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INTRODUCTION OF SAP

53

Table of Contents 31 Create Cost Elements

42 Create an Activity Type

63. Creation of Two Cost centers (T. Code KS01)

64. Define Calculation Base

75. Define Percentage Overhead Rates

87 Define Credits

88 Define Cost Sheet

109 Define Cost Component Structure

1210 Define Costing Variant

1310.1 Define Costing Type

1310.2 Define Valuation Variant

1510.3 Define Date Control

1510.4 Define Quantity Structure Control

1711 Define MRP Controller

1712. Define Floats (Scheduling Margin Key)

1713 Define Production Scheduler

1814 Creation of Material Master (T. Code MM01)

2015 Bill of Material (BOM)

2016 Determine Personal Responsible for Work Center

2017 Create Cost Center (T. Code KP26)

2118 Create Work Centers

2219 Create Routing

2320 Create Material Cost Estimate

2421 Mark Standard Price/Release

2522 Cost Object Controlling

2622.1 Product Cost by Order

2622.1.1 Check Costing Variants for Manufacturing Orders (PP)

2622.1.2 Define Goods Received Valuation for Order Delivery

2722.1.3 Define Result Analysis key

2722.1.4 Define Cost elements for WIP Calculation

2922.1.5 Creation of 2 G/L Accounts (T. Code FS00)

3025.1.6 Define Result Analysis Version

3025.1.7 Define Valuation Method (Actual Costs)

3125.1.8 Define Line IDs

3225.1.9 Define Assignment

3325.1.10 Define Update

3425.1.11 Define Posting Rules for Settling Work in Process


3525.1.13 Define Variance keys

3525.1.14 Define Default Variance Keys for Plants

3625.1.15 Define Target Cost Versions

3725.1.16 Assign Variance key in the Material Master(T. Code MM02)

3725.1.17 Create Allocation Structure

3925.1.18 Create Settlement Profile

4025.1.19 Creation of G/L Account (T.Code FS00)

4125.1.20 Assign CO Number ranges for Actual Overheads and Actual Activity Costs

4125.1.21 Assignment of Accounts for Automatic Posting (T. Code OBYC)

4225.1.22 Define Order Types

4325.1.23 Define Order type-dependent Parameters

4325.1.24 Define Scheduling Parameters for Production Orders

4425.1.25 Define Checking Control

4425.1.26 Define Confirmation Parameters

4425.1.27 Creation of Production Order

4625.1.28 Create purchase Requisition (ME51N)

4625.1.29 Create purchase order to Purchase Raw material (T. Code ME21N)

4725.1.30 Post Goods Receipt (T. Code MIGO)

4725.1.31 Goods Issue to Production Order

4825.1.32 Display the Production Order Line items (T. Code KOB1)

4925.1.33 Work in Process Calculation

4925.1.34 Settlement of Work in Process

5025.1.35 Issue the Remaining Raw material to Production Order

5125.1.36 Actual Overhead Calculation

5125.1.37 Confirmation of Production Order

5225.1.38 Display the Production Order Line Items (T. Code KOB1)

5225.1.39 Production Receipt against Production order

5325.1.40 Change the status of the Order to TECO (T. Code CO02)

5325.1.41 Again Calculate the Work in Process (T. Code KKAX)

5325.1.42 Run the Final Settlement (T. Code KO88)

Introduction

Most manufacturing or service companies are interested in accurately apportioning their operational and other costs to products and services provided. Comparing these costs with corresponding revenues allows you to determine your company profitability.

Accurately determining the profitability of products, product lines, and services provided can be surprisingly difficult. This becomes apparent when you start entering the details that SAP requires to accurately set up Product Cost Controlling.

Cost Component structure (Cost Sheet for Finished Goods)

Raw Material:

RM888

1@1000

1000

RM999

2@2000

4000

5000

Add: 10% Overhead on Raw Material

500

5500Add: Activity Costs

Assembly Cost5@500

2500

Painting Cost

10@200

2000Total Estimated of the product

100001 Create Cost ElementsCreate one cost element for overhead and other two cost elements for Activity costs.

Path: Accounting(Controlling(Cost Element Accounting(Master Data(Cost Element( Individual Processing(KA06 - Create Secondary

(T. Code KA06)

Controlling Area

TA01

Enter

Cost Element

800600Valid From

01.04.2011to31.12.9999

Enter

Name

Overhead Cost Element

Description

Overhead Cost Element

CElem category41 (Overhead rates)

Save

Creation of Cost Element for Assembly ActivitiesCost Element

800700

Valid From

01.04.2011to31.12.9999

Enter

Name

Assembly ActivitiesDescription

Assembly ActivitiesCElem category43 (Internal Activity Allocation)

Save

Creation of Cost Element for Painting ActivitiesCost Element

800701Valid From

01.04.2011to31.12.9999

Enter

Name

Painting Activities

Description

Painting Activities

CElem category43 (Internal Activity Allocation)

Save

2 Create an Activity TypePath: Accounting( Controlling( Cost center Accounting( master data ( Activity type( Individual Processing( Create (T. Code KL01)Enter the below data

Activity Type

ASSEMValid from

01.04.2011 to 31.12.9999

Press enter

Name

Assembly ActivityDescription

Assembly ActivityActivity unit

H (Hour)

CCtr categories

* (All cost center categories)

ATyp category

1 (Manual entry and manual Allocation)

Allocation cost element 800700Save.

