AC515 - SAP CO

AC515 Cost Object Controlling for Sales Orders AC515

Release 470 04/11/2006

© SAP AG 1999© SAP AG

AC515 Cost Object Controlling for Sales Orders

AC515AC515Cost Object Controlling for Sales OrdersCost Object Controlling for Sales Orders

R/3 System Release 4.6C December 2000 5004 3573

© SAP AG 2003

Copyright

Copyright 2004 SAP AG. All rights reserved.

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© SAP AG 2001

Controlling

Cost Managementand Controlling

AC040 5 days

Cost CenterAccounting

AC410 3 days

Product Cost PlanningAC505 4 days

Profitability AnalysisAC605 5 days

Profit CenterAccounting

AC610 2 days

Executive Information System (EIS) 1 -Reporting

AC615 4.6B 2 days

Level 2 Level 3

Cost CenterAccounting:Extended Functionality

AC412 2 days

Activity Based CostingAC420 2 days

Cost Object Controllingfor Products

AC510 3 days

Transfer PricesAC650 2 days

Executive Information System (EIS) - Settingup the System

AC620 4.6B 2 days

Overhead OrdersAC415 2 days

Cost Object Controlling for Sales Orders

AC515 3 days

Actual Costing /Material Ledger

AC530 3 days

Executive Information System (EIS) 3 -Business Planning

AC625 4.6B 1 day

Schedule ManagerAC690 2 days

© SAP AG 1999

SAP20 - SAP R/3 Overview (recommended)

AC040 - Cost Management and Controlling (recommended)

AC505 - Product Cost Planning

Basic knowledge and experience in cost accounting

Good working knowledge of Windows operating environment

Course Prerequisites

User Note The training course material is not intended for self-teaching programs. Only in combination with the explanations provided by the instructor will you receive all course material. Your material includes space for noting this additional information.

© SAP AG 1999

AudienceProject team members responsible for implementing product cost controlling related to sales orders

Accounting personnel responsible for planning, allocating, and analyzing the cost of production processes related to sales orders

Duration: 3 days

Target Group

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Course Overview

Course Goals

Course Objectives

Course Content

Course Overview Diagram

Main Business Scenario

Contents:


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Course Goals

This course will enable you to:

Configure and operate Cost Object Controlling by Sales Order

Acquire the knowledge you need to plan, post, allocate, and analyze costs in several Make-to-Order Scenarios


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Course Objectives

Distinguish between several Make-to-Order Scenarios

Describe and maintain Cost Object Controlling by Sales Order master data and related information

Identify sources of Cost Object Controlling by Sales Order postings and perform transaction processing

Discuss periodic processing options and underlying configuration

Analyze cost information about sales orders using reports

At the conclusion of this course, you will be able to:


© SAP AG 1999

Course Content

Unit 1 Introduction

Unit 2 Overview Product CostControlling

Unit 3 Make-to-Order Scenarios

Unit 4 Make-to-Order withoutSales Order Controlling

Preface

Exercises

Solutions

Appendix

Unit 5 Make-to-Order withSales Order Controlling

Unit 6 Period-End Closing

Unit 7 Sales Order Controllingwithout Manufacturing

Unit 8 Information System


© SAP AG 1999

Course Overview Diagram

Introduction

Overview Product Cost Controlling

Make-to-Order Scenarios

Make-to-Order without Sales Order Controlling

Make-to-Order with Sales Order Controlling

Period-End Closing

Sales Order Controlling without Manufacturing

Information System


© SAP AG 1999

Main Business Scenario

You are in the Cost Accounting department of the IDES Group. IDES, with the help of external consultants, has implemented the SAP R/3 System, including Cost Object Controlling by Sales Order.

Initially, you are temporarily assigned to the project team to review the customization of Cost Object Controlling by Sales Order. You will not only verify the configuration choices, but will also assist the consultants in making changes and completing the system set up.

Once the system is productive, you will be one of the primary users of Cost Object Controlling by Sales Order.


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Integration of Product Cost Controlling

Benefits of Product Cost Controlling

Cost Object Controllingby Order

by Period

by Sales Order

Contents:


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Explain how product cost controlling relates toother CO components

Explain how to use cost object controlling

Explain the differences between cost object controlling

by order

by period

by sales order

Overview Product Cost Controlling: Objectives

At the conclusion of this unit, you will be able to:


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Course Overview

Introduction





Period-End Closing


Information System


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Overview Product Cost Controlling: Business Scenario

You are in the Cost Accounting department of the IDES Group. IDES, with the help of external consultants, has implemented the SAP R/3 System, including Cost Object Controlling by Sales Order.We are in the situation to analyze which business processes in our plant will utilize Cost Object Controlling.We must analyze what production types are used and what the main requirements in Cost Object Controlling are.Because of this, we must know what controlling methods are supported by Cost Object Controlling in the R/3 system.


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Roadmap: Overview Product Cost Controlling




by Period

by Sales Order

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Profit CenterProfit Center

Enterprise Enterprise ControllingControlling

ManagementManagementConsolidationConsolidation

Business Business PlanningPlanning

ECEC

TR

TREASURY

CashTreasuryFonds

CO

CONTROLLING

FI

FINANCIALACCOUNTING

Investment and financingInvestment and financing

G/L Receivables/PayablesAssetConsolidation

Overhead Product costProfitability

FIFIIMIM

EISEIS

Accounting Architecture


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Profit Center Accounting

Product Cost Controlling

Overhead Cost ControllingCOOM

COPA Profitability Analysis

Are the responsibility areas working efficiently?

How high are the costs of organizational activities? Do they keep to their budgets?

How can we optimize the internal processes?

How can we rein in our overhead?

EC-PCA

COPC

COCEL

What costs occur within our organization?Cost Element Accounting

What are the manufacturing costs of a product?

How profitable are individual market segments?

How profitableare individualenterprise areas?

CO Components

How do we rein in our overhead costs? In many organizations, overhead costs have taken a huge upward jump, including costs which the organization cannot assign directly to either products or services. While production areas often display great progress in controlling costs and optimizing processes, overhead continues to display little cost transparency. Overviews and allocations of overhead costs are supported by the following three application components in Overhead Cost Controlling (CO-OM).

Are our responsibility areas actually working efficiently? Cost Center Accounting (CO-OM-CCA) examines where overhead costs arise within the organization. You can assign the costs from organizational sub-areas to their exact causes, with a wide variety of allocation methods to choose from when allocating amounts and quantities. In particular, activity accounting permits allocation of a great many of those costs which would not be normally assigned to products.

How high are the costs of our organizational measures? Do they remain within their budgets? Overhead Orders (CO-OM-OPA) gather and control costs according to the measures taken in the organization. You can assign budgets and arrange that their requirements are monitored by the R/3 System.

How can we optimize processes within our organization? Optimizing business processes treats not only the goals of individual divisions, but those of the entire organization. In recent years, monitoring of functions and products has been joined by control of business processes spanning organizational boundaries. The functional view on your organization is complemented by a cross-functional, process-oriented view. CO-ABC gives you both a powerful management tool for improving your business process performance as well as an information base for your strategic decision making process.


What costs occur within our organization? Cost Element Accounting (CO-OM-CEL) indicates which costs and revenues have occurred and is used for reconciliation of cost controlling with the Financial Accounting (FI) module.


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ECEC--PCAPCA

HRHR

COCOPCPC

ProductionOrder

Process

OverheadOrder

Material ValuationCost

Center

ProfitabilityAnalysis ProfitabilityAnalysis

Profit Center A

ccounting

Product CostControlling

Overhead CostControlling

Human Resources

Cost Element AccountingCost Element Accounting

COCOOMOM

COCOPAPA

Profitabilitysegment

FinancialAccounting

FinancialAccounting

Asset WIP RevenueFIFI Stock

CO-Architecture: Quantities and Values

Material Labor OH Process

Procure Produce Move Stock Sell, Bill

This diagram illustrates the quantity and value flow. The quantity flow is triggered by processes in logistics (procurement, production, stock movements , selling and billing)

Product Cost Controlling is integrated through the processes in logistics. it sets prices for material valuation it provides cost component splits for valuation in Profitability Analysis production cost centers and business processes allocate costs to cost objects (like production orders) in CO-PC it calculates Work in Process it settles production variances to Profitability Analysis

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by Period

by Sales Order

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§

§

§

Product Cost Controlling - Benefits

Management Requirements

Support cost reduction concepts

Strategic Decision Supportwhich products

where or how to produce

Operating Decision Supportpricing of products

effectiveness of manufacturing

§ §

§Legal Requirements

Valuation of:Raw Materials

Semi finished Goods

Finished Goods

Work-in-Process

Reserves for Losses

Evaluate the effectiveness of your production system. - set meaningful standards to measure performance - use variance analysis to compare - report by plant, product group, product or even order

Strategic decisions - (primary) cost component split, cost component splits by organizational unit - scrap costs, full integration of Activity Based Costing

Inventory valuation - alternative valuations (legal, group, profit center) - three parallel currencies - standard costs - actual costs

Semi finished and finished goods valuation - standard prices provided by cost estimates - creation of alternative cost estimates for balance sheet purposes as closing activities

Value Work-in-Process at the close of period end Provisions for losses - used in a make-to-order environment - update balance sheet and profit-and-loss statements accordingly

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Product Cost Controlling - Components (I)

BOM Routing

Prices for MaterialsPrices for ActivitiesPrices for ProcessesOverhead

Cost estimate:Standard costs

Product Cost Planning

Value Structure

Quantity Structure:PP Master Data

Product Cost Planning refers to the creation of cost estimates for the production of goods or services. There is no reference to a production order (the cost estimate is independent of any given production order). If a quantity structure (bill of material and routing) is available in the PP (Production Planning) module of the R/3 system, you can create a cost estimate automatically using the PP data. If no quantity structure is available in R/3, the costing items can be entered manually by means of unit costing, or can be transferred automatically from a non-SAP system using batch input.

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Product Cost Controlling - Components (II)

BOM Routing




Value Structure


Work in processScrapVariances

Settlement

Planned costs,Actual costs

Order

Material $Labor $Overhead $Process $Total ...

Final CostingPeriod-End Closing

Preliminary Costing,Simultaneous Costing

Cost Object Controlling

In Cost Object Controlling, the costs incurred in the production of a product or service are collected on a cost object (such as a production order). Which cost object is used depends on your controlling requirements. It may be a sales order, a production order, a process order or a production cost collector. Cost Object Controlling is used to calculate work in process, scrap costs and variances at period close.

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Product Cost Controlling - Components (III)

Process

Material Ledger

Material movements

Material Settlement:Actual Costs

Value Structure

Actual Costing / Material Ledger

Quantity Structure:Material movements

BOM Routing




Value Structure


Work in processScrapVariances

Settlement

Planned costs,Actual costs

Order

Material $Labor $Overhead $Process $Total ...

Final CostingPeriod-End Closing

Preliminary Costing,Simultaneous Costing


Actual Costing is used to calculate actual product costs at period close. The result may be transferred to the material master as a weighted average price for the closed period. As of Release 4.5 the quantity structure is derived dynamically using the materials movements in the R/3 system. The values connected with these movements are collected in the Material Ledger. Single-level settlement functions to calculate the actual material costs at period close are available in Release 4.0A. Multi-level settlement functions are available in Release 4.5.

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by Period

by Sales Order

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What actual costs did we incur in our area in the current period?

What costs were we expecting based on the quantities manufactured?

Are some product groups performing significantly better than others?

What is causing these variances?

What are the scrap costs of our new line?

Did continuous improvements show cost effects?

What can Cost Object Controlling do for me?

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How does it work - Preliminary Costing ?

Material 4,000

Labor 2,500

Overhead 1,500

Process 1,000

Glass 1,500

Total 9,000

Cost ObjectCost ObjectName Cost ItemsName Cost Items Plan ActualPlan Actual

Plug 2,000

Cable 0,500

Product costing uses the data in Logistics to determine the material consumption (BOM) and the activities used (routing). This data forms the quantity structure.

Product costing valuates this quantity structure with the following information: prices for materials prices for activities overhead on the direct costs for these materials and activities overhead for sales and administration costs processes by evaluating the process template

The results are saved in various forms, and are also used by other applications.

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How does it work - Simultaneous Costing?

Material 4,000 4,600

Labor 2,500 2,800

Overhead 1,500

Process 1,000

Glass 1,500 1,800

Total Costs 9,000 7,400


Plug 2,000 2,200

Cable 0,500 0,600

CONFIRMATION

GOODS ISSUE

EXTERNAL PROCUREMENTEXTERNAL ACTIVITIES

ResourceAllocation

The following business transactions result in actual costs: goods movements in Materials Management invoice receipts in Financial Accounting confirmations in Production Planning reposting and allocation of overhead in Cost Accounting

You can enter the material withdrawals, the confirmations and the goods receipts in separate transactions.

Otherwise you can use the control key of the operation to specify that a goods receipt is to be posted when the operation is confirmed (normally the last operation). You can assign materials that are to be backflushed to an operation and post a goods issue for these components when you create the confirmation.

You can create the confirmation for each order or for each transaction. Confirmation at transaction level is recommended for the subsequent calculation of WIP and variances.

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How does it work - Period End Closing ?

Material 4,000 4,600

Labor 2,500 2,800

Overhead 1,500 1,600

Process 1,000 1,500

Glass 1,500 1,800

Total Costs 9,000 10,500


Plug 2,000 2,200

Cable 0,500 0,600

REVALUATION

PROCESS COSTS

Periodic Costs

OVERHEAD

% %

Period-end closing in Cost Object Controlling contains two new steps in Release 4.0. Process costs can be allocated via the process template. Activities and processes which have been posted directly to the respective cost objects can be revaluated with actual activity prices.

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Settlement

Scrap, Variances,

Target Costs

Work in Process

Overhead

Template Allocation

Revaluation

Periodic Costs

Analyzing Costs

FI/CO -Posting

How does it work - Period-End Closing?

Template Allocation includes process costs and activities. Calculating work in process will calculate your WIP either at actual costs (when using full settlement) or at target costs (when using periodic settlement).

Variance calculation calculates not only variances, but also target scrap and target costs as the basis for the target/actual comparison and scrap variances.

Settlement is the last step in period-end closing in Cost Object Controlling.The necessary accounting documents are posted in Financial Accounting and in the Material-Ledger and data passed on to other components such as Profitability Analysis and Profit-Center Accounting.

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When to Use?

Very flexible production environment

High set-up costs

Full cost tracability needed

Controlling by individual production lots needed

Example: Order related production

Product Controlling by Order

Work center 3

Work center 1Work center 2

Lot

Lot

Lot

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Example: Cumulative Controlling per Process Order

ProductionOrder

Goods issues ConfirmationsGoods receipt

Debit:Material 1,200 $Internal Act. 800 $Overhead 200 $Credit: 2,100 $

ProductionOrder



ProductionOrder



Material

PP

COCO--PCPC

In this case the costs posted onto the process order via goods issues, confirmations and goods receipts are stored on a CO-object, which has a one-to-one relationship to the process order.

In this example process orders have the settlement type FULL. As long the process order is not fully delivered or flagged technical complete the remaining order balance is treated as WIP. Otherwise the order balance shows up in variance calculation.

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Status Relevance in Product Controlling by Order

Order Status

Partially-Releasedor Released

Partially Delivered Delivered or Technically Completed

WIPat Actual

= =

-

=

-

PREL

REL PDLVDLV

TECO

Actual Costs Actual Costs

Actual Costs

WIPat Actual

Variances

Delivery Value

Delivery Value

In the Product Cost by Order component, work in process is valuated at actual costs. The work in process is calculated as the difference between the debit and credit of an order as long as the order does not have the status DLV (delivered).

In the Product Cost by Order component, the variances are not calculated until the order has the status DLV (delivered). This means that when the order has this status, the system no longer interprets the difference between the debit and the credit as work in process but as a variance. In Product Cost by Order, orders never have work in process and variances at the same time.

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When to Use ?

High volume production

Stable and continuous production

No individual lot orientedcontrolling needed

Collecting costs on product cost collectors

Example: Repetitive production

Line

amam--120120

amam--200200

amam--line1line1

amam--110110 amam--210210 amam--220220

amam--100100

Product Controlling by Period

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Example: Periodic Controlling on Product Cost Collectors

Product Cost Collector

Debit:MaterialInteral Act.OverheadCredit:

1,200 $800 $200 $

2,100 $

ProcessOrder

Good issues ConfirmationsGoods receipt

ProcessOrder

Goods issuesConfirmationsGoods receipt

ProcessOrder

Goods issuesConfirmationsGoods receipt

PP-PI

COCO--PCPC

Material

In this case the costs posted onto the process order via goods issues, confirmations and goods receipts are stored on a product cost collector. A product cost collector may exist per production version of a product and collects all costs, which are posted to the logistic object of the according production version.

Product Cost Collectors always have the settlement type PER. With period-end closing, Work in Process at Target Costs as well as Variances can be calculated on the product cost collector.

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Periodicity in Product Cost Controlling by Period

Period

-

-

=

-

-

=

-

-

=

WIPat Target

Actual Costs

Variances

Delivery Value

WIPat Target

Actual Costs

Variances

Delivery Value

WIPat Target

Actual Costs

Variances

Delivery Value

In Product Cost by Period the work in process is calculated at target costs. For repetitive manufacturing you must enter reporting point backflushes for the operation, and for manufacturing orders you must enter confirmations for the operation. Confirmed quantities that are not scrap are valuated in WIP calculation at target costs in accordance with the valuation variant for work in process and scrap defined in Customizing for Product Cost by Period.

In the Product Cost by Period component, variances are calculated by period. Variance calculation compares the confirmed actual values with the target values. The variances are determined as the difference between the actual costs, less the delivery values, less the WIP at target values.

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Product Controlling by Order vs. by Period

Lot-basedProduct Controlling

Period-basedProduct Controlling

Settlement Type

Work in Process

Variances

Settlement

Cost Object

FULL PER

WIP calculated basedon Actual Costs

WIP calculated basedon Target Costs

Variances = Actual Costs -Delivery Value

Variances = Actual Costs -Delivery Value - WIP

Should be doneper period

Has to be doneper period

Production Order,Process Order

Functions

ProductionOrder,

Process,Order

Product CostCollector,

Cost ObjectHierarchy

Product Costby Order

Product Costby Period

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When to Use ?

Costs and revenues collected by Sales Order irrespective of manufacturing scenario

Collecting special sales costs on sales orders

Tracking Funds committed

Calculating Work in Process and Reserves with Results Analysis

Example: Controlling complex Make-to-Order Production

MMMSales Order

Product Cost by Sales Order

The Product Cost by Sales Order component is recommended for complex make-to-order environments. You can use the Product Cost by Sales Order component in the following situations:

When you are manufacturing in-house with reference to a sales order. When you are purchasing products with reference to a sales order and reselling them to your customers. When you are providing services whose costs are assigned to a sales order.

This component allows you to do the following: Calculate and analyze planned costs and actual costs by sales order item Calculate and analyze planned revenues and actual revenues by sales order item Calculate the value of your inventories of finished and unfinished products Create reserves automatically Transfer data to Financial Accounting (FI) Transfer data to Profitability Analysis (CO-PA) Transfer data to Profit Center Accounting (EC-PCA)

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Controlling by Sales Order

SemiSemi--11--22

SemiSemi--22

FinishFinish

RawRaw--11--11 RawRaw--22--11 RawRaw--22--22

SemiSemi--11

RawRaw--11--11 RawRaw--11--11

Make-to-Order-Production

Make-to-Stock-Production

Controlling by Order or by Period

Controlling by Sales Order vs. Make-to-Order Production

MMMSales Order

The slide shows the relationship between Controlling by Sales Order, Controlling by Order/ by Period.

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Overview Product Cost Controlling: Summary

Product Cost Controlling in the R/3 system is located at the interface between Logistics and Accounting.

The functions and cost objects of Product Cost Controlling are designed to support a wide variety of production types.


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Customer Order Management

Make to Order: Controlling Scenarios

Contents:



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Make-to-Order Scenarios: Unit Objectives

explain the process chain of a standard order in customer order management

describe the main make-to-order scenarios



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Course Overview

Introduction





Period-End Closing


Information System


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Make-to-Order Scenarios: Scenario

Your initial aim is to gain an understanding of the process chain of a standard order in customer order management. You learn that the make-to-order manufacturing has two main scenarios.You learn what the main decisions from the controlling perspective are.


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Roadmap: Make-to-Order Scenarios



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Pre-Sales Activities

Sales Order ProcessingInventory Sourcing

Delivery

Billing

Payment

Invoice

Pre-Sales Activities

Sales Order ProcessingInventory Sourcing

Delivery

Billing

Payment

Effective sales order processing ties all activity to customer demand in a series of tightly integrated processes. R/3 Sales and Distribution gives you precisely this kind of sales order processing using a series of linked documents to generate a workflow for sales and distribution. Sales and Distribution begins with pre-sales processing and ends with customer payment for goods received and services rendered. Sales Distribution represents each of these processes with electronic documents, each linked both to preceding and subsequent electronic documents.

The Customer Order Management cycle can begin with Pre-Sales Activities. For example: In response to a Request for Quotation (RFQ) from your customer, you create and send a quotation.

As part of Sales Order Processing, you create a sales document. During Inventory Sourcing, R/3 determines the supplier of the inventory, based on data that you create and control. Is the supplier one of your plants? If so, which one? Is the supplier a third-party vendor? If so, which one?

As a part of Delivery, you create a delivery document. During Billing, you create a billing document. In the Customer Payment process, you receive monies and post these monies in Financial Accounting (FI).

In R/3, the documents defined in Sales and Distribution help you manage the Customer Order Management cycle for you and your customer.


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Order Management: Pre-Sales Activities

Pre-Sales activities may include:Mailing lists

Phone call records kept on the R/3 System

Inquiries

Quotations

Pre-Costing necessary ?

Order cycles sometimes begin with a sales query such as an inquiry or request for quotation. Sales queries help you enter and store important, sales-related information you can use later during order processing.

Use this pre-sales information to plan sales strategies or help build a long-term relationship with the customer.

