intervals so we go as below format
For Line ID EL i.e., Revenues 300000-399999 Assign 00003+++++
For Line ID EK i.e., Direct Costs 400000-400099 Assign 00004000++
For Line ID GK i.e., Overhead 1100000 Assign 0001100000
For Line ID FK i.e., Production Costs
Personnel Cost 400100-400199 Assign 00004001++
Manufacturing 400200-400299 Assign 00004002++
Depreciation 400500-400599 Assign 00004005++
Activity Allocation 1100001 Assign 0001100001
For Line ID ABR i.e., Settled Costs 1000001 Assign 0001000001
Page128

Under the Guidance of Mr. Satyanarayana-2012

Select Line ID - EL-Revenues for Controlling Area-1000
Select Copy As button
Change Controlling Area : BIL
Masked Cost Element : 00003+++++ (5 times +) 
Select Line ID - EK-Direct Cost for Controlling Area-1000
Select Copy As button
Change Controlling Area : BIL
Masked Cost Element : 00004000++ 
Select Line ID - GK-Overhead for Controlling Area-1000
Select Copy As button
Change Controlling Area : BIL
Masked Cost Element : 0001100000
Select Line ID - FK-Production Costs for Controlling Area-1000
Select Copy As button
Change Controlling Area : BIL
Masked Cost Element : 00004001++
Select Line ID - FK-Production Costs for Controlling Area-BIL
Select Copy As button
Masked Cost Element : 00004002++
Select 2 Line ID’s - FK-Production Costs for Controlling Area-BIL
Select Copy As button
1st Masked Cost Element : 00004005++
2nd Masked Cost Element : 0001100001
Select Line ID - ABR-Settled Costs for Controlling Area-1000
Select Copy As button
Change Controlling Area : BIL
Masked Cost Element : 0001000001
----
h. Define Update
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Update
Select New Entries
Controlling Results
Area Version Analysis Key Line ID Category
"N"-Costs Not to be
BIL 0 FERT EL-Revenues Included
EK-Direct
BIL 0 FERT Cost "K"-Costs 1200001 WIP
1200002 Reserves
BIL 0 FERT GK-Overhead "K"-Costs 1200003 WIP
1200004 Reserves
BIL 0 FERT FK-Prod Cost "K"-Costs 1200005 WIP
1200006 Reserves
ABR-Settled
BIL 0 FERT Costs "A"-Settled Costs

----
Page129

Under the Guidance of Mr. Satyanarayana-2012

i. Define Posting Rules for Settling Work in Process
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Update
Select New Entries
Results Balance
Controlling Company Analysis P&L Sheet
Area Code Version Results Analysis Category Account Account
WIPR-Work in Process with Requirement of
BIL BIL 0 Capitalized 300201 200123

----
g. Define Results Analysis Versions
again we have to do this step
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingWork in ProcessDefine Update
Select Controlling Area : BIL
Select Details button
 Transfer to Financial Accounting
----
Notes
Dept A Dept B
RM Consumption RM consumption to the Production Order
Overheads Incurred Overheads Debited to Cost Centers
Salaries Debited to Cost Centers
Salaries
Values in the Departments- Take as Work in Process- Take at Actual Costs-Created Line ID’s to get the breakup of
work in process
Values in the Department by using Secondary Cost Elements Transfer of Financial Accounting by Debiting Balance
Sheet 200123 and Crediting to P&L 300201
4. Variances Customization
a) Define Variance Keys
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingVariance CalculationDefine Variance Keys
Select Variance Key-000001-Production Order
Select Copy As button
Change Variance Key Name - BIL1 - Variance Key for BIL
----
b) Define Default Variance Keys for Plants
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingVariance CalculationDefine Default Variance Keys for Plants
Select Position button
Give Plant : BILP
For Plant BILP : Assign Variance Key- BIL1
----
c) Define Target Cost Versions
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingVariance CalculationDefine Target Cost Versions
Select Controlling Area-1000-Target Cost Version-0
Select Copy As button
Page130

Change Controlling Area - BIL - Target Cost Version for BIL

----

Under the Guidance of Mr. Satyanarayana-2012

Plan Cost  Plan Production - 100 kgs
RM Required - 2 kgs for 1kg of FG
RM Price -100 Rs
200 kgs x 100 Rs = 20000
Actual Cost  Actual Production -1kg
RM Used - 3kgs for 1kg of FG
RM Price - 150 Rs
3kgs x 150 Rs = 450
Target Cost  Plan Cost for Actual Production - 1kg Actual Cost &
Target Cost is
RM Required for Actual Production-2kgs
Comparable
RM Price - 100 Rs
2kgs x 100 Rs = 200
d) Assign Variance Key in Material Master-MM02
Give Material - BILFG1
Select Plant Stock view
Give Plant : BILP
Select Costing1 tab
General Data
Variance Key - Select – BIL1
----
5. Settlement Customization

a) Creation of Cost Element Group-KAH1

Give Group Name : BILALL
BILALL - Production Cost for BIL
Select Insert Cost Element button
400000 -400099 (Rawmaterial Cost)
400100 -400299 (Personnel Cost & Manufacturing Cost)
400500 -400599 (Depreciation)
1100000-1100001 (RM Overhead & Activity Allocation)
----
b) Create PA-Transfer Structure (Profitability Analysis)
SD Condition Types - COPA
PR00-Price -VV601-Revenues
VPRS-Cost -VV605-COGS
Actual Revenues -500
Standard Cost (from Material Master) 260
+/- Variance 50
Actual Cost 310
Actual Profit
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingSettlementCreate PA Transfer Structure-KEI1
Select Structure - E1-PA Settlement, Production Variances
Double Click on Assignment Lines folder
Page131

Select Assignement-20-Price Variance

Double Click on Source folder
Cost Element
Cost Element Group - BILALL
Under the Guidance of Mr. Satyanarayana-2012
 Variances on Production Orders
Variance Category - PRIV (Input Price Variance)
Double Click on Value Fields folder
Select New Entries button
Quantity/Value Fixed/Variable Value Field
Value Field “1”Fixed Amounts- VV605 – Cost of Good Sold
what ever variance amount add to COGS
Double Click on Assignment Lines folder
Select Assignment-30-Quantity Variances Material
Double Click on Source Folder
Cost Element
Group : BILALL
Source
 Variances on Production Orders
Variance Category - QTYV- Input Quantity Variance
Double click on Value Fields folder
Select New Entries button
Quantity/Value Fixed/Variable Value Field
Value Field “3”Sum of Fixed and Variable Amounts VV605 – Cost of Goods Sold
Price Variance or Quantity Variance = it has to add to COGS
Double Click on Assignment Lines folder
Select Assignment – 50- Input Variance
Double Click on Source folder
Cost Element
Group - BILALL
Source
 Variances on Production Orders
Variance Category : INPV- Remaining Input Variance
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field “1”Fixed Amounts- VV605 – Cost of Goods Sold
 Price Variance/Quantity Variance/Balance Variance- Add to COGS
c) Create Settlement Profile
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingSettlementCreate Settlement Profile
Select Settlement Profile-PP01 Production Order
Select Details button
Actual / Cost / Cost of Sales
 To be Settled in Full
Default Values
Allocation Structure : A1
PA Transfer Structure : E1
Indicators
 % Settlement
Page132

 Equivalence Numbers
 Amount Settlement
 Variances to Costing-Based PA (Variances settle to COPA)
Under the Guidance of Mr. Satyanarayana-2012
----
6. Maintain Versions
Path : SPROControllingGeneral ControllingOrganizationMaintain Versions
Select Version-“0”
Double Click on Settings for Each Fiscal Year folder 
Select Year-2012
Select Details button
Currency Translation
Exchange Rate Type : M-Average Rate
Select Price Calculation tab
Ignore mess
Plan
Method : Periodic Price
Actual
Methods : Periodic Price
Revaluation : Original Business Transaction
Cost Component Structure : “01”-Product Costing
----Ignore 
Every Month the activity price changes and actual price changes monthly
Revalue in the month end (the variance)
7. Define CO Number Range Interval for Business Transaction- KANK
KSII-Actual Price Calculation
KZPI-Actual Overhead (Periodic)
Give Controlling Area : BIL
Select Maintain Groups button
Double click on KSII & KZPI
 CO Number Ranges for BIL
From Menu bar-EditAssign Element Group
----Ignore
FI Consultant Job
1. To Take BILRM2-Rawmaterial-2 Receipt
We have 2 methods how we receipt the Rawmaterials

Purchase Order By Way of Opening Stocks

Goods Receipt Entry

Inventory RM Local Dr -Current Assets
To Stock taking -Current Liabilities
Invoice Verification
2. Production Order Differences to Settle to Accounts and COPA
Entry
Production Order Differences Dr - Manufacturing Cost
To Inc/Dec in Stocks FG -
Steps
Page133

a. Creation of GL Masters-FS00
GL Account : 100599 with template  GL Account: 100505 (VAT Payable)
Change Short Text & Long Text: Stock Taking
Select Create/Bank/Interest tab
Under the Guidance of Mr. Satyanarayana-2012
Field Status Group : G049
----
GL Account : 400201 with template  GL Account: 400200 (Conversion Charges)
Change Short Text & Long Text: Production Order Differences
Select Create/Bank/Interest tab
Field Status Group : G014 (MM Adjustment Accounts)
----
GL Account: 300200 (Inc/Dec of Stocks FG)
Select Edit Cost Element button
Valid from: 01.04.2012
Cost Element Category : “22”External Settlement
Production order variance is going to settle to FI
b. Assignment of Accounts for Automatic Postings-OBYC
Double Click on Transaction-PRD –Cost (price) Differences (Price/Production order differences)
Give Chart of Accounts : BIL
Select  Valuation Modifier
 Valuation Class
----
Valuation Modifier Valuation Class Account
X BIL2 (Finished Goods) 400201
----
Production order diff has to go to 400201 account
Select back arrow
Double click on Transaction-GBB-Offsetting Entry for Inventory Posting
Valuation Modifier General Modification Valuation Class Account
X AUA BIL2 300200
X BSA (Opening Stocks Taking) BIL1 100599 (Stock Taking)
----
PP Consultant Job
1. Define Order Types
Path : SPROProductionShop Floor ControlMaster DataOrderDefine Order Types-OBJH
Select Type-PP01-Standard Production Order
Select Details button
Cost Controlling
Settlement Profile : PP01 (Production Order)
We just check
----
2. Define Order Type Dependent Parameters
Path : SPROProductionShop Floor ControlMaster DataOrderDefine Order Type-Dependent
Parameters-OPL8
Select Plant-1000-Order Type-PP01
Select Copy As button
Change Plant to BILP
----Ignore
Page134

3. Define Confirmation Parameters

Path : SPROProductionShop Floor ControlOperationsConfirmationDefine Confirmation
Parameters-OPK4
Select Plant-1000-Order Type-PP01
Under the Guidance of Mr. Satyanarayana-2012
Select Copy As button
Change the Plant - BILP
----
4. Define Scheduling Parameters
Path : SPROProductionShop Floor ControlOperationsSchedulingDefine Scheduling Parameters for
Production Order-OBU3
Select Plant-1000-Order Type-PP01
Select Copy As button
Change Plant : BILP
----
5. Define Checking Control
Path: SPROProductionShop Floor ControlOperationsAvailability CheckDefine Checking Control-
OBJK
Select Business Function-1,2-for Type PP01-For Plant-1000
Select Copy As button
Change Plant : BILP
[Link] Availability during Order Creation-No Check is required at Order Control
 2. Order release time also no Check is required
----
End User Area
1. Creation of Production Order - PP End User
Path : LogisticsProductionShop Floor ControlOrderCreateCO01-With Material
Material : BILFG1
Production Plant: BILP
Planning Plant : BILP
Order Type : “PP01”-Standard Production Order
Quantities
Total Quantity : 100 -KG
Dates
Finished : Today’s
Start : Today’s
Select Cost Order button (Ctrl+F7) at top
From Menu bar-Go toCostsAnalysis
we get total Plan Cost for 100 kgs
Production cost, Plan Order cost
 Once we complete – the actual cost will come
Select back arrow
Select Release Order button (Ctrl+F1) at top
----
Order Number-60003285
2. Rawmaterial-2 Receipt by way of Opening Stock -MM End User
Path : LogisticsMaterials ManagementInventory ManagementGoods MovementGoods Receipt
MB1C-Other
Movement type : 561 (Goods Entry of Stock Balances)
Plant : BILP
Page135

Storage Location: HYD

Material Quantity
BILRM2 800 ----

Under the Guidance of Mr. Satyanarayana-2012

Document will be posted
From Menu bar- Other Goods ReceiptsDisplay
Press
Select Accounting Documents button
Entry
200121 -Inventory RM Local -100000 - BILRM2 - BIL1-BSX
100599 -Stock Taking -100000 - BILRM2 - BIL1- GBB BSA
Quantity Taken Over x Material Master Price
800 x 125 Rs = 100000

3. Rawmaterial Consumption to Production Order –MM End User-MB1A

RM Issue to Production Order
Select To Order button
Order Storage Location
Pdtn Order No: 60003285 HYD
It automatically proposes the quantity required for Production Order
For BILRM1 change quantity to 110 kgs
For BILRM2 change quantity to 110 kgs
(Planned 100 kgs-and actual 110 kgs)
We can see movement Type -261 (GL for Order)
----
From Menu bar-Good IssueDisplay
Select Accounting Documents button
Select Accounting Document Number
Entry
200121 - Inventory RM Local - 8250- BILRM1 -BIL1 -BSX
400000 - RM Consumption Local - 8250 BILRM1 -BIL1 -GBB VBR
(Quantity Consumed x Moving Avg Price)
110 kgs x 75 Rs) = 8250
200121 - Inventory RM Local - 13750- BILRM2 -BIL1 -BSX
400000 - RM Consumption Local - 13750 BILRM2 -BIL1 -GBB VBR
(Quantity Consumed x Moving Avg Price)
(110 kgs x 125 Rs) = 8250

4. Actual Overhead Calculation - CO End User Area

RM Consumption Actual (8250+13750) = 22000
RM Overhead Rate Actual 10% = 2200
Only CO Entry
Debit to Production Order -2200
Credit to Cost Center Dept H -2200
when we have paid loading & unloading charges- we have debited to Dept H-Now we are crediting to Dept H-so
Dept H will be zero
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by
OrderPeriod-End-ClosingSingle FunctionsOverheadKG12-Individual Processing
Give Order - 60003285
Page136

Parameters
Period :7
Fiscal Year : 2012
Under the Guidance of Mr. Satyanarayana-2012
Processing Options
 Test Run
 Dialog Display
--Execute--
We can see the RM overhead calculated
Select back arrow
 Test Run
--Execute—
we can see 2200 is credited to Dept H
5. Work in Process Calculation-CO End User Job
RM Consumption Actual (8250+13750) = 22000
RM Overhead Rate Actual 10% = 2200
Work in Process 24200
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by
OrderPeriod-End-ClosingSingle FunctionsWork in ProcessIndividual Processing
KKAX-Calculate
Give Order : 60003285
Parameters
WIP to Period : 7
Fiscal Year : 2012
 RA Version : “0”
Processing Options
 Test Run
 Log Information Messages
--Execute—
We can see WIP -24200
If data is ok – select back arrow
 Test Run
--Execute—
6. To get the breakup of Work in Process -CO End User
TC- CO03- order Display
Give Order Number : 60003285
From Menu bar-Go toCostsAnalysis
Press Select Layout button
Select 1SAP03-Work in Process layout
7. Settlement of Work in Process to Accounts - CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by
OrderPeriod-End-ClosingSingle FunctionsSettlementKO88-Individual Processing
Give Order : 60003285
Parameters
Settlement Period : “7”
Fiscal Year : 2012
Processing type : Automatic
Processing Options
 Test run
Page137