Message: Activity type has been created

Create one more Activity Type for PAINTING ActivityActivity Type

PAINTValid from

01.04.2011 to 31.12.9999

Press Enter

Name

Painting ActivityDescription

Painting ActivityActivity unit

H (Hour)

CCtr categories

* (All cost center categories)

ATyp category

1 (Manual entry and manual Allocation)

Allocation cost element 800701

Save.

3. Creation of Two Cost centers

(T. Code KS01)One is for Over head costs and other one is for Activity costsCost Center

OVERHEADValid from

01.04.2011 to 31.12.9999Press Enter

Name

OVERHEAD Cost centerDescription

OVERHEAD Cost centerPerson responsibleMr. A

Cost center category1(production)

Hierarchy area

PRODCompany CodeTML

Business Area

HYD Save.

Create one more cost center Activity cost centerCost Center

Activity

Valid from 01.04.2011 to 31.12.9999Press enter

Name

Activity Cost center

Description

Activity Cost center

Person responsibleRAMU

Cost center category1(production)

Hierarchy area

PRODCompany codeTML

Business Area

HYD

Now we need to do the settings for the calculation of Overhead cost, which is of 10% on the Raw- material cost.4. Define Calculation Base 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

Z100

Raw material

Enter

Select Z100 and double click on details folder

Controlling Area TA01

From CElem

TO CElem

500000

500099

Save

Click on Create request

Short DescriptionProduct cost settings for TMLSave and continue.

5. Define Percentage Overhead RatesPath: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Basic Settings for Material Costing(Overhead(Costing Sheet: Components(Define Percentage Overhead RatesSelect New Entries O/H Rate

Name

DependencyZOH1

FG over head 1D020Press Enter

Select ZOH1

Double click on Details button

Ignore the message, press enter Select New Entries

Valid FromTo

CO AreaO/H TypePlantPercentage

01.04.2011 31.03.2012TA01

2

TMPP10

- Planned O/H01.04.2011 31.03.2012TA01

1

TMPP10

- Actual O/H

Save and continue.

Note: The Actual Over head cost may change with the planned over head costs.7 Define CreditsPath: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Basic Settings for Material Costing(Overhead(Costing Sheet: Components( Define Credits

Select New Entries

Credit

Name

Z01

Overhead Credit KeyPress Enter

Select Z01, Double click on Details folder Give the Controlling Area

TA01Enter

Select New Entries button

Valid toCost ElementFxd %Cost Center31.03.2012800600*OVERHEAD

Save and save in your request.

8 Define Cost Sheet Path: SPRO(Controlling(Product Cost Controlling( Product Cost Planning(Basic Settings for Material Costing( Overhead(Define Costing Sheets

(T. Code KZS2)Select New Entries

Cost sheet Description

ZTML01Cost sheet for TML- OH calcSelect Cost Sheet ZTML01Double click on Costing sheet rows

Select New Entries

RowBaseOverhead rate

Description

FromTo row

Credit

100Z100

Raw material

200

ZOH1

FG over head 1100100

Z01

Note: In the above cost sheet we are giving calculation clue to the system saying that Overhead needs to be calculated on Raw material and it needs to be credited in the over head cost center.Cost Sheet determines the formula/schema for calculating the overheads related to the product costing. It consists of the following rows that are processed during the calculation:

Base rowsBase rows contain the calculation base of the overhead costing: the cost elements and origins to which overhead is to be applied.

Overhead rows

Overhead rows have overhead rate assigned to them. An overhead row reference one or more base rows or totals rows. The amount contained in these rows, along with the percentage rate calculated using the overhead rates, determines the overhead amount.

Overhead case be percentage based or Quantity-Based Overhead Rate.

The overhead row contains a credit key that defines which object (cost center or order) is credited during the overhead calculation.

Total rowsNo calculation bases or overhead rates are assigned to the totals rows. They are used only to form subtotals or end totals.9 Define Cost Component StructurePath: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Basic Settings for Material Costing(Define Cost Component Structure

(T. Code OKTZ)Click on New Entries button Cost comp. Str

Active

Prime. Cost Comp. SplitName

TM

Select Check boxSelect Check box

Cost Component for TML

Double click on Cost Components with Attributes folder

Click on New Entries button

Cost component structure TM

Cost component 10 Raw material

Cost ComponentCost component group have been grouped under 10 (all cost components other than OH) and 20 (overheads).Cost ShareIt specifies whether the cost is only variable cost or both. In the case of Activity Cost, Cost sheet both the variable and fixed cost have been considered and in the case of other components only variable cost has been considered.