Using sales queries provide data that can have great value for you later, particularly when: tracking lost sales recording pre-sales data to help negotiate large contracts selling to large organizations that must require documentation of the entire process

Any one of the activities listed above can begin the sales process.


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Order Management: Sales Order Processing

Customers place orders with a customer service representative.Standard orders normally contain:

Customer and material informationPricing conditions for each itemSchedule lines and delivery informationBilling information

Costing information forindividual itemsrequired ?

A sales order is an electronic document that captures and records your customer's request for goods or services.

The sales order contains all pertinent information to process the customer's request throughout the Customer Order Management cycle.

Sales and Distribution automatically proposes appropriate existing data from relevant master records in order to minimize errors and redundant effort in order processing.

You can enter a sales order with many items in a single screen, or place a complex order using an expanded order view.


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Order Management: Inventory Sourcing

Inventory Sourcing (Make/Buy) determines:If the product is available (availability check)How the product will be supplied:

From stock on hand By replenishment activities(production order, purchase order)Make-to-order productionShipped from an external supplierShipped from another warehouse

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Delivery supports:Creating delivery documentsCreating transfer orders (picking)Packing (if required)Goods issue

Order Management: Delivery

Creating the delivery document signals the start of all shipping activities for your sales order. Creating a delivery document includes copying information from the sales order, such as the materials and the quantities, onto the delivery document.

The delivery document is the electronic means to help you manage all the activities of delivery processing, including efficiently picking product, packing, planning and monitoring shipments, preparing shipping papers, and posting goods issue.

Creating a transfer order includes copying information from the delivery document to the transfer order for processing within the warehouse.

The transfer order is essential for controlling the movement of goods within your warehouse. The transfer order is based on a simple principle: where are you taking goods from and where are you taking goods to, within your warehouse. There is a source location and a destination location for every transfer order.

When you post goods issue, you see the automatic update to the general ledger. R/3 affects the general ledger by debiting the Cost-of-Goods Sold account and crediting the Inventory account. Inventory, both stock counts and valuation, goes down; cost-of-goods sold goes up.

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Billing supports:Creating invoices for deliveries and servicesCreating credit and debit memos on the basis of requestsCanceling business transactionsTransferring billing data to financial accounting

Invoice

Order Management: Billing

Creating a billing document includes copying information from the sales order and the delivery document onto the billing document.

The billing document serves several important functions: The billing document is the electronic means to help you prepare invoices, which are considered output of Billing.

The billing document serves as a source to Financial Accounting (FI) to help you in the monitoring and management of customer payment.

When you create a billing document, you see the automatic update to the general ledger. R/3 affects the general ledger by debiting the customer's Accounts Receivable account and crediting the Revenue account.

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Order Management: Payment

Final step of the COM cycleCustomer Payment includes:

Posting payments against invoicesReconciling differences, if necessary

When you post a customer payment, you see the automatic update to the general ledger. R/3 affects the general ledger by debiting the Cash account and crediting the customer's Accounts Receivable account.

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Business Process Summary

Picking

Accounts ReceivableAccounts Receivable

SchedulingagreementSchedulingagreementContract

InvoiceInvoice

Order

ContactContactInquiry

Quotation

Delivery Goods Issue

AccountMaterial Stock

Account

Shipment

Pre-Sales

Sales OrderProcessingInventory Sourcing

Delivery /Transportation

Billing

Customer payment /Financial Accounting

MATERIALS

MANAGEMENT

SALES

INFORMATION

SYSTEM

(C) SAP AG AC515 3-14

© SAP AG 1999




© SAP AG 1999

(C) SAP AG AC515 3-15

© SAP AG 1999


MMMSales Order

Sales Order Item functions as Cost Object

Cost collecting by Sales Order Item irrespective of manufacturing scenario

Ability to assign revenues and costs to sales order item

Ability to show commitments on sales order items

Ability to calculate goods in transit and reserves

(C) SAP AG AC515 3-16

© SAP AG 1999

Make-to-Order Production

A product and sub-assemblies are individually manufactured for a particular customer

Stocks are managed in individual customer segments - sales order stock

Quantities produced for a particular sales order cannot then be used to cover another sales orders demand

Components can be procured specially for an individual sales order

A make-to-order product is planned as a requirement for production using the sales order item number. A separate segment is created in the planning run for this requirement. In the planning segment, the requirements and stocks of the sales order item are managed separately. Thus, various customer-specific variants of a product can be managed using only one material number.

Starting from the sales order, single-item planning can be carried out for any level of the BOM structure. Therefore, it is also possible to procure assemblies and components specifically for the sales order and manage this stock individually for the sales order. This is of particular importance if components can also be configured for the production of the individual customer product.

(C) SAP AG AC515 3-17

© SAP AG 1999

Relevant Decisions

Make-to-Order Production with or without Sales Order Controlling?

Do you want to keep your sales order stock valuated or unvaluated ?

(C) SAP AG AC515 3-18

© SAP AG 1999

Without versus With Sales Order Controlling

COCOPAPA

ScenarioBoth scenarios similar to make to stock production:

Production variances to Profitability Analysis

Valuation of sold quantity with cost component split

Sales order costing(necessary for variant production)

With Sales Order Controlling provides additional functions

Sales OrderCost Estimate

Mat. Labor OH Process

A similar handling of make-to-order production in comparison with make-to-stock production is enabled with the new R3/4.0 functionality of valuated sales order stock.

This enables you to calculate production variances of related production orders to settle these variances to Profitability Analysis to provide a cost component split for Cost of Goods sold

Moreover the sales order costing provides a basis for: sales and pricing decisions planned costs methods of results analysis (percentage of completion)

Sales order costing supports different cost component views, delivers a costed BOM structure, cost element, and cost itemization information.

(C) SAP AG AC515 3-19

© SAP AG 1999

Without Sales Order Controlling

When to Use ?

Production controlling focused on product groups

High production volumes

Sales controlling similar to make-to-stock

Examples:

Assemble to order

Make to order with packaging variants

Use this option when your production controlling is strictly focused on products and not on the sales order itself.

This scenario fits perfectly to a make to stock environment and no additional period end closing activities have to be performed.

The Sales Controlling in such a scenario is accomplished in Profitability Analysis.

(C) SAP AG AC515 3-20

© SAP AG 1999

With Sales Order Controlling

Sales OrderCost Estimate


When to Use ?

Complete Cost OverviewEstimated costs

Special sales costs

Funds commitment

Cost situation of related production orders

Results AnalysisAutomatic creation of reserves

Control of Goods in Transit

Examples:High Order Value

Complex MTO structures

CompleteOverview

COCOPAPA

Sales Order Controlling is recommended if the following information is essential to your business: You high is my profit margin with this special sales order? How can I control my special sales efforts? How high is my fund commitment. Is this sales order performing well from costing point of view?

Where did late customer changes effect my production costs heavily? Moreover you can use results analysis to:

create reserves for expected losses automatically manually add reserves for foreseen risks calculate Goods in Transit where goods have been shipped but not yet invoiced

(C) SAP AG AC515 3-21

© SAP AG 1999

Valuated Sales Order Stock

Combined quantity and value flow

Simplified inventory processing

Assembly costs shown with multilevel make-to-order production

Variances can be determined for these production orders

Similar to make to stock production

Enable more controlling scenarios and the first step in logical de-coupling of CO-PC and PP.

Material movements are made via individual sales order stock. In Release 3.0/3.1 this stock is not valuated In Release 4.0 you can choose whether you manage this stock as unvaluated or valuated sales order stock.

(C) SAP AG AC515 3-22

© SAP AG 1999

Combined Quantity and Value Flow for Sales Order Stock

Material $ 100

Labor $ 200

Surcharge $ 150

Process $ 150

Total $ 600

SD Order 4815SD Order 4815

10 Product-X 1 pc10 Product-X 1 pc

Production OrderProduction Order

Material $ 110

Labor $ 180

Inv. Change $ 600

Material: Product-X

Sales Order StockItem Quantity Value

4763 30 3 1,500.-4783 20 2 900.-4711 10 1 450.-4815 10 1 600.-Delivery

Sales Order CostEstimate

Material ManagementMaterial: Product-XSales Order: 4815/10

Debits:

Credits:

Because the inventories assigned to sales orders and projects carry costs as well as quantities, goods movements for these inventories generate postings in Financial Accounting. The costs of the materials can be determined in a cost estimate for the sales order or production order. The inventory value can therefore be shown immediately in Financial Accounting - costing in the Controlling module is not necessary. The valuated goods movements result in debits and credits to the affected objects.

The goods receipt is valuated using a predefined valuation strategy sequence. The first goods receipt results in valuation on the basis of one of the subsequent strategies in the specified sequence. A standard price selected through one of the subsequent strategies is copied into strategy and serves as the valuation basis from this point onwards. The system calculates the standard price on the basis of your customer exit COPCP002 Material valuation for valuated sales order stock.

The system calculates the standard price in a sales order cost estimate. This sales order cost estimate can be based on a unit cost estimate or on a product cost estimate.

The system determines the standard price using the production order cost estimate or the planned costs for the WBS element. If there are multiple production orders for the same sales order item, the system uses the standard price that results from the production order that delivers first (see strategy 1).

(C) SAP AG AC515 3-23

© SAP AG 1999

Unvaluated Sales Order Stock

Cost Object Controlling by Sales Order is necessary !

The quantity flow is separated from the value flow

The quantity flow (goods receipts, goods issues) is made via individual customer stockThe value flow is made via the sales order item and all assigned orders.

Costs are not posted to the sales order item until order settlement or until the invoice is received for purchased goods No variance calculation on assigned production orders

(C) SAP AG AC515 3-24

© SAP AG 1999

Separated Quantity and Value Flow for Sales Order Stock

Material Management

Material $ 110

Labor $ 180

Settlement $ 290

Material: Product-X

Sales Order StockItem Quantity

4763 30 3 4783 20 2 4711 10 1 4815 10 1

Cost Object Sales Order 4815 / 10

Settlement $ 290

Debits



Goods receipt

Production Order

Debits:

Credits:

Material: Product-XSales Order: 4815/10

(C) SAP AG AC515 3-25

© SAP AG 1999

Plants

Consistent Cost Object Controlling Approach for production

Order Related Production

Process Industry

Stable and Continuous Production

Make-to-order Production

Top-Down Reporting ApproachKey Figures

Aggregated Data

Aggregation Levels

Lean Scenarios

ProductGroups

Materials

Orders

Key Message Valuated Sales Order Stock

(C) SAP AG AC515 3-26

© SAP AG 1999

Decision Table

Controlling bySales Order

SalesOrder Stock

Valuated

Unvaluated

Without With

Not supported

X X

X

SAP Recommendation

(C) SAP AG AC515 3-27

© SAP AG 1999

You understand the process chain of a standard order in customer order management.

You know the main make-to-order scenarios.

In make-to-order environments, the product cost controlling functionality varies, depending on whether the sales order stock is valuated or unvaluated.

Make-to-Order Scenarios: Summary


© SAP AG 1999

MTO without Sales Order Controlling: Contents

Quantity and Value Flow in a Make-to-Order Scenario without Sales Order Controlling

Using Make-to-Order with Repetitive Manufacturing to demonstrate the Scenario

Contents:


© SAP AG 1999

Explain the quantity and value flow in a Make-to-Order Scenario without Sales OrderControlling

Explain the possibilities of lean controlling for mass production with a product cost collector

Explain how to carry out the confirmation and period closing in this scenario

Identify the necessary settings in customizing


MTO without Sales Order Controlling: Objectives


© SAP AG 1999

Course Overview

Introduction





Period-End Closing


Information System


© SAP AG 1999

MTO without Sales Order Controlling: Business Scenario

In your plant 1000, you trigger sales order related repetitive manufacturing using a single production line when a sales order is received for the automobile T-FA00 (in original IDES use am2-gt).

You must now maintain the necessary master data in the R/3 system.

Then you have to carry out the necessary postings in the R/3 system.


© SAP AG 1999

Roadmap: MTO without Sales Order Controlling

Overview Business Scenario

Master Data

Actual Postings

Period-End Closing

Customizing

© SAP AG 1999


© SAP AG 1999

MTO without Controlling by Sales Order

CO-Scenario

Sales order costing(necessary for variant production)

Production variances toProfitability Analysis groups

Valuation of quantity sold with cost component split

When to Use ?

Production controlling focused on product groups

High production volumes

Sales controlling similar tomake-to-stock

Controlling bySales OrderSales

Order Stock

Valuated

Unvaluated

Without With

Notsupported

X X

X


© SAP AG 1999

Repetitive Manufacturing (I)

Line

amam--120120

amam--200200

amam--line1line1

amam--110110 amam--210210 amam--220220

amam--100100

When to Use ?

High volume production

Stable and continuous production

No individual lot orientedcontrolling needed

Repetitive manufacturing

In repetitive manufacturing, the same product is usually produced over a longer period of time on one production line. Instead of being manufactured in restricted production lots, a total quantity of the product is manufactured over a specific period of time, with a specific production rate per partial period. Products generally go through production in a relatively steady flow. Semi-finished products are often processed further directly, without being placed in interim storage.


© SAP AG 1999

Repetitive Manufacturing (II)

Production Line Production Line

Make-to-Order

Make-to-Stock

Sales Order

SDSD

DemandManagement

Production Line Production Line

Make-to-stock repetitive manufacturing: one alternative is to use repetitive manufacturing in make-to-stock production. This means that you produce products with no direct reference to sales orders. Depending on your production strategy, you can settle planned independent requirements from Demand Management against sales orders. The same product is produced repeatedly over a substantial period of time. Instead of being manufactured in restricted production lots, a total quantity of the product is manufactured over a specific period of time, with a specific production rate per partial period. Products go through production in a relatively steady flow. Sales orders are delivered from stock.

Order-oriented repetitive manufacturing: the other alternative is to use repetitive manufacturing for order-oriented production. Sales orders can be processed separately and planned orders are created with direct reference to sales orders. Production is therefore controlled via sales orders. The quantities you produce cannot be swapped between the individual sales orders, the finished products are stocked specifically for individual sales orders (sales order stock). Sales order stock is reduced via goods issue for sales order.


© SAP AG 1999

Creation of the Sales Order and Planned Order

CreationSales OrderCreationCreation

SalesSales OrderOrder Material Requirement Planning/Assembly Processing

SDSD

Production Line

Planned OrderPlannedPlanned OrderOrderHeader

MaterialQuantityDate

Items

The system generates a planned order for the material listed in the sales order item. This planned order contains all the material components necessary for the manufacture of the finished product. The planned order can be created in the following ways: In requirement planning When the sales order is saved

In order to generate the planned order generated when the sales order is saved, you must enter assembly type 1 (planned order: static processing) or 4 (planned order: dynamic processing) in the requirements class.

(C) SAP AG AC515 4-10

© SAP AG 1999

Controlling Scenario Product Cost Collector

StockSales Order

valuated$

MMMMStock

Sales Ordervaluated$

MMMMStock

Sales Ordervaluated$

MMMM


Product Product Cost CollectorCost Collector

Debit

Credit

Sales OrderSalesSales OrderOrder

Planned OrderPlannedPlanned OrderOrder

SDSD





SDSD SDSDCOCO--PAPA

ActualActual+

Product GroupProduct Group

+-

30,000 30,000 45,00045,00054,00054,00012,50012,50020,00020,00021,50021,500

5,0005,00013,00013,000

MotorMotor CyclesCyclesFreight vehiclesFreight vehiclesCars Cars SportSport cars cars ConvertiblesConvertiblesLimousinesLimousinesClassClass AAClassClass BB

COCO--PCPC

If you are in a sales-order-related production environment and using a valuated sales order inventory with repetitive manufacturing, you can collect the costs for a configurable material on a product cost collector for the material.

(C) SAP AG AC515 4-11

© SAP AG 1999

Logistical Benefit - Separate Backflushing

3 C3 C3 C

Aggregated Component Goods Issue

Single Component Goods Issue

Finished Product Level / Assembly Level

Component Level

C = Component C = Component

2 C2 C2 C

Monday Tuesday

1C1C1C 1C1C1C1C1C1C 1C1C1C 1C1C1C

Separate Backflushing

If you have to process a high volume of data, you can significantly improve performance by separating the backflushing processes.

For this purpose, the backflushing processes are split into critical and uncritical partial processes. In the standard system backflushing includes the following partial functions: Goods receipt posting Goods issue of the material components Calculation of actual costs in production activity posting Reduction of the production quantities Adjustment of the dependent requirements of the components in the reporting point backflush Adjustment of the capacity requirements

By separating the backflushing processes, you can instruct the system to post the goods receipts, and reduce the production requirement quantities and capacity requirements immediately. The partial functions that can be carried out later (uncritical functions) are collected in a work list and processed in a background job sometime later. These uncritical functions include, for example, BOM explosion, posting goods issues, reduction of the dependent requirements and posting the production activities. Before posting the goods issues the single component requirements are aggregated, so that the number of material documents are decreased dramatically.

(C) SAP AG AC515 4-12

© SAP AG 1999

Master DataMaster Data


Master Data

Actual Postings

Period-End Closing

Customizing

© SAP AG 1999

(C) SAP AG AC515 4-13

© SAP AG 1999

Master Data

Routing

MaterialMaterial mastermaster

BOMBOM

Production lineProduction line

RoutingRouting

For make-to-order repetitive manufacturing, you must maintain the following logistics master data: material master, bill of materials, production line and routing. As of Release 4.0, you must also create a product cost collector. If you are prepared not to use capacity planning and to carry out simplified cost accounting (for example, not posting production activities for materials with a high material cost share), it is not absolutely necessary to maintain a routing for repetitive manufacturing.

You should not use materials of standard material type KMAT. Instead, you should use a material that is not material type KMAT and for which you select the ‘Material is configurable' indicator in the Basic data view.

(C) SAP AG AC515 4-14

© SAP AG 1999

Master Data: Material

Repetitive manufaturing indicator and profileProduction versionsFinancial accounting and costing

MaterialMaterial mastermaster

BOM

Production line

Routing

In the material master (MRP view), the indicator Repetitive manufacturing authorizes the material for repetitive manufacturing. This enables the use of various repetitive manufacturing functions (for example, using various backflushing transactions). In the views Costing and Financial accounting , you define the price of the material and the price control to be used (standard price, moving average price) to valuate the material in backflushing.

The repetitive manufacturing profile contains control parameters for repetitive manufacturing. You define the repetitive manufacturing profile in Customizing for Repetitive Manufacturing and assign it to a material in the material master record. Various standard profiles for typical procedures are shipped with the standard system. They define, for example: whether, in backflushing, the system posts goods issues for the components simultaneously with goods receipt of the assembly, or only posts a goods receipt (field GR and GI). If you set the system to only post goods receipts, the goods issue for the components must be posted later in a separate transaction.

whether, in backflushing, the system posts production activities simultaneously with goods receipt of the assembly, or only posts a goods receipt (field Activities). If you set the system to only post goods receipts, the production activities must be posted later in a separate transaction (if you want to post production activities).

whether, when the backflushing processes are separated at final backflush, the system does not post the goods issues for the components and/or the production activities in a separate transaction, but automatically as a background job at a later point in time (field Process control).

which movement types are to be used for the goods movements.

(C) SAP AG AC515 4-15

© SAP AG 1999

Master Data: BOM

Repetitive manufacturing indicator and profileProduction versionsFinancial accounting and costing

Planned material consumptionStorage location for backflush

BOMBOM

Material master

Production line

Routing

The BOM defines planned material consumption for the components. In the status/long text of the BOM item (field production storage location), you can define which issue storage location is used to backflush the components in the repetitive manufacturing backflush.

(C) SAP AG AC515 4-16

© SAP AG 1999

Master Data: Production Line

Repetitive manufactoring indicator and profileProduction versionsFinancial accounting and costing


Available capacityCost centerWith scheduling based on takts: takt time

Material master

BOM

Routing

Production lineProduction line

Simple production lines, often consisting of one work center, are created in the R/3 system as work centers with work center category 0007 (WkCtr on prod. line). Other work center categories can also be used in repetitive manufacturing. The work center category WkCtr on prod. line is simply there to separate repetitive manufacturing work centers from other work centers, for organizational purposes.

The work center defines the available capacity (standard or shift sequence). Various capacity categories can be stored.

The formulas the system uses to calculate capacity requirements are defined in the work center. You make the assignment to a cost center for valuation of internal activities in the work center. It makes sense to use the standard value key SAP3 (Production line planning) in the work center. For this standard value key, you can set the production time to must be entered and the setup and teardown times to should not be entered (for the times in the routing).

(C) SAP AG AC515 4-17

© SAP AG 1999

Master Data: Routing

Routing

Repetitive manufacturing indicator and profileProduction versionsFinancial accounting and costing


Available capacityCost centerWith scheduling based on takts: takt time

OperationsStandard values for operations

Material master

BOM

Production line

RoutingRouting

The routing is often used in repetitive manufacturing simply as a basis for scheduling/capacity requirements determination, since it defines the production rate (quantity per time unit). Rate routings therefore often have only one operation and do not describe the operations which are actually to be carried out. The operations which are actually to be carried out by personnel are often described in externally created work center instructions. These are for the information of work center personnel and are kept directly at the production line. You could, however, use a printout of the routing as an alternative to work center instructions.

(C) SAP AG AC515 4-18

© SAP AG 1999

Collecting Costs on the Product Cost Collector

Production version 0001

Production version 0002Product cost collector



Product cost collector

Product cost collector

In repetitive manufacturing, all costs incurred in production of a material are collected on a product cost collector and settled at period close (period-based Controlling).

(C) SAP AG AC515 4-19

© SAP AG 1999


Data

Production ProcessShort TextPlanning PlantProduction Version

Plant

Characteristics for production process

Material

Production Version

Short TextExternal order no

Overhead KeyProfit Center

Costing SheetResults analysis keyVariance Key

Business Area

COPC-CONFIG-1CO01

COPC-CONFIG-1

Cstg. variant planned

Cstg. variant actual

Variance Calculationis possible !