 Check Transaction Data

--Execute—
Select Detail List button

Under the Guidance of Mr. Satyanarayana-2012

Select Accounting Documents button
Double Click on Accounting Document number
Entry
300201 - Inc/Dec in Stock WIP 24200- P&L Credit
200124 - Work in Process 24200 Balance Sheet Debit
8. Confirmation of Production Order - PP End User
Path : LogisticsProductionShop Floor ControlConfirmationEnterFor Operation
CO11N-Time Ticket
Order : 60003285
Operation/Activity : “010” In first Dept
Confirmation Type : Final Confirmation
Select Proposes Quantity -100
Machine hours -500 hours
But actual is different
So give Machine Hours -550 hours
----
9. Production Receipt against Production Order - PP End User
Path : LogisticsProductionShop Floor ControlGoods MovementsMB31-Goods Receipt
Document Date : 31.10.2012 Posting Date : 31.10.2012
Defaults for Document Items
Movement Type : 101
Order : 60003285
Plant : BILP
Storage Location : HYD Ignore that date is future
system proposes 100 quantities
----
From Menu bar-Goods ReceiptDisplay
Select Accounting Documents button
Double Click on Accounting Documents number
Entry
200122 - Inventory FG 26000 -BILFG1 -BIL2-BSX
300200 - Inc/Dec in Stocks FG 26000- -BILFG1 -BIL2-GBB AUF
(Quantity Produced x Standard Cost)
100 kgs x 260 = 26000
GBB AUF-Goods Receipt against Production Order
10. Salary Provision in the Month End - FB01L- FI End User
Document Date : 31.10.2012 Type : SA Company Code : BIL
Posting Date : 31.10.2012 Currency : INR
Posting Key : 40 Account: 400100 Ignore about date
Amount : 8250
Cost Center : Dept G
Text : Salary Provision
Posting Key : 50 Account: 100500
Amount : “*”
Page138

Profit Center : Steel

Text : “+”
DocumentSimulate--

Under the Guidance of Mr. Satyanarayana-2012

11. Actual Machine Hour Rate Calculation - CO End User
Actual Salaries 8250
Actual Machine Hours 550
Actual Machine Hour Rate : 8250/550 = 15
Path : AccountingControllingCost Center AccountingPeriod-End-ClosingSingle FunctionsPrice
CalculationKSII-Price Calculation
 Cost Center Group : BILGRPG
Parameters
Period : “7”
Fiscal Year : 2012
 Test Run
 Detail List
--Execute—
We can see 15 Rs
----Ignore
12. Revaluation of Production Order with Actual Activity Price Difference -CO End User
Planned-550 hours 10 Rs - Plan Price - 550
Actual -550 hours 15 Rs - Actual Price -8250
2750
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingSingle FunctionsRevaluation at Actual PricesMFN1-Individual Processing
Give Order : 60003285
Parameters
Period :7
Fiscal Year : 2012
Processing Options
 Test Run
 Detail Lists
--Execute—
Select Next List Level button
we can see that the Production Order is debited with 2750-Extra
13. To Make Production Order Technically Completed (TECO) - Close Production Order – CO02
-PP End User
Give Order Number : 60003285
 we can see that the quantity is coming in Changeable mode
To close order
From Menu bar - FunctionsRestrict ProcessingTechnically Complete
now order is closed we cannot change
We can see the status- TECO
----
15. Calculate variances - CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period-End ClosingSingle FunctionsVariancesKKS2-Individual Processing
Give order ; 60003285
Period :7
Page139

Fiscal Year : 2012

 All Target Cost Versions

Under the Guidance of Mr. Satyanarayana-2012

Process Options
 Test Run
 Detail List
--Execute—
 we can see target cost 26000 - Actual Cost
Double Click on Variance Amount 6450
We can see the variances of diff places
Open one more session with Order Display - CO03
Give Order Number : 60003285
From Menu bar- Go To CostsAnalysis
Press Select Layout button
Select Layout-1SAP02-Cost Trend
Note
In Material Master we have selected  Material Origin- Each Material wise we can see the Variances
15. Settlement of Variances to Accounts and COPA - CO End user
In October we have take Work in Process and Finished Goods also- we cannot take both
a. Calculate Work in Process once again KKAX- then the Work in Process will be zero
b. Settlement of Work in Process Variances to accounts and COPA -KO88
Entry
200123 Work in Process 24200 - Balance Sheet Credit
300201 Inc/Dec in Work in Process 24200 - P&L A/c Debit

400201 Production Order Difference Dr 6450 -BILFG1 - BIL2-PRD

300200 Inc/Dec in Stocks FG 6450 -BILFG1 -BIL2-GBB AUA
Steps
a. Calculate Work in Process once again –KKAX
Give Order Number - 60003285
Parameters
WIP to Period : “7
Fiscal Year : 2012
 RA Version : “0”
Processing Options
 Test Run
 Log Information Messages
--Execute—
We can see work in process is zero
because when we take production the work in process should be zero
b. Settlement of work in process and variances to accounts and COPA - KO88
Give Order : 60003285
Parameters
Settlement Period :7
Fiscal Year : 2012
Processing Type : Automatic
Processing Options
Page140

 Test Run
 Check Transaction Data
--Execute—

Under the Guidance of Mr. Satyanarayana-2012

 Select Details Lists button
Select Accounting Documents button
We can see COPA & Accounting Document is generated
Select Accounting Document Number
Note
We are crediting to P&L Account and Debiting to P&L Account- Production Order Differences- To the extent of
Finished Goods available Debit to Balance Sheet-
For Debiting to Balance Sheet - we need to Activate- Material Ledger
MM/PP/SD/ENTRIES FI ENTRIES CO ENTRIES
1. Rawmaterial Receipt Inventory RM Local Dr No CO Entry
To GR/IR Clearing RM Local
2. Invoice Verification GR/IR Clearing RM Local Dr No CO Entry
To Vendor A/c
3. Rawmaterial issue RM Consumption Local Dr Debit to Production Order
to Production Order (MB1A) To Inventory RM
4. Actual Overhead No FI Entry Debit to Production Order
Calculation (KG12) Credit to Cost Center
5. Work In Process No FI Entry No CO Entry
Calculation (KKAX)
6. Settlement of Work WIP Dr-Balance Sheet No CO Entry
in Process to Accounts (K088) To Inc/Dec in WIP- P&L A/c
7. Confirmation of Production No FI Entry Debit to Production Order
Order (CO11N) Credit to Cost Center (At Plan Activity Price)
8. Production Receipt Inventory FG-Balance Sheet-Debit Credit to Production Order
To Inc/Dec in FG- P&L Credit
9. Actual Activity Price No FI Entry No CO Entry
Calculation (KSII)
10. Revaluation of Production Order No FI Entry Debit to Production Order
Credit to Cost Center (At Difference of Actual - Plan
with Activity Price (MFN1) Activity Price)
11. Variances Calculation (KKS2) No FI Entry No CO Entry

12. Settlement of Variances

to Accounts (KO88)
a. For WIP Inc/Dec in WIP - P&L Dr No CO Entry
To WIP- Balance Sheet
b. For Variances Pdtn Order Diff Dr No CO Entry
To Inc/Dec in FG- P&L
13. Delivery (VF01) Inc/Dec in Stock-FG Dr No CO Entry
To Inventory FG
14. Sales Billing (VF01) Customer A/c Dr No CO Entry
To Sales
Page141

Under the Guidance of Mr. Satyanarayana-2012

 Make to Stock

Product Cost by Order Product Cost by Period

(Discrete Manufacturing) (Repetitive Manufacturing)
a. Production in Individual Production Orders a. Production with certain quantities Per Period
(Order based Production) (Period based Production)
b. Product Changes Frequently b. Product unchanged over a long time
c. Varying Sequence of Work Centers (Complex c. Steady Flow through Production (Simple
Routing) Routing)
d. Order based Controlling (Cost Control) d. Period based Controlling (Cost Control)
e. Here we use Production Orders e. Here we use Product Cost Collectors
Eg: Tools Manufacturing (Different Sizes of Eg: Cement, Sugar (Constant Pdtn for long period)
Tools based on the Orders)

Main Differences between Product Cost by Order & Product Cost by Period
Product Cost by Order Product Cost by Period
a. Costing at Job/bath Level a. Costing at Material Level
b. Work in Process will be calculated at Actual b. Work in Process will be calculated at Target
Cost. cost
c. Variances Calculation based on Order Status c. Variances Calculation at any stage
Eg: If Order Status is TECO (Technically
Complete) then only Variances will be
calculated

Product Cost by Period

Product Cost by Period Product Cost by Period Product Cost by Period

with Work in Process without Work in Process with Production Order

Terms used in Product Cost by Period

1. Production Version:
Production Version is used to Define Number of Production Options or ways i.e., different combination of
BOM/Routing. It is a mandatory Master Data in Repetitive Manufacturing Scenario.
Eg:
To Produce BILFG2 (to Produce BILFG2 we have 2 Production ways – with different combinations)
Production Version 1:
In BOM Material No. BILRM1 1kg
In Routing First go to Work Center Dept G then go to work Center Dept H
Production Version 2:
In BOM Material No. BILRM2 2kgs
In Routing First to Process in Work Center Dept A then next to Process in Work Center DeptB
2. Back Flush
Automatic Goods issue during Operation Confirmation or Automatic Goods Receipt from Production. This will be
used when the Product is Standardized Product.
3. Rate Routing
Rate Routing is used in Repetitive Manufacturing Scenario. Rate Routing will have a single Production Line and
Page142

also in Repetitive Manufacturing Scenario same Product is manufactured over a long period of time.

Under the Guidance of Mr. Satyanarayana-2012

4. Reporting Point
This will be used where the Product Line takes considerable amount of time going through more number of work
centers- to calculate Work in Process in the month end we use Reporting Points
Eg: To Produce BILFG2-we require BILRM1- to Process in Work Centers Dept G, Dept H and Dept I
Dept G Dept H Dept I
Issue BILRM1 Processing time 2 months Get BILFG2

Create Dept G, Dept H and Dept I as Reporting Points.(Each Dept we create as Reporting Points)
In the month end take Work in Process at Reporting Point Level.
what ever the values are there in the Departments we take
Product Cost by Period with Work in Process
Customization
CO Consultant Job
1. Check Costing Variants for Product Cost Collectors for Plan and Actual
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Product Cost CollectorsCheck Costing Variants for Product Cost Collectors
Double Click on Costing Variants to Determine Activity Quantities
Select Costing Variant- PREM-Repetitive Manufacturing Versions
Select Details button
Select Costing Type button
Select Miscellaneous tab
Product Cost Collector Standard
 Preliminary Costing for Product Cost Collector Costing
Select back arrow
Select Valuation Variant button
Select Overhead tab
Costing Sheet  BIL Costing Sheet
Costing Sheet  BIL Costing Sheet
----
Select back arrow 2 times
Double Click on Costing Variants for Valuation of Internal Activities
Select Costing Variant-PPP3-Product Cost Collector
Select Details button
Actual
Select Valuation Variant button
Costing
Select Overhead tab
Costing Sheet  BIL Costing Sheet
----
2. Check Order Types
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Product Cost CollectorsCheck Order Types
Select Category –RM01- Product Cost Collectors
Select Details button
check whether the Settlement Profile - PP01 is there or not
----
3. Define Cost Accounting Relevant Default Values for Order Types and Plants
Page143

Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period

Product Cost Collectors Define Cost Accounting Relevant Default Values for Order Types and Plants
Select Order Type-RM01-with Plant-1000
Select Copy As button
Under the Guidance of Mr. Satyanarayana-2012
Change Plant : BILP
----
4. Check Control Data for Repetitive Manufacturing Profile
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Simultaneous Costing Check Control Data for Repetitive Manufacturing Profiles
Select 0004
Select Details button
General
 GL Back Flush at GR Posting ( issue will be done at the time of goods receipt)
 RP Back Flush (At each Reporting Point we need to take Value)
 Mandatory
 Automatic GR Posting at Last RP when Back Flushing (Last Reporting Point when finished good is receipt-
automatically posted)
Cost Accounting
 Post Activities
 Using Data from Preliminary Costing for Product cost Collector
----
5. Activate Generation of Cost Login Repetitive Manufacturing
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Simultaneous CostingActivate Generation of Cost Login Repetitive Manufacturing
Select New Entries
Plant Name1 Log
BILP blank 
----
6. Work in Process Customization
a) Maintain Versions
Path : SPROControllingGeneral ControllingOrganizationMaintain Versions
Select Version-1
Double Click on Controlling Area Settings folder
Give Controlling Area : BIL
Select Yes button for the message
----
b) Define Results Analysis Keys
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in ProcessDefine Results Analysis Keys
 Results Analysis Key FERT-P--WIP at Plan Cost (Reporting Points)
c) Define Results Analysis Version
Same as per Product Cost by Order
d) Define Valuation Method (Target Costs)
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in ProcessDefine Valuation Method (Target Costs)
Select New Entries
Select Target Cost button for the Message (WIP Calculate at Target Cost)
Give Controlling Area : BIL
RA Version : “0”
RA Key : “FERT-P”
Page144

----

Under the Guidance of Mr. Satyanarayana-2012

e) Define Valuation Variant for WIP and Scrap (Target Costs)
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in Process Define Valuation Variant for WIP and Scrap (Target Costs)
Select 001-
Select Copy As button
Change Valuation Area : BIL - Valuation Area for BIL
Priority
“1” -Current Standard Cost Estimate
“2” -Plan Cost / Preliminary Cost Estimate
----
f) Assignment of Valuation Variant for WIP
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in Process Assignment of Valuation Variant for WIP
Select Position
Give Controlling Area : BIL
For Valuation Variant for WIP at Target Cost
BIL- Assign- BIL
----Ignore
g) Define Line IDs
 Same as per Product Cost by Order
h) Define Assignment
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in Process Define Assignment
Delete ABR-Assignments
Select Controlling Area : BIL with Line ID-ABR
Select Delete button
----
when they follow Product Cost by order they will not delete
i) Define Update
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingWork in Process Define Update
Select Position
Give Controlling Area : BIL
Select All Line IDs of BIL except- ABR
Select Copy As button
Change Result Analysis Key - to FERT-P – for all the Line IDs
----
j) Define Posting Rules for Settling Work in Process-Same as Per Product Cost by Order
 Same as per Product Cost by Order
7. Variance Customization
a) Define Variance Keys
Same as Per Product cost by Order
b) Define Default Variance Keys for Plants
Same as Per Product cost by Order
c) Define Target Cost Versions
: SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Page145

Path
Period End ClosingVariance CalculationVariance Calculation for Product Cost Collectors
Define Target Cost Versions
Select Controlling Area BIL - Target Cost Version-“0”

Under the Guidance of Mr. Satyanarayana-2012

Select Copy As button
Change Target Cost Version to “1” -Target Cost 1 Version for BIL
Control Costs
 Plan Cost
----
8. Settlement Customization
Same as per Product Cost by Order
PP Consultant Job
1. Define Control Key
Path : SPROProductionBasic DataRoutingOperation DataDefine Control Key
Select –PP01-In-House Production
Select Details button
Confirmations : “1” (Milestone Confirmation)
----
2. Plant Parameters for Material Requirement Planning
Path : SPROProductionMaterial Requirements PlanningPlant ParametersCarry Out Overall
Maintenance of Plant Parameters
Select Copy button
From Plant : 1000
To Plant : BILP
Select Copy button--

End User Area

1. Creation of Activity Types-KL01 -CO End User
BIL6 - Machine Hours
BIL7 - Labour Hours
Activity Type : BIL6
Copy From
Activity Type : BIL5
Controlling Area: BIL
----
Activity Type : BIL7
Copy From
Activity Type : BIL5
Controlling Area: BIL
Change Name & Description : Labour Hours
Page146

----
2. Creation of 2 Cost Centers -KS01 -CO End User
Cost Center : BIL6
Reference
Under the Guidance of Mr. Satyanarayana-2012
Cost Center : Dept G
Controlling Area: BIL
Change Name & Description : Dept BIL6
----
Cost Center : BIL7
Reference
Cost Center : Dept G
Controlling Area: BIL
Change Name & Description : Dept BIL7
----
3. Creation of Cost Center Group - KSH1-CO End User
Cost Center Group : BIL67GRP
Description : BIL Cost Center Group-67
Insert Cost Centers : BIL6 & BIL7
----
4. Planning Cost Center wise-KP06 -CO End User
Variables
Version : “0”
From Period :7
To Period :7
Fiscal Year : 2012
Variables BIL6 - 720000
Cost Center : BIL6
BIL7 - 360000
Cost Element : 400100
 Form Based
Select Overview Screen button
Plan Fixed Cost : 720000
----
Again
Change Cost Center: BIL7
Select Overview Screen button
Plan Fixed Cost : 360000
----
5. Planning Activity Hours - KP26 - CO End User
Variables
Version : “0”
From Period :7
To Period :7
Fiscal Year : 2012
Variables
Cost Center : BIL6
Activity Type : BIL6
 Form Based
Select Overview Screen button
Page147