Cost Roll-upThe indicator determines whether the costing results of a cost component are rolled up in to the next highest costing level.


Click on New Entry button (F8)

Cost Component StructureTM

Cost Component20 Over head costSave.

Again click on Next Entry button (F8)

Cost Component StructureTM

Cost Component 30 Activity costSave.

Select Back Arrow two times.

Select Cost Comp. Str. TM10Raw Material component

Double Click on Assignment: Cost Component Cost Element Interval folder

Select New Entries

Cost comp str

Chart of AccountFrom cost elementTo cost element cost component TM

TML

500000

500100 30


Select Back ArrowSelect Cost Comp. Str. TM20Overhead costs component


Select New Entries

Cost comp str

Chart of AccountFrom cost elementTo cost element cost component

TM

TML

600000

600099 30

Save

Select Back Arrow

Select Cost Comp. Str. TM30Activity costs component


Select New Entries

Cost comp str

Chart of AccountFrom cost elementTo cost element cost component

TM

TML

800700

800799 30

Save.

10 Define Costing Variant Every cost estimate you create is based on a costing variant. The costing variant contains all of the control parameters and settings for costing such as selecting prices to access when costing materials, activities, and business processes.

A costing variant contains the following six control parameters:

Costing type

Valuation variant

Date control

Quantity structure control

Transfer control (optional)

Reference variant (optional)10.1 Define Costing TypePath: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Material Cost Estimate with Quantity Structure(Costing Variant: Components( Define Costing Types

(T. Code OKKI)Cost variant is nothing but Why we are costing (estimating) this material and where it needs to be updated in the material master

Here we are going to use costing type 01 Standard cost est. (mat.)10.2 Define Valuation Variant

Path: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Material Cost Estimate with Quantity Structure(Costing Variant: Components( Define Valuation Variants

(T. Code OKK4)Valuation Variant is the most important component in the Costing Variant. It gives the details about how to pick up the cost of the Raw material, Over head and Activity cost.

Here we are going to define our new Valuation Variant

Click on New Entries Z01Valuation Variant TMLFirst we will discuss about the Material Val. Tab

Priority Strategy Sequence

1 Moving Average Price

2 Plan Price1

3 Standard price

These are all the Prices in the Material Master record. Depends the given priority system will picks up the Appropriate price.

Click on Activity Types/ Processes Tab Priority Strategy Sequence

1 Plan price for the period

2 Actual price of previous period

3 Plan price as Average of All Fiscal year periods

Click on Overhead tab

Costing Sheet

Cost Sheet for TML- OH calc

Save and Save in your request.

Click on create button Select New Entries button

Give the plant

TMPPSave and Continue.

Select back Arrow 4 times (Till we get the SPRO Screen)

10.3 Define Date Control

Path: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Material Cost Estimate with Quantity Structure(Costing Variant: Components(Define Date Control

(T. Code OKK6)Date control determines which dates are proposed when a cost estimate is created and whether these dates can be changed by the user. You maintain date control either by clicking the Date Control button in the control tab of costing variant, with Transaction code OKK6.

Here, we are going to use the standard date control

PC01

Standard cost est- month.

10.4 Define Quantity Structure Control

Path: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Material Cost Estimate with Quantity Structure(Costing Variant: Components( Define Quantity Structure Control

(T. Code OKK5)

We will use PC01 Quantity structure controlNote: As there will not be anything much difference in creating new Date control and Quantity structure control, if you want we can create new Date control and Quantity.

Now we will define the new Costing Variant

Define Costing Variant

Path: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Material Cost Estimate with Quantity Structure( Define Costing Variants

(T. Code OKKN)Click on New Entries

Costing VariantTML1 Costing Variant for TMLCosting Type

Standard cost est. (mat.)Valuation Variant

Valuation Variant for TML

Date Control

Std cost est month

Qty Struct Control

Std qty struct. Determ 1

Click on Update tab

Select All the check boxes as shown in the below screen


After creating cost variant, once again we need to go to the cost component structure to Assign the costing variant to the cost component structure.

Path: SPRO(Controlling(Product Cost Controlling(Product Cost Planning(Basic Settings for Material Costing(Define Cost Component Structure

(T. Code OKTZ)Select the Cost Component Structure TM

Double click on Assignment: Organiz. Units - Cost Component StructClick on New Entries

Co CodePlantCosting VariantValid fromCost comp.str

TML

++++++++

01.04.2011TM

Enter

Save and save in your Request.