0001

(C) SAP AG AC515 4-20

© SAP AG 1999

Actual Postings


Master Data

Actual Postings

Period-End Closing

Customizing

© SAP AG 1999

(C) SAP AG AC515 4-21

© SAP AG 1999

Creation of the Sales Order

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD

4720 / 10 FIN-I4720 / 10 FIN4720 / 10 FIN--II

SDSD


100 150 80 120 450


150 200 100 150 600

With the creation of the sales order a product cost estimate could be created automatically to cost the order specific quantity structure. This cost estimate assigns the planned costs for material, labor and so on to the cost components.

(C) SAP AG AC515 4-22

© SAP AG 1999

Creation of the Planned Order

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD

4720 / 10 FIN-I4720 / 10 FIN4720 / 10 FIN--II

SDSD


100 150 80 120 450


150 200 100 150 600

Planned Order4710 /10

Material QuantityComponent-1 2Component-2 3... ....



The system generates a planned order for the material listed in the sales order item. This planned order contains all material components necessary for manufacture of the finished product. The planned order can be created in the following ways: In requirement planning When the sales order is saved (assembly processing)

(C) SAP AG AC515 4-23

© SAP AG 1999

Goods Receipt for Sales Order Stock

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD

4720 / 10 FIN-I4720 / 10 FIN4720 / 10 FIN--II

SDSD


100 150 80 120 450


150 200 100 150 600

StockSales Order

4710 / 10450

MMMMStock

Sales Order4720 / 10

600

MMMM

Debit

Credit

Product Cost CollectorPlanned Order4710 /10



Material QuantityComponent-1 3Component-2 5... ....Stock Change -450

Stock Change -600

Once you have manufactured the material, you enter a goods receipt for the planned order. To do this, access the menu of Repetitive Manufacturing and enter a goods receipt for the sales order.

The sales order stock is valuated on the basis of the sales order cost estimate.

(C) SAP AG AC515 4-24

© SAP AG 1999

Goods Issue

Product Cost CollectorDebit

Credit

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD

4720 / 10 FIN-I4720 / 10 FIN4720 / 10 FIN--II

SDSD


100 150 80 120 450


150 200 100 150 600

Material 270

Stock Change -450

Stock Change -600





The product cost collector is debited with the costs for the material components listed in the planned order.

(C) SAP AG AC515 4-25

© SAP AG 1999

Activities

Production Cost CollectorDebit

Standard Cost Estimate

Cost CenterDirect activityallocation

Material 10

Labor 25

Surcharge 15

Process 10

Total 60

Material 270

Labor 300

Stock Change $ -450

Stock Change $ -600

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD

4720 / 10 FIN-I4720 / 10 FIN4720 / 10 FIN--II

SDSD

Debit

Credit

Automatic posting of the product cost collector with the activities used only takes place if you have created a standard cost estimate for the configurable material. If you have created a standard cost estimate for the configurable material and if you have specified in the repetitive manufacturing profile that activities should be posted, then when the goods receipt is posted in the menu of repetitive manufacturing the product cost collector is debited with the activities according to the standard cost estimate. The debit with direct material costs is still made in accordance with the material components listed in the planned order.

If you have not created a standard cost estimate for the configurable material but you still want to debit the product cost collector for the activities used, carry out an internal activity allocation in the Product Cost by Period menu.

(C) SAP AG AC515 4-26

© SAP AG 1999

Delivery to Customer

StockSales Order

4710 / 10450 450

Cost of Goods Sold

450

Post Goods Issue

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

Delivery

Goods issue:reduces warehouse stock

posts the value change to the stock accounts in inventory accounting

reduces delivery requirements

updates the document flow for sales and delivery documents

creates a work list for billing

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD


100 150 80 120 450

FIFI

(C) SAP AG AC515 4-27

© SAP AG 1999

Invoicing Customer

Customer

800

Sales Revenue

800

Creating an invoice:automatically creates an accounting document that updates the general ledger account

updates the customer’s credit record

updates sales statistics for the sales information system

updates controlling such as profitability analysis and profit center accounting

FIFI

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

Delivery

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

SDSD


100 150 80 120 450

4710 / 10 FIN-I4710 / 10 FIN4710 / 10 FIN--II

Invoicing

COCO--PAPA

At billing, the R/3 System will debit the customer's Accounts Receivable account and credit the Revenue account.

Please note: In your implementation of the R/3 System, there may be automatic update to other accounting components, if implemented. For example: Controlling (CO), Profitability Analysis (CO-PA), and Legal Consolidation (FI-LC). In your implementation of the R/3 System, there may be additional updates to the general ledger if you implement Warehouse Management or if you accept multiple methods of payment, in addition to Credit Management.

(C) SAP AG AC515 4-28

© SAP AG 1999

Analysis Paths in Reporting

Division

Reg

ion

Region

Customer

group

Sales revenueSales deductionNet revenueCost gds mfdContr. margin 1

ActualDetail List: North

3500550

295012001750

Cst grp1Cst grp2Total

Drilldown ListNetrevenue

Contr.margin

1100 680 1850 10702950 1750

Contr.marg. 1

Drilldown ListNetrevenue2950 17503400 1540

NorthSouth

CG2CG1

North South

Customergroup

You can summarize the data according to the derived characteristics and then drill down interactively in reporting. At each level of the report, you can display the drilldown list (overview) or detailed information (margin analysis).

(C) SAP AG AC515 4-29

© SAP AG 1999

CO-PA Reporting

Total Revenues 49.997.014 203.313.263Quantity Discounts 103.700 807.910Customer Discounts 890.630 1.203.980 .

.

.Total Discounts 994.330 2.011.890Net Revenue 49.002.684 201.301.373

Raw Materials 25.340.480 110.200.260Labour Costs, var. 6.100.340 23.600.140Machine Costs, var. 1.100.320 3.000.540Production Process Cost, var. 800.520 900.720 Total Variable Production Cost 33.341.660 137.701.660Contribution Margin 1 15.661.024 63.599.713

Labour Costs, fix. 3.500.340 15.600.140Machine Costs, fix. 3.100.320 17.000.540Production Process Cost, fix 4.200.660 16.600.680Total Fixed Production Cost 10.801.320 49.201.360

Total Overhead Surcharges 1.000.000 4.000.000

Contribution Margin 2 3.859.704 10.398.353

Administration Process Cost 600.300 1.204.500Marketing Process Cost 760.600 1.708.000

Total Period Cost 1.360.900 2.732.500

Contribution Margin 3 2.498.804 7.665.853

Vans Motor Bikes

Material

Labor

OH

Process

In a CO-PA contribution margin report value fields containing process costs can now be included for a more realistic profitability analysis on product families, customers, distribution channels etc. The CO-PA reporting functionality allows a ‘Turn and Twist' through all the dimensions of CO-PA to even drill down to the profitability of single products.

(C) SAP AG AC515 4-30

© SAP AG 1999

Period-End Closing


Master Data

Actual Postings

Period-End Closing

Customizing

© SAP AG 1999

(C) SAP AG AC515 4-31

© SAP AG 1999

Period End Closing: Product Cost Collector

1. Template Allocation

2. Revaluation at Actual Activity Prices

3. Overhead

6. Settlement

ProductCost Collector

5. Variances

4. Work in Process

(C) SAP AG AC515 4-32

© SAP AG 1999

Integration of Variances - S-Price Control

Material 1000

Labor 500

Overhead 100

Process 800

Total 2400

Credit

Inv. Change -2000

Debit

2000Stock Price variance

400

Financial Accounting

Variance CategoriesInput Price 150Input Quantity 150Resource-Usage 100Scrap 0Lotsize 0Output Price 0Total: 400

Profitability AnalysisProduct Cost Collector

Variance 400

It depends on your business scenario if a variance calculation is usefull for the analysis of production costs.

To settle the price differences to CO-PA, you can process variance calculation and settle the variance categories. In case that you do not want to analyse the variance categories, use only variance category “remaining variances”.

Define the price difference account as a cost element and enter a default account assignment to profitability segment.

(C) SAP AG AC515 4-33

© SAP AG 1999

Integration of Variances - V-Price Control

Material 1000

Labor 500

Overhead 100

Process 800

Total 2400

Credit

Inv. Change -800

Debit

Variance 400

Inv. Change -1200

Product Cost CollectorStock

Sales Order4710 / 10800160

MMMM

400 x800

2000

StockSales Order

4720 / 101200

240

MMMM

Apportion Variancesaccording to

Delivery Value

400 x1200

2000

Settlement dynamically distributes the variance to the different individual requirements stock segments according to the delivery values of the delivered quantities. Dynamic distribution to individual stock segments and to stock segments of make-to-stock materials is also possible.

(C) SAP AG AC515 4-34

© SAP AG 1999

Customizing


Master Data

Actual Postings

Period-End Closing

Customizing

© SAP AG 1999

(C) SAP AG AC515 4-35

© SAP AG 1999

Sales Document Structure

Sales documents contain information that is logically organized:

Controlling by Sales Order at Item LevelControlling by Sales Order at Item Level

Header

Item 1

Schedule line 1

Item 2

Schedule line 1

Schedule line 1

The header contains customer-related data for the entire order, such as currency and term of payment

Item contain data about the material and quantities ordered

Schedule lines inform you as to when and in what quantity the individual items will be delivered

A sales document can contain as many items as you require. Items contain information such as: Conditions Texts Partner

Each item may contain several schedule lines. The requested delivery date appears in the first schedule line. If the order quantity cannot be confirmed for the requested delivery date, the R/3 System proposes delivery dates and confirmed quantities in the following lines. Schedule lines contain the following information:

Delivery dates Quantities to be delivered on these dates

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Item Categories

Partner Texts

Partner Texts

Relevance for deliverySchedule lines allowedRelevance for deliverySchedule lines allowed

Incompletion logIncompletion log

Pricing Relevance for billing

Pricing Relevance for billing

Item categoryItem category

Item categories provide additional control functions for the sales order documents. By using an item category, the system can process a material differently in each document type. The item category in the sales document depends on the sales document type and the material.

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Item Category Determination

Document Type: Inquiry

Document Type: Standard Order

SDSD

SDSD

Item Material Item Category10 M1 AFN Standard Item

Item Material Item Category10 M1 TAN Standard Item

Material master

MaterialM1

Item category group

Norm

MMMM

You can find the item category group in view „basic data“ and „sales 2“ of the material master record.

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Requirement Class Determination (I)

Customizing for common business processes

for example sales order type OR

Requirement Class

Requirement Type

Planning Strategy

Material Requirement Planning

Strategy Group

MRP Group

You can select the requirements type through the MRP group or the strategy group in the MRP 1 view in the material master record.

Strategy for Determining the Requirements Type: First, an attempt is made to find a requirements type using the strategy group in the material master. If the strategy group has not been maintained, the system will determine it using the MRP group. If the MRP group has not been defined, the system uses the material type instead of the MRP group

when accessing the corresponding control tables. If no requirements type is found here, the system assumes a special rule and attempts to find a

requirements type with the aid of the item category and the MRP type. If this is not possible, a last attempt is made to find a requirements type with the item category only. If the last attempt fails, the system declares the transaction as not relevant for the availability check

or transfer of requirements.

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Requirement Class Determination (II)

Requirement Class

Requirement Type

Planning Strategy

Item CategoryMRP Type

Sales and DistributionMaterial Requirement Planning

Customizing for special business processes

for example returns

Strategy Group

MRP Group Item UsageItem Category Group Document Type

Another possibility is to select the requirement type through the item category group (sales view material master record) and the order type of the SD document (inquiry, quotation, sales order)

You can select an alternative search strategy in the customizing step ‘Check Control of Requirements Type Determination'. If the field ‘Source' field contains the value 1 or 2 the requirement type is selected through the item category group and order type.

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Customizing - Requirement Class (I)

Assembly / Requirements

Costing

Assembly TypeCopy Cost estimate

Automatic planning

Account Assignment

Requirement Class

CostingCosting-Id Costing Method Costing VariantCosting SheetCopy Costing SheetCndTypLineItemsCndTypLineItFix

Account Assgt. Category EValuation Without Val.-Strategy Settlement ProfileResult Analysis Key

Account Assignement Sales Order Stock Product Cost byCategory Sales Order

E Yes YesM Yes NoB No Yes

To enable goods movements to take place through the sales order stock, you must select a requirements class that specifies an account assignment category that specifies that goods movements take place through the sales order stock ( Special stock field). Goods movements take place through the sales order stock if the entry in the Special stock field is "E" (order stock).

To be able to collect costs on a sales order item, you must select a requirements class that specifies an account assignment category that allows costs and revenues to be collected on a sales order item (Consumption posting field). Collecting costs and revenues on the sales order item is allowed when the entry in the Consumption posting field is "E" (settlement through sales order).

Collecting costs and revenues on the sales order item is recommended in complex make-to-order production. In the standard system, the account assignment category is "E" (individual customer requirements with controlling by sales order).

You make no entry in the Consumption posting field if you are using a valuated sales order stock and do not want to flag the sales order item (item in an inquiry, quotation, or sales order) as carrying costs and revenues. This is especially recommended in mass production on the basis of sales orders. In the standard system, the account assignment category is "M" (individual customer requirements without controlling by sales order).

You can also carry materials from make-to-stock production in a sales order item that carries costs and revenues. This is recommended for replacement parts that are delivered for a material of the sales order stock and are withdrawn from the non-customer inventory. Here you enter "E" in the consumption posting field (settlement through sales order). In the standard system the account assignment category is "B".

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© SAP AG 1999

Customizing - Requirement Class (II)


Costing


Automatic planning

Account Assignment

Requirement Class


Account Assgt. Category Valuation M Without Val.-Strategy Settlement ProfileResult Analysis KeyControls, if the special stock is valutated:

- SPACE: No stock valuation - M: Separate valuation with ref. to sales document/project

- A: Valuation without reference to sales document

The special stock indicator in the sales order item determines how the sales order stock for that SD document item is to be valuated. For dependent requirements that are controlled by individual requirements, the valuation approach is taken from the SD document item assigned to the component.

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Valuation of Sales Order Stock

Already existing Price inSales Order Stock Segment

Already existing Price inSales Order Stock Segment

Customer ExitCustomer Exit

Sales Order CostingSales Order Costing

Production OrderPlanned Costs

Production OrderPlanned Costs

Standard Price(Standard Cost Estimate)

Standard Price(Standard Cost Estimate)

Valuation Strategy

Goods Issues Debit orders

cost collectors

sales order item

Goods Receipt Creditsorders

cost collectors

The goods receipt is valuated using a predefined valuation strategy sequence. The first goods receipt results in valuation on the basis of one of the subsequent strategies in the specified sequence. A standard price selected through one of the subsequent strategies is copied into strategy and serves as the valuation basis from this point onwards.

The system calculates the standard price on the basis of your customer exit COPCP002 Material valuation for valuated sales order stock.

The system calculates the standard price in a sales order cost estimate. This sales order cost estimate can be based on a unit cost estimate or on a product cost estimate or a mixture of the two.

The system determines the standard price using the production order cost estimate or the planned costs for the WBS element. If there are multiple production orders for the same sales order item, the system uses the standard price that results from the production order that delivers first (see strategy 1).

If you created the same material as a collective requirements material, the system reads the material master record of the collective requirements material. The standard price in the master record of the collective requirements material may have been calculated in different ways, such as in a standard cost estimate.

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Customizing - Requirement Class (III)


Costing


Automatic planning

Account Assignment

Requirement Class


Account Assgt. Category ValuationWithout Val.-Strategy Settlement ProfileResults Analysis Key

X Special stock isvaluated by a standardcost estimate.

You have to set the indicator val.-strategy to valuate the valuated sales order stock with the standard price of the non-allocated warehouse stock.

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© SAP AG 1999

Customizing - Requirement Class (IV)


Costing


Automatic planning

Account AssignmentCostingCosting-Id Costing Method Costing VariantCosting SheetCopy Costing SheetCndTypLineItemsCndTypLineItFix

Account Assgt. Category ValuationWithout Val.-Strategy Settlement ProfileResult Analysis Key

Controls the automatic costing of a sales orderitem:- A Automatic Costing- B Automatic Costing

and marking

Requirement Class

The costing activities indicator controls, whether the system automatically costs any remaining uncalculated sales document items, or costs and marks any remaining uncosted sales document items.

when you save an SD-document.

The following values are allowed for this indicator: Enter an A if the sales document item should be automatically costed when you save the document. Enter a B if the sales document item should be automatically costed and marked when you save the document.

Enter nothing, if you want to be able to cost a sales document item manually in the sales document.

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Requirement Class for demonstrated Scenario


Costing


Automatic planning

Account AssignmentCostingCosting-Id B Costing Method 1 Costing Variant PPC4 Costing Sheet COGM Copy Costing SheetCndTypLineItemsCndTypLineItFix

Account Assgt. Category M Valuation M Without Val.-Strategy Settlement ProfileResults Analysis Key

Automatic Costing andMarking

Valuated Sales Order Stock without Cost ObjectControlling on Sales Order

Requirement Class

You have to set the indicator val.-strategy to valuate the valuated sales order stock with the standard price of the non-allocated warehouse stock.

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© SAP AG 1999

Account Assignment Category ‘M’

Consumption PostingAccount ModificationInd.Account Assigment ScreenSpecial Stock

Detailed Information

Acc.assigt.changeableAcc.ass.change on IRDerrive acct. assigt.

VKB1E

Special stock

Account Assignment Category ‚M‘

No Product Cost by Sales Order=>No Cost Object is created

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© SAP AG 1999

MTO without Sales Order Controlling: Summary

Explain the quantity and value flow in a Make-to-OrderScenario without Sales Order Controlling

Explain the possibilities of lean controlling for mass production with a product cost collector

Explain how to carry out the confirmation and period closing in this scenario


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MTO without Sales Order Controlling Exercises

Unit: MTO without Sales Order Controlling At the conclusion of this exercise, you will be able to:

• Understand the quantity and value in make-to-order without sales order controlling using repetitive manufacturing.

• Maintain the master data required for make-to-order repetitive manufacturing.

• Check the control data of the sales order item.

• Create a planned order to fulfill the sales orders requirement.

• Carry out back-flushing in sales order-oriented repetitive manufacturing.

• Create a delivery and invoice for a sales order.

• Analyze the relevant accounting and controlling documents for the make-to-order process.

In your plant 1000, the finished product T-FA## can be produced on production line T-LA##. The master data has already been maintained but is to be verified. You create a sales order, check the control data of the sales order and back-flush the quantity produced in the R/3 system. At the end of this exercise you create a delivery to the customer and an invoice for the delivery.

1-1 The master data for the production of assembly T-FA## has already been prepared. In the following exercise, you will check that the entries for the repetitive manufacturing process are correct.

1-1-1 Is the material authorized for repetitive manufacturing? (use MRP4 view in the material master record)

Menu path:

Logistics Production Master data Material master Material Display Display current Material: T-FA## Choose Enter. In the dialog box, select MRP 4 Choose Enter. In the dialog box, make the following entry: Plant: 1000 Choose Enter.

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What is the repetitive manufacturing profile? _____________________________________________________

1-1-2 According to the repetitive manufacturing profile, are production activities automatically posted to the product cost collector at final back-flush for this material? Menu path: Tools AcceleratedSAP Customizing Project Management Press Button SAP Reference IMG. Customizing path: Implementation Guide Production Repetitive Manufacturing Control Data Define Repetitive Manufacturing Profiles or

Implementation Guide Controlling Product Cost Controlling Cost object controlling Product Cost by Period Simultaneous Costing Check Control Data for Repetitive Manufacturing Profiles

1-1-3 Does a product cost collector exist for material T-FA##? Menu path: Accounting Controlling Product Cost Controlling Cost object controlling Product Cost by Period Master Data Product Cost Collector Edit Now enter the following data: Material: T-FA## Plant: 1000 Choose Enter

1-2 Start by creating a sales order for the finished product T-FA##.

1-2-1 Create a sales order for one piece: Menu path: Logistics Sales and Distribution Sales Order Create Order type: OR (Standard Order) Sales organization: 1000 Distribution channel: 12

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Division: 00 Choose Enter. Now enter the following data: Sold-to party: 1012 PO number: 55## Req.deliv. date: in 10 days Material: T-FA## Order quantity: 1 piece Choose Enter. In the following characteristic valuation, valuate the material characteristics as follows: Engine: 66 (Motor 4 cyl. 66kW) Transmission: 01 (5-speed) Paint: MSC (Metallic Black) Trim: S (Substance) Interior color: B (Beige) Options: RBU (Radio Business Sound) Choose the pushbutton back.

1-2-2 Check the following control data of the sales order item. What item category does the item have? ______________________________________________________ What requirement type was determined for the sales order item? (Select tabstrip Procurement) ______________________________________________________

1-2-3 Save the sales order and record the sales order number: ______________________________________________________

1-2-4 Now check the cost estimate which was generated when saving the sales order. Menu path: Logistics Sales and Distribution Sales Order Display Menu path: Extras Costing Make a note of the cost of goods manufactured:

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______________________________________________________

1-3 Now create planned orders for the sales orders.

1-3-1 To do this, execute an MRP run for the finished product T-FA## in plant 1000: Menu path: Logistics Production MRP Planning Single-Item, Multi-Level Material: T-FA## Plant: 1000 Confirm by choosing Enter twice.

1-3-2 Check the planning results in the MRP list for the material: Menu path: Logistics Production MRP Evaluations MRP list Material: T-FA## Plant: 1000 Confirm with Enter.

1-4 You have produced 1 finished product T-FA##. for your sales order.

1-4-1 Carry out the final back-flush in Repetitive Manufacturing: Menu path: Logistics Production Repetitive manufacturing Backflush REM backflush Select the tabstrip Make-to-order. Now enter the following data: Backflush qty: 1

Sales order: your sales order number Sales order item: 000010 Plant: 1000 To location: 0002

Confirm with Enter and save the final back-flush. In the subsequent dialog box for serial number processing, select Create serial no. automatically and leave the dialog box with the pushbutton

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Continue/Enter. Make a note of the serial number: ______________________________________________________

1-4-2 Display the goods receipts/issue document and determine what financial accounting or cost accounting documents were created. Menu path: Logistics Production Repetitive manufacturing Environment Mat. document for material Now enter the following data: Material: T-FA## Plant: 1000 Posting date: today Confirm with Execute. Select for the relevant material document the accounting documents. Menu path: Environment Mat. document for material

Select for the relevant material document the overview.