Plan Activity : 72000

----

Under the Guidance of Mr. Satyanarayana-2012

Variables
Version : “0”
From Period :7
To Period :7
Fiscal Year : 2012
Variables
Cost Center : BIL7
Activity Type : BIL7
 Form Based
Select Overview Screen button
Plan Activity : 18000
----
6. Calculation of Activity Price -KSPI -CO End User
 Cost Center Group : BIL67GRP
Parameters
Version : “0
Period : 7 to 7
Fiscal Year : 2012
 Test Run BIL6 -10
 Detail List BIL7 -20
--Execute—
----Ignore
7. Creation of Finished Good Material Master- MM01 - MM End User
Material : BILFG2
Industry Sector : Mechanical Engineer
Material Type : Finished Product
Press Select Views button -Basic Data1
-MRP1
-MRP2
-MRP3
-MRP4
-Work Scheduling
-General/Plant Data/Storage1
-Accounting1
-Costing1
Select Organizational Levels button
Plant : BILP
Storage Location : HYD
Description : Finished Product2
General Data
Base Unit of Measurement : KG
Division : BD
Select MRP1 tab
MRP Procedure
MRP Type : PD
MRP Controller: A
Lot Size Data
Page148

Lot Size : EX
Select MRP2 tab

Under the Guidance of Mr. Satyanarayana-2012

Production Storage Location : HYD
Scheduling
In-house Production : “0” days
Scheduled Margin Key : BIL
Select MRP3 tab
Availability Check
Availability Check : KP
Select MRP4 tab
 Repetitive Manufacturing
REM Profile : “0004”
Select Work Scheduling tab
General Data
Production Scheduler : “B’
Select Accounting1 tab
Current Valuation
Valuation Class : BIL2
Price Control : “S”
Standard Price : 300
Select Costing1 tab
 Material Origin
Overhead Group : BIL1
Profit Center : Steel
----
Variance key comes automatically
8. Creation of Bill of Material - CS01 - PP End User
Material : BILFG2
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM1 1
0020 BILRM2 1

Double Click on Item10

Select Status/Long Text tab
Production Storage Location : HYD
Select Next Item button
Select Header button
Select Item button (Item Overview)
Double Click on Item20
Select Status/Long Text tab
Production Storage Location : HYD
----
9. Creation of 2 Work Centers -CR01 -PP End User
Plant : BILP
Work Center : BIL6
Page149

Basic Data
Work Center Category : “0001”-Machine
Description : Work Center BIL6

Under the Guidance of Mr. Satyanarayana-2012

General Data
Person Responsible :C
Usage : “009”
 Back Flush (For Automatic Postings)
Standard Value Maintenance
Standard Value Key : SAP1
Select Costing tab
Validy
Start Date : 01.04.2012
Link to Cost Center/Activity Types
Cost Center : BIL6
Activity Activity Type Activity Unit Formula Key
Machine BIL6 H SAP002 (Production Machine Activity)
------
Create another Work Center
Work Center : BIL7
Basic Data
Work Center Category : “0003”-Labour
Description : Work Center BIL7
General Data
Person Responsible :C
Usage : “009”
 Back Flush
Standard Value Maintenance
Standard Value Key : SAP1
Select Costing tab
Validity
Start Date : 01.04.2012
Link to Cost Center/Activity Types
Cost Center : BIL7
Activity Activity Type Activity Unit Formula Key
Labour BIL7 H SAP003 (Production Labour Activity)
----
10. Creation of Rate Routing -PP End User
Path : LogisticsProductionMaster DataRoutingsRoutingsRate RoutingsCA21-Create
Material : BILFG2
Plant : BILP
General Data
Usage : “1”
Status : “4”
Select Operations button (Operations Overview)
Operation Work Center Control Key
0010 BIL6 PP01
Double Click on Operation tab
Page150

Standard Value Unit

Machine 10 H
Select Component Allocation button

Under the Guidance of Mr. Satyanarayana-2012

Select Component 10-BILRM1
Select New Assignment button
Assign to
Operation : 010
` Back Flush
BIL RM1  Back Flush

IN BIL6-we issue only BIL RM1

Create one more
Material : BILFG2
Plant : BILP
Select Operations button
Operation Work Center Control Key
0020 BIL7 PP01
Double Click on Operation-20
Standard Value Unit
Labour 10 H
Select Component Allocation button
Select Component-BILRM2
Select New Assignment button
Assign to
Operation /Activity : 020
` Back Flush
BIL RM2  Back Flush
----
In BIL7-we issue RM2 (we get separate Dept wise –WORK IN PROCESS-Reporting Point)
11. Assign Rate Routing in Material Master -MM02- MM End User
Material : BILFG2
Press Select Views button
Select MRP4
Plant : BILP
Storage Location : HYD
Select Production Versions button ( in middle of document)
Version Text
“1” Production Line1
Select Details button
Ignore
Planning Data
Task List Type Group Group Counter
Rate-Based Planning - Rate Routing 10637 (Created already) 1
Bill of Material
Alternative BOM : “1”
BOM Usage comes automatically
Repetitive Manufacturing
Page151

 REM Allowed
Select Continue button
Select Continue button once again

Under the Guidance of Mr. Satyanarayana-2012

----
12. Creation of Cost Estimate with Quantity Structure - CK11N - CO End User
Material : BILFG2
Plant : BILP
Costing Data
Costing Variant : PPC1
Costing Version: “1”
In live we do for next month
Change dates - for todays
Costing Date From : Today’s
Quantity Structure : Today’s
Valuation Date : Today’s’ 
we can see the cost
----Ignore
13. Marking and Releasing -CK24 CO End User
Posting Period/Fiscal Year :7 2012
Company Code : BIL
Plant : BILP
Material : BILFG2
 Test Run
--Execute—
marking updates-future price based on the standard price
Select back arrow
Select Release button
--Execute—
today onwards when we run the production the Standard price takes- 510
14. Creation of Product Cost Collector -CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Master DataProduct Cost ControllerKKF6N-Edit
Selection
Material : BILFG
Plant : BILP
Select Create Product Cost Collector button
Order Type : “RM01”
Controlling Level for Material
 Production Version
Characteristics for Production Process
Planning Plant : BILP
Production Version : “1”-Production Line 1
Select Confirm button
----
Select Yes button
we can see the plan cost for the product
15. Back Flush -PP End User
once he confirms the operations-automatically goods will be issued
Page152

Path : LogisticsProductionRepetitive ManufacturingBack FlushMFBF-REM Back Flush

Yield Back Flush
Back Flush Quantity : 10
Under the Guidance of Mr. Satyanarayana-2012
Material : BILFG2
Plant : BILP
Planning Plant : BILP
To Location : HYD
 RP back Flush (Reporting Point purpose)
it asks which dept job is over
Select Reporting Point-10
Select Post with Correction button
system shows the that automatically 10 kgs
suppose the actual we have used 15 kgs consumption
Quantity
BILRM1 15
----
we are saying that in this particular month operation 10 is completed
Select Documents button
--Execute—
Double Click on Material Document Number-310059
Automatic Good issue is made
Select Documents Info tab
Select FI Documents button
Double click on Accounting Documents number
Entry

200121 Inventory RM Local 1125-

400000 RM Consumption Local 1125

Automatically Rawmaterial will be issued and RM Consumption entry will be posted
16. Work in Process Calculation -CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingSingle Functions: Product Cost CollectorWork in ProcessIndividual
ProcessingKKAS-Calculate
work in process at material level
Material : BILFG2
Plant : BILP
Parameters
WIP to Period : “7”
Fiscal Year : 2012
 RA Version : “0”
Processing Options
 Test Run
 Log Information Messages
--Execute—
Wecan see 1787.50
Select WIP Explanation button
work in process will be calculated at target cost
Note
Page153

Target Cost
BILRM1 10kgs 75 Rs 750
RM Overhead Rage 5% 37.5

Under the Guidance of Mr. Satyanarayana-2012

 Activity Hours for 10kgs-10hrs
10hrs x 10 Rs 1000
1787.5
17. Settlement of Work in Process to Accounts -CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingSingle Functions: Product Cost CollectorSettlementKK87-Individual Process
Material : BILFG2
Plant : BILP
Parameters
Settlement Period :7
Fiscal Year : 2012
Processing Options
 Test Run
 Detail List
 Check Transaction Data
--Execute--
Select Detail List button
Select Accounting Documents button
Double click on Accounting Document number
Note
Actual WIP
Plan Actual
RM Consumption 10 kgs 15 kgs 75 Rs 1125
Activity Hours 10 kgs 10 hrs 10 Rs 1000
2125
Plan WIP 1785.5
Variance 337.5

Entry
Inc/Dec in Stocks
300200 FG 337.50-
400201 Prod Order Diff 337.50
Inc/Dec in Stock
300201 WIP 1787.50-
200123 Work in Process 1787.50

18. Final Operation Confirmation MFBF - PP End User

Back Flush Quantity : 10
Material to Stock
Material : BILFG2
Plant : BILP
Planned Plant : BILP
To Location : HYD
 RP Back Flush
Select Reporting Poing-20 
Select Post with Correction button
for 10 kgs pdtn we have to consume 10 kgs of BILRM2
Page154

Quantity
BILRM2 15
----

Under the Guidance of Mr. Satyanarayana-2012

Select Documents button
--Execute—
Select Material Document number
 we can see- 15 kgs of RM consumtion for 10 kgs of FG
Select Document info tab
Select FI Docuemnts button
Double Click on Accounting Document number
Entry
200122 Inventory FG 5100 Production Receipt
300200 Inc/Dec in Stocks FG 5100- Production Receipt
200121 Inventory RM Local 1875- Rawmaterial 2 Consumption
400000 RM Consumption Local 1875 Rawmaterial 2 Consumption

19. Actual Overhead Calculation -CO End User

Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingSingle Functions: Product Cost CollectorOverheadCO42-Individual Process
Material : BILFG
Plant : BILP
Parameters
Period : “7”
Fiscal Year : 2012
Processing Options
 Test Run
 Detail List
 Dialog Display
--Execute—
 we can see (1874+1125)x10% = 300 is debited to Dept H
20. Variance Calculation -CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Period
Period-End ClosingSingle Functions: Product Cost CollectorVariancesKKS6-Individual Process
Material : BILFG
Plant : BILP
Parameters
Period : “7”
Fiscal Year : 2012
 All Target Cost Versons
Processing Options
 Test Run
 Detail List
--Execute—
 the variance 587.5
when we settle variance-the work in process will be reversed
Actual RM Cost (1875+1125) 3000
Actual RM Overhead 10% 300
Actual Production Cost
10 hrs x 10 Rs x 10 kgs 1000
Page155

10 hrs x 20 Rs x 10 kgs 2000 6300

Less Production Taken 5100
1200
Work in Proces Taken 1787.5
Under the Guidance of Mr. Satyanarayana-2012
 587.5

21. Settlement of Variances to Accounts -CO End User

 In October we have taken Work in Process and Production - we cannot take both
a) Calculate Work in Process once again KKAS-so that work in Process will be zero
Material : BILFG2
Plant : BILP
Parameters
WIP to Period : “7”
Fiscal Year : 2012
 RA Version : “0”
Processing Options
 Test Run
 Log Information Messages
--Execute—
work in process will be zero
b) Settlement of Work in Process to Accounts - KK87
work in process entry will be reversed
Total Variances -(minus) Variances Accounted in the Operation 10- will be charged to Accounts
Material : BILFG2
Plant : BILP
Parameters
Settlement Period : “7”
Fiscal Year : 2012
Processing Options
 Test Run
 Detail List
 Check Transaction data
--Execute—
Select Detail List button
Select Accounting Documents button
Double click on Accounting Document number
Entry

300200 Inc/ Dec in Stocks FG 862.50- Balance Variance

400201 Prod Order Diff 862.50 Balance Variance
300201 Inc/Dec in Stock Wip 1787.50 Work in Process Reversed
200123 Work in Process 1787.50- Work in Process Reversed

Actual RM Cost 1875 1125 3000

Actual RM
10% 300
Overhead
Actual Production Cost
10 hrs x 10 Rs x 10 kgs 1000
10 hrs x 20 Rs x 10 kgs 2000 6300
Less Production Taken 5100
Total Variances 1200
Page156

Less Already Accounted in Operation 10 337.5

862.5

Under the Guidance of Mr. Satyanarayana-2012

2nd Scenario- Product Cost by Period-Without Work in Process
In this Scenario – there will not be any Work in Process in the Month End
The Production will be completed in the Same Month - Just in Time
All the Scenarios are same
But in the following step instead on 0004
☛ Check Control Data for Repetitive Manufacturing Profiles
Here we select – 0002
Parameters
General
 GI Back Flush at GR Posting
 RP Back Flush (Reporting Poing)
all the steps are same
----
in the same month the production will be received- so no WIP will be calculated
3rd Scenario-Product Cost by Period with Production Order
PP Consultant Job
1. Define Order Types-OPJH
Select Order Type : PP08 ( PP Production Order)
Select Details button
Cost Controlling
Settlement Profile : PP01
----Ignore
2. Define Order Type Dependent Parameters -OPL8
Earlier we have assigned PP01 to our company
Now we assign Order type PP08
Select Order Type PP08 for Plant 1000
Select Copy As button
Change Plant to: BILP ----
3. Define Scheduling Parameters for Production Orders-OPU3
Select Order type PP08 for Plant 1000
Select Copy As button
Change the Plant to : BILP ----
4. Define Confirmation Parameters-OPK4
Select Order Type-PP08 for Plant-1000
Select Copy As button
Change the Plant to : BILP ----
5. Define Checking Control -OPJK
Select Business Function-1&2 for PP08 for Plant-1000
Select Copy As button
Change the Plant to : BILP
Change the Plant to : BILP ----
6. Create PA Transfer Structure -KEI1 CO Consultant Job
Select Structure : E1
Double Click on Assignment Lines folder
Page157

Select Assignment-40
Double Click on Source folder
Cost Element

Under the Guidance of Mr. Satyanarayana-2012

From : 1100000
Source
Variances on Production Orders
Variance Category : RSUV
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field 3-Sum VV605-Cost of Goods Sold
----

End User Area

1. Creation of Finished Goods Material Master -BILFG3 -MM01- MM User
Copy the Parameters of BILFG1
2. Creation of Bill of Material -CS01 -PP End User
Material : BILFG3
Plant : BILP
BOM Usage : ‘1’
Item Component Quantity
0010 BILRM2 2
----
3. Creation of Routing -CA01 - -PP End User
Material : BILFG3
Plant : BILP
General Data
Usage : “1”
Status : “4”
Select Operations button
Operation Work Center Control
0010 Dept G PP01
Double Click on Operation 0010
to produce in this dept G 10 hours are required
Standard Value Unit
Machine 10 H
----
4. Creation of Cost Estimate with Quantity Structure -CK11N -CO End User
Material : BILFG3
Plant : BILP
Costing Data
Costing Variant : PPC1
Costing Version: “1”
IN Live we give for next month
 here we give today’s
Page158

Change Dates to Today’s Date

Costing Date From : Today’s
Qty Structure : Today’s

Under the Guidance of Mr. Satyanarayana-2012

Valuation Date : Today’s
we have given 2 kgs 12y x 2 -5% overhead
----Ignore
5. Marking and Releasing –CK24 -CO End User
Posting Period/Fiscal Year :7 2012
Company Code : BIL
Plant : BILP
Material : BILFG3
Processing Options
 Test Run
 With List Output
--Execute---
We can see that it updates future price
Select back arrow
Select Release button
--Execute—
Now we can see the Standard Price
6. Creation of Product Cost Collector -KKF6N- CO End User
Selection
Material : BILFG3
Plant : BILP
Select Create Product Cost Collector button
Order Type : RM01- Product Cost Collector
Controlling Level of Material
BOM / Routing
Characteristics for Production Process
BOM Usage : “1”
Alternative BOM : “1”
Task List Type : Routing
Group : 50001266 (when we create routing this number creates automatically)
Group : “1: comes automatically
Select Confirm button
----
Select Yes button
7. Creation of Production Order -CO01 -PP End User
Material : BILFG3
Production Plant: BILP
Planning Plant : BILP
Order Type : PP08
Quantities
Total Quantity : 10
Dates
Finish : Today’s
Start : Today’s
Page159

Select Cost Order button (Ctrl+ F7)