Select Back Arrow Click on Activate check box against Cost Component StructureTM

11 Define MRP Controller

Path: SPRO(Production(Material Requirements Planning(Master Data(Define MRP Controllers

(T. Code OMD0)

Click on New Entries PlantMRP ControllerMRP controller name

TMPP001

Mr. B

Enter

Save and Save in your Request.

12. Define Floats (Scheduling Margin Key)

Path: SPRO(Production(Materials Requirement Planning(Planning( Scheduling and Capacity Parameters(Define Floats (Scheduling Margin Key)

(T. Code OMDC)Select New Entries

Enter the following details


13 Define Production Scheduler

Path: SPRO(Production(Shop Floor Control( Master Data( Define production scheduler

(T. Code OPJ9)Select New Entries button


Save and save in your request 14 Creation of Material Master (T. Code MM01)

Material

RM888

Industrial sectorMechanical engineering

Material Type

Raw MaterialEnter

Select: Basic data1, Purchasing, General plant data/storage 1, Accounting1 views

Click on Continue button Enter Plant

TMPP

Storage locationRM

Click on Continue

Description

RM888Base unit of measureEA

Material GroupMOTORCARSSelect Purchasing Data tab

Purchasing GroupTMRSelect Accountig1 data tab

Valuation ClassTMRM

Price control

V

Moving price

1000

Save.

Exercise: Create one more Raw material Material No RM999

Price

2000

Creation of Finished Goods Material Master (T. Code MM01)Material:

FG520Industrial Sector:Mechanical engineering Material Type:

Finished product

Select: Basic Data1, MRP1, MRP2, MRP3, Work Scheduling, General Plant data/storage1, Accounting1, Accounting2, Costing1 and Costing2 views.Click on Continue buttonPlant

TMPP

Storage locationFGPress Enter

Description

FG520Base unit of measureEA

Material groupsMOTORCARSSelect MRP1 tab

MRP type

PD

MRP Controller001

Lot Size

EX (lot of lot order quantity)

Select MRP2 tab

In house Production days 0

Schedule margin key: TML

Select MRP3 tab

Availability checkKP

Select work scheduling tab

Production schedulerP

Select Accounting1 tab Valuation classTMFGStandard price

15000

Material FG 520 created.15 Bill of Material (BOM)Path: Logistics(Production(Master Data(Bills of Material(Bill of Material(Material BOM( Create (T. Code CS01)MaterialFG520Plant

TMPP

BOM Usage1Enter


ItemComponentQuantityUn

0010RM8881

EA

0020RM9992

EA

Enter and save

BOM created for material FG520

16 Determine Personal Responsible for Work Center

Path: SPRO(Production(Basic Data(Work Center(General Data(Determine person responsible

Select New Entries button

Plant

Person respons.Person responsible for work center

TMPP

RAM

Person Responsible for TMPP Work CenterSave and save in your request17 Create Cost Center (T. Code KP26)

Planner profile

SAPALLEnterVersion

0

From period

2

To period

2

Fiscal Year

2011

Cost Center

ACTIVITYActivity Type

ASSEMEnter

Click on Overview screen (F5) button

Give Fixed price500

Enter and Save

Select Back Arrow

EnterVersion

0

From period

2

To period

2

Fiscal Year

2011

Cost Center

ACTIVITYActivity Type

PAINT

Enter

Click on Overview screen (F5) button

Give Fixed price200

Enter and Save

18 Create Work Centers

Path: Logistics(Production(Master Data(Work Centers(Work Center (CR01 - Create

(T. Code CR01)

Plant

TMPPWork Center

TM01WC1Work center cat.0001

Enter

Give Work center description

Assembling and PaintingPerson responsible

RAMUsage

009

Standard value key

SAP1 (Normal Production)

Select Default values tab

MachineH

Labour

H

Select Costing tab

Cost CenterACTIVITYEnter the following details

Save.

19 Create RoutingPath: Logistics( Production( Master Data( Routings( Routings( Standard Routings( CA01 Create

(T. Code CA01)

Material FG520

Plant

TMPP

Enter

Usage

1

Status

4

Select Operations button Give Work CenterTM01WC1Control Key

PP01 (In-house production)Enter

Select Operation 0010 and double click

Machine5

Labor

10

Save

Routing was saved with group 50001038 and material FG520

20 Create Material Cost EstimatePath: Accounting( Controlling( Product Cost Controlling( Product Cost Planning( Material Costing( Cost Estimate with Quantity Structure( CK11N Create

(T. Code CK11N)Material

FG520

Plant

TMPP

Costing VariantTML1

Costing Version

1

Enter

Change the Costing date From08.05.2011

Change the Qty Structure Date08.05.2011

Valuation Date

08.05.2011Enter

21 Mark Standard Price/Release

Path: Accounting(Controlling(Product Cost Controlling(Product Cost Planning( Material Costing ( CK24 - Price Update (T. Code: CK24)

Posting Period/Fiscal Year

2/2011

Company Code

TML

Plant

TMPP

Material

FG520

Click on Marking Allowance button

Click on Company code TML

Costing Variant

TML1

Costing version

1

Enter and Save

Select Back Arrow

Remove Test Run

Execute (F8)

Select Back Arrow

Click on Release button Execute (F8)

Now go and see in the material master costing2 view, It got updated standard cost as Rs10000/-With this we have completed the Product cost planning; now we are moving on to Cost Object Controlling.