1-5 The car ordered is now available for delivery.

1-5-1 Create a sales delivery for the car. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Outbound Delivery Enter the following data: Shipping Point: 1000 Delivery Date: today’s date plus 10 days Sales Order: number of your sales order Choose Button: Enter You need to specify the serial number for your car. Menu path: Extras Serial numbers Now enter the following data: Serial Number: your serial number from the backflush GR Leave the dialog box with the pushbutton Continue/Enter.

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Proceed with the steps for picking. Select tabstrip Picking. Enter the following data: Storage Location: 0002 Pick quantity: 1 Post the goods issue with the pushbutton Post Goods Issue.

1-5-2 Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue Form delivery processing: Outbound delivery Display, enter the delivery document, press Enter, select item 10, then Environment Document flow. Choose the GD goods issues, then, Environment Display document. Select Accounting documents.

1-6 Create an invoice for delivery. Display the billing document that was created, Display the financial accounting document and the cost accounting document. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing document Save the billing document. To display the invoice: Billing document Display. Enter the billing document number, then enter. To view the accounting documents, press button Accounting to analyze the FI- and CO- Documents.

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MTO without Sales Order Controlling Solutions

Unit: MTO without Sales Order Controlling

1-1 The master data for the production of assembly T-FA## has already been prepared. In the following exercise, you will check that the entries for the repetitive manufacturing process are correct.

1-1-1 Is the material authorized for repetitive manufacturing? Menu path:

Logistics Production Master data Material master Material Display Display current

Material: T-FA## Choose Enter. In the dialog box, select MRP 4 Choose Enter. In the dialog box, make the following entry: Plant: 1000 Choose Enter. The indicator ‘Repetitive manufacturing allowed’ is set. Therefore the material T-FA## is authorized for repetitive manufacturing.

What is the repetitive manufacturing profile? A001 Man.cost coll/total reqs/aggr.

1-1-2 According to the repetitive manufacturing profile, are production activities automatically posted to the product cost collector at final back-flush for this material? Menu path: Tools AcceleratedSAP Customizing Project Management Press Button SAP Reference IMG. Customizing path: Implementation Guide Production Repetitive Manufacturing Control Data Define Repetitive Manufacturing Profiles or

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Implementation Guide Controlling Product Cost Controlling Cost object controlling Product Cost by Period Simultaneous Costing Check Control Data for Repetitive Manufacturing Profiles The repetitive manufacturing profile A001 determines, that activities are posted / not posted (delete the wrong one) automatically with the goods receipt.

1-1-3 Does a product cost collector exist for material T-FA##? Menu path: Accounting Controlling Product Cost Controlling Cost object controlling Product Cost by Period Master Data Product Cost Collector Edit Now enter the following data: Material: T-FA## Plant: 1000 Choose Enter The product cost collector for material T-FA## is already created.

1-2 Start by creating a sales order for the finished product T-FA##. 1-2-1 Create a sales order for one piece: Menu path: Logistics Sales and Distribution Sales Order Create Order type: OR (Standard Order) Sales organization: 1000 Distribution channel: 12 Division: 00 Choose Enter. Now enter the following data: Sold-to party: 1012 PO number: 55## Req.deliv. date: in 10 days Material: T-FA## Order quantity: 1 piece Choose Enter. In the following characteristic valuation, valuate the material characteristics as follows: Engine: 66 (Motor 4 cyl. 66kW) Transmission: 01 (5-speed)

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Paint: MSC (Metallic Black) Trim: S (Substance) Interior color: B (Beige) Options: RBU (Radio Business Sound) Choose the pushbutton back.

1-2-2 Check the following control data of the sales order item. What item category does the item have? (Select tabstrip Sales)

TAC (Variant Configuration) What requirement type was determined for the sales order item? (Select tabstrip Procurement) KEKS (Ord. + cons. of char. planning Order)


1-2-4 Now check the cost estimate which was generated when saving the sales order. Menu path: Logistics Sales and Distribution Sales Order Display Enter the Sales order number

Choose Enter

Menu path: Extras Costing Make a note of the cost of goods manufactured: ______________________________________________________

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1-3 Now create planned orders for the sales orders.

1-3-1 To do this, execute an MRP run for the finished product T-FA## in plant 1000: Menu path: Logistics Production MRP Planning Single-Item, Multi-Level Material: T-FA## Plant: 1000 Confirm by choosing Enter twice.

1-3-2 Check the planning results in the MRP list for the material: Menu path: Logistics Production MRP Evaluations MRP list Material: T-FA## Plant: 1000 Confirm with Enter. For the individual requirement of your sales order a planned order was created.

1-4 You have produced 1 finished product T-FA##.

1-4-1 Carry out the final back-flush in Repetitive Manufacturing: Menu path: Logistics Production Repetitive manufacturing Backflush REM backflush Select the tabstrip Make-to-order. Now enter the following data: Backflush qty: 1

Sales order: your sales order number Sales order item: 000010 Plant: 1000 To location: 0002 Confirm with Enter and save the final back-flush. In the subsequent dialog box for serial number processing, select Create serial no. automatically and leave the dialog box with the pushbutton Exit window Enter. Make a note of the serial number:

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_____________________________________________________

1-4-2 Display the goods receipts/issue document and determine what financial accounting or cost accounting documents were created. Menu path: Logistics Production Repetitive manufacturing Environment Mat. document for material Now enter the following data: Material: T-FA## Plant: 1000 Posting date: today Confirm with Execute. Select for the relevant material document the accounting documents. Menu path: Environment Mat. document for material

Select for the relevant material document the overview:

1 piece T-FA## is in the sales order stock.

1-5 The car ordered is now available for delivery.

1-5-1 Create a sales delivery for the car. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Outbound Delivery Enter the following data: Shipping Point: 1000 Delivery Date: today’s date plus 10 days Sales Order: number of your sales order Choose Button: Enter You need to specify the serial number for your car. Menu path: Extras Serial numbers Now enter the following data: Serial Number: your serial number from the backflush GR. Leave the dialog box with the pushbutton Continue/Enter..

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Proceed with the steps for picking. Select tabstrip Picking. Enter the following data: Storage Location: 0002 Pick quantity: 1 Post the goods issue with the pushbutton Post Goods Issue.

1-5-2 Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue Form delivery processing: Outbound delivery Display, enter the delivery document, press Enter, select item 10, then Environment Document flow. Choose the GD goods issues, then, Environment Display document. Select Accounting documents.

1-6 Create an invoice for delivery. Display the billing document that was created, display the financial accounting document and the cost accounting document. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing document Save the billing document. To display the invoice: Billing document Display. Enter the billing document number, then enter. To view the accounting documents, press button Accounting to analyze the FI- and CO- Documents.


© SAP AG 1999

MTO with Sales Order Controlling

Quantity and Value Flow in a Make-to-Order Scenario with Sales Order Controlling

Using Make-to-Order with Discrete Manufacturing to demonstrate the Scenario

Contents:


© SAP AG 1999

Explain the quantity and value flow in a Make-to-Order Scenario with Sales Order Controlling

Understand the discrete manufacturing process

Describe commitment management



MTO with Sales Order Controlling: Objectives


© SAP AG 1999

Course Overview

Introduction





Period End Closing


Information System


© SAP AG 1999

MTO with Sales Order Controlling: Business Scenario

Since you have management responsibility for this application, you need to understand the flow of costs onto sales orders and production orders, which are assigned to the sales orders.

Since the enterprise uses all of the SAP integrated application components, you will examine how business events recorded in other applications affect your sales order.


© SAP AG 1999

Roadmap: MTO with Sales Order Controlling

© SAP AG 1999


Customer Order Processing

PlanningActual PostingFunds Commitment

Customizing


© SAP AG 1999

MTO With Sales Order Controlling


Order

StockValuated

Unvaluated

Without With

Not supported

X X

X

When to Use ?


Special sales costs

Funds commitment




Examples:High Order Value

Complex MTO structures

Sales Order Controlling is recommended if the following information is essential to your business: How high is my profit margin with this special sales order? How can I control my special sales efforts? How high is my fund commitment? Is this sales order performing well from a costing point of view?

Where did late customer changes effect my production costs heavily? In this scenario you have the ability to:

allocate sales overhead to the sales document item allocate process costs to the sales document item assign special direct costs of sales and distribution to the sales document item

Moreover you can use results analysis to: create automatically reserves for expected losses manually add reserves for foreseen risk calculate Goods in Transit when goods have already shipped but not yet invoiced


© SAP AG 1999

Discrete Manufacturing

When to Use?

Very flexible production environment

High set-up costs

Full cost tracability needed

Controlling by individual production lots needed

Work center 3

Work center 1Work center 2

Lot

Lot

Lot

Typical of discrete manufacturing is the frequent switching from one manufactured product to another. The products are typically manufactured in individually defined lots, for each of which the sequence of work centers through production varies. Costs are calculated on the basis of orders and individual lots. With repetitive manufacturing, products remain unchanged over a longer period and are not manufactured in individually defined lots. Instead, a total quantity is produced over a certain period at a certain rate.

Discrete manufacturing typically involves varying sequences of work centers through which products can pass as they are being made. The order of work centers is determined in routings, which can often be very complex. There can be waiting times between the individual work centers. Also, semi-finished products are frequently placed in interim storage prior to further processing.

In discrete manufacturing, component materials are staged with specific reference to the individual production lots. Completion confirmations for the various steps and processes document the progress of work and serve the purposes of fine-tuned control.


© SAP AG 1999

Product Cost by Sales OrderProduct Cost by Sales Order

When to Use ?

Costs and revenues collected by Sales Order irrespective of manufacturing scenario

Collecting special sales costs on sales orders

Tracking Funds committed

Calculating Work in Process and Reserves with Results Analysis

Example: Controlling complex Make-to-Order Production

MMMSales Order

The Product Cost by Sales Order component is recommended for complex make-to-order environments. You can use the Product Cost by Sales Order component in the following situations:

When you are manufacturing in-house with reference to a sales order. When you are purchasing products with reference to a sales order and reselling them to your customers.

When you are providing services whose costs are assigned to a sales order. This component allows you to do the following:

Calculate and analyze planned costs and actual costs by sales order item Calculate and analyze planned revenues and actual revenues by sales order item Calculate the value of your inventories of finished and unfinished products Create reserves automatically Transfer data to Financial Accounting (FI) Transfer data to Profitability Analysis (CO-PA) Transfer data to Profit Center Accounting (EC-PCA)


© SAP AG 1999

Additional Focus of Sales Order Controlling

SD-Order

SDSD

Production order

PPPPProduction order

PPPP

StockSales Order

valuated

$

MMMMStock

Sales Ordervaluated

$

MMMM

COCO--PAPA

RevenueCost of sales

Profit

SD-Order

SDSD

Production orderPPPP

StockSales Order

valuated

$

MMMM

SD-OrderSDSD

+

Product GroupProduct Group

+-

30,000 30,000 45,00045,00054,00054,00012,50012,50020,00020,00021,50021,500

5,0005,00013,00013,000

MotorMotor CyclesCyclesFreight vehiclesFreight vehiclesCars Cars Sport Sport cars cars ConvertiblesConvertiblesLimousinesLimousinesClassClass AAClassClass BB

TargetTarget ActualActual

34,40034,40047,00047,00063,90063,90013,50013,50022,50022,50027,90027,90011,00011,00015,00015,000

COCO--PCPC

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© SAP AG 1999

Controlling by Sales Order vs. Make-to-Order Production


SemiSemi--11--22

SemiSemi--22

FinishFinish

RawRaw--11--11 RawRaw--22--11 RawRaw--22--22

SemiSemi--11

RawRaw--11--11 RawRaw--11--11

Make-to-Order-Production

Make-to-Stock-Production

Controlling by Order or by Period

MMMSales Order

The slide shows the relationship between Controlling by Sales Order, Controlling by Order and Controlling by Period.

Complex make-to-order production could involve order-specific changes or complete redesigns of products. The costs and revenues of such products must be planned and monitored in detail.

Different methods are available for complex make-to-order production: Tracking costs directly on the sales order item (make-to-order) Using projects for complex production, such as in plant engineering (engineer-to-order)

The inventories assigned to sales orders or projects are valuated in both cases. Because these inventories are valuated, the actual costs on the sales order or work breakdown structure element do not result from the goods receipt for a purchase order or production order as with nonvaluated inventories, but instead are incurred at withdrawal or delivery of the sales order inventory or project inventory. The funds tied up in the inventories are reported in the Controlling Information System.

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© SAP AG 1999




Customizing

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© SAP AG 1999

Sales Order Controlling: Planning Options

Material 4,000

Labor 2,500

Overhead 1,500

Process 1,000

Glass 1,500

Total 9,000

Sales Order ItemSales Order ItemName Cost ItemsName Cost Items Plan ActualPlan Actual

Plug 2,000

Cable 0,500

BOM Routing

A Unit Cost Estimate could be used to add known costs to a Product Cost Estimate when they cannot be represented in the quantity structure

Unit Cost Estimate

Product Cost Estimate

You can plan the costs of manufacturing the material in a product cost estimate or a unit cost estimate. You could specify the Costing method in the customizing. If you do not specify the costing method in customizing, then you choose the method when you call up costing.

When product cost estimates are post processed with unit costing, the system does not save a cost component split. If the standard price is based on a post processed cost estimate, the system cannot transfer a cost component split to CO-PA.

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© SAP AG 1999

Product Cost Planning Sales Order

** Debits 97,500

Cost Element Plan

* 62000 Overhead Sales 15,000* 89000 Finished Consumption 75,000

* 61000 Overhead Administration 7,500

Sales Order Values in USD US DollarSales OrderSales Order Mat. Labor OH Process

Product

Raw 2

Overhead

Semi-2

Raw 1

Semi-1+

-

The sales order costing contains the detail of the cost estimate. All that is shown on the sales order cost object is the cost of good sold (COGS), not the detail (itemization). With the sales order as a cost object, the only actuals that post to the sales order are for the sales order delivery and invoice. The entire Cost of goods manufactured will be reported under one cost element, it will not display the itemization.

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© SAP AG 1999

Product Cost Planning Sales Order: Overheads

** Debits 97,500

Cost Element Plan

* 62000 Overhead Sales 15,000* 89000 Finished Consumption 75,000

* 61000 Overhead Administration 7,500

Sales OrderSales Order Mat. Labor OH Process

Product

Raw 2

Overhead

Semi-2

Raw 1

Semi-1+

-

Costing Sheet in valuation method of costing variant for material / manufacturing overheads

Costing Sheet in valuation method of costing variant for material / manufacturing overheads

Costing Sheet from requirement class for sales / administration overhead

Costing Sheet from requirement class for sales / administration overhead

Sales Order Values in USD

Overheads for sales and administration are calculated with the costing sheets of the requirement class Overheads for goods of manufactured are calculated with the costing sheet of the valuation variant of the costing variant

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© SAP AG 1999

Costing Sales Order BOM (I)

Material-X

Assembly 1

???

SD Order 4711

10 Material-X 1 pc

Sales Order BOM




-

-

Assembly 2

Raw 1

Raw 2

Separate costing for sub-assemblies

?

Before the sales order BOM is completed, you can cost the sub-assemblies. This cost can be used to value the stock for these sub-assemblies.

With the following menu path you can create a cost estimate for a sub-assembly: Accounting Controlling Cost Object Controlling Product Cost by Sales Order Master Data/Planning Create)

You can only use this function with valuated sales order stock.

(C) SAP AG AC515 5-16

© SAP AG 1999

Costing Sales Order BOM (II)

Material-X

Assembly 1

Semi-Finished 1

Sales Order BOM




-

-

Assembly 2

Semi-Finished 2

Raw 2

Raw 1


SD Order 4711

10 Material-X 1 pc

You can transfer the planned costs, which are already calculated for the sub-assemblies, into the sales order cost estimate for the finished good. This improves performance significantly.

(C) SAP AG AC515 5-17

© SAP AG 1999

Exploding Requirements

BOM Structure

Individualrequirements

Collectiverequirements

Individual Requirement Indicator

1 - only individual requirements

2 - only collective requirements

‘ ‘ - collective and individual requirements

Material 1

Material 2 Material 2

Indicator determining whether the following requirements are allowed for the dependent requirements of the material: Individual requirements Requirement quantities of the dependent material are stated individually.

Collective requirements Requirement quantities of the dependent material are grouped together.

The collective/individual requirement indicator applies to all lower level BOM components For each component with individual requirements, a separate order is created with lot-for-lot order quantity (that is, orders created for different sales orders cannot be grouped together)

You can maintain this indicator in the following places: In the material master record For the explosion type of the BOM item (in Customizing for Basic Data in the IMG activity Define explosion types)

The setting for the explosion type overrides that in the material master record.

(C) SAP AG AC515 5-18

© SAP AG 1999

Planned Revenue

Price listMaterial priceIndividualizedOther

Conditions

Prices Surcharges and discounts

On customerOn materialOn price groupOn material groupOn customer/material groupOn customer/materialOn price group/material group. . . .

(C) SAP AG AC515 5-19

© SAP AG 1999

StepStep Condition typeCondition type DescriptionDescription Ref. levelRef. level ManualManual Req.Req.

1234567

PriceGross valueSpec. offer disc.Discount %Discount %Discount valueNet value

PR00

KA00RA01RA00

2

3-5X

2

222

8910

HA00HD00

Header disc. %FreightNet value 2

X

111213

MWST

SKTO

Output taxCash disc. basisCash discount

Pricing Procedure

SD documentSD document Sold-to partySold-to partyPricing procedurePricing procedure

Sales organization, distribution channel, divisionSales organization, distribution channel, division

All condition types permitted in pricing are contained in the pricing procedure. You determine how the system is to use conditions by specifying requirements for each condition. The sequence in which the system accesses conditions in the business document is also determined here.

The reference level provides a method to specify a different basis for the condition type calculation and for grouping conditions for subtotals.

The pricing procedure can contain any number of subtotals between gross and net price. You can mark a condition type in the pricing procedure as being:

a mandantory condition a manually entered condition for statistical purposes only

(C) SAP AG AC515 5-20

© SAP AG 1999

SD pricing on Cost Plus

Pricing for Item 10

EK01 3,000 1 pc 3,000Profit increase 10 % 300 300

Net value 3,300

Costing only Statistical

Pricing for Item 10

PR00 4,000 1 pc 4,000Sales Deduction 10% 400 400

Net value 3,600

EK02 - statistical - 3,000

Contribution margin 1,000

Product

Raw 2

Semi-2

Raw 1

Semi-1+

-

Transferring Costing Data into Pricing

The definition of the condition type per requirement class allows you to determine different condition types for the different items of a sales and distribution. For example, you could carry out pricing for one item on the basis of a sales order pricing procedure, while the value of the sales order pricing might only be forwarded statistically for another item in the same document. The sales order costing refers to the to the sales order item.

If you do not store a condition type in the requirements class, then the condition type is determined via the sales document type. In this case, the condition type is valid for all sales document items of the sales document.

In the standard version of the SD system, two condition types are provided for the cost transfer of line items: EK01 If you choose this condition type, the result of the sales order costing is first printed to the pricing screen for the item. The value can be used as the basis for price computation.

EK02 If you choose this condition type, the result of the sales order costing is simply a statistical value, which you can compare with the price.

(C) SAP AG AC515 5-21

© SAP AG 1999

Product

Raw 2

Semi-2

Raw 1

Semi-1+

-

Assembly Processing Type 2 (I)


Sales Order: 4815

Pricing for Item 10

PR00 4,000Sales Deduction 400

Net value 3,600


Contribution margin 600

Production OrderSales Order CostEstimate

Cost Estimate:Material $ 1400

Labor $ 800

Overhead $ 450

Process $ 350

Total $ 3000

If you are using assembly type 2 ("production order, network or service (stat. processing)” before Release 4.5 the system copies the planned costs, which are calculated using the preliminary cost estimate for the production order, to the SD conditions. You are unable to create a sales order costing for the sales document item.

(C) SAP AG AC515 5-22

© SAP AG 1999

Assembly Processing Type 2 (II)


Cost Estimate:

Sales Order: 4815

Pricing for Item 10

PR00 4,000Sales Deduction 400

Net value 3,600


Contribution margin 400

Production Order

Material $ 1400

Labor $ 800

Overhead $ 450

Process $ 350

Total $ 3000

Product

Raw 2

Semi-2

Raw 1

Semi-1+

-

Sales Order CostEstimate

Now you have the choice if the system copies the planned costs, which are calculated using the preliminary cost estimate for the production order, to the SD conditions, or if the planned costs of a sales order costing for the sales document item are transferred to the SD conditions.

You control this feature in the requirement class.

(C) SAP AG AC515 5-23

© SAP AG 1999

Actual Postings

© SAP AG 1999




Customizing

(C) SAP AG AC515 5-24

© SAP AG 1999

Material:

- FIN-I : Finished Good Individual requirement- SEMI-I : Semi-Finished Good Individual requirement- RAW-I : Raw Material Individual requirement- RAW-C: Raw Material Collective requirement

Material:


SDSDBOM

FIN-I

SEMI-I RAW-C

RAW-I

PPPP

SD Order 4711Item 10 FIN-I 1 PC

Example: Valuated Sales Order Stock

(C) SAP AG AC515 5-25

© SAP AG 1999

Cost Object - 4711 / 10Plan Revenue

500

Plan CostsFIN-I 200 Special Costs 10

Actual Revenue

Actual Costs

BOM Routing


Unit Cost Estimate

SDSD


Sales Order Controlling: Planning

(C) SAP AG AC515 5-26

© SAP AG 1999

BOM

FIN-I

SEMI-I RAW-C

RAW-I

PPPP

Plan CostsRAW-I 50ACTIVITY 100

Actual Costs

PP Order 1 PCSEMI-I 4711 / 10

Plan CostsSEMI-I 150RAW-C 10 ACTIVITY 40

Actual Costs

PP Order 1 PCFIN-I 4711 / 10

PPPP

Components with individualrequirements are costed when

using the valuated sales order stockbased on the valuation strategy

Components with individualrequirements are costed when

using the valuated sales order stockbased on the valuation strategy

Purchase orderRAW-I 4711/10

MMMMSDSD


Materials Requirements Planning

MRP (Material Requirement Planning) creates 2 production orders and 1 purchase order. This example is only using the planned costs of the production order. There is no sales order estimate. The goods receipt for the raw material will be treated as valuated sales order stock, also. With multi-level structures, it would be recommended to cost the item on the sales order. Any components using individual requirements will also be valuated sales order stock.