Select Release Order button (CTRL+F1)
----

Under the Guidance of Mr. Satyanarayana-2012

Order Number : 60003305
8. Rawmaterial Issue to Production Order -MB1A-MM End User
Select To Order button
Order Storage Location
60003305 HYD 
system to produce 20 kgs required
----
9. Confirmation of Order -CO11N -PP End User
Order : 60003305
Operation : “0010”
Confirmation Type : Final Confirmation
 System shows- 10 kgs required
Machine hours 100 hours received
Change Machine hours : 150 (to produce we have taken 150 hours) ----
10. Production Receipt(Goods Receipt for Order): MB31 -PP End User
Movement Type : 101
Order : 60003305
Plant : BILP
Storage Location : HYD
System shows 10 kgs receipt
----
11. To Make Order Technically Complete (TECO) -CO02 - PP End User
Order : 60003305
From Menu bar-FunctionsRestrict ProcessingTechnically Complete
We can see the order is closed
12. Variance Calculation-KKS6 -CO End User
we calculate variance at material level
Material : BILFG3
Plant : BILP
Parameters
Period : “7”
Fiscal Year : 2012
 All Target Cost Versions
Processign Options
 Test Run
 Detail List
--Execute—
System shows actual cost, target cost and target cost
13. Settlement of Variances to Accounts -KK87 -CO End User
Material : BILFG3
Plant : BILP
Parameters
Settlement Period : “7
Fiscal Year : 2012
Page160

Processing Options
 Test Run
 Detail List

Under the Guidance of Mr. Satyanarayana-2012

 Check Transaction Data
--Execute—
MIXED COSTING
-This will be used when we manufacture a product through different Production Processes
-When we Procure Material through different sources
A Mixed Cost Estimate allows us to calculate a Mixed Price- we can update the Mixed Price as a Standard Price.
This is used for Product Standard Price purpose
Eg: To Produce BILFG4-we have 2 alternatives
BILRM1 1kg 75.00 BILRM2 2kgs 125 250.00
RM RM
Overhead 5% 3.75 Overhead 5% 12.50
Production Cost Production Cost
BIL6 10 hrs BIL6 10 hrs
10 Rs
Rate 100.00 20 Rs Rate 200.00
178.75 462.50
Ratio we give 0.70 0.30

Standard Cost
(178.75 x 0.7) + (462.5 x 0.3) =
Mixed Cost = 263.88
Customization
1. Define Quantity Structure Types
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningSelected Functions in
Material CostingMixed CostingDefine Quantity Structure Types
Double Click on Display Quantity Structure Types for Mixed Costing
Select New Entries
Quantity Structure Type Time Dependency Percent Valid Name
MIX2 (Text) “2”-Based on Period  Mixed Costing for BIL
----
2. Define Costing Versions
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningSelected Functions in
Material CostingMixed CostingDefine Costing Versions
Costing Version Valuating Variant Quantity Structure
“1” “001” MIX2
----
End User Area
1. Creation of Finished Goods Material Master-BILFG4 -MM01- MM End user Area
Copy by BILFG2
2. Creation of 2 Bills of Material -CS01 -PP End User
Material : BILFG4
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM1 1
Double Click on Item -0010
Select Status/Long Text tab
Page161

Production Storage Location : HYD

----
Again Press
Under the Guidance of Mr. Satyanarayana-2012
Ignore
Item Component Quantity
0010 BILRM2 2
Double Click on Item-0010
Select Status/Long Text tab
Production Storage Location : HYD
----
3. Creation of Rate Routing -CA21- PP End User
Material : BILFG4
Plant : BILP
General Data
Usage : “1”
Status : “4”
Select Operations button
Operation Work Center Control Key
0010 BIL6 PP01
Double Click on Operation-0010
Standard Value Unit
Machine 10 H
Select Component Allocation button
Double Click on Alternative BOM1
Select Component –BILRM1
Select New Assignment button
Operation/Activity : 010
Select Back Flush 
----
for alternative 2
Again give
Material : BILFG4
Plant : BILP
Select New Entries button
we can see Group counter=2
Usage : “1”
Status : “4”
Select Operations button
Operation Work Center Control Key
0010 BIL7 PP01
Double Click on Operation tab
Standard Value Unit
Labour 10 H
Select Component Allocation button
Double Click on Alternative BOM2
Select Component BILRM2
Select New Assignment button
Page162

Operation/Activity : 010
Select  Back Flushing
----

Under the Guidance of Mr. Satyanarayana-2012

4. Assign Production Version in Material Master-MM02 -MM End User
Material : BILFG4
Press Select Views button
Select - MRP4 View
Organizational Levels
Plant : BILP
Storage Location: HYD
Select Production Versions button in middle of the page
Version Text
1 Production Line1
2 Production Line2
Keep cursor on Production Line 1
Select Details button
Ignore
Planning Data
Task List Type Group Group Counter
Rate Based Planning : Rate Routing 10638 1
Bill of Material
Alternative BOM : “1”
Repetitive Manufacturing
 REM Allowed
Select Next Version button
Planning Data
Task List Type Group Group Counter
Rage Based Planning : Rate Routing 10638 2
Bill of Material
Alternative BOM : “2” BOM Usage : “1”
Repetitive Manufacturing
 REM Allowed
Select Continue button
Select Continue button once again
----
5. Edit Procurement Alternatives -PP End User
Path : LogisticsProductionProduct Cost PlanningMaterial CostingMaster Data for Mixed Cost
EstimateCK91N-Edit Procurement Alternatives
Material : BILFG4
Plant : BILP
Select Create button
Select Production from the drop down at left cab
Select  Production Version
Production Version : “1”-Production Line1
Select Confirm button
Ignore
Select Create button once again
Page163

Select Production from the drop down at left cab button

Production Version : “2” Production Line2
Select Confirm button
Ignore
Under the Guidance of Mr. Satyanarayana-2012
to produce BILFG we have 2 alternatives – Production Line1 and Production Line2
----
6. Create Mixing Ratios -PP End User
Path : LogisticsProductionProduct Cost PlanningMaterial CostingMaster Data for Mixed Cost
EstimateMixing RatiosCK94-Create/Change
Material : BILFG4
Plant : BILP
Mixing Ratio
Period : “7”
Fiscal Year : 2012
Quantity Structure Type: MIX2
Changeable Name Mixing Ratio
Production Version-1 0.7
Production Version-2 0.3
----
7. Creation of Quantity Structure with Cost Estimate -CK11N - CO End User
Material : BILFG4
Plant : BILP
Costing Data
Costing Variant : PPC1
Change the Dates to Today’s
Costing Date From
Quantity Structure Date
Valuation Date
we can see mixed price -263.88
we can see each alternative price
Now 263.88 is standard price
----Ignore
8. Marking and Releasing -CK24 -CO End User
Same as before
Page164

Under the Guidance of Mr. Satyanarayana-2012

 JOINT PRODUCT COSTING
(OR)
Main Product, Co-Product And By-Product Costing
-When we manufacture number of Products at a time through one Production Order it is called Joint Production.
Eg: 1
Petro Chemical Refining Industry
a. Input Material -Crude Oil
b. Output Material -a. Petrol -Main Product
b. Diesel -Co-Product
c. Kerosene -Co-Product
d. Naptha -Co-Product
e. Water -By-Product
Eg: 2
Sugar Industry
a. Input Material -Sugarcane
b. Output Material -a. Sugar -Main Product
-b. Mollasses -Co-Product
-c. Bagasse -By-Product
Differences between Main Product & Co-Product
Main Product & Co-Product By-Product
a. High Value-Costs Can be allocated a. Low Value-Costs Cannot Be Allocated
b. In the Material Master-Co-Product Indicator b. In The Material Master-Co-Product should
should be activated not be activated
c. In BOM of Main Product – Co-Product c. In BOM of Main Product – By-Product
Quantity should be shown with “-“sign quantity should be shown with “-“ sign
d. Product Value will be at allocated cost price d. Product will be at Realizable Value Price
e. When we calculate Cost of the Product - e. Costs will not be allocated to the By-
Realizable value of By-Product will be Product
reduced
f. To take Production use Movement Type- f. To Take Production use Movement Type-
101 531

By Product
By product value will be Nominal-so we will not allocate the by-product cost
Customization
1. Creation of Rawmaterial Cost Element Group-KAH1 -CO End User
Cost Element Group : BILRMCOST
Description : RM Cost Elements Group for BIL
Insert Cost Elements : 400000-400099
300200  this should be reduced from By-Product
Cost Element Group : BILPROD
Description : Production Cost Elements Group for BIL
Insert Cost Elements : 400100-400299
400500-400599
1100001
----
Page165

2. Assign Cost Element -300200- For Consumption -GBB VBR- OBYC- FI Consultant Job
Double Click on GBB-Off Setting Entry for Inventory Postings
Give Chart of Accounts : BIL
Valuation Modifier General Modifier Valuation Class Account
Under the Guidance of Mr. Satyanarayana-2012
 X VBR BIL2 300200
----
3. Assign Cost Element -300200 in Cost Component Structure-for Item Rawmaterial-CO Consultant
-OKTZ
Select Cost Component Structue-01
Double Click on Components with Attributes folder
Select Cost Component Structure-01-with Cost Component-10-Rawmaterials
Double Click on Assignment: Cost Component-Cost Element Interval folder
Select New Entries
Cost Component Structure Chart of Accounts From Cost Element Cost Component
01 BIL 300200 10-Rawmaterial
----
Double click on Cost Component
Select Active 
----

Page166

Under the Guidance of Mr. Satyanarayana-2012

4. Create Source Structure -CO Consultant
Main Product Co-Product
Rawmaterial 2 : 1
RM Overheads 2 : 1
Production Costs 2 : 1
If we don’t use Source Structure it allocates costs equally to Main product as well as Co-Product
-By using Source Structure we can allocate costs in different ratios between main product and Co-Product
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period –End ClosingSettlementCreate Source Structure
Select New Entries
Structure Text
B1 BIL Source Structure
---
Select Structure – B1
Double Click on Assignments folder
Select New Entries
Assignment Text
1 Rawmaterials
2 RM Overheads
3 Production Costs
----
Select Assignment-1-Rawmaterials
Double Click on Source folder
Select New Entries
Group
Cost Element BILRM Cost
------
Double Click on Assignments folder
Error message comes-Program terminated-again repeat the steps
Select Assignment-2-RM Overheads
Double Click on Source folder
Select New Entris
From Value
Cost Element 1100000
Double Click on Assignments folder
Select Assignment-3-Production Costs
Double Click on Source Folder
Select New Entries
Group
Cost Element BILPROD
------
5. Assign Source Structure in Production Order Settlement Profile -CO Consultant Job
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Order
Period –End ClosingSettlementCreate Settlement Profile
Select Settlement Profile-PP01
Page167

Select Details button

Default Values
Source Structure : B1 (created now)
Under the Guidance of Mr. Satyanarayana-2012
----
End User Area
1. Creation of 3 Finished Goods Material Masters -MM01- MM End User
Create by copying BILFG1
BILFG6 Main Product -Select  Co-Product Indicator-in MRP2 View
Standard Price: 500 Rs
BILFG7 Co-Product - Select  Co-Product Indicator-in MRP2 View
Standard Price: 500 Rs
BILFG8 By-Product -Deselect  Co-Product Indicator in MRP2 View
Standard Price: 10 Rs
2. Assign Apportionment in Material Master -MM02 MM End User
Material : BILFG6 (Main Product)
Press Select Views button
Select -Costing1 View
Plant : BILP
Select Joint Production button (in the middle of the page)
No. Description Struture
1 BIL Source Structure B1
Select Equivalence Numbers button
Assignment Co-Product Equivalence Number
“1”Rawmaterial BILFG6 2
“1”Rawmaterial BILFG7 1
rawmaterial cost we assign in 2:1 Ratio
“2”RM Overheads BILFG6 2
“2”RM Overheads BILFG7 1
RM Overhead Cost we are assigning 2:1 Ratio
“3”Production Cost BILFG6 2
“3”PRodcution Cost BILFG7 1
Production Cost we are assigning 2:1 Ratio
 ----
3. Creation of BOM CS01 -PP End User
Material : BILFG6 (Main Product)
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM2 3
0020 BILFG7 1- when we consume BILRM2-we get BILFG7
0030 BILFG8 1- we are receiving the Production when we consume BILFG7
Double Click on Item-0020
General Data
 Co-Product
----
4. Creation of Routing -CA01 - -PP End User
Material : BILFG6
Page168

Plant : BILP
General Data
Usage : “1”

Under the Guidance of Mr. Satyanarayana-2012

Status : “4”
Select Operations button
Operation Work Center Control Key
0010 Dept G PP01 (In-house Pdtn)
Double Click on Operation-0010
Operation-0010
Standard Value Unit
Machine 20 H
----
5. Planning Cost Center wise-For November -KP06 -CO End User
Version : “0”
From Period : “8”
To Period : “8”
Fiscal Year : 2012
Variables
Cost Center : Dept G
Cost Element : 400100
 Form Based
Select Overview Screen button
Plan Fixed Cost
720000
----
6. Planning for Machine Hours -KP26 -CO End User
Version : “0”
From Period : “8”
To Period : “8”
Fiscal Year : 2012
Variables
Cost Center : Dept G
Activity Type : BIL5
 Form Based
Select Overview Screen button
Plan Activity
72000 hrs
7. Plan Machine Hour Rate Calculation ; KSPI -CO End User
Cost Center Group -BILGRPG
Parameters
Version : “0”
Period : “8” to “8”
Fiscal Year : 2012
 Test Run
 Detail List
--Execute—
we can see 10 Rs per hour
Page169

----Ignore

Under the Guidance of Mr. Satyanarayana-2012

8. Creation of Cost Estimate with Quantity Structure -CK11N -CO End User
Material : BILFG6
Plant : BILP
Costing Date
Costing Variant : PPC1
Dates
Change dates to Today’s
Note
BILFG6 BILFG7 BILFG8 Total Cost
RM Cost 3 kgs x 125 375
2:1 250 125
RM Overheads 5% 18.75
2:1 12.5 6.25
RM Production 20 hrs x 10
Cost Rate 200
2:1 133.33 66.67
By Product
Standard Price 10

Standard Price need to be

reduced 2:1 -6.67 -3.33 10

389.17 194.58 10 593.75

If data is OK----Ignore
9. To Open Material Periods for November -MMPV -MM End User
From Co : BIL
Period :8
Close and Open
10. Marking and Releasing -CK24 -CO End User
Give Material BILFG6
We get a standard price
11. Creation of Production Order -CO01 -PP End User
Material : BILFG6
Production Plant : BILP
Planning Plant : BILP
Order type : PP01
Quantities
Total Quantity : 10 kgs
Start and Finish Date : Today’s
Select Cost Order (Ctrl +F7) button
Select Release Order button
-----
Order Number : 60003306
12. Goods Issued to Production Order -MB1A-MM End User
Select To Order button
Order Storage Location
Page170

60003306 HYD
It proposes-30 kgs or RM----
13. Actual Overhead Calculation -KGI2 -CO End User
Under the Guidance of Mr. Satyanarayana-2012
Order : 60003306
Parameters
Period : “8”
Fiscal Year : 2012
Processing Options
Test Run
 Dialog Display
--Execute—
We can see actual overhead calculated 10%
Dept H will be Credited
14. Confirmation of Production Order -CO11N -PP End User
Order : 60003306
Operation/Activity : 0010
Confirmation Type : Final Confirmation
System show -10 kgs
Machine hours 200 hrs
----
15. Production Receipt -MB31 - --PP End User
When we receive production we have to receive co produt and main produt
Movement Type : 101
Order : 60003306
Plant : BILP
Storage Location : HYD
We can see we are receiving 2 products BILFG6 and BILFG7
16. By-Product Receipt -MB1C-PP END User
Movement Type : 531
Plant : BILP
Storage Location : HYD
Order : 60003306
Material Quantity
BILFG8 10 kgs
----Ignore
From Menu bar-Other Goods Receipt Display
Select Accounting Documents button
Double Click on Accounting Document Number
We can see the cost 10 Rs x 10 = 100
Page171

