Product cost by sales order
Scenario 1
When sales order is not a cost object, with valuated stock
This scenario comes into picture when manufacturing takes place against a particular
sales order. In other words, this scenario is customer specific. Based on customer
specifications we manufacture the product and sell it to the same customer.
Some important terms used in the scenario
Valuated stock
Stock of a company which is held by the company and which forms part of current assets is
known as valuated stock. In other words, along with MM entries FI entries will also be
generated.
The total valuated stock of a material at a plant is the sum of:
Unrestricted-use stock held at all storage locations,
Stock in quality inspection at all storage locations, and
Stock in transfer at storage location and plant levels.
Account assignment category
Here we define whether sales order carries costs on the sales order or not
If we go for the scenario where sales order is not the cost object – we keep the
consumption posting field as blank.
If we go for the scenario where sales order is the cost object – consumption posting field
shall be “E”.
Requirement class
In the requirement class we attach the costing variant, condition type and account
assignment category.
Requirement type
Requirement class is attached to the requirement type. Requirement type will be
assigned in sales order.
Define account assignment categories
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.
T Code: OME9
Select M and click on details.
Keep the consumption field as blank, enter and save.
Check requirement Classes
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.
T Code: OVZG
Click on details button.
Check requirement types
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.
T Code: OVZH
Enter and save.
Check control of requirements type determination
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.
T Code: OVZ1
Check strategy groups
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.
T Code: OPPT
Click on details button.
Check costing variants for product costing
SPRO Controlling Product cost controlling Product cost by sales order
Product costing for sales order items/ order BOMs Costing variants for product
costing Check costing variants for product costing.
T Code: OKY9
Select PPC4 and click on details.
Click on valuation variant button.
Work in progress configuration
Define result analysis keys
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Create Result analysis
keys.
T Code: OKG1
Enter and save.
Define result analysis versions
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Create Result analysis
versions.
T Code: OKG2
Define valuation methods for Result analysis
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Define valuation
methods for Result analysis
T Code: OKG3
Save
Select expert mode radio button.
Click on yes button.
Enter and save.
Define line ids
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Define line ids.
We have already created the settings in product cost by order scenario
Enter and save.
Define assignment for result analysis.
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Define assignment for
result analysis.
T Code: OKG5
We have already created the settings in product cost by order scenario
Define update for result analysis
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Define updates for
result analysis.
T Code: OKG4
Enter and save.
Define posting rules for settlement to financial accounting
SPRO Controlling Product cost controlling Cost object controlling Product
cost by sales order Period – End Closing Result analysis Define posting rules for
settlement to financial accounting.
T Code: OKG8
We have already created the settings in product cost by order scenario
Creation of cost element group – KAH1
We create a group for secondary cost elements so that the secondary cost will form part
of cost of goods sold.
Create PA transfer structure – KEI1
Double click on folder
Double click on folder.
Double click on folder.
Enter and save.
Come back (F3) button.
Double click on folder.
Double click on folder.
Enter and save.
Come back (F3) button.
Double click on folder.
Enter and save.
Create Allocation structure – OKO6
Double click on folder.
Double click on folder.
Double click on folder.
Save
Come back (F3) button.
Double click on folder.
Double click on folder.
Enter and save.
Create Settlement profile – OKO7
Click on button.
Enter and save.
Carry out overall maintenance of MRP groups
SPRO Production Material requirements planning MRP groups Carry out
overall maintenance of MRP groups.
T Code: OPPR
Click on button.
Click on button.
Activate requirement planning to plant
SPRO Production Material requirements planning Planning file entries
Activate MRP and Set up planning file.
T Code: OMDU
Select button.
Enter and save.
Check settings for generated operations
SPRO Controlling Product cost controlling Material cost estimate with quantity
structure Settings for quantity structure control Routing Selection Check
settings for generated operations
T Code: OPJG
Continue
Click on button.
Enter and save.
Assign standard sales procedure to sales organization
SPRO Sales and distribution Basic functions Pricing Pricing control Define
and assign pricing procedure
Double click on define pricing procedure determination
Enter and save.
Scenario 1: Sales order is not a cost object with Valuated stock
Create new material – MM01
Enter and save.
Creation of Bill of Material – CS01
Enter and save.
Creation of Routing – CA01
Enter and save.
Creation of sales order – VA01
Save
Go to T. Code VA02
Extras Costing
Click on save button.
Continue and save
Run MRP
Logistics Production MRP Planning Single item, sales order
T Code: MD50
Ignore the warning message and enter.
Run stock requirement list – MD04
For third line item, click on button.
Click on button
Click on button
Click on button
Click on button
Click on button
Click on button
Save
To take Raw Material by way of opening stock – MB1C
Save
Raw materials issues to production order – MB1A
Save
Enter time ticket – CO11N
Save
Work in progress calculation – KKAX
Click on button
How the system arrived at Rs.5 as WIP cost??
Standard cost run – 2 kg’s * 4 = Rs.8
Overhead cost – 2 Hours * 6 = Rs.12
Total cost shall be Rs.20
Although we have used 1 kg as our raw material quantity the system picks up the
quantity mentioned in the sales order, because we are selling the final product to
customer.
In confirmation, I have given
2 kg’s as quantity and 1 Hour as activity. So my actual cost shall be Rs.15
Hence the system has taken Rs.5 (-) as WIP.
Settlement of WIP to accounts – KO88
Click on
Click on button
Production receipt against production order – MB31
Click on button
Click on button
Calculation of Variance – KKS2
Settlement of variances to accounts – KO88
Click on button
Finished goods delivery – VL01N
Click on button
Journal entry
Sales Billing – VF01
Click on button
Click on button
Change in billing document – VF02
Click on button
Click on button
Double click on accounting document
Customer A/C – Dr
To Sales A/C.
Scenario 2
When sales order is the cost object with valuated stock
Check account assignment categories.
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.
Click on details
Assign sales account for condition type KOFK – VKOA
Enter and save.
Creation of sales order – VA01
Click on button.
Change sales order – VA02
Go to menu bar, Extras Costing.
Click on Recost button.
Ignore the warning message and enter.
Enter
Click on button.
Enter
Click on button.
Run MRP – MD50
Ignore the warning message and enter.
Conversion of plan order to production order – MD04
For the first line item, click on button.
Click on button.
Click on button
Click on button
Click on button
Click on button
Click on button
Save
Creation of GL master selling and administration expenses – FS00
Enter and save.
Posting of selling expenses – F-02
Save
Raw material receipt against sales order – MB1C
Click on button
Raw material issues to production – MB1A
Enter and save.
Production order confirmation – CO11N
Save
Work in process calculation - KKAX
Settlement of WIP to accounts – KO88
Click on button
Goto detail lists
Click on button
Calculation of WIP at sales order level – KKA3
Click on button
Save
Settlement of WIP at sales order level – VA88
Click on button
Production receipt – MB31
Click on button
Click on button
Calculation of variance – KKS2
Click on button
Settlement of variances to accounts – KO88
Click on button
Delivery – VL01N
Click on button
Billing – VF01
Click on button
Click on button
Run WIP for sales order – KKA3
Click on button
Settlement of sales order – VA88
Goto Detail lists
Click on button
Double click on button
So in this way a valuated sales order is costed.
