The Configurations for Product Costing :

1) OKKN : Define costing variant

Costing variant is a key which determines how a cost estimate is carried out and valuated. Standard cost estimate is always created with reference to a costing variant.

Costing Variant consists of the following control parameters:A. Costing typeB. Valuation variantC. Date controlD. Quantity structureE. Transfer control

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Costing type: Costing type controls, which price is to be updated in the material master.

Valuation variant : Valuation variant controls the strategy sequence (for price) to be adopted for costing materials, activities, sub contracting, external procurement, overhead calculation etc.

Date Control: It controls the dates on which the quantity structure and the value structure are created

Quantity Structure Control: Quantity structure determines BOM and routing selection.

Define Transfer Strategy : Here define parameters for partial costing. The purpose of partial costing is to prevent the system from creating a new cost estimate for a material when costing data already exists. Instead, the existing costing data is simply transferred into the new cost estimate.

2) Costing sheet:

COSTING SHEET : It is used to identify the overheads in product costing. Costing Sheet is assigned in valuation variant.

The following parameters are defined in Costing Sheet. The direct costs to which overhead is applied (calculation

base)

The conditions under which overhead is applied (dependency)

Whether overhead is allocated as a percentage or based on the quantity

The overhead percentage rate, or the quantity-based overhead rate per unit of measure

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The validity period for the overhead rate

Which object is credited (cost center, process, or order), and which cost element is used for actual credit postings (credit key).

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3) OKZ2 – Define Overhead Group:

4) OKTZ – Cost Component structure:

Here we assign the respective cost elements (Primary a swell as Secondary) to the respective cost components

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5) KOT2 Check Order types (OPJH- maintain production order types)

6) To define Order type dependent parameters (OPL8)

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This is a PP configuration. The values to be selected for integrating PP with CO are:

Distribution rule, Costing variant Planned, Costing variant actual, Result analysis key

7) OPL1 Costing variant

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8) OKV1 Variance key

Orders can only be selected for variance calculation if a variance key is entered in the order.

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9) OKVW Default variance key for Plant

Assign variance key to the plant here. Variances are calculated on the basis of the variance key in the order master record.

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10) OKVG Check variance variant

In this step you define the variance variant. Variance variants determine what categories are calculated.

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11) OKV6 Define target cost version In this step you define hoe you want to calculate the target costs and there for the variances. Variance calculation calculated target costs so that the variances between the actual costs and planned costs are calculated using the same reference basis.

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