Under the Guidance of Mr. Satyanarayana-2012

 SPLITTING STRUCTURE
If a Cost Center is Rendering 2 Activities or More (which is Activity Independent) then we need to Apportion the
Costs of the Cost Center to these Activities
If we don’t define Splitting Structure system will divide the Costs Equally between these Activity Types. We want
to Allocate based on Activities - So, We create Splitting Structure
In Splitting Structure we define which Cost Element will get allocated to which Activity Type. This applied to both
Plan and Actual Costs
We can Split the Cost according to the following criteria:
a. Activity Quantity
b. Equivalence Numbers
c. Capacity
d. Output
e. Statistical Key Figures
After we define Splitting Structure we must assign it to Cost Centers
Example
Cost Center : Dept K
In Work Center Dept K- Assigned Cost Center Dept K
In Work Center Dept K : 3 Activities
Max 6 Activities in one work center
Activities
Cleaning
Machine
Labour
Cost Center : Dept K
Salaries 100000 based on Labour hrs 500 and Cleaning hrs 100
Depreciation 300000 based on Machine hrs 1000 and Cleaning hrs 100
400000
If we don’t Create Splitting Structure-It allocates Equally for All Activity Types
If we want to allocate on Activity Type basis Create Splitting Structure
Customization
1. Creation of 3 Secondary Cost Elements ie., Activity Allocation-KA06
Cost Element : 1300000
Reference
Cost Element : 1100001 ----
Create 2 more cost Centers in the same way - 1300001 & 1300002
2. Creation of Activity Types - KL01
Activity Type : BILA
Copy From
Activity Type : BIL7 (Labour hours)
Allocation Cost Element: 1300000
----
Activity Type : BILB
Copy From
Activity Type : BIL7 (Labour hours)
Name & Description : Cleaning Hours
Page172

Allocation Cost Element: 1300001

----
Activity Type : BILC

Under the Guidance of Mr. Satyanarayana-2012

Copy From
Activity Type : BIL7 (Labour hours)
Name & Description : Machine Hours
Allocation Cost Element: 1300002
----
3. Creation of Activity Groups
Path : AccountingControllingCost Center AccountingMaster DataActivity Type GroupKLH1-Create
Activity Type Group : BILAB
Description : Activity Type Group BILAB
Insert Activity Type : BILA
BILB
----
Go back
Activity Type Group : BILBC
Description : Activity Type Group BILBC
Insert Activity Type : BILB
BILC
----
4. Creation of Cost Center : Dept K -KS01
Cost Center : Dept K
Reference
Cost Center : Dept G
Names
Name : Department K
Description : Cost Center Department K
----
5. Define Splitting Structure
Path : SPROControllingCost Center AccountingPlanningAllocationsActivity AllocationSplitting
Define Splitting Structure-OKES
Select New Entries
Struture Text
B1 (text) Splitting Structure for BIL
----
Select Structure-B1
Double Click on Splitting Rules folder
Select New Entries
Rule Text Method
B1 (text) Splitting Structure Rule for BIL “12”-Activity Quantity
----
Double Click on Splitting Structure folder
Select Structure-B1
Double Click on Assignments folder
Select New Entries
Assignment Text Rule
Page173

01 Labour and Clearing B1 (Created already)

02 Machine and Cleaning B1 (Created already)
----
Select Assignment-1- Labour and Cleaing
Under the Guidance of Mr. Satyanarayana-2012
Double Click on Selection for Assignment folder
Select New Entries
From Group
Cost Elements 400100
Activity Type Group BILAB
----
salary should be allocated to these BILAB Activities ie., Labour & Cleaning Activities
Go back
Select Assignment-2-Machine and Cleaing
Double Click on Selection for Assignment folder
Select New Entries
From Group
Cost Elements 400500
Activity Type Group BILBC
----
Depreciation Cost should be allocated to BILBC Activities-ie., Machine & Cleaning Activities
6. Assign Splitting Structure to Cost Centers
Path : SPROControllingCost Center AccountingPlanningAllocationsActivity AllocationSplitting
Assign Splitting Sy-OKEW
 Cost Center : Dept K
Parameters
 All Versions
Fiscal Year : 2012
Select Change button
Select  Dept K
Keep Cursor on Splitting Structure-B1
Select Assign button
----
End User Area
1. Planning Cost Center wise -KP06
Version : “0”
From Period :8
To Period :8
Fiscal Year : 2012
Variables
Cost Center : Dept K
Activity Type : Blank (Activity Independent)
Cost Element : 400100 - 400599
 Form Based
Select Overview Screen button
Cost Element Plan Fixed Cost
400100 100000
400500 300000
----
Page174

2. Planning Activity Hours -KP26

Version : “0”
From Period :8
To Period :8
Under the Guidance of Mr. Satyanarayana-2012
Fiscal Year : 2012
Variables
Cost Center : Dept K
Activity Type : BILA
To : BILC
 Form Based
Select Overview Screen button
Activity Plan Activity
BILA (Labour) 500
BILB (Cleaning) 100
BILC (Machine) 1000
----
3. Cost Center Splitting
Path : AccountingControllingCost Center AccountingPlanningAllocationsKSS4-Splitting
 Cost Center : Dept K
--Execute—
we can see the values automatically allocated
Keep cursor on Activity Dept K/BILA
From Menu bar-Go toCost Elements
We can see the cost
Keep cursor on Activity Dept K/BILA
Select Splitting Base button
ADDITIVE COST
To add some Fixed Cost to Standard Inventory Cost i.e., Adding Some Fixed Cost to the Cost Estimate in addition
to Normal Overhead.
Disadvantage
We can add Cost only to Standard Cost Estimate-Not to Actual/Plan Costing
Eg: Handling Charges Rs.200 to Add to Standard Cost Estimate.
Customization
1. Creation of Secondary Cost Element -KA06
Cost Element : 1400000
Valid From : 01.04.2012 to 31.03.9999
Names
Name & Description : Other Overheads
Basic Data
Cost Element Category : “41”-Overhead Rates
----
2. Select Additive Cost in Costing Variant
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with
Quantity StructureDefine Costing Variants
Select Costing Variant-PPC1-Standard Cost Estimate for Materials
Select Details button
Select Additive Costs tab
Additive Cost Components : Select-Include Additive Costs and Apply Overhead
 Include Additive Costs with Stock Transfers
Page175

----
3. Update Additive Costs in Cost Component Structure -OKTZ
Select Cost Component Structure-01
Under the Guidance of Mr. Satyanarayana-2012
Double Click on Update of Additive Costs folder
Select New Entries
Cost Component Structure Cost Component Chart of Accounts Cost Element
01 0010-Rawmaterial BIL 1400000
----Ignore
Double Click on Assignment: Cost Component-Cost Element Interval
Select New Entries
Cost Component Structure Chart of Accounts From cost Element Cost Component
01 BIL 1400000 0010
----
Double Click on Cost Component Structure folder
Cost component Strucute Active
01 
----
End User
1. Creation of Finished Goods Material BILFG9 -MM01 -MM End User
Copy BILFG1 and Create
2. Enter Additive Costs -CO End User
Path : AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial Costing
Cost Estimate with Quantity StructureAdditive CostsCK74N-Create
Material : BILFG9
Plant : BILP
Costing Data
Costing Variant : PPC1
Costing Version: “1”
Change Dates to Todays’ Date
Costing Date From
Valuation Date 
Unit of Price Cost
Category Plant/Activity Quantity Measurement Description Total Element
"V"-Variable Item BILP "1" EA-Each Handling Charges 200 1400000

----
----Once again
3. Creation of Bill of Material -CS01 -PP End User
Material : BILFG9
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM1 2
4. Creation of Routing -CA01 -PP End User
Give Material : BILFG9
Plant : BILP
General Data
Usage : “1”
Page176

Status : “4”
Select Operations button
Operation Work Center Control Key

Under the Guidance of Mr. Satyanarayana-2012

0010 Dept G PP01
Double Click on Operation-0010
Standard Value Unit
Machine 5 H
----
5. Creation of Cost Estimate with Quantity Structure -CK11N
Material : BILFG9
Plant : BILP
Costing Variant
Costing Variant : PPC1
Change Dates for Today’s
Costing Date From
Quantity Structure Date
Valuation Date 
we can see that the Variant -200 is added
----Ignore
CREATION OF COST ESTIMATE WITHOUT QUANTITY STRUCTURE
(Where PP Module is not implemented)
No BOM & No Routing will be there
1. Creation of Material Master -MM01 MM End User
Create BILFG10 by copying BILFG1
2. Creation of Cost Estimate without Quantity Structure -CO End User
No-BOM
Path : AccountingControllingProduct Cost ControllingProduct Cost PlanningMaterial Costing
Cost Estimate without Quantity StructureKKPAN-Create
Material : BILFG10
Plant : BILP
Costing Data
Costing Variant : PPC1
Change Dates for Today’s
Costing Date From
Valuation Date
Category Resource Plant/Activity Quantity
"M"-Material BILRM1 BILP "2"
"E"-Internal Activity Dept G BIL5 "10"

 ----
 In Product itself we are giving what RM is required and the activity cost
We can see RM Cost and Production Cost
Page177

Under the Guidance of Mr. Satyanarayana-2012

 CENTERAL EXCISE AND SALES TAX
TAXINN: CONDITION BASED TAXINJ: FORMULA BASED

-SAP suggests create only 2 codes for Purchase and 2 -In Case of TAXINJ we have to Create Number of Tax
codes for Sales Codes-Purchase Person at the Time of Purchase Order
Creation Select Tax Code
-In case of HYD Plant for Vendor X-For Material RM1
-If the Purchase Person Selects wrong Tax Code – the
We specify what is Excise Rate and the Sales Tax Rate.
Rate will be Different and GL Account will be Different
-At the time of Purchase Order Creation- No need to
-Manual Intervention in required
Select any Tax Code
-No Manual Intervention is required
For Floating changes in the Tax rates also we can give
the Rate –From which date onwards the Rate will be
applicable. (As of Floating Interest Rates)

Cu
Vat-show separately
CST-add to material-If we purchase from outside state-the cost will be added to the Material cost-CST

Sales
Accounts Receivables
Procedure
100 -BASB -Base Amount 100
120 -BIL1 -A/P Excise BED % on 100
130 -

Base Type
Excise Calculation
Basic Price -100
Excise 8% on Basic Price 8

For Some Products –Like Pharmaceuticals/Garments-Excise is based on MRP Value

Sale Price -100
MRP Value -500
Abatement -40%
Net MRP Price 500-200 = 300
Excise 8%
Excise Amount 300 x 8% = 24

GL PLA
Excise Chart MODVAT Account CENVAT CENVAT On Hld
Excise TraSACTION Co of RG23C Clearing for PLA OH (On SSE (On
Group Type Code Account RG23BED BED Account BED Hold) (Suspense) Hold)
GRPO-Excise
Invoice for
Goods Receipt
55 against PO BIL BIL 200156 200157 100521 200159 200158 100522 200159

----
Page178

Select “55”
Select Copy As button
Copy for All Excise Transaction types
For Excise Transaction Type -DLFC -
Under the Guidance of Mr. Satyanarayana-2012
Change –RG23A BED -100523
Change - RG23C BED -100523
When we make delivery this account has to be credited

SCRAPS
Scrap Definition
Non-Conforming Material that cannot be reworked or used – and has no value except for its Material Content
-In SAP we have 3 types of Scraps
1. Assembly Scrap
2 Component Scrap
3. Operation Scrap

1. Assembly Scrap:
Percentage of Assembly Quantity that does not meet required Production Quality Standards
-It will be specified in MRP view of Finished Goods Material Master
-It calculates for all Input Components
-It is called Input Scrap
-It increases the required quantities of the Components
Example
For Finished Product -BILFG11
We have given in MRP View-Assembly Scrap -5%
In BOM -To Produce BILFG11 we require
BILRM1 -1kg
BILRM2 -1kg
In Routing : we give to Produce BILFG11 -From Dept G - 5 hours required
Cost Estimate
Increased
Required 5% Rate Amount Total
BILRM1 1kg 1.05 75 78.75
BILRM2 1kg 1.05 125 131.25 210
10.50
Production
Hours 5hrs 5.25 hrs 10 52.50
273.00

2. Component Scrap
Component Scrap can be defined as the Percentage of Component Quantity that does not meet required Production
Quality Standards.
-It will be specified in MRP View of Rawmaterial Material Master (or) BOMBOM has priority
-It calculates for the Particular Component
-It is called Input Scrap
-It Increases the required Quantities of the Component
Example
Finished Product : BILFG11
In BOM – To Produce BILFG11 we require
BILRM1 -1kg
Page179

BILRM2 -1kg -we gave Component Scrap of 5% in BOM

In Routing - To Produce- Dept G -5hours required
Cost Estimate
Required Increased Rate Amount Total
Under the Guidance of Mr. Satyanarayana-2012
 5% Amount
BILRM1 1kg 75 75
BILRM2 1kg 1.05 125 131.25 206.25
RM Overhead 5% 10.31
Production Hours 5hrs 10 50
266.56

3. Operation Scrap
Operation Scrap can be defined as the Percentage of Assembly Quantity that does not meet required Production
Quality standards
-It will be Specified in Routing or BOM (Routing has Priority)
-It is called Output Scrap
-It reduces the Output Quantity
Example
Production Quantity -1000kgs
Operation Scrap -5%
–––––––––––––––
Production to be received -90 kgs
It is going to reduce from the Production
-In BOM if we don’t want to Calculate Assembly Scrap
-For Operation Scrap – Select  Net Indicator
Customization
Testing of Assembly Scrap
1. Creation of Finished Goods Material Master-MM01 -BILFG11 -MM End User
Copy BILFG1
In MRP-1 View Assembly Scrap -5%
2. Creation of Bill of Material -CS01 -PP End User
Material : BILFG11
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM1 1
0020 BILRM2 1
If we don’t want to Calculate for BILRM1 Assembly Scrap-double click on 0010
We have to select  Net Indicator check box
3. Creation of Routing -CA01 -PP End Uer
Material : BILFG11
Plant : BILP
General Data
Usage : “1’
Status : “4”
Select Operations button
Operation Work Center Control Key
0010 Dept G PP01
Double Click on Operation-0010
Page180

Standard Value Unit

Machine 5 H
We can see that the Operation Scrap Can be given in Routing
----
Under the Guidance of Mr. Satyanarayana-2012
4. Creation of Cost Estimate with Quantity Structure -CK11N -CO End User
Material : BILFG11
Plant : BILP
Costing Data
Costing Variant : PPC1
Change the Dates to Today’s
we can see RM required -1.05
Production Hours -5.25 hours
----Ignore
5. Marking and Releasing -CK24 -CO End User

Page181

Under the Guidance of Mr. Satyanarayana-2012

 ACTUAL COSTING / MATERIAL LEDGER
Material Ledger gives 2 main Functionalities
1. To Carry out Finished Goods Valuation at Actual Prices
2. To Carry out Material Prices in Multiple Currencies
3. To take Actual Price of the Current Month as Standard Price for Next Month
To achieve the above all Material Movements are to be valuated with Standard Price
-All Variances are collected during the Period-In the Month End the Variances are used to calculate Actual Price
-The Actual Cost that is calculated is called Period Unit Price (PUP)
Customization
CO Consultant Job
1. Activate Valuation Areas for Material Ledger
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerActivate Valuation
Areas for Material Ledger
Double Click on Activate Material Ledger
Select Position button
Give Valuation Area : BILP (Plant)
Valuation Area Company Code Material Ledger Price Determination
BILP BIL  “3”-Single/Multi Level
----Ignore
Save in CO Customization Request
2. Assign Currency Types to Material Ledger Type
Path: SPROControllingProduct Cost ControllingActual Costing/Material LedgerAssign Currency Types
Material Ledger Type Currency Type from FI CO Currency Type
0000  
if they are we have to choose which one currency=both are INR so we select both
----
3. Assign Material Ledger Types to Valuation Area
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerAssign Material
Ledger Types to Valuation Area
Valuation Area Material Ledger Type
BILP 0000 ----
4. Maintain Number Ranges for Material Ledger Documents
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerMaintain Number
Ranges for Material Ledger Documents
Double Click on Number Ranges for Material Ledger Documents
Select Maintain Groups button
we can see already the Number ranges are given-just we check the number ranges Client Level
Come back
Double Click on Maintain Financial Accounting Document Types
Select Type-ML-ML Settlement
Select Details button
Note Down the Number Range-47
Select Number Range Information button
Give Company Code button
Select Change Intervals button
Page182

Select Insert Interval button

Number Range Year From Number To Number
47 2012 1400001 1500000

Under the Guidance of Mr. Satyanarayana-2012

5. Configure Dynamic Price Changes
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerConfigure Dynamic
Price Changes
Select Position button
Valuation Area : BILP
Valuation Area Price Release
BILP “1”
----
6. Assign Material Update Structure to a Valuation Area
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerMaterial Update
 Assign Material Update Structure to a Valuation Area
Valuation Area Material Update
BILP 0001 –Standard
----
7. Activate Actual Costing
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerActual Costing
Activate Actual Costing
Double Click on Activate Actual Costing
Plant Actual Costing Actual Activities Updation
BILP  “2”-Activity Update relevant to Price Determination
----
8. Activate Actual Cost Component Split
Path : SPROControllingProduct Cost ControllingActual Costing/Material LedgerActual Costing
Activate Actual Cost Component Split
Valuation Area Actual Cost Component Split Active
BILP 
----