(C) SAP AG AC515 5-27

© SAP AG 1999

Goods Receipt / Invoice Receipt Raw Material

Valuation strategy:

Value Purchase Order

Expense Stock change

Customers Vendors

GR/IRStockGoods Receipt

1 PC RAW-I 60

Invoice Verification

1 PC RAW-I 60

RAW-C100 PC 10

Stock: Quantity / Valuation

RAW-I4711/10 1 PC 60

FIFI

SEMI-I

FIN-I


MMMMSDSD


The goods receipt creates a debit to the valuated sales order stock. If price differences occur after the issue of the material (during invoice receipt), and if the price difference account is a cost element, then it could use the account assignment of the sale order item to post the price difference. This is the reason for the valuated sales order stock valuation class (Accounting View 1 of the material master record).

(C) SAP AG AC515 5-28

© SAP AG 1999

Goods Issue Raw Material

RAW-C100 PC 10


RAW-I4711/10 0 PC 60

MMMM

Plan CostsRAW-I 50 ACTIVITY 100

Actual CostsRAW-I 60


PPPP


CustomersSales

Revenue

CreditStock

FIFI

SEMI-I

FIN-I

SDSD


The goods issue of the raw material credits inventory and debits production expense.

(C) SAP AG AC515 5-29

© SAP AG 1999

Goods Receipt Semi-finished Material

Valuation strategy:

production order cost estimatePlan Costs

RAW-I 50 ACTIVITY 100

Actual CostsRAW-I 60 ACTIVITY 120

-150


PPPP

RAW-C100 PC 10

MMMM

SEMI-I 4711/10 1 PC 150


CustomersSales

Revenue

CreditStock


RAW-I4711/10 0 PC 60

FIFI

FIN-I

SDSD


During the goods receipt of the sub-assembly, the debit is posted to valuated sales-order stock, and a credit is posted to production output.

(C) SAP AG AC515 5-30

© SAP AG 1999

Goods Issue: Components of the Finished Good

Plan CostsSEMI-I 150 RAW-C 10 ACTIVITY 40

Actual CostsSEMI-I 150 RAW-C 10


RAW-C99 PC 10


RAW-I4711/10 0 PC 60

MMMM

SEMI-I 4711/10 0 PC 150


Sales Revenue

CreditStock

FIFI

FIN-I

Customers

PPPP

SDSD


Goods issues in Materials Management (MM) for dependent requirements of the finished product result in corresponding debits of the manufacturing orders. If the price control indicator of the material is set to S, the production order is debited with the standard price; if the price control indicator is set to V, the production order is debited with the current moving average price. The manufacturing orders therefore always show the full actual costs. Note that if the price control indicator of the material is set to S, the actual costs are calculated by multiplying the confirmed quantity by the standard price.

The goods issue is for the semi finished and raw materials to the finished goods. The FI postings are normal, as with any goods issue from valuated stock.

(C) SAP AG AC515 5-31

© SAP AG 1999

Goods Receipt Finished Good

Valuation strategy:

production order cost estimate


Sales Revenue

CreditStock

RAW-C99 PC 10


RAW-I4711/10 0 PC 60

MMMM

SEMI-I 4711/10 0 PC 150

FIN-I 4711/10 1 PC 200


Actual CostsSEMI-I 150 RAW-C 10 ACTIVITY 50

-200


FIFI

Customers

PPPP

SDSD


During the goods receipt for the finished material, the debit to finished goods inventory and credit to factory output is posted.

(C) SAP AG AC515 5-32

© SAP AG 1999


FIFI


Sales revenues

CreditStock

Delivery

Item 10 FIN-I 1 PC

RAW-C99 PC 10

MMMM

SEMI-I 4711/10 0 PC 150

RAW-I4711/10 0 PC 60

FIN-I 4711/10 0 PC 200


Customers

Cost Object - 4711 / 10

Plan Revenue Actual Revenue500

Plan Costs Actual CostsFIN-I 200 FIN-I 200 Special Costs 10

SDSD


The sales order item is debited at the time of the goods issue for delivery to the customer. The cost of sales is transferred to Financial Accounting with the goods issue posting.

(C) SAP AG AC515 5-33

© SAP AG 1999

Results Analysis/Settlement (I)

FIFI


Price Differences

CreditStock

Customers




WIP 200

Work in Process

Goods in Transit

SDSD


You can use results analysis to calculate the value of the costs that can be capitalized for each sales order item. You can activate the costs that have an option to capitalize by means of settlement to Financial Accounting (FI). For manufacturing enterprises, results analysis is recommended when you want to capitalize goods that have been delivered but not yet invoiced.

(C) SAP AG AC515 5-34

© SAP AG 1999

Invoices

FIFI


Sales revenues

CreditStock

Invoices

Delivery

Item 10 FIN-I 1 PC

10 FIN-I 1 PC 500

Customers


Plan Revenue Actual Revenue500 500


SDSD


The actual revenues are updated on the sales order item by the invoice. Billing invoices the customer for the goods and services delivered for a sales order. In Sales and Distribution, you create an invoice (billing document) on the basis of a reference document. In order-related billing, the reference document is the standard order or the delivery document with delivery-related billing.

The data such as prices and quantities are transferred from the previous documents into the billing documents. The price can be calculated in the following ways: Using pricing on the basis of conditions (such as material or customer) On the basis of the incurred costs if you want to use resource-related billing

When you enter a billing document, the system proposes a billing type depending on the reference document. The billing type determines the following: Which pricing procedure is used for account determination for Financial Accounting Whether the invoices are passed immediately to Financial Accounting

(C) SAP AG AC515 5-35

© SAP AG 1999

Results Analysis/Settlement (II)

FIFI


ReservesSales

revenues

CreditStock

Profit. Segment

Revenue 500

Cost of Sales 210

COCO--PAPA



Plan Costs Actual CostsFIN-I 200 FIN-I 200Special Costs 10

WIP -200Reserves 10

COGS 210

SDSD


When a sales order item is finally billed, this means that no more revenue is expected for that sales order item. Only debit memos and credit memos can be entered. For this reason you can normally cancel all capitalized inventories. In case of follow-up costs it is possible to create reserves.

(C) SAP AG AC515 5-36

© SAP AG 1999

Settlement of Price Differences to Sales Order Item



Plan Costs Actual CostsFIN-I 200 FIN-I 200Special Costs 10 Price diff. 40



-200




-150


FIFI


Price Differences

CreditStock

Profit. Segment

Revenue 500

Cost of Sales 200

COCO--PAPA

Customers

SDSD


3030

1010

In complex MTO-scenarios, it might make sense to collect the total production costs including price differences on the level of the sales order item. In this case, you can define the price difference account as a cost element and post the value to the sales order item when settlement to FI takes place.

In this case, make sure that variance categories are not settled from production order to CO-PA.

(C) SAP AG AC515 5-37

© SAP AG 1999

Settlement of Variances to Profitability Analysis

FIFI


Price Differences

CreditStock

Profit. Segment

Revenue 500

Cost of Sales 200

Variance Finish 10Variance Semifinish 30

COCO--PAPA



-200




-150


PPPP

3030

1010

Customers

Because the manufacturing orders contain the full actual costs for the production of the material manufactured by the manufacturing order, you can calculate variances at the level of the manufacturing orders and settle them to CO-PA.

(C) SAP AG AC515 5-38

© SAP AG 1999

Funds Commitment

© SAP AG 1999




Customizing

(C) SAP AG AC515 5-39

© SAP AG 1999

Definition Funds Commitments

Contractual commitments which results in actual costs

Purchase Requisition

Purchase Orders

Capitalized costs in the valuatedsales order stock

Commitments show you the contractual or planned commitments that do not yet affect accounting (no expenses yet) but that will result in actual costs at a later time. This allows you to analyze the effects on cost accounting of purchase orders for sales document items.

In addition, you can view the funds commitment in the valuated sales order inventory on the sales order item as statistical actual data in the Product Cost Controlling Information System if the sales order item carries costs and revenues.

Unlike unvaluated sales order stock, a goods receipt in valuated sales order stock leads to actual costs on the relevant Controlling objects (SD document item, WBS element). In order to be able to display the committed funds on the sales order stock in the Controlling information system, the system would need to read the corresponding segments in the material master.

If the purchase requisitions are created by the MRP-run, the commitments for these purchase requisitions are not updated.

(C) SAP AG AC515 5-40

© SAP AG 1999

Reporting: Commitments

CostElement

PlannedCost

PurchaseRequisition

FundsCommitment

ActualCosts

Revenues

Steel

PurchaseOrder

Electrical

Subcontr.PurchaseFin. Goods

- 1000,-

800,-Total - 200,-

250,-100,-

200,-

200,-250,- 100,- 200,- 200,-

required, not ordered yet

ordered,not delivered

yet

Sales order stock

(C) SAP AG AC515 5-41

© SAP AG 1999

Customizing

© SAP AG 1999




Customizing

(C) SAP AG AC515 5-42

© SAP AG 1999

Customizing - Requirement Class


Costing


Automatic planning

Account Assignment

Requirement Class

CostingCosting-Id BCosting Method 1Costing Variant PPC4Costing Sheet COGSCopy Costing SheetCndTypLineItemsCndTypLineItFix

Automatic Pre-Costing of Sales Order Item

Account Assgt. Category EValuation MVal.-Strategy Settlement Profile SD1Results Analysis Key SDOR1

Valuated Sales Order Stock with Cost Object Controlling on Sales Order

(C) SAP AG AC515 5-43

© SAP AG 1999

Account Assignment Category E




VKB1E

E Acc. Via Sales Order

Account Assignment Category ‘E‘

Special stock

Product Cost by Sales Order

(C) SAP AG AC515 5-44

© SAP AG 1999

Customizing - Assembly Processing Type 2

Account Assgt. CategoryValuationVal.-StrategySettlement ProfileResults Analysis Key


CostingCosting-IdCosting MethodCosting VariantCosting SheetCopy Costing SheetCndTypLineItemsCndTypLineItFix

Costing


Automatic planning

Account Assignment

2

Requirement Class

This indicator controls whetherthe preliminary costing for the manufacturing order should be used for assembly processinga sales order costing can be created

This indicator is only relevant if you are using assembly type 2 ("production order, network or service (stat. processing)"). If you don't set this indicator the system copies the planned costs, which are calculated using the preliminary cost estimate for the production order, to the SD conditions. You are then unable to create a sales order costing for the sales document item.

If you set this indicator, you can create a sales order costing for the sales document item, which is then copied to the conditions. The planned costs, created using the preliminary cost estimate for the production order, are not copied into the SD conditions.

The following examples explain where it is appropriate to create a sales order costing for assembly type 2: A cost component split has been stored for sales order costing using the product costing method but it is not available for the preliminary costing estimate of a production order (because the system only creates a cost component split dynamically for the production order display). Copying the cost component split based on sales order costing to Profitability Analysis (CO-PA) is useful if you are working with a valuated sales order stock and the standard price is based on the sales order costing (also see Valuation with standard price).

When you use the nonvaluated sales order stock, the preliminary cost estimate does not deliver the complete planned costs to the assembly order. To receive the complete planned costs, it makes sense to calculate the sales order costing and transfer this to the SD conditions.

(C) SAP AG AC515 5-45

© SAP AG 1999

Customizing - Transferring Costing Data into Pricing

Account Assgt. CategoryValuationVal.-StrategySettlement ProfileResults Analysis Key


CostingCosting-IdCosting MethodCosting VariantCosting SheetCopy Costing SheetCndTypLineItemsCndTypLineItFix

Costing


Automatic planning

Account Assignment

Transfer of the total cost

EK01

Transfer of the fixed cost part

Requirement Class

If you also want to display the fixed cost part in the condition in addition to the full costs, then enter a condition type in field "CondTypeIndFix". The transfer of the fixed cost part improves the ability of the system to predict the profit margin.

(C) SAP AG AC515 5-46

© SAP AG 1999

Only individual req. 20 x 30 x

10 x

Costing lot size

material master

BOM Structure



20 x 30 x

10 x

SD Order 4711

Item Quantity10 Material 1 10

Production structure

Passing On the Costing Lot Size

Material 2 Material 2

Material 1

2 x 3 x

Material 1Costing lot size: 10






(C) SAP AG AC515 5-47

© SAP AG 1999

BOM Structure



Transfer only with collective requirements

Prio Strategy Designation1 2 Current standard cost estimate

Transfer Strategy

Transfer Strategy for Collective Requirements

The transfer strategy determines whether a material is recosted when cost planning data for the material exists in the plant or controlling area of the finished product. Transferring existing costing data can significantly improve performance.

You can define strategy sequences in Customizing for Product Cost Controlling in order to specify how you want the system to search for existing cost estimates for the purpose of transferring costing data from one cost estimate to another: The Transfer only with collective requirements material indicator in transfer control allows you to have the transfer depend on the requirements indicator: - For materials from individual requirements, the system creates a new cost estimate even if the

search strategy finds that a cost estimate already exists for that material. - For materials from collective requirements, existing costing data are transferred into the new cost

estimate. The strategies for transfer control should harmonize with the setting in the costing variant for passing on the costing lot size: If the costing lot size is only passed on for individual requirements materials, you should make sure that transfer only takes place for collective requirements materials.

If the costing lot size is always passed on, you should not define any transfer strategies for sales order costing.

(C) SAP AG AC515 5-48

© SAP AG 1999

Customizing - Costing Variant (I)

Costing Variant

Control

Costing Type

Valuation Variant

Date Control

Transfer Control

Reference Variant

Update

Assignment

Misc

Transfer only with collective requirements material

Strategy Sequence Fiscal Year Periods ...12Current standard cost estimate

Single-Plant Cross-Plant

Quantity Structure Pass on Lot size Only with individual requirement

...

Performance Recommendation:Pass on the lot size only with individual requirements and use a transfer control, which searches for existing cost estimates for collective requirements

A costing variant contains control parameters for calculating the planned costs of a sales document item. From the sales document item you branch to the costing functions.

Performance recommendation: Pass on the lot size only for individual requirements and use a transfer control, which searches for existing cost estimates for collective requirements.

(C) SAP AG AC515 5-49

© SAP AG 1999

Customizing - Costing Variant (II)

Costing Variant

Control

Costing Type

Valuation Variant

Date Control

Transfer Control

Reference Variant

Update

Assignement

Defaults for Update Parameters

Save itemizationSave error logDefaults changed by user

Quantity Structure

Itemization is needed, if target costs for variance analysis are based on sales order costing

Postprocessing with Unit Costing

Costing Variant

Misc

Sales document

The indicator ‘save itemization' must be activated, if the target costs for variance analysis are based on sales order costing.

If you cost a sales order item with a product cost estimate and you want to process the results of this cost estimate manually as a unit cost estimate, enter a costing variant in the parameter costing variant (postprocessing with unit costing) with which this unit cost estimate can be processed.

(C) SAP AG AC515 5-50

© SAP AG 1999

Activate Components

Cost CenterOrder ManagementCommitment ManagementProfit AnalysisActivity based Costing

Profit Center AccountingProjectsSales Orders

W. commit managementCost Objects

1 Component active1 Component active1 Active4 Profit Analysis2 Activity based Costing

This indicator controls whether commitments are updated

Customizing - Commitments

Controlling Area 0001 Europe

(C) SAP AG AC515 5-51

© SAP AG 1999

Basic Data

Names

Controlling AreaValid from

NameDescription

Cost Element CategoryAttribute Group

90 Statistical cost element for Balance Sheet Account

Finished Goods

Finished Goods

01.01.1997 31.12.9999

0001

For balance sheet accounts the cost element type 90 is defined

Cost Elements for Balance Sheet Account

Cost Element 792000

The committed funds on the sales order stock not only need to be displayed, but must have interest calculated for them as well, especially in projects. Therefore the information on the committed funds needs to be available up-to-date on a daily basis. But this information cannot be taken from the material master, and thus needs to be updated in Controlling under the value type 11 Statistical actual for all goods movements for sales order stock. To this end, cost elements are created with the cost element category 90 statistical balance sheet account for the relevant statistical balance sheet accounts.

Note: Before an inventory account may be created as a statistical cost element, the inventory account must be already identified for MM Account determination for the Inventory posting (BSX process).

(C) SAP AG AC515 5-52

© SAP AG 1999

MTO with Sales Order Controlling: Summary

Actual postings to production orders, which are assigned to sales orders, are similar to actual postings to production orders for collective requirements.

From the production side only goods issue for delivery to customers leads to actual costs on the sales order item.

You can use results analysis to capitalize goods that have been delivered but not yet invoiced or to build reserves for follow-up costs.

Purchase requisitions, purchase orders, and funds in the sales order stock will result in a commitment value recorded to the sales order item.

To maintain commitment information, commitment management must be activated in the controlling area for sales orders.

(C) SAP AG AC515 5-53

Make-to-Order with Sales Order Controlling Exercises

Unit: Make-to-Order with Sales Order Controlling At the conclusion of this exercise, you will be able to:

• Understand the quantity and value flow in make-to-order with sales order controlling using discrete manufacturing.

• Check the control data of the sales order item.

• Determine which material will be produced or purchased specifically for the sales order.

• Create production orders and purchase orders to fulfill the sales orders requirements.

• Create a delivery and invoice for the sales order item.

• Analyze the relevant accounting and controlling documents.

In your plant 1000, the finished product T-F1## is produced. The master data has already been maintained but is to be verified. You will create a sales order for material T-F1## and execute material requirements planning for your sales order. You will then create production orders and a purchase order for the individual requirements materials and complete the necessary postings (goods issues, goods receipts, confirmations) in the system to produce the product T-F1##. At the end of this exercise, you will create a partial delivery to the customer.

1-1 Start by creating a sales order for the finished good T-F1##.

1-1-1 Create a sales order for the material T-F1##: Use the following data: Order type: OR (standard order) Sales organization: 1000 Distribution channel: 10 Division: 00 Sold-to party: 1171 PO number: 44## Material: T-F1## Order quantity: 10 pieces Choose Enter.

(C) SAP AG AC515 5-54

Accept the delivery date proposal.

1-1-2 Check the following control data of the sales order item. What item category does the item have? ___________________________________________________________ What results analysis key and costing sheet were transferred into the sales order? How were the defaults for the costing sheet and results analysis key transferred to the sales order item? ___________________________________________________________ What requirements type was determined for the sales order item? ___________________________________________________________

1-1-3 Save the sales order and record the sales order number: ___________________________________________________________

1-2 Review the BOM (listed below) for T-F1##. Complete the following questions by reviewing the material master setting for the individual/collective requirements indicator for the BOM components.

1-2-1 Which sub assemblies will be produced specifically for the sales order requirement? ___________________________________________________________

1-2-2 Which materials will be issued from anonymous stock? ___________________________________________________________

1-2-3 Change the individual/collective requirements indicator for Material T-T4## so that this component will be purchased specifically for the sales order. ___________________________________________________________

(C) SAP AG AC515 5-55

T-F1##

T-B1##

1

T-B2##

1

T-B3##

1

BOM for product T-F1##

T-T2##

1

T-T1##

1

T-T4##

1

T-B4##

1

...

1-3 Execute material requirement planning for your sales order. Save the results for all components.

1-4 From the evaluations menu, go to the stock requirements list for T-B3##, plant 1000, and display the planning result.

1-4-1 The list will show the planned order created to fulfill the dependent requirement of your sales order requirement for T-F1##. Convert this planned order to a production order.

1-4-2 Display the assignment data for the production order. Is the production order assigned to the sales order?

___________________________________________________

1-4-3 Display the settlement rule for the production order. What is the settlement receiver?

___________________________________________________

1-4-4 Release the production order.

1-4-5 Save the production order and record the production order number: ___________________________________________________________

1-5 Review the stock requirements list for T-T4##. A purchase requisition was created to support the sales order requirement.

(C) SAP AG AC515 5-56

1-5-1 Convert the purchase requisition into a purchase order. Use purchasing organization 1000, vendor 1000, purchase group 010 and company code 1000. The price is 50 UNI.

1-5-2 Save your purchase order and record the purchase order number. If the pop-up PO of today already exists appears, proceed with the button New Purchase Order. ___________________________________________________________

1-5-3 Go to the information system for Product Cost by Sales Order and review the commitment report for your sales order. Check whether the commitment for the purchase order was updated on the corresponding sales order item

1-6 From inventory management, process the goods receipt for material T-T4## and review the valuated special stock report.

1-6-1 Process the goods receipt: Menu path: Logistics Materials Management Inventory Management Goods Receipt For Purchase Order PO number known Now enter the following data: Purchase Order: your purchase order number Choose Enter Set the OK flag for the purchase order position.

Choose: Save

1-6-2 From the valuated special stock report, determine if the material T-T4## is shown as valuated special stock.

1-7 Proceed with the manufacturing of material T-B3##.

1-7-1 Issue material T-T4## to the production order for T-B3##. Use movement type 261, plant 1000, storage location 0001. Is there an accounting document created for the transaction?

______________________________________________________

1-7-2 Return to production control menu. Enter the production confirmation (time ticket based) for the last operation, confirm a quantity of 10 and increase the proposed activity quantity to 2 hours. Save the final confirmation.

(C) SAP AG AC515 5-57

1-7-3 Go to the information system and display the actual costs for the production order. Was the production order credited for the goods receipt of T-B3##? How was the value of the goods receipt determined?