22 Cost Object ControllingCost Object Controlling allows you to determine planned costs for cost objects, post actual costs, and then analyze variances. Cost Object Controlling, which involves preliminary costing for manufacturing orders. Preliminary costing allows us to determine the planned costs of a product cost collector or manufacturing order.In preliminary costing, the bill of material (BOM) components and routing activities are valuated using the valuation variant specified in the costing variant. The costing variant is determined by the order type, which is a required filed when creating an order. The system calculates overhead expenses using the costing sheet if specified in the valuation variant.22.1 Product Cost by Order 22.1.1 Check Costing Variants for Manufacturing Orders (PP)Path: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Manufacturing Orders(Check Costing Variants for Manufacturing Orders (PP)

(T. Code OPL1)

Here we are going to use Two costing variants PPP1 and PPP2PPP1 is to calculate Planned cost on the production order and PPP2 is to calculate Actual cost on the production order.

Now Double click on Costing Variant PPP1

Click on Valuation Variant tab Select the Overhead tab, In the one change the Costing Sheet to Cost sheet for TML-OH Calculation

Click on Create button beside the Valuation variant/plant tabSelect New Entries

Give the Plant TMPP


Select Back Arrow three times.

Exercise: Do the same thing for Costing Variant PPP2 also22.1.2 Define Goods Received Valuation for Order Delivery

Path: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Define Goods Received Valuation for Order Delivery

(T. Code OPK9)Select New Entries buttonValuation AreaValuation Variant

TMPP

007 (Production order- Actual)


22.1.3 Define Result Analysis keyPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period End Closing(Work in Process( Define Results Analysis Keys (T. Code OKG1)

We are going to use the standard Result analysis key FERT (WIP calculation for production orders)

Save.

22.1.4 Define Cost elements for WIP CalculationPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period End Closing(Work in Process(Define Cost Elements for WIP Calculation Double click on Create Cost Element

Enter the Controlling Area TA01

(OR) We can create cost elements through T. Code KA06

Give the Cost Element 800800Valid From

01.04.2011 to 31.12.9999Enter

Name

W.I.P Cost Element-1Description W.I.P Cost Element-1Cost Element category 31 (Order/project results analysis)

Save

Create 4 more Cost Elements like this.

Give the Cost Element 800801

Valid From

01.04.2011 to 31.12.9999Enter

Name

W.I.P Cost element-2Description W.I.P Cost element-2Cost Element category 31 (Order/project results analysis)

Save.Give the Cost Element 800802

Valid From 01.04.2011 to 31.12.9999Enter

Name


Save.Give the Cost Element 800803

Valid From 01.04.2011 to 31.12.9999Enter

Name


Save.

Give the Cost Element 800804Valid From 01.04.2011 to 31.12.9999Enter

Name


Save.

22.1.5 Creation of 2 G/L Accounts (T. Code FS00)

Work in Process G/L A/c under Current Assets, loans & Advances.Increase/ Decrease in Stocks A/c - under Cost of Production Group.G/L Account No 300207Company code TML

Select w. Template button

Give the G/L Account No300205 (Inv. Raw material Local)

Company Code

TML

Enter.

Change Short and long text to

Work in Process A/cSelect Create/bank/interest tab

Deselect post automatically check box

Save.

One more G/L AccountG/L Account No 400203

Company CodeTMLAccount Group Cost of Production

Click on Profit & Loss statement account radio button

Short and Long text

Inc/Dec in stock- WIP

Click on Control Data tab Click on Line item display check box

Sort Key001Click on create/bank/interest tab

Give Field Status Group G030

Select Post automatically check box

Save.

25.1.6 Define Result Analysis VersionPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period End Closing(Work In Process(Define Results Analysis Versions

Click on new entries buttonSelect controlling Area TA01Enter Technical Result analysis cost element: 800800

Save and Save in your Request.

25.1.7 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)

(T. Code OKGC)

Click on New Entries button

Click on Actual costs button

Give the following dataControlling Area

: TA01

Result analysis version: 0

Result analysis Key

: FERT

Enter


System will automatically create following details.