Page183

Under the Guidance of Mr. Satyanarayana-2012

FI Consultant Job
1. Creation of GL Masters which are not Cost Elements -FS00
a. Price Differences-Manufacturing Cost Group
Debit to Stock
Credit to GL account
b. Gain/Loss on Revaluation-Manufacturing Cost Group
c. Material Ledger Provision-Current Liabilities & Provision
☛GL Account : 400202 with template GL Account : 400201 (Production Order Differences)
Change Text : Price Differences
------
☛GL Account : 400203 with template GL Account : 400201
Change Text : Gain/Loss on Revaluation
----
☛GL Account : 100550 with template GL Account : 100500
Change Text : Material Ledger Provision
Select Create/Bank/Interest tab
Field Status Group : G014 –MM Adjustment Accounts
----
2. Assignment of Accounts for Automatic Postings -OBYC
Double Click on Transaction-PRV-Material Ledger for Lower Levels Price Differences
Give Chart of Accounts : BIL
----
Account
400203
----
Select back arrow
Double Click on Transaction-PRY-Cost (Price) Differences (Material Ledger)
----
Account
400203
----
Select back arrow
Double Click on Transaction-UMB-Gain/Loss from Revaluation
----
Account
400203
----
Select back arrow
Purchase Price or Production Order Differences we assign as follow
Double Click on Transaction-PRD-Cost(Price) differences
Valuation Modifier Valuation Class Account
X BIL1 400202
----
Select back arrow
Double Click on Transaction-LKW-Accruals and Deferral Accounts (Material Ledger)
Page184

----
Account
100550

Under the Guidance of Mr. Satyanarayana-2012

----
11. Define Document Types for Entry View in a Ledger
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New) Document
Document TypesDefine Document Types for Entry View in a Ledger
Give Ledger : D1
Select New Entries
Type Number Range
ML 81
----
Select back arrow
Give Ledger : D2
Select New Entries
Type Number Range
ML 82
----
12. Define Document Types for General Ledger View
Path : SPROFinancial Accounting (New)Financial Accounting Global Settings (New) Document
Document TypesDefine Document Types for General Ledger View
Give Ledger : D1
Select New Entries
Type Number Range
ML 83
----
Select back arrow
Give Ledger : D2
Select New Entries
Type Number Range
ML 84
----
End User Area
1. Production Start Up -CO End User
One Time Job
Path : AccountingControllingProduct Cost ControllingActual Costing/Material Ledger
EnvironmentProduction StartupCKMSTART-Set Valuation Areas as Productive
Plant : BILP
Processing Options
 Background Processing
 Test Run
--Execute—
2. Change Material Price Determination -CO End User
Path : AccountingControllingProduct Cost ControllingActual Costing/Material Ledger
EnvironmentCKMM-Change Material Price Determination
we are going to change to only one Rm Price
Material : BILRM1
Plant : BILP
Page185

Program Definition
Old Price Determination : “2”
New Price Determination : “3”
New Price Control : “S”-Standard Price
Under the Guidance of Mr. Satyanarayana-2012
Processing Options
 Test Run
 Save Log
--Execute—
For RM1 the price is changed
Check Rawmaterial Master-MM03-Accounting1 View button
3. Creation of Material Goods Material Master -MM01 -MM End User
Create BILFG12 by copying -BILFG1
4. Creation of Bill of Material -CS01 -PP End User
Material : BILFG12
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM1 2
----
5. Creation of Routing -CA01 -PP End User
Material : BILFG12
Plant : BILP
General dAta
Usage : “1”
Status : “4”
Select Operations button
Operation Work Center Control Key
0010 Dept G PP01
Double Click on Operation-0010
Standard Value Unit
Machine 10 H
----
6. Creation of Cost Estimate with Quantity Structure -CK11N -CO End User
Material : BILFG12
Plant : BILP
Costing Data
Costing Variant : PPC1
Change the Dates to Today’s
Costing Date From
Costing Date To: Month Ending Date -30.11.2012
Quantity Structure Date
Valuation Date
we want to make this Actual Price for Next month
----Ignore
7. Marking and Releasing -CO End User -CK24
Posting Period/Fiscal Year : 8 2012
Company Code : BIL
Plant : BILP
Page186

Material : BILFG12
 Test Run
--Execute—

Under the Guidance of Mr. Satyanarayana-2012

Its shows future price
Select back arrow
Select Release button
--Execute—
Now current standard price is 257.50
8. Creation of Purchase Order -ME21N -MM End User
Standard PO Select Vendor-2000301
Purchasing Organization : BILR
Purchasing Group : BIL
Company Code : BIL
Select Item Overview folder
Item Material PO Quantity Net Price Plant
10 BILRM1 2000 100 BILP
Material standard price is 75 and bwe are buytin
Select Item folder
Select Invoice tab
Tax Code : V1
Select Taxes button
Select back arrow
Select Conditions tab
Gross Price : Change Price to 100 Rs
----
Purchase Order: 450001709
9. Goods Receipt-MIGO -MM End User
Select Goods Receipt  Purchase Order  450001709
Select Where tab
Storage Location : HYD
Select Quantity tab
Quantity in Delivery Note : 2000 kgs
 Item OK
Select Excise Invoice tab
Give Excise Invoice :2
Excise Invoice Date : Today’s
----
Select Display
Select Document Info tab
Select FI Documents button
Now on wards it generates Material Ledger Document number also
Double Click on Accounting Document number
Entry
200121 Inventory RM Local 150000 BILRM1 BIL1 BSX
(75Rsx2000 kgs)
100520 GR/IR Clearing RM Local 200000 BILRM1 BIL1 WRX
400202 Price Differences 50000 BILRM1 BIL1 PRD
(25Rs x 2000 kgs)
Page187

It is calculated with the standard price

Select back arrow
Double Click on Material Ledger Document Number

Under the Guidance of Mr. Satyanarayana-2012

It shows 2000kgs 150000
Select Material Price Analysis button
We can see the Standard price is considered for the material
10. Invoice Verification -MIRO - MM End User
Give Invoice Date : Today’s Reference : 3456
 Calculate Tax
Tax Code : V1-Dummy Tax code
Text : Invoice Vérification
PO Reference
Purchase Order : 4500017092
Give Amount : 226800
----
From Menu bar- Invoice DocumentDisplay
Select Follow-On Documents button
Double Click on Accounting Document Number
Select back arrow
Double Click on Material Ledger Document Number
Now Changes at the Time of Invoice Verification
Select Material Price Analysis button
We can see the Inventory Preliminary Value & Price Difference
11. Creation of Production Order -CO01 -PP End User
Material : BILFG12
Production Plant: BILP
Planning Plant : BILP
Order Type : PP01
Quantities
Total Quantity : 10 kgs (Production Order Quantity)
Dates
Finish : Todays
Start : Todays
Select Cost Order button
Select Release Order button
----
Order Number : 60003307
12. Goods Issue Against Production Order -MB1A-MM End User
Select To Order button
Order Storage Location
60003307 HYD
based on BOM it proposes the Quantity
Change the Quantity to 25 kgs (5 kgs extra)
----
From Menu bar-Goods IssueDisplay
Select Accounting Documents button
Double Click on Accounting Document Number
Page188

Under the Guidance of Mr. Satyanarayana-2012

Valuation is done on 75 Rs-Standard Price
Entry
200121 Inventory RM Local 1875 BILRM1 BIL1 BSX
(25kgs x 75 Rs)
400000 RM Consumption Local 1875 BILRM1 BIL1 GBB VBR
Consumptions is done based on Standard Price-75 Rs
Select back arrow
Double Click on Material Ledger Document Number
Select Material Price Analysis button
We can see the Receipt & Consumption of Rawmaterial
8. Actual Overhead Calculation-KGI2- CO End User
Give Order Number : 60003307
Parameters
Period : “8”
Fiscal Year : 2012
Processing Options
 Test Run
 Dialog Display
--Execute—
10% overhead we can see
Debit to Production Order - Credit to Dept H
14. Confirmation of Production Order-CO11N -PP End User
Order : 60003307
Operation/Activity : “10”
Confirmation Type : Final Confirmation
System Show thr Ouput Yeeld
----
15. Production Receipt-PP End User - MB31
Movement Type : 101
Order : 60003307
Plant : BILP
Storage Location : BILP
----
16. To Make Order Technically Complete -CO02 -PP End User
Order : 60003307
From Menu bar-FunctionsRestrict ProcessingTechnically Complete
----
17. Calculation of Variances -KKS2 -CO End User
Order Number : 60003307
Parameters
Period : “8”
Fiscal Year : 2012
 All Target Cost Versions
Processing Options
 Test Run
Page189

 Detail List
--Execute—
Variance 487.50
Under the Guidance of Mr. Satyanarayana-2012
18. Settlement of Variances to Accounts and CO-PA -KO88 -CO End User
Order : 60003307
Parameters
Settlement Period : “8”
Fiscal Year : 2012
Processing Options
 Test Run
 Check Transaction Data
--Execute—
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document Number
because of Material Ledger the Differences will be added to Stocks-Finished goods
Select back arrow
Double Click on Material Ledger Document
Select Material Price Analysis button
19. Actual Costing Run -CO End User
Path : AccountingControllingProduct Cost ControllingActual Costing/Material LedgerActual Costing
CKMLCP-Edit Costing Run
this will be done in the month end
Costing Run : BIL1 -BIL Costing Run for November
Period :8 2012
Select Create Costing Runbutton
Give Costing Run : BIL1 -BIL Costing Run for November
Period :8 -2012
Select Plant-BILP
Select Left arrow
for our Plant we are running the month end provision
----
From Menu bar-Go toSwitch Screen Formatting
At bottom-Select Process folder
At bottom
For Selection -Select Parameter button (Change Parameter)
 Background Processing
 save Log
Select back arrow
Select Yes button for the message to save values
Select Execute button for Selection
Select back arrow
After executing it creates a Log
Select Logbutton for Selection
Double click on the Item Text
Select Cab button
it gives a list
Page190

Select back arrow

Select Cancel button for the Log (Test)
Select Costing Results folder at bottom
From Menu bar-Go toSwitch Screen Formatting
Under the Guidance of Mr. Satyanarayana-2012
Select Process tab
Select Parameter for Determine Sequence
 Back Ground Processing
 Save Log
Select back arrow
Select Yes button to Save Values
Select Execute button for Determine Sequence
Select back arrow
Select Log button for Determine Sequence
Double Click on Test-Item
Select Cab button
It shows in green if errors are there it shows in red
Select back arrow
Select Cancel button for –Test-Item
Select Authorization for Single-Level Price Determination
Now it will be unlocked
Select Parameters for Single-Level Price Determination
Select  Process Again
Select  Check against Standard Price for Period
Processing Options
 Background Processing
Save Log
Select back arrow
Select Yes button to Save the Values
Select Execute button for Single-Level Price Determination
Select back arrow
Select Post Closing-Authorization button
now it will be unlocked
Select Parameters for Post Closing
Processing Type
Select  Execute
Processing Options
 Background Processing
 Test Run
 Save Log
Select back arrow
Select Yes button to Save Values
Select Execute button for Post Closing
Ignore Message
For Mark Material Prices select Parameters button
Validity of Marking
 Manual Date : 01.12.2012
Marking has to come for next month
Processing Options
Page191

 Background Processing
 Save Log
Select back arrow

Under the Guidance of Mr. Satyanarayana-2012

Select Yes for to Save Values
Select Execute button for Mark Material Prices
if we have errors we can see
Select back arrow
In Next Month we have to do the following steps
20. To Open Material Periods for Dec, 12 -MM End User -MMPV
From Company Code : BIL
Period : “9”-Dec
Fiscal Year : 2012
 Check and Close Period
--Execute--
Now the Period is opened
21. Periodic Material Valuation
Path : AccountingControllingProduct Cost ControllingActual Costing/Material LedgerPeriodic
Material ValuationCKMI-Post Closing
Material : BILFG12
Plant : BILP
Parameters
Period : “8”-Nov
Fiscal Year : 2012
Closing Entries for November
 Revaluate Material
Processing Options
 Background Processing
 Test Run
 Save Log
--Execute----
Come back if no errors are there
 Test Run
--Execute--
Select Cab button
now automatically 2 entries will be posted
With 301.11.2012

Inventory FG Dr 487.50
To Gain/Loss on Revaluation 487.50

Reversed on 1.12.2012 date same entry

Credit to balance sheet Debit to P&L account
22. To View Finished Goods Material Master -MM03- MM End User
Material : BILFG12
Press Select Views button
Select Accounting1 view
Give Plant : BILP
we can see Periodic Price 306.25
Page192

The Future Price will be from 01.12.2012 -306.25 -this will be Standard Price from December

Under the Guidance of Mr. Satyanarayana-2012

 Sales ORDER COSTING

Product Costing

Make to Stock Make to Order

Product Cost by Product Cost by Product Cost by Sales Order

Period Order (Production Order)

Sales Order Costing (Product Cost by Sales Order):

1. Complex Products like Production is based on Customer Specific Orders
2. Composite Contracts (Contracts covered with Goods and Services)
3. When Profitability is required at Sales Order Level or Sales Order Item (SDI) Level-we need to collect Revenues
and Costs at Sales Order/Sales Order Item Level
4. Funds Commitment against Sales Orders
5. To include Additional Selling Expenses Respective Customer Specific Order wise
Sales Order Costing

Valuated Stock Non-Valuated Stock

(Along with MM Goods Movement (Along with MM Goods Movements FI Documents
FI Documents will be Generated) will not be Generated-Separate Entries)

1st Scenario 2nd Scenario 1st Scenario 2nd Scenario

-Sales Order is not a -Sales Order is a Cost -Sales Order is a Cost -Sales Order is not a
Cost Object Object Object Cost Object
-Only Production -Production Order and -Production Order and -Not Possible in SAP
Order will be a Cost Sales Order both are Sales Order both are System will not
Object Cost Objects Cost Objects support

Page193

Under the Guidance of Mr. Satyanarayana-2012

Difference between the Scenarios
Column 1 2 3

Sales Order Is A Cost Sales Order is not a Cost Sales Order is a Cost
Object With Valuated Object-With Valuated Object-Non Valuated
Stock Stock Stock

1. When we use this -To Manufacture against -To Manufacture against -To Manufacture against
Scenario Sales Order, Additional Sales Order. No Sales Order. Additional
Selling Expenses to Sales Additional Selling Selling Expenses to Sales
Order-MM/SD Entries and Expenses to Sales Order. Order. MM/SD Entries
FI Entries together MM/SD Entries and FI and FI Entries separately
Entries together
we can add Selling
Expenses to Sales Order
2. Cost Object -Production Order and -Production Order -Production Order and
Sales Order Sales Order
3. Cost Estimate -No Standard Cost -No Standard Cost -No Standard Cost
Estimate-Only Sales Order Estimate-Only Sales Order Estimate-Only Sales Order
Cost Estimate Cost Estimate Cost Estimate
4. Production Order -Production Order -Production Order -Production Order
Settlement
5. Sales Billing -FI Entry -FI Entry -FI Entry
-No CO-PA Entry -CO-PA Entry -No CO-PA Entry
6. Results Analysis (Work -Sales Order and -Only Production Order --Only Sales Order Level
in Process) Production Order Level
[Link] -MM & FI Entries will be -MM & FI entries will be -Only MM Entries
Consumption Passed with Movement passed with Movement -No FI Entries
Type-261 E (Special Type-261 E (Special
Stock) Stock)
[Link] Receipt MM & FI Entries will be MM & FI Entries will be -No FI Entry
passed with Movement passed with Movement
-Only MM Entry
Type 101 E (Special Type 101 E (Special
Stock) Stock)
[Link] MM & FI Entries will be MM & FI Entries will be -No FI Entry
Passed with Movement Passed with Movement
-Only MM Entry
Type 601 E (Special Type 601 E (Special
Stock) Stock)
[Link] Order Settlement Required-COPA -Not Required -Required- COPA
Document at the time of Document at the time of
Sales Order Settlement Sales Order Settlement