______________________________________________________

1-8 Return to stock requirements list for T-F1##. When MRP was executed for your sales order, a planned order was created for T-F1##.

1-8-1 Convert this planned order to a production order.

1-8-2 Release and save the production order. Record the production order number. ___________________________________________________________

1-9 Proceed with the manufacturing of material T-F1##.

1-9-1 Post the material issue to the production order for T-F1##. Use movement type 261, plant 1000, storage location 0001

1-9-2 Return to the production control menu. Enter a partial confirmation for the production order for T-F1##. Confirm only a quantity of 5 and save the partial confirmation.

1-9-3 Go to valuated special stock display for material T-F1##. Is the goods receipt for production confirmation of 5 ea displayed as sales order stock? What is the total stock quantity and stock value for valuated sales order stock of T-F1##?

1-10 5 of the ordered 10 pumps are now available for delivery.

1-10-1 Create a sales delivery for the 5 pumps. Use the following data: Shipping Point: 1000 Delivery Date: today’s date plus 10 days Sales Order: number of your sales order

Record the delivery number.

__________________________________________________________

1-10-2 Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue.

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Make-to-Order with Sales Order Controlling Solutions

Unit: Make-to-Order with Sales Order Controlling

1-1 Start by creating sales orders for the finished good T-F1##.

1-1-1 Create a sales order for the material T-F1##: Menu path: Logistics Sales and Distribution Sales Order Create Enter the following data: Order type: OR (Standard order) Sales organization: 1000 Distribution channel: 10 Division: 00 Choose Enter. Now enter the following data: Sold-to party: 1171 PO number: 44## Material: T-F1## Order quantity: 10 pieces Choose Enter. Accept the delivery date proposal by selecting the button Delivery Proposal

1-1-2 Check the following control data of the sales order item. What item category does the item have?

(found on tabstrip Sales) TAN (Standard Item) What results analysis key and costing sheet were transferred into the sales order? How were the defaults for the costing sheet and results analysis key transferred to the sales order item? To verify the results analysis key and the costing sheet, which are assigned through the requirements class, select the following menu path: Goto Item Account Assignment

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Results Analysis Key: SDOR1 Costing Sheet: COGS1

What requirements type was determined for the sales order item? (From sales overview, select tabstrip Procurement) CO2 (Make-to-Order with Controlling by Sales Order


1-2 Review the BOM (listed below) for T-F1##. Complete the following questions by reviewing the material master setting for the individual/collective requirements indicator for the BOM components.

1-2-1 Which subassemblies will be produced specifically for the sales order requirement for T-F1##?

Menu path:

Logistics Production Master data Material master Material Display Display current Material: T-B1## Choose Enter. In the dialog box, select MRP 4 Choose Enter. In the dialog box, make the following entry: Plant: 1000 Choose Enter.

From the MRP4 view of the material master, determine the entry for individual/collective requirements for each subassembly (Material: T-B1##, T-B2##, T-B3##, T-B4##). Since T-B3## has a blank indicator, it will use the setting of the next higher assembly.

1-2-2 Which materials will be issued from anonymous stock? T-B1##, T-B2## and T-B4## have the collective requirement indicator, which determines that these subassemblies will be issued to the production order from anonymous stock.

1-2-3 Change the individual/collective requirements indicator for material T-T4## so that this component will be purchased specifically for the sales order.

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For the Material T-T4## you need to set the individual/collective requirements indicator to blank (or 1). Then, T-T4## will follow the same control that is established for T-B3##. MRP will generate a purchase requisition for T-T4## to support the sales requirement for T-F1##.

T-F1##

T-B1##

1

T-B2##

1

T-B3##

1

BOM for product T-F1##

T-T2##

1

T-T1##

1

T-T4##

1

T-B4##

1

...

1-3 Execute material requirements planning for your sales order. Save the results for all components. Menu path: Logistics Production MRP Planning Single-Item, Sales Order Enter your sales order number and item 10. Press enter TWICE. Save the MRP result for T-F1##. When you receive the window for Next Stopping Point, select proceed without stopping, then continue.

1-4 From the evaluations menu, go to the stock requirements list for T-B3##, plant 1000, and display the planning result. Menu path: Logistics Production MRP Evaluations Stock/Reqmts List

Enter material T-B3##, plant 1000, and press Enter.

1-4-1 The list will show the planned order created to fulfill the dependent requirement of your sales order requirement for T-F1##. Convert this planned order to a production order. To convert the planned order: Double-Click on the planned order, then press the

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button -> Prod.ord (Convert planned order to production order)

1-4-2 Display the assignment data for the production order. Is the production order assigned to the sales order?

Select the tabstrip Assignment.

The production order is assigned to the sales order item for material T-F1##.

1-4-3 Display the settlement rule for the production order. What is the settlement receiver?

Menu path: Header Settlement rule Settlement rule: 100 % to material

1-4-4 Release the production order. To release the production order:

From the production order header select Functions Release

1-4-5 Save the production order and record the production order number: (Press the refresh button in the stock/requirement list to record the number of the production order) ______________________________________________________

1-5 Review the stock requirements list for T-T4##. A purchase requisition was created to support the sales order requirement. Menu path: Logistics Production MRP Evaluations Stock/Reqmts List

Enter material T-T4##, plant 1000, press Enter.

1-5-1 Convert the purchase requisition into a purchase order. Use purchasing organization 1000, vendor 1000, purchase group 010 and company code 1000. The price is 50 UNI.

To convert the purchase requisition into a purchase order: Double-click on the purchase requisition, then press the button -> Purchase order (Convert purchase requisition to purchase order) Enter the vendor and purchasing organization and press Enter. From the selection screen, select the purchase requisition, and press the button Adopt.

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If the pop-up PO of today already exists appears, proceed with Button New purchase order.

If necessary, enter a price of 50 UNI.

1-5-2 Save your purchase order and record the purchase order and record the purchase order number (Press the refresh button in the stock/requirement list to record the number of the purchase order number). ______________________________________________________

1-5-3 Go to the information system for Product Cost by Sales Order and review the commitment cost report for your sales order. Check whether the commitment for the purchase order was updated on the corresponding sales order item. Menu 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 For Sales Order Now enter the following data: Sales order: your sales order number Item: 10 Choose: Execute

Switch to the layout "funds commitment".

Yes, the commitment was updated on the sales order item.

1-6 From inventory management, process the goods receipt for material T-T4## and review the valuated special stock report.

1-6-1 Process the goods receipt: Menu path: Logistics Materials Management Inventory Management Goods Movement Goods Receipt For Purchase Order PO Number Known Now enter the your purchase order number and set the OK-Flag for the purchase order position. Press the button Post to post the goods receipt.

1-6-2 From the valuated special stock report, determine if the material T-T4## is shown as valuated special stock.

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Menu path: Logistics Materials Management Inventory Management Environment Stock Valuated Special Stock Now enter the following data: Material: T-T4## Choose Execute Yes, T-T4## is displayed as valuated sales order stock.

1-7 Proceed with the manufacturing of material T-B3##.

1-7-1 Issue material T-T4## to the production order for T-B3##. Use movement type 261, plant 1000, storage location 0001. Is there an accounting document created by the transaction? Menu path: Logistics Material Management Inventory Management Goods Movement Goods Issue Enter movement type 261, plant 1000, storage location 0001. Then select To order and enter in the following pop-up your production order number for T-B3##, press continue and save the goods issue document.

Yes, there is an accounting document created. To display the accounting document:

Menu path:

Goods Issue Display Enter the material document number. Select Enter Select Accounting

documents

1-7-2 Return to production control menu. Enter the production confirmation (time ticket based) for the last operation, confirm a quantity of 10 and increase the proposed activity quantity to 2 hours. Save the final confirmation. Menu path: Logistics Production Production Control Confirmation Enter For Operation Time Ticket Now enter the following data: Order: your production order number Oper./activity: 0070 Confirm.type Final confirmation Select: Enter

Increase the proposed activity quantity to 2 h and save the confirmation.

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1-7-3 Go to the information system and display the actual costs for the production order. Was the production order credited for the goods receipt of T-B3##? How was the value of the goods receipt determined? Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Order Information System Reports for Product Cost by Order Detailed Reports For Orders Now enter the following data: Order: your production order number Choose: Execute Yes, the production order was credited for the goods receipt of T-B3##. The value was determined from the sales order cost estimate value for T-B3##. This can be verified by displaying the cost estimate for the sales order line item.

1-8 Return to stock requirements list for T-F1##. When MRP was executed for your sales order, a planned order was created for T-F1##. Menu path: Logistics Production MRP Evaluations Stock/Reqmts List Enter material T-F1##, plant 1000, press Enter.

1-8-1 Convert this planned order to a production order. To convert the planned order: Double-Click on the planned order, then press the button -> Prod.ord (Convert planned order to production order)

1-8-2 Release and save the production order. Record the production order number. ______________________________________________________ To release the production order: From the production order header select Functions Release

Save Press the refresh button in the stock/requirement list to record the number of the production order number.

1-9 Proceed with the manufacturing of material T-F1##.

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1-9-1 Post the material issue to the production order for T-F1##. Use movement type 261, plant 1000, storage location 0001. Logistics Material Management Inventory Management Goods Movement Goods Issue Enter movement type 261, plant 1000, storage location 0001. Then select To order and enter in the following pop-up your production order number for T-F1##, press continue and save the goods issue document. (To view all materials, press the key "page down" on your keyboard).

1-9-2 Return to the production control menu. Enter a partial confirmation for the production order for T-F1##. Confirm only a quantity of 5 and save the partial confirmation. Menu path: Logistics Production Production Control Confirmation Enter For Order Enter the order number, press enter: Enter a quantity of 5, check the partial confirmation indicator and save the confirmation.

1-9-3 Go to valuated special stock display for material T-F1##. Is the goods receipt for production confirmation of 5 ea displayed as sales order stock? What is the total stock quantity and stock value for valuated sales order stock of T-F1##? Menu path: Logistics Materials Management Inventory Management Environment Stock Valuated Special Stock Now enter the following data: Material: T-F1## Sales document: Your Sales Order Number Sales document item: 0010 Choose Execute

Yes, the 5 pieces of T-F1## are displayed as sale order stock.

1-10 5 of the ordered 10 pumps are now available for delivery.

1-10-1 Create a sales delivery for the 5 pumps. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Outbound Delivery Enter the following data:

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Shipping point: 1000 Selection Date: today’s date plus 10 days Sales order: your sales order number Press Enter. Proceed with the steps for picking. Select tabstrip Picking. Enter the following data: Storage Location: 0002 Pick quantity: 5 Delivery quantity 5 Post the goods issue with the button Post Goods Issue. Record the delivery number. ______________________________________________________

1-10-2 Display the goods issue document and determine if any financial accounting or cost accounting documents were created for the goods issue. From delivery processing: Outbound delivery Display, enter the delivery document, press Enter, select item 10, then Environment Document flow. Choose the GD goods issues, then, Environment Display document. Select Accounting documents

Accounting documents were created for the goods issue. The value was based on the inventory cost, which was determined by the sales order cost estimate.


© SAP AG 1999

Period End Closing

Period-End Closing in Controlling by Order

Period-End Closing in Controlling by Sales Order

Contents:


© SAP AG 1999

Period End Closing: Objectives

Explain how to carry out the period-end closing in controlling by order and controlling by sales order

Understand which alternative valuation methods you can use in results analysis.

Maintain settlement rules and execute salesorder settlement.



© SAP AG 1999

Course Overview

Introduction





Period-End Closing


Information System


© SAP AG 1999

Period End Closing: Business Scenario

In your company at the beginning of the new month the following activities will be carriedout for the last period:

Template Allocation, Overhead cost for materials

WIP (Work in Process)

Variance Analysis on production orders

Results analysis on sales orders

Settlement of the costs.


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Roadmap: Period End Activities

© SAP AG 1999


Controlling by orderTemplate Allocation, Overhead


Variance Analysis

Controlling by sales orderResults Analysis

Settlement

Schedule Manager


© SAP AG 1999

Period End Closing

Order relatedControlling

Sales Order Controlling


2. Revaluation at Actual Activity Price

3. Overhead

4. Work in Process

5. Variance Calculation

6. Settlement


2. Revaluation at Actual Activity Price

3. Overhead

4. Results Analysis

6. Settlement

PPPP

SDSD

The period end closing process for the production orders which are assigned to a sales order is now identical to the traditional PP period closing process. Specifically, the period-end process now includes WIP and variance calculation for the production orders that support the MTO strategy. If you are using Sales Order Controlling, there are additional processes that may need to be completed: overhead, results analysis and settlement. In the ‘lean' environment, there is no sales order closing process.


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Process, Overhead Costs

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Variance Analysis


Settlement

Schedule Manager


© SAP AG 1999

Cost centers

ProductsSales Order

Allocation

Allocation

Allocation

Processes

Processes

Identify business processesthat consume significantoverhead resources

Assign costs to processesthrough resource drivers

Detect non-value-addedactivities

Provide realistic productcosts through productcost driver consumption

FinancialFinancial AccountingAccounting

Process Costs

This is a simplified illustration of general cost allocation for production. From other modules (such as Financial Accounting), direct costs are directly assigned to cost object accounts, and the overhead costs of the cost centers are assigned according to responsibility. Traditionally, overhead costs are then allocated through various methods (surcharges, activity accounting, etc.) from the cost centers onto the cost objects. When using activity based costing, the overhead costs are first assigned from the cost centers onto the processes and are allocated to the cost objects only according to the utilization of the corresponding processes.


© SAP AG 1999

Cost centers

ProductsSales Order

SurchargePercentage of base cost elementIn reference to quantitiesOn the basis of dependenciesOn the basis of fixed and variable cost portions

Overhead Cost Allocation via Surcharge

You determine overhead costs in the Cost Center Accounting component. You can allocate these costs to the product in a number of ways:

Activity allocation You can use activity allocation to allocate the machine or labor costs from a production cost center to a product or order. You can calculate an activity price by cost center and specify the number of activities in the routing.

Overhead rates You can define overhead rates in a costing sheet to allocate storage costs from the warehouse to a product or order. You can calculate this allocation as a percentage of the direct material costs or in proportion to the quantity.

Process costs You can use Activity-Based Costing to calculate process costs. You can then allocate these costs to a product or order. You can calculate a price for each process based on the resources used by that process, and a process template specifies the number of activities.

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© SAP AG 1999

Overhead versus Process Costs

Conventional Costing

Direct Material Costs $

Material Costs

Production Hours $

Production Costs

Total Cost of Goods Manufactured

Costing using Process Costs

Direct Material Costs $

Material Costs

Production Hours $

Production Costs

Storage process $

Total Cost of Goods Manufactured

Procurement process $

Commissioning process $

Production Overhead $ Set up process $

Test process $ Shop Floor control $

Material Overhead $

Further information on activity based costing is available in course AC420.

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© SAP AG 1999


© SAP AG 1999




Variance Analysis


Settlement

Schedule Manager

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© SAP AG 1999

WIP Calculation in Product Controlling by Order

Order Status

Partially-Releasedor Released

Partially Delivered Delivered or Technically Completed

WIPat Actual

= =

-

=

-

PREL

REL PDLVDLV

TECO

Actual Costs Actual Costs

Actual Costs

WIPat Actual

Variances

Delivery Value

Delivery Value

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© SAP AG 1999


Material 4,600

Labor 2,800

Overhead 1,600

Process 1,500

Total 10,500

Production Order

Credit

Stock Change - 5,400

Work in Process 5,100

Overhead 2,800

Process 1,500

Goods receipt 5,400

Debit

Goods Issue 4,600

Confirmation 2,800 Reserves

WIP Stock change

Expenses



Division

Product

Product-group

Settlement

If you control your product cost by order, the work in process is that part of the order lot that has not yet been delivered to stock. If no goods receipt has been posted by period close, the work in process is the actual costs to date. If a part of the lot has been delivered to stock, the work in process is the difference between actual costs and the value of the good receipt.

The system updates the financial accounts with the work in process when the order is settled.

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Variance Analysis

© SAP AG 1999




Variance Analysis


Settlement

Schedule Manager

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© SAP AG 1999

Variance Calculation

Debit

Credit

Stock Change - 2000

Production Order

Material 1000

Labor 500

Overhead 100

Process 800

Variance 400

Where do the variances

come from?

Variance calculation is an analysis tool for closer examination of problematic discrepancies. Product order variances result from either:

Too many or too few costs debited Too many or too few costs allocated

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© SAP AG 1999

Variance Categories

Variances on theInput Side

2050

100

INPUT PRICE

INPUT QUANTITY

INPUTSurcharge of 25% on $150 (actual) instead of $100 (target)

RES.-USAGE

v

S

Variances on theOutput Side

Setup

OUTPUT PRICE

LOT-SIZE

REMAININGSum of indivi-dual variances does not equaltotal variances

Mix-Price

Variances between the plannedprices and the actual prices of the resources

Variances between the plannedinput quantities and the actualinput quantities of the resources

Variances caused by a different resource being used than was planned

Variances that cannot be assigned to any other variance category, such as overhead surcharges

Variances between planned costsand actual costs (independent of lot size) as calculated in thedelivery

Variance between the targetcredit (standard price) and theactual credit (e.g., moving average price)

Variances that cannot beassigned to any other variance category, such as rounding differences

Variances between the standardprice calculated in a mixed costestimate of multiple proc. altern.and of a single proc. alternative

Variance categories: Examples Input price variance. Raw material 1 went into the standard cost estimate at $10 (the standard price was selected in accordance with the valuation strategy). When the material was withdrawn from stock, however, the goods movement was valuated at $11 (because according to price control the moving average price is used for valuation). This results in a price variance of $1.

Input quantity variance. Machine time of 15 minutes was planned. However, 17 minutes were confirmed. The activity price for the machine time is $5 per minute. This results in a quantity variance of $10.

Resource-usage variance. Raw material 2 was used instead of raw material 1. The costs for both raw material 1 and raw material 2 are reported as resource-usage variances.

Input variance. Because the material price for raw material 1 changed, the material overhead is higher than planned. The difference between the planned and the actual material overhead surcharges is reported as an input variance.

Output price variance. If the delivery to stock is made at a price that is not the standard price (such as the planned price), the difference is reported as an output price variance. This variance category can only occur for materials that have moving average price control.

Remaining variance. If the system cannot calculate any target costs, it will report only remaining variances.

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© SAP AG 1999

Integration of Variances

Total 2400

Credit

Inv. Change - 2000

Debit

2000Stock Price variance

400


Variance CategoriesInput Price 150Input Quantity 150Resource-Usage 100Scrap 0Lotsize 0Mix-Price 0Output Price 0Total: 400

Profitability AnalysisProduction Order

Variance 400


800 400 100 700

Sales Order

Cost Estimate

Target cost for variances are based on the cost estimate used for valuating the delivery to stock

Target cost for variances are based on the cost estimate used for valuating the delivery to stock

Material 1000

Labor 500

Overhead 100

Process 800

The variances relevant to settlement are calculated based on the cost estimate used for valuating the delivery to stock. If collective orders exist for a sales order, the delivery of semifinished products in the collective order is valuated using the production order cost estimate. Consequently, variance calculation requires information whether the valuation is based on a sales order cost estimate, production order cost estimate, or standard cost estimate for the material. You can determine additional target cost versions for these variances for the information system. Provided the material is below the moving average price control, the variances appear only on production order levels.

Variance calculation for the Controlling object of the SD document item is not planned.

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© SAP AG 1999

Results Analysis

© SAP AG 1999




Variance Analysis


Settlement

Schedule Manager

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© SAP AG 1999

Results Analysis

Which amount of thecurrent expenses could

be capitalized as work in process ?

Should reserves for unrealized costs be

created ?

Are reserves forimminent losses

necessary ?

What is the periodic resultof my sales ?

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© SAP AG 1999

Integration of Results Analysis (I)

Sales Order Item

Material 1000 1100

Labor 500 600

OH 100 120

Process 800 1000

Plan Actual

Results Analysis DataRevenuesCost of SalesWork in ProcessReserves

Results Analysis

Sales Order Item

Material 1000 1100

Labor 500 600

OH 100 120

Process 800 1000

Plan Actual

The first stage of results analysis is to calculate the following values: Inventory values Reserves for unrealized costs Reserves for imminent loss Reserves for complaints and commissions Cost of sales

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© SAP AG 1999

Integration of Results Analysis (II)

Reserves

WIP Stock change

Expenses



Division

Product

Product-group

Profitability Analysis

RevenuesCost of sales

Profit

Sales Order Item

Material 1000 1100

Labor 500 600

OH 100 120

Process 800 1000

Plan Actual


Settlement

You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA): Inventory values Reserves for unrealized costs Reserves for imminent loss Reserves for complaints and commissions The cost of sales if you are using a nonvaluated sales order inventory and are balancing in Financial Accounting with the cost-of-sales accounting method

You can settle the following to Profitability Analysis (CO-PA): Cost of sales or calculated revenue Reserves for imminent loss and complaints

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© SAP AG 1999

General Approach (1)

POCResults Analysis provides different methods to determine the percentage of completion

R(PA) = Percentage of Completion x Planned RevenueC(PA) = Percentage of Completion x Planned Costs


R(PA) Revenues C(PA) Cost of sales

Profit

COCO--PAPA

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© SAP AG 1999


!



Profit

COCO--PAPA


Profit/LossR(a)

ActualRevenues

C(a)ActualCosts

FIFI

CO-PAdoes not equal

FI

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© SAP AG 1999


!



Profit

COCO--PAPA


Profit/LossR(a)

ActualRevenues

C(a)ActualCosts

FIFI

If C(a) > C(PA)Then WIP = C(a) – C(PA)Else Reserves = C(PA) – C(a)

If R(a) < R(PA)Then Capitalized Rev. = R(PA) – R(a)Else Revenue surplus = R(a) – R(PA)

Costs

Revenue

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Profit

COCO--PAPA

Financial AccountingProfit/Loss

R(a) WIP

CapitalizedRev.