25.1.8 Define Line IDs

Path: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period End Closing(Work in Process(Define Line IdsSelect line ID: ABR, EK, EL, FK and GK for Controlling Area 1000

Select Copy As button

Change the CO Area TA01 in the place of 1000 for all the 5 items

Enter & Save

Save in your request

25.1.9 Define AssignmentPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Work in Process(Define Assignment

(T. Code OKGB)Select Line IDs EK, FK, GK and ABR for the Controlling Area 1000 as show below.

Select Copy As button Change the Controlling Area 1000 to TA01

Now the first line ID EK stands for direct costs, here in our scenario direct cost elements are Raw material consumption accounts - 500000 to 500099. We can mask the above entry like 0000500+++

Change the Masked cost element field against the EK to 0000500+++

Next line item ID is FK, it pertains to production costs. So we need to assign the Activity Cost elements for this. Activity cost elements in our scenario is 800700 and 80071. So we can mask the entry like 00008007++

Third line item is GK, It pertains to overhead costs. Our over head cost elements is 800600, we can mask the cost element as 00008006++.

For the line ID ABR Masked cost element is 00004002++

Change According, after the change it looks like as below

Press enter,

Save and Save in your Request.25.1.10 Define UpdatePath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Work in Process(Define Update

(T. Code OKGA)Select New Entries Button Give Controlling Area

TA01

Version

0

Result Analysis key

FERT

Line ID

EK

Category

K (Costs)

WIP (Cost element)

800801Reserves

800801Like this we have to up date for line Ids FK, GK and ABR. For EL (Revenues) updating is not required. (Please follow the below diagram and assign accordingly).

Press Enter,

Save and Save in your request.25.1.11 Define Posting Rules for Settling Work in ProcessPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Work in Process(Define Posting Rules for Settling Work in Process

(T. Code OKG8)Select New Entries button

Controlling Area

TA01

Company Code TML

Result Analysis Version0

Result Analysis Category WIPR (Work in process with requirement to capitalize)

P&L account

400203 (Increase/decrease in stock WIP)

Balance Sheet account300207 (Work in process balance sheet accounts)

Save

Save in your request.


Path: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Work in Process( Define Results Analysis Versions (T. Code OKG9)Again Go to Result Analysis Version

Select Controlling AreaTA01

Click on Details button

Select Transfer to Financial Accounting Check box.

Save, ignore the message and press enter.

Save in your request.

25.1.13 Define Variance keysPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing( Variance Calculation( Define Variance Keys (T. Code OKV1)Select New Entries button

Variance key

Name

TA01

Variance key for plant TMPPSave and save in your request.

25.1.14 Define Default Variance Keys for PlantsPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing( Variance Calculation( Define Default Variance Keys for Plants

(T. Code OKVW)Select Position Button

Give the Plant

TMPP

Enter

For TMPP Plant assign Variance Keya TA01

Save and Save in your request25.1.15 Define Target Cost VersionsPath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Variance Calculation(Define Target Cost Versions (T. Code OKV6)Click on New Entries Give Controlling Area

TA01

Target Cost version

0

Description

Target cost version for TA01

Variance Variant

STD

Valuation Variant for Scrap001

Select Actual Costs radio button under Control Costs tab.

Select Current std cost Est button under Target Costs tab

Save25.1.16 Assign Variance key in the Material Master(T. Code MM02)

Give Material

FG520

Enter

Select Costing 1 View

Click on Enter button

Give PlantTMPP

Enter

Give Variance KeyTA01

Save

25.1.17 Create Allocation StructurePath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Settlement(Create Allocation Structure.Select New Entries Button Allocation Structure

Text

TP

TML All. Str- Production orderSave and Save in your request.

Select Allocation Structure TP

Double click on Assignment Folder

Give

AssignmentText10Raw Material cost

20Over head costs

30Activity Costs

Press Enter.

Select Assignment 10- Raw Material Cost

Double click on Source folder From Cost Element 500000 to cost element 500100

Double click on Settlement cost element folder Click on New Entries

Receiver category

CTR (Cost center)

Click on By Cost Element check box

SaveSelect Back Arrow two times

Select Assignment 20- Overhead Cost

Double click on Source folder From Cost Element 800600 to 800699 Cost Element


Receiver category

CTR (Cost center)

Click on By Cost Element check boxSave

Select back Arrow two times.

Select Assignment 30- Activity Cost

Double click on Source folder From cost element 800700 to cost element 800799


Receiver category

CTR (Cost center)

Click on By Cost Element check box

Save.

25.1.18 Create Settlement ProfilePath: SPRO(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Settlement(Create Settlement ProfileSelect New Entries

Settlement Profile

Z03

Production ord set profile-TMLSelect To Be Settled in Full radio button

Allocation structure

TP

Default Object type MAT (Material)

Select Check boxes

100% - Validation %- settlement

Equivalence numbers

Under the Valid receivers,

Select Settlement Optional for the below objectsG/L Account, Cost center, Order, Material and Profitability testing.