Steps
1. Account Assignment Category
Here we define whether Sales Order Carry Costs on the Sales Order or not
☛If we go for Scenario where Sales Order is not a Cost Object-We keep Consumption Posting Field-“Blank”
☛If we go for the Scenario where Sales Order is a Cost Object-We keep Consumption Posting Field-“E”
This Account Assignment is specified in Requirement Class.
2. Requirement Class
-In Requirement Class we attach the Costing Variant, Condition Type and Account Assignment Category.
-In Requirement Class All Configuration Settings are maintained for Controlling
-This will be assigned in Requirement Type
3. Requirement Type
-Requirement Class is to be assigned to Requirement Type-Requirement Type will be assigned in Sales Order
Page194

Configuration
4. Together with Item Category, MRP Type of Material an Allocation to the Individual Transactions in Sales
and Distribution is carried out by means of Requirement Type
Sales Order Item Category–––––> MRP Type–––––>Requirement Type
Under the Guidance of Mr. Satyanarayana-2012
Customization
CO Consultant Job
1. Check Account Assignment Categories
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Account Assignment
Categories
Select Account Assignment Category-M
Select Details button
Consumption Posting- Blank
all the things are Same-
when sales order is not a Cost Object –Keep Consumption Posting-Blank
----
2. Check Requirement Classes
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Requirement Classes
Select Requirement Class-040
Select Details button
Change Costing Sheet : BIL (Created already)
----
3. Check Requirement Types
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Requirement Types
to check – Requirement Type-KEL-Requirement Class-040 is assigned
4. Check Control of Requirements Type Determination
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Control of
Requirements Type Determination
Select Position button
Item Category : TAN
Check –
Item Category Type Requirement Type
TAN PD KEL
5. Check Planning Strategies
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderSelection of Requirements
Type through MRP GroupCheck Planning Strategies
Select Strategy-26-Make-to-Order for Material Variant
Select Details button
Check ––
Requirement Type of Customer Requirement : KEL (Make-to-Order, Material Variant)
7. Check Strategy Groups
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderSelection of Requirements
Type through MRP GroupCheck Strategy Groups
Select Strategy Group-26-Make-to-Order for Stock Item
Select Details button
Check—
Page195

Main Strategy : 26-Make-to-Order for Stock Item

Under the Guidance of Mr. Satyanarayana-2012

8. Check Costing Variants for Product Costing
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Preliminary Costing and Order BOM CostingProduct Costing for Sales Order Items/Order BOMs
Costing Variants for Product CostingCheck Costing Variants for Product Costing
PPC4-is Standard Sales Order
Select Costing Variant-PPC4
Select Details button
Select Valuation Variant button
Select Overhead tab
Assign Costing Sheet - “BIL Costing Sheet” in both Places
----
9. Create Results Analysis Keys
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisCreate Results Analysis Keys
Standard RA Key -KUND-For Sales Order
10. Define Results Analysis Versions
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisDefine Results Analysis Versions
Select Controlling Area-BIL
Select Details button
 Transfer to Financial Accounting (Deselect)
----Ignore
first accounts need to be assigned then we activate this check box
11. Define Valuation Methods for Results Analysis
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisDefine Valuation Methods for Results Analysis
Select New Entries
Controlling Area : BIL RA Version : “0” RA Key: KUND
Results Analysis Method : “0”-Revenue-Based Method-With Profit Realization
Status Control
Cancel Inventory with Status : FNBL
once the Billing is Over Inventory is not Required
Profit Basis
 Sales Order Cost Estimate
Valuation Level
 Valuation at Totals Level
----
Select Expert Mode button
Ignore Message - Select Yes button
Once again select Yes button
Double Click on FNBL Status Number-2
all come automatically
-----
11. Define Line IDs -As Per Product Cost by Production Order
we have done already in Production Order
12. Define Assignment for Results Analysis
Page196

as per Product Cost by Production Order –we have already created

Under the Guidance of Mr. Satyanarayana-2012

13. Creation of Secondary Cost Element i.e., “Cost of Sales”
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisCreation of Cost Element
Double Click on Secondary Cost Element
Cost Element : 1200007
Reference
Cost Element : 1200000
Names
Name & Description : Cost of Sales
--–-
14. Define Update for Results Analysis
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisDefine Update for Results Analysis
Select Position button
Controlling Area : BIL
Select all Line IDs- except ABR for Controlling Area-BIL- Results Analysis Key-FERT
Select Copy As button
Change Results Analysis Key for EL- KUND
Chang Category for EL E-Revenues
Creation
For Line ID EK Change RA Key – KUND
Reserves : 1200000
COS/Revenue : 1200002
For Line ID FK Change RA Key – KUND
Reserves : 1200005
COS/Revenue : 1200006
Press
For Line ID EL - It will ask Cost Element
COS/Revenue : 1200007
Change RA Key for Line ID GK KUND
Reserves : 1200003
COS/Revenue : 1200004
Press ----
now we can transfer to Financial Accounting
15. Define Results Analysis Versions
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisDefine Results Analysis Versions
Select Company Code-BIL
Select Details button
Select  Transfer to Financial Accounting
----Ignore
16. Settlement Customization
a. Creation of Cost Element Group -KAH1
Cost Element Group : BILSECELE (BIL Secondary Cost Elements)
Description : BIL Secondary Cost Elements
Page197

Select Insert Cost Element button

1200000 1200007
----

Under the Guidance of Mr. Satyanarayana-2012

 b. Create PA Transfer Structure
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingSettlementCreate PA Transfer Structure
Select Structure-30
Double Click on Assignment Lines folder
Select Assignment-20-Revenues
Double Click on Source folder
Cost Element
From : 300000 To : 399999
Source
 Cost/Revenues
Double Click on Value Field folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field “3” VV601-Revenues
----
Double Click on Assignment Lines folder
Select Assignment-21
Double Click on Source folder
Cost Element
Group : BILALL (Production Cost Element Group)
Source
 Costs/Revenue
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field “3” VV605-Cost of Goods Sold
Expenditure Variance has to go to this Account-VV605
------
Double Click on Assignment Lines folder
Select Assignemnt-30
Double Click on Source folder
Cost Element Group
Group : BILSECELE -BIL Secondary Cost Element Group
Source
 Costs/Revenue
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field “3” VV605-Cost of Goods Sold
----
Double Click on Assignment Lines folder
Select Assignment-40
Double Click on Value Fields folder
Page198

Select New Entries

Quantity/Value Fixed/Variable Value Field
Quantity Field “3” VV600-Quantity
----
Under the Guidance of Mr. Satyanarayana-2012
 c. Create Allocation Structure
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingSettlementCreate PA Transfer Structure
Select Allocation Structue-30
Double Click on Assignments Folder
Select Assignment-20-Revenues
Double Click on Source folder
Cost Element Group
BILSECELE
----
Double Click on Settlement Cost Elements folder
Select New Entries
Receiver Category By Cost Element Settlement Cost Element
PSG-Profitability Segment 1000001
SDI-Sales Document Item 1000001
G/L-GL Account 
----
Double Click on Assignments
Select Assignment-10-Total Costs
Double Click on Source folder
Cost Element Group
BILALL
Double Click on Settlement Cost Elements folder
Select New Entries
Receiver Category By Cost Element Settlement Cost Element
PSG-Profitability Segment 1000001
SDI-Sales Document Item 1000001
G/L-GL Account 

----
d. Create Settlement Profile
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingSettlementCreate Settlement Profile
Select Settlement Profile-SD1
Select Details button
Default Values
Allocation Structure : 30
PA Transfer Structure : 30
----
17. To Select Sales Order Check Box in Maintain Controlling Area -OKKP
Select Controlling Area-BIL
Select Activate Components/Control Indicators folder
Select  Sales Orders
----
PP Consultant Job
Page199

1. Carryout Overall Maintenance of MRP Groups

Path : SPROProductionMaterial Requirements PlanningMRP GroupsCarry out Overall Maintenance
of MRP Groups

Under the Guidance of Mr. Satyanarayana-2012

Plant : BILP
Select Copy button
From
Plant : 1000
MRP Group : 0010
To
Plant : BILP
MRP Group : 0010
Select Copy button
2. Activate Requirement Planning to Plant BILP
Path : SPROProductionMaterial Requirements PlanningPlanning File EntriesActivate MRP and Set
Up Planning File
Select Material Requirement Planning button
Plant Activate Requirement Planning
BILP 
----
3. Check Settings for Generated Operations
Path : SPROControllingProduct Cost ControllingProduct Cost PlanningMaterial Cost Estimate with
Quantity StructureSettings for Quantity Structure ControlRouting SelectionCheck Settings for
Generated Operations
Plant : BILP
Select New Entries
Order Type : PP01
Default Values
Control Key : PP01-Inhouse Production
Task List Unit : PC
Usage : “1”
Denominator : “1”
Counter : “1”
Base Quantity : “1”
Work Center : Dept G
Operation : 010 - Default Operation
----
SD Consultant Job
1. Assign Standard Sales Procedure to Sales Organization
Path : SPROSales and DistributionBasic FunctionsPricingPricing ControlDefine and Assign Pricing
Procedures
Double Click on Define Pricing Procedure Determination
Select Position button
Sales Organization : BILS
Sales Org Pricing Procedure
BILS RVAA01
------
Page200

Under the Guidance of Mr. Satyanarayana-2012

End User Area
1st Scenario-Sales Order CostingSales Order is not a Cost Object with Valuated Stock
1. Create New Material Master and Assign Strategy Sequence in Material Master -MM01
-MM End User
Material : BILFG15
Industry Sector : Mechanical Engineer
Material Type : Finished Product
Press Select Views button
Select -Basic Data1
-Sales: Sales Organization Data1
-Sales: Sales Organization Data2
-Sales: General/Plant Data
-MRP1
-MRP2
-MRP3
-Work Scheduling
-General Plant Data/Storage1
-Accounting1
-Costing2
we are selecting PP and SD requirements
Select Organizational Levels button
Organizational Levels
Plant : BILP
Storage Location: HYD
Sales Org : BILS
Distribution Channel : BD
Description : Finished Product 15
General Data
Base Unit of Measurement : KG
Division : BD (Steel Division)
Dimensions/EANs
Gross Weight : “1”
Net Weight : 0.99
Select Sales: Sales Organization1 tab
Tax Classification
0-Nil Tax
0-Nil Tax
Select Sales: Sales Organization2 tab
Grouping Items
Accounting Assignment Group : “03”
Select Sales: General/Plant tab
Availability Check : KP
Shipping Data
Transportation Group : “0003” Loading Group : “0003”
Select MRP1 tab
MRP Procedure
MRP Type : PD MRP Controller: A
Lot Size Data
Page201

Lot Size : EX
Select MRP2 tab
Scheduling
Under the Guidance of Mr. Satyanarayana-2012
In-House Production : “0” days
Scheduling Margin Key : BIL
Select MRP3 tab
Planning
Strategy Group : “26”-Make to Order
Select Work Scheduling tab
Production Scheduler : “B”
Select Accounting1 tab
Prices and Values
Standard Price : 260
General Valuation Data
Valuation Class : BIL2
Select Costing1 tab
General Data
 Material Origin
Overhead Group : BIL1
Profit Center : Steel
----
2. Creation of Bill Of Material (BOM) -CS01 -PP End User
Material : BILFG15
Plant : BILP
BOM Usage : “1”
Item Component Quantity
0010 BILRM2 2
----
3. Creation of Routing -CA01 -PP End User
Material : BILFG15
Plant : BILP
General Data
Usage : “1
Status : “4”
Select Operations button
Operation Work Center Control Key
0010 Dept G PP01
Double Click on Operation-0010
Standard Value Unit
Machine 10 H
----
4. Creation of Sales Order -VA01 -SD End User
Order Type : “OR”-Standard Order
Organizational Data
Distribution Channel : BD
Division : BD
Sold-to Party : 3100101
Page202

PO Number : 25 PO Date : Today’s

Sales
Required Delivery Date : Todays Delivery Plant : BILP

Under the Guidance of Mr. Satyanarayana-2012

Payment Terms : “0001”
Item Material Order Quantity
10 BILFG15 10
Ignore
Select Item-10
From Menu bar-Go toItemConditions
Pricing Elements
Condition Type Amount
PR00 600
System shows the Profit comparing with Standard Price
From Menu bar-EditIncompletion Log
Mess comes Document is Complete
----
Order Number : 11772
From Menu bar-Sales DocumentChange
Order Number comes automatically Press
Select Item-10
From Menu bar-ExtrasCosting
Select Recost button
Ignore Messages
we can see 10 kgs value and cost, Overhead
----
Ignore
----again
5. Run MRP - PP End User
Path : LogisticsProductionMRPPlanningMD50-Single-Item, Sales Order
Sales Order : 11772
Sales Order Item: 010
Ignore
6. Run Stock Requirement List -PP End User
Path : LogisticsProductionProduction PlanningDemand ManagementEnvironment
MD04-Stock/Requirement List
Material : BILFG15
Plant : BILP 
convert Plan order to Conversion order
Double Click on Plant Order (our order number)
Select Convert Planned Order to Production Order button (Ctrl+F1)
quantity comes automatically
Select Cost Order button
Select Release Order button
----
Sale Order converted to Production Order
Production Order Number : 60003325
7. To Take Rawmaterial by way of Opening Stock -MB1C -MM End User
Page203

Defaults for Documents Items

Movement Type : 561 Special Stock : “E”
Plant : BILP
Storage Location : HYD
Under the Guidance of Mr. Satyanarayana-2012
Give Sales Order : 11772 -Item: 010
Items
Item Material Quantity
1 BILRM2 50
8. Goods Issue against Production Order -MB1A -MM End User
Defaults for Documents Items
Movement Type : 261 Special Stock : “E”
Select To Order button
Give Order Number : 60003325
system shows for this order 20 kgs quantity is required
Change quantity to 25 kgs
----
9. Enter Time Ticket -CO11N -PP End User
Order : 60003325
Operation/Activity: 0010
Confirmation Type : Final Confirmation
it proposes we required 100 hours
Change Machine hours : 120 hours
----
10. Actual Overhead Calculation -KGI2 - CO End User
Order : 60003325
Parameters
Period : “8”
Fiscal Year : 2012
Processing Options
 Test Run
 Dialog Display
--Execute—
 10% of overhead can be seen
11. Work in Process Calculation -KKAX -CO End User
Order : 60003325
Parameters
WIP to Period : “8”
Fiscal Year : 2012
 RA Version : “0”
Processing Options
 Test Run
 Log Information Messages
--Execute—
We can see Work in Process
12. Settlement of Work in Process to Accounts -KO88 -CO End User
Order : 60003325
Parameters
Settlement Period : “8”
Page204

Fiscal Year : 2012

Processing Type : Automatic
Processing Options

Under the Guidance of Mr. Satyanarayana-2012

 Test Run
 Check Transaction Data
--Execute—
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document Number
13. Production Receipt- MB31 -PP End User
Document Date : Month End Posting Date : Month End: 30.11.2012
Defaults for Document Items
Movement Type : 101
Order : 60003325
Plant ; BILP
Storage Location : HYD
----
14. Variance Calculation -KKS2 -CO End User
Order : 60003325
Parameters
Period :8
Fiscal Year : 2012
 All Target Cost Versions
Processing Options
 Test Run
 Details List
--Execute—
15. Calculation of Work in Process again -KKAX -CO End User
Order : 60003325
Parameters
WIP Period :8
Fiscal Year : 2012
Processing Options
 Test Run
--Execute
work in Process will be zero
16. Settlement of Variances to Accounts -KO88 - CO End User
Variances will be settled and Work in process will be reversed
Order : 60003325
Settlement Period :8
Fiscal Year : 201
 Processing Type : Automatic
Processing Options
 Test Run
--Execute—
Error Message comes
Select Proceed button
Page205

Select  PA Transfer Structure

Select Choose button
Select Structure-E1

Under the Guidance of Mr. Satyanarayana-2012

Double click on Assignment Lines
Select Assignment-65-Output Price Variance
Double Click on Source folder
Cost Element
From : 300200
Source
 Variances on Production Orders
Variance Category : OPPV
Double Click on Value Fields folder
Select New Entries
Quantity/Value Fixed/Variable Value Field
Value Field “3” VV605
----
Select back arrow
 Test Run
--Execute—
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document number
work in process is reversed-differences is posted in respective accounts
17. Finished Goods Delivery -VL01N -SD End User
Shipping Point : BISH
Sales Order Data
Selection Date : Todays
Order : 11772
Item Overview
Actual GI Date : Todays (Goods Issued Date)
Select Item-10
Select Picking tab
Picked Quantity
10
Select Post Goods Issue button
the entry will be posted
18. Sales Billing -VF01 -SD End User
Select Delivery Document number (automatically delivery document comes)
Select Execute button
----
From Menu bar-Billing DocumentDisplay
Document number comes automatically
Select Accounting button
Double Click on Accounting Document number
19. To View Sales Order Report - -SD End User
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
KKAC-For Sales Order with Assigned Orders
Page206