C(a)ReservesRevenue surplus

FIFI

If C(a) > C(PA)Then WIP = C(a) – C(PA)Else Reserves = C(PA) – C(a)

If R(a) < R(PA)Then Capitalized Rev. = R(PA) – R(a)Else Revenue surplus = R(a) – R(PA)

Costs

Revenue

SettlementReserves Expenses

WIP Stock change


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© SAP AG 1999

Method Based Results Analysis

01 - Revenue-Based Method - With Profit Realization

02 - Revenue-Based Method - W/O Profit Realization

03 - Cost Based POC-Method

04 - Quantity-Based Method

05 - Quantity-Based POC Method

06 - POC Method on Basis of Revenue Planned by Period

07 - POC Method on Basis of Project Progress Value Determination

08 - Derive Cost of Sales from Resource-Related Billing

09 - Completed Contract Method

10 - Inventory Determination, without Planned Costs, without partial billing

11 - Inventory Determination, without Planned Costs, with partial billing

12 - Inventory Determination, Reserve for Follow-Up Costs, without partial billing

13 - Inventory Determination "WIP at Actual Costs" for Objects Not Carrying Revenue

14 - Derive Cost of Sales from Resource-Related Billing of Dynamic Items

15 - Derive Revenue from Resource-Related Billing and Simulation of Dynamic Items

What results analysis method you choose depends on your business requirements. A company will normally run different types of processing and thus also different methods of results analysis simultaneously. The results analysis method contains the formula for calculating the results analysis data.

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© SAP AG 1999

Different legal regulations in differentcountries stipulate that unrealized profits can be or cannot be capitalized.

For automatic creation of reserves for unrealized costs or reserves for imminentlosses plan costs are necessary.

When should the inventory and the reserves be cancelled??

Decision Criteria

Different legal regulations in different countries stipulate that unrealized profits can be or cannot be capitalized. Differences exist for example between North America and Germany in this respect. This situation requires different balancing methods in different countries. If you do not want to capitalize unrealized profits, use a results analysis method that can be used to create capitalized costs.

If you want to capitalize unrealized profits, use a results analysis method that can be used to create inventory from which revenue can be generated.

Some methods of creating capitalized costs and creating inventory from which revenue can be generated also allow automatic creation of reserves for unrealized costs or reserves for imminent losses.

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© SAP AG 1999

01: Revenue-Based Valuation Method

POC = R(a) / R(p) R(PA) = R(a) / R(p) x R(p)C(PA) = R(a) / R(p) x C(p)


R(PA) = R(a) C(PA) = R(a) / R(p) x C(p)

Profit

COCO--PAPA

Percentage of Completion

The revenue relevant to profit equals the actual revenue. The costs relevant to profit are calculated by multiplying the planned costs by the percentage of completion (POC): (K(pa) = C(p) x R(a) / R(p)).

If the actual costs are greater than the costs relevant to profit, the system creates capitalized costs. If the actual costs are less than the costs relevant to profit, the system creates reserves for unrealized costs.

If you are using the revenue-based method with profit realization, the calculated cost of sales is zero as long as your actual revenue for the period is zero. The capitalized costs then equal the actual costs of the period.

This method provides you with the following capabilities: You can create reserves for unrealized costs You can create reserves for imminent losses You can use milestone billing You can report intermediate profits.

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© SAP AG 1999

SettlementSettlement

SettlementSettlementProfitability Analysis

R(PA) C(PA)

Profit

COCO--PAPA


Profit/Loss10001000

FIFI

WIP Inv. change1000 1000

Sales Order Item Results Analysis


WIP

POC= 0 / 3000 = 0 %

Plan ActualRevenue 3000 0Cost 2000 1000

00

1000

Example: Revenue-Based Results Analysis (I)

You have planned revenues of 3,000 and costs of 2,000 for your sales order. You have actual costs of 1,000 but no revenues. In results analysis, the system calculates the following data: Revenue of 0 Cost of sales of 0 Capitalized costs in the amount of the actual costs of 1,000

You then settle the capitalized costs to FI and EC-PCA. No line item is generated for CO-PA. The settlement generates based on postings rules (you have to maintain in customizing) the following posting: WIP Account against Inventory-Change Account of 1,000.

The inventory change account is closed against the profit&loss account. Therefore the profit&loss account shows on the profit side 1,000 and on the loss side actual costs of 1,000. In this case in FI and CO-PA no profit is shown.

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© SAP AG 1999



R(PA) 1200 C(PA) 800

Profit 400

COCO--PAPA


Profit/Loss1200

2001000

FIFI



POC= 1200 / 3000 = 40 %



WIP

1200800

200

Example: Revenue-Based Results Analysis (II)

You have actual costs of 1,000 and actual revenues of 1,200. In results analysis, the system calculates the following data: Revenue of 1,200 Cost of sales of 800 Capitalized costs in the amount of the actual costs of 200

You then settle the capitalized costs to FI and EC-PCA. Also a line item is generated for CO-PA. The settlement generates in FI the following posting: WIP Account against Inventory-Change Account of 200.

The inventory change account is closed against the profit&loss account. Therefore, the profit&loss account shows on the profit side 1,200 actual revenue plus 200 of inventory change and on the loss side actual costs of 1,000. In FI and CO-PA a profit of 400 is shown.

(C) SAP AG AC515 6-31

© SAP AG 1999



R(PA) 3000 C(PA) 2000

Profit 1000

COCO--PAPA


Profit/Loss30001800

200

FIFI

Reserves Expenses200 200


POC= 3000 / 3000 = 100 %


Revenue Cost of sales

Reserves

30002000

200

Example: Revenue-Based Results Analysis (III)

You have actual costs of 1,800 and actual revenues of 3,000. In results analysis, the system calculates the following data: Revenue of 3,000 Cost of sales of 2,000 The reserves for unrealized costs of 200

You then settle the capitalized costs to FI and EC-PCA. Also a line item is generated for CO-PA. The settlement generates in FI the following posting: Expense against Reserves-Change Account of 200

The expense account is closed against the profit&loss account. Therefore the profit&loss account shows on the profit side 3,000 of actual revenues and on the loss side actual costs of 1,800 plus expenses of 200. In FI and CO-PA a profit of 1,000 is shown.

(C) SAP AG AC515 6-32

© SAP AG 1999

POC = C(a) / C(p) R(PA) = C(a) / C(p) x R(p)C(PA) = C(a) / C(p) x C(p)


R(PA) = C(a) / C(p) x R(p) C(PA) = C(a)

Profit

COCO--PAPA

Percentage of Completion

03: Cost-Based Percentage of Completion Method

When you use the cost-based percentage-of-completion method in results analysis, the system calculates the revenue on the basis of the actual costs incurred up to the current period.

The percentage-of-completion method differs from revenue-based results analysis in that a profit or loss is reported if actual costs have been incurred but no revenue. With revenue-based results analysis, a profit or loss is not shown until actual revenue has been received.

The percentage of completion for each sales order item is determined by dividing the actual costs by the planned costs. It forms the basis for calculating the following data.

(C) SAP AG AC515 6-33

© SAP AG 1999



R(PA) C(PA)

Profit

COCO--PAPA


Profit/Loss15001000

FIFI




Cap. Rev.

POC= 1000 / 2000 = 50 %


15001000

1500

1500 1000

500

Example: Cost-Based POC Valuation Method (I)

You have actual costs of 1,000 but no revenues. In results analysis, the system calculates the following data: Costs affecting net income in the amount of the actual costs of 1,000 Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned costs x planned revenue of 1,500

Revenue in excess of billings with the formula Revenue in excess of billings = Revenue affecting net income – Actual revenue

The following values are shown in CO-PA: Calculated revenue 1,500 Cost of sales (actual costs) 1,000 ---------------------------------------------------------- Profit 500

The settlement generates in FI the following posting: WIP against Inventory-Change Account of 1,500

The inventory account is closed against the profit&loss account. Therefore the profit&loss account shows on the profit side 1,500 and on the loss side actual costs of 1,000. In FI and CO-PA a profit of 500 is shown.

Although no revenues have been received, profit has already been capitalized.

(C) SAP AG AC515 6-34

© SAP AG 1999



R(PA) C(PA)

Profit

COCO--PAPA


Profit/Loss1200

3001000

FIFI



POC= 1000 / 2000 = 50 %



Cap. Rev.

15001000

300

1500 1000

500

Example: Cost-Based POC Valuation Method (II)

You have actual costs of 1,000 and actual revenues of 1,200. In results analysis, the system calculates the following data: Costs affecting net income in the amount of the actual costs of 1,000 Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned costs x planned revenue of 1,500

Revenue in excess of billings with the formula Revenue in excess of billings = Revenue affecting net income – Actual revenue = 300

The following values are shown in CO-PA: Calculated revenue 1,500 Cost of sales (actual costs) 1,000 ---------------------------------------------------------- Profit 500

The settlement generates in FI the following posting: WIP against Inventory-Change Account of 300.

The inventory account is closed against the profit&loss account. Therefore the profit&loss account shows on the profit side 1,200 of actual revenues plus the revenues which could be capitalized of 300 and on the loss side actual costs of 1,000. In FI and CO-PA a profit of 500 is shown.

(C) SAP AG AC515 6-35

© SAP AG 1999



R(PA) 2700 C(PA) 1800

Profit 900

COCO--PAPA

Financial AccountingProfit/Loss

30001800300

FIFI

Revenue Surplus Expense

300 300


POC= 1800 / 2000 = 90 %


Revenue 2700Cost of sales 1800

Reserves 300

Example: Cost-Based POC Valuation Method (III)

You have actual costs of 1,800 and actual revenues of 3,000. In results analysis, the system calculates the following data: Costs affecting net income in the amount of the actual costs of 1,800 Revenue affecting net income using the formula Calculated revenue = Actual costs / Planned costs x planned revenue of 2,700

A revenue surplus of 300 because the actual revenue exceeds the calculated revenue The following values are shown in CO-PA: Calculated revenue 2,700 Cost of sales (actual costs) 1,800 ---------------------------------------------------------- Profit 900

The settlement generates in FI the following posting: Expense against Reserve Account of 300

The expense account is closed against the profit&loss account. Therefore the profit&loss account shows on the profit side 3,000 and on the loss side actual costs of 1,800 plus 300 for the expenses for the revenue surplus. In FI and CO-PA a profit of 900 is shown.

(C) SAP AG AC515 6-36

© SAP AG 1999

Percentage of Completion: Status Released

Remarks:

10: Inventory Determination, w/o Plan Costs, w/o partial billing

Method:No revenues, all expenses could be capitalizedRevenues posted, all expenses are cost of good sold

R(a) = 0: POC = 0 => WIP = C(a) C(PA) = 0R(a) > 0: POC = 1 => WIP = 0 C(PA) = C(a)

No plan costs neededReserves cannot be createdFollow-up costs are directly cost of sales

If you use this method, the calculated cost of sales are zero as long as your actual revenue is zero. The capitalized costs are equal to the actual costs during this time.

If the actual revenue is not zero, the calculated cost of sales are equal to the actual costs. The capitalized costs is canceled as soon as actual revenues are received. When you invoice, it is no longer possible to capitalize capitalized costs.

The capitalized costs are canceled no later than status TECO. Features You cannot create reserves. This method is not suitable for milestone billing because such billings result in final cancellation of the capitalized costs.

There is no proportionality between the cost of sales and revenue: - As soon as revenue has been received, the actual costs are considered cost of sales in full. That is,

the cost of sales are not proportional to the actual revenues, as with the revenue-based method, nor are they proportional to the quantity sold, as with the quantity-based method. This method provides you with the following capabilities: You do not need planned values.

(C) SAP AG AC515 6-37

© SAP AG 1999

Profit basisPlan value of object and dependent objectsSales order cost estimateStandard price of material for sales order

Valuation levelValuation at totals level Valuation at line ID level

Expert mode

Result analysis method

Result Analysis with statusCancel inventory with statusCancel inventory/reserves with status

Status ControlREL ReleasedFNBL Finally billedTECO Technical completed

01

Revenue-Based Method - With Profit Realization

Controlling Area 1000 Version 0 Result analysis key MTO1

Valuation Method

Status Dependency of Valuation

Valuation Method:01 Revenue-Based Method03 Cost-based POC Method04 ...

Method Based Customizing

Which results analysis method you choose depends on your business requirements. A company will normally run different types of processing – and therefore use different methods of results analysis – simultaneously. Results analysis methods contain the rule for calculating the results analysis data. The standard system contains a number of different results analysis methods. Decide which results analysis method you want to use.

A sales order item passes through a number of stages that lead to different results in results analysis. In the standard system there are three relevant system statuses: REL (released) FNBL (final billing) TECO (technically completed)

In Customizing for Product Cost by Sales Order under Period-End Closing, you specify which status allows the following activities: At which status results analysis can be performed At which status the work in process is canceled (optional) At which status the work in process and reserves are canceled

(C) SAP AG AC515 6-38

© SAP AG 1999

Original costelements

Work in process /Reserves for unrealized costs

Posting rules

400000 400000 ––415000415000 DK

610000 610000 ––620000620000 PC

660000 660000 ––662000662000 OH

672110673110

672130673130

672120673120

RequirementRequirementtoto capitalizecapitalize

891000 (P/L)791000 (balance sheet)

Option toOption tocapitalizecapitalize

891005 (P/L)791005 (balance sheet)

Assignment to Cost Elements for Work in Process and Reserves

Results analysis updates the results analysis data for the sales order item under secondary cost elements. You define in Customizing what cost elements are updated.

To be able to pass the WIP and reserves to Financial Accounting, you must define posting rules in Customizing that assign this data to G/L accounts.

(C) SAP AG AC515 6-39

© SAP AG 1999

Results Analysis at Group Level

Material- WIP- Reserves

Material- WIP- Reserves

Labor- WIP - Reserves

Labor- WIP - Reserves

Results Analysis

Cost of Sales Material = POC x Planned Cost Material

Sales Order Item

Material 1000 1100

Labor 500 600

Overhead 100 120

Plan Actual

Cost of Sales Labor = POC x Planned Cost Labor

Cost of Sales Overhead= POC x Planned Cost Overhead Overhead

- WIP- Reserves

Overhead- WIP- Reserves

If you choose ‘Line ID level', results analysis calculates separate values for each line ID. Under certain conditions this method can result in one line ID showing work in process while the other line IDs show reserves.

(C) SAP AG AC515 6-40

© SAP AG 1999

C(PA) = POC * Planned Costs Total

Results Analysis

Cost of Sales

Work in Process

Reserves

Sales Order Item

Material 1000 1100

Labor 500 600

Overhead 100 120

Plan Actual

MaterialLaborOverhead



Apportionmentrules !?

Results Analysis at Totals Level

If you choose ‘Totals Level', the system calculates work in process, reserves for unrealized costs, reserves for complaints and commissions, and reserves for imminent loss for each order. These values are then distributed to line IDs according to a method of apportionment specified in the valuation method.

The standard setting for apportionment is: Capitalized costs / Work in process: Cumulative actual costs Reserves for unrealized costs: Difference between planned costs and cumulative actual costs Reserves for costs of complaints and commissions: Difference between plan costs and cumulative actual costs

Reserves for imminent loss: Display of credit for inventory with prohibition to capitalize and inventory with option to capitalize.

If a method of apportionment cannot be used, the system looks for an alternative method of apportionment. The system searches in the following order: apportionment numbers (according to the number defined under ‘Update for Results Analysis') cumulative actual costs planned costs apportionment numbers with apportionment numbers per line ID = 1

(C) SAP AG AC515 6-41

© SAP AG 1999


Revenue 1200

Cost of sales 800

WIP 200

Apportionment of WIP

Plan ActualRevenue 3000 3000

WIP Actual ActualGroup Total

Material 200 x 600 / 1000

Labor 200 x 200 / 1000

Overhead 200 x 200 / 1000

Material 1000 600

Labor 500 200

Overhead 500 200

Total Costs 2000 1000

Material 120

Labor 40

Overhead 40

Apportionment of WIP Based on Actual Costs

(C) SAP AG AC515 6-42

© SAP AG 1999

Settlement

© SAP AG 1999




Variance Analysis


Settlement

Schedule Manager

(C) SAP AG AC515 6-43

© SAP AG 1999

Settlement

Which are the settlementreceivers ?

Is settlement necessary ?

Which settlementtechniques could

be used ?

(C) SAP AG AC515 6-44

© SAP AG 1999

Integration of Settlement

Reserves

WIP Stock change

Expenses



Division

Product

Product-group


RevenuesCost of sales

Profit

Sales Order Item


Valuation

Plan Actual

Revenue 3000 1200Cost 2000 1000

Settlement Costs ...

Settlement Revenues ...

Debit

Credit

You can settle the following to Financial Accounting (FI) and Profit Center Accounting (CO-PCA): Inventory values Reserves for unrealized costs Reserves for imminent loss Reserves for complaints and commissions The cost of sales if you are using a nonvaluated sales order inventory and are balancing in Financial Accounting with the cost-of-sales accounting method

You can settle the following to Profitability Analysis (CO-PA): Cost of sales or calculated revenue Reserves for imminent loss and complaints

The line item to CO-PA could be valuated with the cost component split of the sales order cost estimate or with the cost component split of a standard cost estimate.

(C) SAP AG AC515 6-45

© SAP AG 1999

Sales Order 4712 10

Actual Settlement Distribution Rule

Cat Receiver Receiver-Short Text Perc. Equivl. Amount Type Source from Per PSG 17302 100 PER

DescriptionSettlement Profile SD1Settlement Structure 30PA Transfer Structure 30Source Structure

Sales Order 4712 10

Parameters

Settlement techniquesSettlement

receiver

Maintain Settlement Rule

If CO-PA is active, the settlement rule and the profitability segment are automatically generated.

(C) SAP AG AC515 6-46

© SAP AG 1999

Settlement Profile

Settlement structureSource structurePA transfer structure

Default Values

Profitability SegmentSales OrderProject...

Valid receivers

IndicatorsPercentage SettlementAmount SettlementEquivalence Numbers

Settlement ProfileSettlement Structure

Source Structure

PA Transfer Structure

Cost element groupSettlement cost element /Indicator by cost element

Debit cost elementsSettlement cost element /Indicator by cost element

Cost element groupValue field

Must be settled in fullCan be settledMust not be settled

Actual Costs/ Costs of Sales

If CO-PA is inactive, you can specify in the settlement profile that the sales order must not be settled. Settlement will still generate a posting to FI in accordance with the posting rules.

(C) SAP AG AC515 6-47

© SAP AG 1999

Customizing the Settlement Structure

SettlementSettlementAssignmentAssignment: 001: 001



Source

$

Settlement cost elementsReceiverReceiver

Cost centerCost centerProf. Prof. segment segment OrderOrderFixed assetFixed asset. . .. . .

Cost centerCost centerProf. Prof. segment segment Order Order Fixed assetFixed asset. . .. . .

By cost elementBy cost element Settlement costSettlement cost el.el.Cost centerCost centerProf. Prof. segment segment OrderOrderFixed assetFixed asset. . .. . .

Material (Material (externalexternal))400000400000400100400100400200400200

Material (Material (internalinternal))410000410000410100410100

LaborLabor420000420000421000421000

650000650000

811000

651000651000

811000

652000652000

811000

Results analysis cost element for cost ofgoods sold have to be included

To use the settlement structure, you must first create cost element groups that aggregate the primary and secondary cost elements used for debit postings to your orders. Within Customizing, you link the cost element group to the settlement structure with a settlement assignment. For each settlement assignment, you stipulate by receiver type whether the settlement will use the original posted cost elements or a designated settlement cost element.

You might use settlement cost elements: To separate out costs allocated from orders to the receiver and to describe their purpose, such as Repairs or Maintenance.

To reduce data volumes by combining several debit cost elements under one settlement cost element.

(C) SAP AG AC515 6-48

© SAP AG 1999

Profitability Analysis Transfer Structure

1010

Value FieldValue FieldAssignmentAssignmentCostCost ElementsElements

for results analysisfor results analysis

2020

3030

CostsCosts

RevenuesRevenues

Res.LossRes.Loss

Costs of Sales 671110671120...

Costs of Sales 671110671120...

Revenues675500..

Revenues675500..

Reserves forimminent Loss673212...

Reserves forimminent Loss673212...

You must define a PA settlement structure if you want to settle the costs and revenues for a sales order item to a profitability segment.

The PA settlement structure defines what costs and revenues are settled to Profitability Analysis. It groups the debit cost elements according to PA settlement assignments and assigns the PA settlement assignments to the value fields of an operating concern.

The PA settlement structure consists of one or more items called PA settlement assignments. It is used to assign a cost element group to a PA settlement assignment.

Note the following when defining the PA settlement structure: Each debit cost element must be represented in the PA settlement structure The debit cost elements have the category cost elements

If you do not carry out results analysis, the actual costs and actual revenue will be settled to the profitability segment for the sales order item. The PA settlement structure must contain all cost elements under which costs and revenue can be updated on the sales order item.

Once you have carried out results analysis, the results analysis data (valuated actual revenue, cost of sales, and reserves for imminent loss) is settled to the profitability segment. The PA settlement structure must contain all results analysis cost elements under which data used in Profitability Analysis is updated.

(C) SAP AG AC515 6-49

© SAP AG 1999

Valuation using Material Cost Estimate

Set Up Valuation Using Material Cost Estimate

Define Keys for Accessing Material Cost Estimate

Assign Costing Keys to Material Types

Assign Costing Keys to Any Characteristics

Assign Costing Keys to Products

Assign Value Fields

In Profitability Analysis (CO-PA), you can valuate documents by reading the cost of goods manufactured in the material cost estimates from Product Cost Planning. You do this by defining costing keys.

Which costing key is used for a particular document can depend on when the document is valuated in CO-PA (the "point of valuation"), the record type, the product sold, the material type of that product, or any other characteristic in your operating concern.

The following steps in Customizing are necessary to set up valuation using material cost estimates in your system: When you maintain costing keys, you determine which cost estimates the system should read in Product Cost Accounting in order to valuate the data in CO-PA.

Once you have done this, you can assign these costing keys to a product or material type. Alternatively, you can use the flexible assignment function to assign costing keys to any characteristics in your operating concern for valuation.