Document type: SA

Maximum Distribution rules: 999

Residence time: 12 months

25.1.19 Creation of G/L Account (T. Code FS00)Creation of Production order Difference Account under Other Manufacturing Cost

G/L Account No500105

Company CodeTML

Account Group Other Manufacturing cost

Give Short and Long text Production Order Difference

Select Control Data tab

Select Line item display check boxSort key

001

Select Create/Bank/interest tab

Field Status Group

G014 (MM Adjustment accounts)Select Post automatically only check box.

Save.

Create one more G/L Account for Increase/Decrease in FG under the group Cost of Production.

G/L Account No400204Company CodeTML

Account Group Cost of Production

Give Short and Long text

Change in Finished Goods AccountSelect Control Data tab

Select Line item display check boxSort key

001

Select Create/Bank/interest tab

Field Status Group G036[Revenue accts (with profit center)]Select Post automatically only check box.

Save.

Select Edit cost element button Valid From 01.04.2011 to 31.12.9999

Enter

Cost Element Category 22Save.

25.1.20 Assign CO Number ranges for Actual Overheads and Actual Activity Costs

(T. Code KANK)Controlling Area

TA01Select Maintain Groups button (F6) Double Click on Business Transactions

KZPI [Actual overhead (periodic)]

RKL [Actual activity allocation]Click on Actual Document Number ranges for TA01 check boxClick on Assign Element group button (F5) Save and Continue.

25.1.21 Assignment of Accounts for Automatic Posting (T. Code OBYC)Double click on PRD (Cost (price) differences)Give Chart of Account TML

Enter

Give the Account Number 500105

Save and Save in our Request.

Select Back Arrow (F3)

Double click on GBB

Valuation ModifierGeneral ModifierValuation ClassAccount Number

TM01

AUA

TMFG

400201Save and Save in the request.

25.1.22 Define Order Types

Path: SPRO(Production(Shop Floor Control(Master Data(Order(Define Order Types

(T. Code OPJH)

Select the Order Type PP01


Change Order Type PP01 to TAP1

TextProduction order for TA01Change Settlement Profile to Z03Functional AreaBlankPress Enter

Ignore the message,

Save and Save in the request.

25.1.23 Define Order type-dependent Parameters

Path: SPRO(Production(Shop Floor Control(Master Data(Order(Define Order Type Dependant Parameters

(T. Code OPL8)

Select the Order Type PP01 for the Plant 1000

Click on Copy as button Change the Plant to TMPP

Order Type TAP1

Enter

Save and Continue.

25.1.24 Define Scheduling Parameters for Production Orders

Path: SPRO(Production(Shop Floor Control(Operations(Scheduling(Define Scheduling Parameters for Production Orders

(T. Code OPU3)

Select order TypePP01 (for plant 1000)


Change the Plant to TMPP

Order type to TAP1

Enter Save and Save in your request25.1.25 Define Checking ControlPath: SPRO(Production(Shop Floor Control(Operations(Availability Check(Define Checking Control

(T. Code OPJK)

Select Plant 1000 for Order Type PP011Select Plant 1000 for Order Type PP012

Click on Copy As button

Change the plant to TMPP and Order type to TAP1 for both the business functions

Press Enter Save and Save in the request.25.1.26 Define Confirmation Parameters

Path: SPRO(Production(Shop Floor Control(Operations(Confirmations(Define Confirmation Parameters

(T. Code OPK4)Select Plant 1000 for Order Type PP01


Give Plant

TMPP

Order Type

TAP1Enter & Save

25.1.27 Creation of Production Order

Path: Logistics(Production(Production Control(Orders(Create(CO01 - With Material

(T. Code CO01)

Give the Material No

FG520

Production Plant

TMPP

Planning Plant

TMPP

Order type

TAP1EnterTotal quantity

4Finish Dates

16.05.2011

Start Dates

11.05.2011

Enter

Click on Cost Order button You will get the message Costs determined --> see cost displayFrom the menu select, Goto(Costs(Itemization

You will get the message Order number 60002685 saved (Order number might differ)

Change Production Order (T. Code CO02)

Give the Order number 60002685Click on Release Button You will get the message Release carried out.Save.

25.1.28 Create purchase Requisition (ME51N)

Item MaterialQuantityUnit Delivery date Material Group Plant Stor loc

10 RM88810

EA10.05.2011Motorcars

TMPP RM

20 RM99910

EA10.05.2011Motorcars

TMPP RM

Enter the above Details and Press Enter.

Save.

Purchase requisition will be created.25.1.29 Create purchase order to Purchase Raw material (T. Code ME21N)

Left side of the screen you will be having the Purchase requisition created i.e. 10008623

Keep the cursor on the purchase requisition and Click on the Adopt details icon Purchase OrganizationTMRM

Give the Vendor Account number700005

Enter the Currency INR

Enter the Net Price Against RM888: Rs1000 (Against Line items no: 10)

Against RM999: Rs2000 (Against Line items no: 20)

Save

You will get the message Purchase order was created.