Report Object
Order : 11772
Item : 010
Under the Guidance of Mr. Satyanarayana-2012
Period : 8
--Execute—
Double Click on Order Number
we can see each order wise cost -plan cost and actual cost
2nd Scenario
Sales Order Costing-Sales Order is a Cost Object with Valuated Stock
CO Consultant Job
1. Account Assignment Category for “M”- Consumption Posting Field-Select “E”
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Account Assignment
Categories
Select Account Assignment Category-M
Select Details button
Detailed Information
Consumption Posting : Select-“E”
----
2. Assign Sales Account for Condition Type KOFK -VKOA
In SD Module we have discussed 2 Condition Types
-KOFI-Account Assignment through FI (Sales Order is not a Cost Object)
-KOFK-Account Assignment through CO (Sales Order is a Cost Object)
T-Code-VKOA
Double Click on Table 1
Select Condition Type-KOFI-For BIL
Select Copy As button
Change Condition Type to –KOFA ----
End User Area
1. Creation of Sales Order -VA01 -SD End User
Order Type : “OR”
Organizational Data
Sales Organization : BILS
Distribution Channel : BD
Division : BD
Sold-to Party : Select Customer-3100101
PO Number : 26 PO Date : Todays
Sales
Required Delivery Date : Todays Delivery Plant : BILP
Payment Terms : 0001
Item Material Order Quantity
10 BILFG15 20
Ignore
Select Item-10
From Menu bar-Go toItemConditions
Conditions
Condition Type Amount
PR00 500
Page207

From Menu bar-EditIncompletion Log

----
Order Number-11773
Under the Guidance of Mr. Satyanarayana-2012
From Menu bar-Sales DocumentChange
Order Number comes automatically Press
Select Item-10
From Menu bar-ExtrasCosting
Select Recost button
Ignore Messages
for 20 kgs it shows RM cost, Overhead & Production Cost
----Ignore
we get a message Cost Estimate Saved in Buffer
----again
2. Run MRP -MD50 -PP End User
Sales Order : 11773
Sales Order Item: 010
Ignore
3. Create Plan Order and Convert Plan Order to Production Order -MD04 - PP End User
Sales Order Plan Order Production Order
Individual Access
Material : BILFG15
Plant : BILP
Double Click on Plan Order
Select Convert Planned Order to Production Order
Select Cost Order button
Select Release Order button
----
Order Number-60003326
4. Creation of GL Master -Selling Expenses under Administration Cost -FI End User
T-Code FS00
GL Account : 400340
Company Code : BIL with template  GL Account : 400300
Change Text : Selling Expenses
----
Select Edit Cost Element button –
Valid From : 01.04.2012
Cost Element Category : “1”
5. Assign Selling Expenses Cost Element to Line ID FK
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Period-End ClosingResults AnalysisDefine Assignments for Results Analysis
Select Position give Co Area : BIL
Select Line ID-FK-For Controlling Area-BIL
Select Copy As button
Controlling Area Masked Cost Element
BIL 0000400340
----
6. Posting of Selling Expenses -FB50 -FI End User
: AccountingFinancial AccountingGeneral LedgerPostingFB50-Enter G/L Account Document
Page208

Path
Select Company Code button
Give Company Code : BIL
Document Date : Todays
Under the Guidance of Mr. Satyanarayana-2012
 GL Cost Sales Profit
Account Debit/Credit Amount Text Center Order Item Center
400340 Debit 200 Selling Exp Dept A 11773 010 Steel
200105 Credit 200 Selling Exp Steel

SimulateSave
7. Rawmaterial Receipt Against Sales Order -MB1C -MM End User
Defaults
Movement Type : 561 Special Stock : E”
Plant : BILP
Storage Location: HYD
we are receiving material against Sales Order so
Give Sales Order : 11773 Item:010
Material Quantity
BiLRM2 100
----Ignor
8. Goods Issue Against Production Order -MB1A- MM End user
Select To Order button
Order
60003326
for this production /Sales order-RM required 40
Change Quantity- 50 kgs (Consumed 50 kgs of RM2)
----
9. Confirmation of Production Order -CO11N -PP End User
Order : 60003326
Operation/Activity : 0010
Confirmation Type : Final Confirmation
it proposes yield 20 kgs with proposing 200 hours (10 hrs for1 kg)
Change Machine Actual hours -240
----Ignore about the holiday message
10. Actual Overhead Calculation -KGI2 -CO End User
Order : 60003326
Parameters
Period : “8”
Fiscal year : 2012
Processing Options
 Test Run
 Dialog Display
--Execute—
it shows the overhead rate-and crediting to Dept G
10. Work in Process Calculation -KKAX -CO End User
Order : 60003326
Parameters
WIP to Period : “8”
Fiscal year : 2012
Page209

 RA Version : “0”
Processing Options
 Background Processing

Under the Guidance of Mr. Satyanarayana-2012

 Test Run
 Log Information Messages
--Execute—
we can see WIP
11. Settlement of WIP to Account -KO88 -CO End User
Order : 60003326
Parameters
Settlement Period : “8”
Fiscal year : 2012

 Test Run
--Execute—
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document number
WIP B/S a/C Dr-Credit to P&L
12. Calculation of Work in Process at Sales Order Level -CO End User
Now Selling exp will be added
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales
OrderPeriod-End ClosingSingle FunctionsResults AnalysisExecuteKKA3-Individual Processin
Sales Order : 11773
Item : 010
Period : “8”
Fiscal Year : 2012
RA Version : “0”
 Manual Processing Only
 Full Log
--Execute—
----
13. Settlement of Work in Process at Sales Order Level -CO End User
Path : AccountingControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales
OrderPeriod-End ClosingSingle FunctionsVABB-Settlement
Sales Organization : BILS
Sales Document : 11773
Sales Document Item : 10
Parameters
Settlement Period :8
Fiscal Year : 2012
Processing Options
 Background Processing
 Test Run
 Detail List
 Check Transaction Data
--Execute--
200 Rs WIP will be added
Page210

Select Detail List button

Select Accounting Documents button
Double Click on Accounting Document Number
Under the Guidance of Mr. Satyanarayana-2012
Cost has come at Production Order Level
Sales Exp has come at Sales Order Level
14. Production Receipt -MB31 -PP End User
Document Date : 30.11.2012 Posting Date : 30.11.2012
Defaults for Document Items
Movement Type : 101
Order : 60003326
Plant : BILP
Storage Location : HYD
Ignore
----
15. Calculate WIP once again -KKAX -CO End User
Order : 60003326
Parameters
WIP to Period : “8”
Fiscal year : 2012
 RA Version : “0”
Processing Options
 Background Processing
 Test Run
 Log Information Messages
--Execute—
we can see WIP becomes “Zero”
16. Variances Calculation -KKS2 -CO End User
Order : 60003326
 Test Run
--Execute—
17. Settlement of Variances to Accounts -KO88 -CO End User
Order : 60003326
 Test Run
--Execute--
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document number
work in process will be reversed and the variances will be settled to accounts
18. Delivery -VL01N -SD End user
Shipping Point : BISH
Order : 11773
Item Overview
Actual GI Date : Todays
Select Item-10
Select Picking tab
Picked Quantity
20 kgs
Page211

Select Post Goods Issue button

19. Sales Billing -VF01 -SD End User
Delivery Document number comes automatically

Under the Guidance of Mr. Satyanarayana-2012

Select Delivery Document number
--Execute—
----
From Menu bar-Billing DocumentDisplay
Select Accounting button
No COPA document will be generated
when we do Sales Order Settlement The COPA Documents will be generated
20. Run Work in Process for Sales Order -KKA3 -CO End User
Sales Order : 11773
Item : 10
Period : “8”
Fiscal Year : 2012
RA Version : “0”
 Manual Processing Only
 Full Log
--Execute--
----
21. Settlement of Sales Order -VA88 - CO End User
for the net amout the COPA document will be generated
wip wil be reversed
Sales Organization : BILS
Sales Document : 11773
Sales Document Item : 10
Parameters
Settlement Period :8
Fiscal Year : 2012
 Test Run
--Execute--
Select Detail List button
Select Accounting Documents button
Double Click on Accounting Document number
wip will be reversed
Come back
Double Click on Profitability Analysis Document
Select Value Fields tab
for the net amount it updates-COGS
3rd Scenario
Sales Order Costing-Sales Order is a Cost Object with Non-Valuated Stock
Customization
1. Assign RM Consumption Account for Transaction GBB VKA -OBYC- FI Consultant Job
Double Click on GBB
Give Chart of Accounts : BIL
Valuation Modifier General Modification Valuation Class Account
X VKA BIL1 400000
Page212

----

Under the Guidance of Mr. Satyanarayana-2012

2. Check Requirement Classes -CO Consultant
Path : SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by Sales Order
Control of Sales-Order-Related Production/Product Cost by Sales OrderCheck Requirement Classes
Select Requirement Class-040-Make-to Order without Consumption
Select Details button
Costing Account Assignment
Costing : Blank Valuation : Blank
Costing ID : Blank
Costing Method: Blank
----
End User Area
1. Creation of Sales Order -VA01 -SD End User
Order Type : “OR”-Standard Order
Organizational Data
Sales Organization : BILS

Sold to Party
PO Number : PO Data
Required Delivery dAte
Delivery Plant
Payment Terms
Item BILFG15 10kgs
Upto Incompletion Log
Order Number : 11774
Change Order :
----
2. Run MRP - -MD50 -PP End User
Same as per first scenario
3. Create Plan Order- and Convert Plan Order to Production Order -MD04 - PP End User
Same as per first scenario
Order : 660003327
4. Rawmaterial Receipt against Sales Order -MB1C - MM End User
accounting documents should not be generated
Movement type 561 Special Stock E
No Valuation-Only MM Entries will be generated
5. Goods Issue Against Production Order -MB1A
st
Same as per 1 Scenario -MM End User
6. Selling Expenses -FB50
Same as per 2nd Scenario -FI End User
7. Confirmation of Production Order -CO11N
Same as per Second Scenario -PP End User
8. WIP Calculation at Sales Order Level -KKA3 -CO End User
nd
Same as per 2 Scenario
9. Settlement of WIP at Sales Order Level VA88 -CO End User
Same as per 2nd Scenario
Page213

Now accounting document will be generated

10. Production Receipt -MB31 PP End User
Same as per 2nd Scenario
Under the Guidance of Mr. Satyanarayana-2012
11. Delivery to Customer -VL01N -SD End User
Same as per 2nd Scenario
12. Sales Billing -VF01 -SD End User
nd
Same as per 2 Scenario
13. Work in Process Calculation at Sales Order Level - KKA3 -CO End user
nd
Same as per 2 Scenario
Work in Process will be zero
14. Settlement at Sales Order Level -VA88 -CO End User
nd
Same as per 2 Scenario

Page214

Under the Guidance of Mr. Satyanarayana-2012

 CO-PA TOPICS
CO-PA VALUATION STRATEGY
In CO-PA we get Cost of Goods Sold Value-we will not get the Breakup of COGS like
-What is the RM Cost?
-What is Overheads Cost?
-What is Production Cost?
To get the breakup of Cost in CO-PA we use Valuation Strategy
Customization
1. Define and assign Valuation Strategy
Path : SPROControllingProfitability AnalysisMaster DataValuationStrategiesDefine and Assign
Valuation Strategy
Give Operating Concern : BIL1
Select New Entries
Valuation Strategy Name
BIL BIL Valuation Strategy
----
Select Valuation Strategy-BIL
Double Click on Details folder
Select New Entries
Sequence Material Costing Quantity Field
“1”  VV600-Quantity
----
Select Sequence-1
Double Click on Assignment of Valuation Strategy folder
Select New Entries button
Point of Valuation Record Type Plan Version Valuation Strategy
01 “F”-Billing Data “BIL”
03 “F”-Billing Data “0” “BIL”
for Planning and Actual we are giving the steps
----
2. Define Access to Standard Cost Estimate
Path : SPROControllingProfitability AnalysisMaster DataValuationSet Up Valuation Using
Material Cost EstimateDefine Access to Standard Cost Estimates
Select New Entries
Costing Key : B1 - BIL Costing Key
Determine Material Cost Estimate
 Transfer Standard Cost Estimate
Control Data for Standard Cost
Costing Data
Costing Variant : PPC1-Standard Cost Estimate (materials)
Costing Version: “1”
 Period Indicator : Select-Current Standard Cost Estimate Account to Entry in Material Master
in CO-PA take Standard Cost Estimate as per material Master
----
3. Assign Costing Keys to Material Types
Page215

Path : SPROControllingProfitability AnalysisMaster DataValuationSet Up Valuation Using

Material Cost EstimateAssign Costing Keys to Material Types
Select New Entries

Under the Guidance of Mr. Satyanarayana-2012

 Plan Material Costing
Point of Valuation Record Type Version Type Valid to Key1
"01"-Actual "F"Billing Data FERT 31.12.9999 "B1"
"03"-Manual Plan "F"Billing Data "0" FERT 31.12.9999 "B1"

----
4. Assign Costing Keys to any Characteristics
Path : SPROControllingProfitability AnalysisMaster DataValuationSet Up Valuation Using
Material Cost EstimateAssign Costing Keys to any Characteristics
Select Display Change button
Select Create Step button
Select  Assignment Rule 
Step Description : BIL Valuation Strategy
Source Fields
Name
Select -WERKS-Plant
Select -MTART-Material Type
----
Select Maintain Rule Values button
Plan Material Costing
Point of Valuation Record Type Version Plant Type Key1
"01"-Actual "F"Billing Data BILP FERT "B1"
"03"-Manual Plan "F"Billing Data "0" BILP FERT "B1"

----
5. Assign Value Fields
Path : SPROControllingProfitability AnalysisMaster DataValuationSet Up Valuation Using
Material Cost EstimateAssign Value Fields
Operating Concern : BIL1
Cost Component Structure : “01”-Product Costing
Select New Entries
We are mapping cost components to COPA
Point of
Valuation Cost Component Fixed/Variable Field Name1
"3"-Sum of Fixed and
"01"-Actual "010"-Rawmaterials Variable VV602-RM Cost
"03"-Manual "3"-Sum of Fixed and
Plan "010"-Rawmaterials Variable VV602-RM Cost
"080"-Material "3"-Sum of Fixed and
"01"-Actual Overhead Variable VV603-RM Overheads
"03"-Manual "080"-Material "3"-Sum of Fixed and
Plan Overhead Variable VV603-RM Overheads
"050"-Production "3"-Sum of Fixed and VV604-Production
"01"-Actual Machine Variable Costs
"03"-Manual "050"-Production "3"-Sum of Fixed and VV604-Production
Plan Machine Variable Costs

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End User Area
1. Create Line Items
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Path : AccountingControllingProfitability AnalysisActual PostingsKE21N-Create Line Items

Record Type : “F”-Billing Data
Characteristics

Under the Guidance of Mr. Satyanarayana-2012

Company Code : BIL
Sales Organization : BILS
Customer : 3100101
Product Related Characteristics
Product : BILFG1
Plant : BILP
Select Value Fields tab
Value Field Amount
Quantity 10 kgs
Select Valuation button
we can see RM Cost and Production Cost and RM Overhead
----
CO-PA TABLES
1. CE1XXXX -Actual Line Items
2. CE2XXXX -Plan Line Items
3. CE3XXXX -Summarization Table
4. CE4XXXX -Segment Definition Table/Total Table
-We will not get Drilldown Reports for CE1 and CE2 tables
-We get Drilldown Reports for CE3 and CE4 tables
XXXX Stands for Operation Concern
When we Create Operating Concern automatically the tables are updated
Path to View Tables
ToolsABAP WorkbenchDevelopmentSE11-ABAP Dictionary
Select  Database Table : CE1BIL1-Operating Concern-BIL1
Select Display button
We can see Actual Line Items
CO-PA RECORD TYPES
Record Type in CO-PA
1. Incoming Sales Order “A”
2. Direct Posting From FI “B”
3. Order/Project Settlement “C”
4. Single Transaction Costing “E”
5. Sales Billing Data “F”
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Under the Guidance of Mr. Satyanarayana-2012