Note: If you are not clear about how to create Purchase requisition and Purchase order, Please see the steps in MM-FI Integration.25.1.30 Post Goods Receipt (T. Code MIGO)

Enter the Purchase Order No

4500014497

Click on Execute button

Select Item Ok check box at the bottom for line item 1 Press Enter,

Select Item Ok check box for the line item 2

Click on Check button Click on Post button 25.1.31 Goods Issue to Production Order

Path: Logistics(Materials Management(Inventory Management(Goods Movement(Goods Issue

(T. Code MB1A)

Movement type

261Plant

TMPPStorage Location

RMPress Enter

Give the Order 60002685[Note: With this order we are going to manufacture 4 quantity, which requires RM888 quantity 4 and RM999 8 Quantity.]Initially we are going to issue 4 quantity of Raw material each

MaterialQuantityunEStorage location

RM888 4 EA RM

RM999 4 EA RM

Save.

Now we have issued Raw material to production order. Now we will go and see the production order line items25.1.32 Display the Production Order Line items (T. Code KOB1)

Give the Order No 60002685Execute (F8)

Note: Assume that at the month end the finished good was not complete, so we need to transfer this mount to Production order.25.1.33 Work in Process Calculation

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

(T. Code KKAX)

Give the Order

60002685WIP to period

2

Fiscal Year

2011

RA (Result analysis) Version

0

Select Test Run check box

Execute (F8)

Select Back Arrow and De-select Test run Check box

Execute (F8)25.1.34 Settlement of Work in Process

Path: Accounting(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Single Functions(Settlement(Individual Processing

(T. Code K088)Give the Order No 60002685

Settlement period 2

Fiscal year

2011


Execute (F8)Select Back Arrow (F3)De-select Test Run check box

Execute (F8)Select Detail list button

Select Accounting Documents button

Select Accounting Document Number

Note: By the end of the period 2, product was not completed, so we booked to work in progress account in the month end. All the below entries will be posted in the next month.

25.1.35 Issue the Remaining Raw material to Production Order

Path: Logistics(Materials Management(Inventory Management(Goods Movement(Goods Issue

(T. Code MB1A)

Movement Type

261Plant

TMPPStorage location

RMPress Enter

Give the Order

60002685Initially we are going to issue 4 quantity of Raw material RM999MaterialQuantityunEStorage location

RM999 4 EA RM Save.25.1.36 Actual Overhead Calculation

Path: Accounting(Controlling(Product Cost Controlling(Cost Object Controlling(Product Cost by Order(Period-End Closing(Single Functions(Overhead(Individual Processing

(T. Code KGI2)Give the Order No60002685Period

3Fiscal Year

2011


Select dialog display check box


Execute (F8)25.1.37 Confirmation of Production Order

Path: Logistics(Production(Production Control(Confirmation(Enter(For Operations(CO11N - Time Ticket

(T. Code CO11N)Give the Order Number60002685

Operation

10

Confirmation type

Select Final confirmation

Yield

4

Machine20

Labour

50 (Actual Estimated was 4*10, but Assume that it consumed 10 labour hours more)

Unit of measurement

H

Save

Note: If you get the error for Exchange rate, Go and maintain the exchange rate in T. Code OB08 According to the error message. We will not get this message in Real time system.

25.1.38 Display the Production Order Line Items (T. Code KOB1)Give Order No60002685Execute (F8)

Planned cost is 4*10000 = Rs 40000/-

But the Actual cost is Rs 42000/-25.1.39 Production Receipt against Production order

Path:Logistics(Materials Management(Inventory Management(Goods Movement(Goods Receipt(For Order (T. Code MB31) Give the Document Date & Posting Date15.06.2011Movement Type101

Give order No

60002685

Plant

TMPP

Storage locationFGEnterIgnore the warning message and press Enter

Save

From the menu select Goods Receipt(Display

Enter


Select Accounting Document No

25.1.40 Change the status of the Order to TECO (T. Code CO02)Give the Order No60002685Enter

From the menu select, Functions(Restrict Processing(Technically Complete

Save 25.1.41 Again Calculate the Work in Process (T. Code KKAX)Give the Order Number60002685

WIP period

3Fiscal Year

2011

RA Version

0


Execute (F8)Select Back Arrow

De-select Test Run Check box

Execute (F8)25.1.42 Run the Final Settlement (T. Code KO88)Give the Order No

60002685

Settlement Period

3

Fiscal Year

2011



Execute (F8)Select Details list button


Select Accounting Document No

Inc/Dec in stock FG1

- 2000

Prod. Order difference- 2000

Inc/Dec in stock WIP

- 12000

Work in Process

- 1200

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