You then need to use value field assignment to determine for each operating concern and at each point of valuation how the cost components in the cost component split are to be assigned to the value fields in CO-PA. This must be done for each relevant cost component split.

(C) SAP AG AC515 6-50

© SAP AG 1999

Define Key for Accessing Material Cost Estimate

Determine material cost estimate

Transfer Standard Cost Estimate

Transfer sales order cost estimate

Control Data for standard Cost Estimate

Additional Data for CO-PA

Exclusive access to sales order cost estimateError message if no cost estimate is found

Additional Data for CO-PC

Transfer aux. Cost compoment splitTransfer cost compoment split in cont. area curr.

Costing DataCosting Variant PPC1 Standard Cost Estimate

...

Plant used for reading costing data

...






Assign Value Fields

Costing Key

Product Cost Planning is used to determine the planned cost of goods manufactured for a product. In Profitability Analysis (CO-PA), you can access these material cost estimates to value the data in CO-PA. This includes cost estimates both with and without quantity structures.

With this function, you determine which cost estimates from Product Cost Planning should be used to value actual or planning data in CO-PA. You do this by defining costing keys. A costing key is a set of access parameters which are used in valuation to determine which data in Product Cost Planning should be read.

Normally you need at least 2 costing keys. You use one costing key to value a Make-to-Stock process with a standard cost estimate and another to value a Make-to-Order process with a sales order cost estimate.

(C) SAP AG AC515 6-51

© SAP AG 1999

Assign Value Fields






Assign Value FieldsTable Lookup for Requirement Type from the sales order item

1 Determine Process

2 Assignment Costing Key

Assigment Rule of temporay field to costing key

Assign Requirement Type to temporary field

The steps ‘Assign Costing Keys to Products’ or ‘Assign Costing Keys to Material Types’ let you assign costing keys to individual products or material types. In the case of using make-to-stock and make-to-order scenarios in parallel the product-dependent or material-dependent call-up of material cost estimates in Product Cost Accounting is not flexible enough. To meet this or other requirements, you can determine the costing keys using your own "strategy" for the "flexible assignment of costing keys".

This "strategy" is taken to determine the costing keys, generally using user-defined assignment tables. As in characteristic derivation in CO-PA, you can also work with table lookups or your own customer enhancements when setting up the "strategy".

You can use the following Step Methods to define a strategy: Table Lookups A table lookup allows you to access individual data records in any SAP table and to transfer the contents of individual table fields to Target Fields of the type USERTEMP. The USERTEMP fields that have been filled by a table lookup can then be used in a subsequent strategy step as source fields for an assignment rule. In our scenario we look up the requirement type of the sales order item to determine the process.

User-Defined Assignment Tables As with the predefined assignment tables for products and material types, these user-defined assignment tables let you assign costing keys separately for each point of valuation, record type and plan version. We specify an user-defined assignment table to assign the requirement type to a costing key.

(C) SAP AG AC515 6-52

© SAP AG 1999

Assign Value Fields






Assign Value Fields Cost Component Fix/Var Value Field

10 Raw Materials Sum MATERIAL20 Production Labor Var PROD_VAR30 Production Labor Fix PROD_FIX

... ... ... ...

Here you can assign the components of a cost component structure from Product Cost Controlling to the value fields of your operating concern. Note that you need to maintain separate value field assignments for each point of valuation in Profitability Analysis (CO-PA).

You can divide the cost components into fixed and variable parts before transferring them to CO-PA. For each cost estimate, you can transfer any number of cost components to the same value field (n:1 relationship). The values from these cost components are then added together in the value field.

If you valuate using multiple material cost estimates simultaneously, this means that the values of different cost components within the same cost estimate are aggregated and then entered in one CO-PA value field.

However, value fields that already contain data from a previous cost estimate are not overwritten by a later cost estimate. Consequently, you should assign value fields in Customizing so that the values of different cost estimates are entered in different sets of value fields.

You can assign up to six different value fields from your operating concern to each cost component in the cost component structure. These assignments are indicated by the value fields entered in the columns Field name 1 through Field name 6.

(C) SAP AG AC515 6-53

© SAP AG 1999© SAP AG 1999




Variance Analysis


Settlement

Schedule Manager

Schedule Manager

(C) SAP AG AC515 6-54

© SAP AG 1999

Schedule Manager: Benefits

Benefits provided by the Schedule Manager

the closing process is more transparentand easier to handle

monitoring the complete process is convenient

event driven processing means that the R/3 Systemautomatically performs the necessary steps

worklist driven error analysis and integrated error handlingprocedures reduce the time needed for error correction

total processing time is minimized byoptimized worklist processing

(C) SAP AG AC515 6-55

© SAP AG 1999

Schedule Manager: Scheduling

1999OctoberTaskTask listlist

DailyDaily overviewoverview: : October October 31, 199931, 1999

Define sequences

of background jobs for

automatic processing

Send mail:Closing process startedSet period lockPeriodic repostingof personnel costsInternal Orders:Overhead, WIP, Variances, settlementCost Centers: Overhead PA and settlement

UserMillerMillerSmithJonesJones

Time Description8:00 Mail sent8:15 Actual period lock8:30 Periodic reposting9:45 Production Orders

11:30 Sales Orders: Closing

Status

Convenient management of period-end closing with the ScheduleManager

(C) SAP AG AC515 6-56

© SAP AG 1999

Schedule Manager: Monitor

TaskTask listlist StatusStatus

Mssg Text202 VBP 1000/10 Trade fair Lisbon

205 Maintain the settlement rule of the sender

202 VBP 1011/20 Trade fair Atlanta

205 Cost Center 12345 does not exist on 10/31/99

202 VBP 1071/10 Special Events

217 Cost element 600199 does not exist on 10/31/99

202 VBP 1071/10 Marketing

Start dateEnd date

User nameJob status

Business transactionActivity

The monitor

provides you with all

necessary information

Spool list

Basic list

DetailsDetails ParametersParameters Add. InfoAdd. Info

MessagesMessages

Actual period lockPeriodic repostingSales Orders: Closing

Actual OverheadResults AnalysisActual SettlementUser decision

Detail list

Job log

(C) SAP AG AC515 6-57

© SAP AG 1999

Schedule Manager: Worklist Monitor

Error analysisand error handlingare convenient with the worklist monitor

Object listObject listWorklistWorklist

ObjectObject MessagesMessages

Processing stepsProd. Orders: Closing

Actual OverheadActual SettlementUser decision

Objects5000

Proc.

49874980

Object Mssg Text

ORD100070 205 Maintain the settlement rule of the sender

ORD100071 205 CCtr 12345 does not exist on 10/31/99

ORD100358 217 CEl 600199 does not exist on 10/31/99

ORD100700 162 Credit C01 for 10/31/99 not defined

Object Ovh StlmORD100070ORD100071ORD100358ORD100700ORD101065ORD109999

TextP-1001P-1500H-1701P-1399P-5609 P-3450

Err.

137

Note: The Worklist Monitor is implemented for Sales Order Items as of Release 4.6c.

(C) SAP AG AC515 6-58

© SAP AG 1999

Period End Closing: Summary

You can explain how to carry out the period-end closing activities in controlling by order and controlling by sales order.

Results analysis controls the transfer of costs and revenues to Profitability Analysis and the transfer of work in process and reserves for unrealized costs to Financial Accounting and Profit Center Accounting.

Settlement parameters allow you to define how the system will process the settlement. The settlement profile parameter is taken over as a default value in the individual sales order items via the requirement class. The settlement profile determines settlement information such as the allowed receivers and provides the default values of the other settlement parameters.

(C) SAP AG AC515 6-59

Period-End Closing Exercises

Unit: Period-End Closing At the conclusion of this exercise, you will be able to:

• Carry out the period-end closing activities for controlling by sales order

• Understand the difference between the revenue-based and cost-based valuation methods in results analysis.

• Understand when WIP (work in process) or reserves are cancelled during results analysis

In your plant 1000 you have to carry out the period-end closing activities. In order to simulate different phases of the process, you proceed with the production and delivery of the order from the previous section and post the period-end closing activities (especially the results analysis transaction) more than once

1-1 Calculate the overhead surcharges for the sales order item. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Overhead

Enter the following data: Sales document: your sales order number (last unit) Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: deselect Dialog display: select Choose: Execute How was the costing sheet defaulted into the sales order item? ___________________________________________________

(C) SAP AG AC515 6-60

1-2 At this point, a delivery for 5 pieces has been completed. However, no billing has occurred for the delivery. Carry out results analysis using the revenue-based valuation method (results analysis version 0) and using the cost-based valuation method (results analysis version 1). Analyze the different results and compare them to the actual/planned comparison for the sales order. Why are the results different for the two different methods. Save the results of the results analysis calculations. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute For the cost-based method, repeat the same procedure, but using results analysis version 1. Access the logs to obtain information regarding the results analysis calculation and the configuration for results analysis key SDOR1.

1-3 Create the billing document for the partial delivery of 5 pieces from the previous unit. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing Document Enter the following data: Document: your delivery number (previous unit) Choose: Save From the document flow, display the invoice and review the financial accounting document and the cost accounting document.

1-4 Now that billing has been completed for the 5 pieces, carry out results analysis again using results analysis version 0. Does any work in process remain? Why or why not? Have reserves been calculated?

(C) SAP AG AC515 6-61

Use the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute

1-5 Return to the production control menu, and create the final confirmation for your production order for T-F1##. Confirm the remaining 5 pcs. Menu path: Logistics Production Production Control Confirmation Enter For order Enter the following data: Order: your production order number for material T-F1## Choose: Enter Select the radio button final conf. and save the production order confirmation.

1-6 Complete the delivery for the remaining 5 pump assemblies for your sales order item. Create the delivery document and post the goods issue. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Outbound Delivery Enter the following data: Shipping point: 1000 Selection Date: today’s date plus 10 days Sales order: your sales order number Choose Button: Enter Enter 5 as the picked quantity. To post the goods Issue, press button Post Goods Issue Record the delivery number. ___________________________________________________________

(C) SAP AG AC515 6-62

1-7 Create the billing document for the delivery. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing Document Enter the following data: Document: your delivery number Choose: Save From the document flow, display the invoice and review the financial accounting document and the cost accounting document.

1-8 Again, calculate the overhead surcharges for the sales order item. Use the following data: Sales document: your sales order number (last section) Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: deselect Dialog display: select Choose: Execute

1-9 Now that billing is complete, execute results analysis again using version 0. Does any work in process or reserves remain? Why or why not?

Use the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute

1-10 No further costs are anticipated for the sales order item. From the sales order, set the status of the sales order item to technically completed. What affect should this have on results analysis?

(C) SAP AG AC515 6-63

Menu path: Logistics Sales and Distribution Sales Order Change

Select Enter

Select the sales order item, then

Goto Item Status Select the status icon Change

Now press the set button for Technically completed and save the sales order.

1-11 Carry out results analysis with results analysis version 0. Check if there are still reserves for unrealized costs. Save the results analysis data. Use the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute Save the results of the results analysis.

1-12 Carry out sales order settlement. Display the settled amounts by selecting Detail lists. From the display , you can select the Receiver, Sender or Accounting documents for review. Menu Path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Settlement Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: select Choose: Execute

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1-13 Go to the Make-to-Order reports, and display the order profit for the sales order. To view the profit: Menu 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 for sales orders

Change the layout by adding the item "profit" as new column.

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Period-End Closing Solutions

Unit: Period-End Closing



Enter the following data: Sales document: your sales order number (last unit) Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: deselect Dialog display: select Choose: Execute How was the costing sheet defaulted into the sales order item? The costing sheet is assigned to the sales order item through the requirement class.

1-2 Carry out results analysis using the revenue-based valuation method (results analysis version 0). Save the results. In addition, calculate results analysis using the cost-based valuation method (results analysis version 1). Analyze the different results. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing

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Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute Using a different R/3 session, repeat the same procedure, for the cost based method, using results analysis version 1.

The results are different because RA version 0 is a revenue based method, and RA version 1 is a cost based method. At this point, using RA version 0, no actual revenue has been realized, therefore, the POC equals 0%. All of the actual costs for the product are considered WIP, or inventory from which revenue can be generated. The overhead allocation is considered COS. The RA version 1 is a cost based method. Using this basis for POC determination, calculated revenue is determined as POC times planned revenue. All of the actual costs, which includes both product and overhead, are considered COS.

Access the logs to obtain additional information regarding the results analysis calculation, such as the POC, and the configuration for results analysis key SDOR1.

1-3 Create the billing document for the partial delivery of 5 pieces from the previous unit. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing Document Enter the following data: Document: your delivery number (previous unit) Choose: Save From the document flow, display the invoice and review the financial accounting document and the cost accounting document.

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1-4 Carry out results analysis for results analysis version 0. Does any work in process remain? Have reserves been calculated? Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute Billing has been completed for the 5 pieces, so, POC is R(a)/R(p). Then C(c) are determined. At this point, C(c) > C(a), so no WIP is determined. All actual costs for both the product and overhead are considered COS.

Reserves for unrealized costs are created, if the calculated costs exceed the actual costs. (C(c) - C(a) = C(r)).

1-5 Return to the production control menu, and create the final confirmation for your production order for T-F1##. Confirm the remaining 5 pcs. Menu path: Logistics Production Production Control Confirmation Enter For order Enter the following data: Order: your production order number for material T-F1## Choose: Enter Select the radio button final conf. and save the production order confirmation.

1-6 Complete the delivery for the remaining 5 pump assemblies for your sales order item. Create the delivery document and post the goods issue. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Outbound Delivery Enter the following data: Shipping point: 1000 Selection Date: today’s date plus 10 days Sales order: your sales order number Choose Button: Enter

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Enter 5 as the picked quantity. To post the goods Issue, press button Post Goods Issue Record the delivery number. ______________________

1-7 Create the billing document for the delivery. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing Document Enter the following data: Document: your delivery number Choose: Save From the document flow, display the invoice and review the financial accounting document and the cost accounting document.



Enter the following data: Sales document: your sales order number (last unit) Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: deselect Dialog display: select Choose: Execute

1-9 Now that billing is complete, carry out results analysis for results analysis version 0. Does any work in process or reserves remain? Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing

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Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute No WIP remains, as WIP is cancelled after final billing, since no further deliveries are expected. However, reserves can remain if actual costs are less than calculated costs.

1-10 No further costs are anticipated for the sales order item. From the sales order, set the status of the sales order item to technically completed. What affect should this have on results analysis? Menu path: Logistics Sales and Distribution Sales Order Change

Select Enter

Select the sales order item, then Goto Item Status

Select the status icon Change Now press the set button for Technically completed and save the sales order.

1-11 Carry out results analysis with results analysis version 0. Check if there are still reserves for unrealized costs. Save the results analysis data. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Result analysis version: 0 Full log: selected Choose: Execute

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Since no further postings are expected on the sales order, you may change the status for the sales order item to technically completed. This will cancel reserves for unrealized costs and WIP.

Save the results of the results analysis.

1-12 Carry out sales order settlement. Display the settled amounts by selecting Detail lists. From the display, you can select the Receiver, Sender or Accounting documents for review. Menu Path: Accounting Controlling Product Cost Controlling Cost Object Controlling

Product Cost by Sales Order Period-End Closing Single Functions Settlement Enter the following data: Sales order: your sales order number Item: 10 Period: current period Fiscal year: current fiscal year Background processing: deselect Test run: deselect Detailed lists: select Choose: Execute

1-13 Go to the Make-to-Order reports, and display the order profit for the sales order. To view the profit: Menu 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 for sales order

Change the layout by adding the item "profit" as new column.


© SAP AG 1999


Explain the quantity and value flow in this scenario

Understand when to use resource-related billing


Sales Order Controlling without Manufacturing: Objectives


© SAP AG 1999

Sales Order Controlling without Manufacturing: Business Scenario

You have to implement a business process to handle a service at a customer site.

Since you have management responsibility for this process, you need to understand the flow of costs onto a sales order without manufacturing.


© SAP AG 1999

Roadmap: Sales Order Controlling without Manufacturing

© SAP AG 1999



Planning Costs

Actual Posting

Customizing


© SAP AG 1999

Sales Order Controlling for Services

Resources used

LaborMaterialTravel

Overheads

SD-Order

Costs

COCO--PAPASDSD

Cost Object - SD Order Item

Billing based on resources used

Revenues

Settlement

This example shows the provision of a service or on-site assembly. This means that the service has been provided and the customer is to pay for the service received. Standard customer pricing conditions can be taken into account on the billing document.

It traces the following process: Costs are charged to the order through goods issues, posting internal activities, travel expense reporting, etc.

The billing process is run. The revenues are calculated in SD pricing on the basis of the billed line items.

The sales order is settled to Profitability Analysis (CO-PA)


© SAP AG 1999

Resource-related Structure

Collection of expenses

Generation and display of dynamic items by the system

Creation of billing request from the dynamic items

2 Resource-related billing

3 Create billing document

1 Confirm services SD-OrderSDSD

InvoiceSDSD

Billing Request

SDSD

During billing, the system generates so-called dynamic items from the information regarding the expenses involved (for example, costs for material and personnel). Before a billing request is created, you are brought to a modifiable overview screen that enables you to determine what the billing request should look like. You generate the billing request from this overview screen. You can work on this screen for example, to simulate prices or save the screen itself. This is where you determine which data the system copies to the billing request after you have finished working with the overview screen.

There are two aggregation levels: First level: The system aggregates the data records for the overview screen into dynamic items. Second level: The system generates a billing request using the data from the dynamic items. If necessary, the data is reaggregated based on the assigned materials. Aggregation depends on the settings in the dynamic item processor profile.

If you do not want to bill a customer for a dynamic item, you can enter your reason (for example, warranty) in the overview screen for dynamic items as an apportionment reason. The reason will only be used for internal purposes such as calculating profits.

You follow the same procedure as above when creating a quotation from a service order.


© SAP AG 1999

Dynamic Item Processor

Source Data DynamicItems

Flexible tool for creation of dynamic items

Use:Resource-related billing

Flat-rate billing document with list of the actual effort

Resource-related creation of quotations

Flat-rate quotation with list of the planned effort

Control using Dynamic Item Processor Profile (DIP profile)

Billing request/Quotation

The dynamic item processor is a tool that the system uses to summarize data on dynamic items during resource-related quotation creation and billing (for example, line items that arise through the posting of goods movements, completion confirmations or surcharges). Further entries are made according to use. The Dynamic Item Processor profile (DIP profile) controls how the system summarizes data on dynamic items.

You can use the DIP profile for creating quotations and billing (both resource-related and flat-rate). Assignment to the DIP profile is performed in the service order header or in the sales order item. You can enter the default profile when making customizing settings for service order types or sales document item types.

You will find the customizing settings for quotation creation and billing in the IMG under Plant Maintenance and Customer Service -> Maintenance and Service Processing -> Basic Settings.

You have the following customer exits at your disposal: AD010001 (Change object list and its hierarchy), AD010002 (Delimit selection and/or filter data that is determined), AD010003 (Create user-defined DI characteristics), AD010005 (Creat user-defined sources), AD010006 (Menu exit: Change DI value), V46H0001 (Enter additional item data and insert a partner for the item).

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Planning Options with Unit Costing

Item Categories

M Material

E Internal Activity

V Variable Item

N Service

B Base Planning Object

G Overhead

...

Unit Cost Estimate

You can plan the costs of a service with a unit cost estimate. You use them like spreadsheets to make costing decisions and to access information on material costs, internal activity prices, purchasing costs, overhead, and process costs. For existing cost estimates, you can refer to these and copy the relevant items into the unit cost estimate.

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Item Categories in Unit Costing (1)

ITEM CATEGORY...ITEM CATEGORY... YOU ENTER...YOU ENTER...

THE SYSTEM CALCULATES ...THE SYSTEM CALCULATES ...

E (internal activity)

M (material)

P (process manual)

B (base planning object)

the price, unit of measure, text, cost element, and item value

N (service)

L (subcontracting)

F (external service)

process, quantity

name and quantity

cost center, (work center), quantity, activity type

material, plant, quantity

service, quantitiy

info record (normal), plant, purchasing org.

info record (subcontracting), plant, purch.org.

To support the full integration between unit costing and product costing, the new item categories F (external service) and L (subcontracting) are available in unit costing with Release 4.0.

The item category P (process manual) is used if you want to include business processes in a unit costing manually and not using the process template.

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Item Categories in Unit Costing (2)

ITEM CATEGORY...ITEM CATEGORY... YOU ENTER...YOU ENTER... THE SYSTEM CALCULATES ...THE SYSTEM CALCULATES ...

G (overhead)

O (operation)

S (total)

formula

the sum of the item values

overhead surcharge,cost element

the result of the formula

T (text) description

V (variable item) quantity, price the item value

created automatically

X (process) created automatically Quantity, price, unit of measuretext, cost element, and item value

Y (customer exit)

The item category X is created automatically when using a process template to calculate process quantities.

The item category Y (customer exit) can be acitivated as enhancement KKEK0001, if customers require their own calculation logic.

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Functions in Unit Costing

Unit Cost EstimateRevaluation

Referencing

Exploding

Fixed/variable split

Lot size reference

Foreign currencies

Copying

Within unit costing you can calculate totals, sub-totals, and formulas for mathematical operations. As the information in the cost estimate becomes out of date, you can use the revaluation function to determine the latest material or activity prices for the items in the cost estimate.

If the unit costing includes a material item with a cost estimate, you can explode this cost estimate to display the items that make up the material cost. Likewise, if you enter a base-planning object as an item, you can explode its cost estimate.

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Plan Revenue Actual Revenue

500

Plan Costs Actual CostsMaterial-X 200 Labor 300

Sales Order - 4711

Item 10 Service 1 PC

SDSD

Unit Cost Estimate

You create a sales order and plan the cost with unit costing.

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Goods Issue for Material needed for Service


MMMM

SEMI-I

Material-X


CustomersSales

Revenue

CreditStock

FIFI



Plan Costs Actual CostsMaterial-X 200 210Labor 300

Sales Order - 4711


SDSD

You post the goods issue for the material needed for the service.

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Posting Internal Activities

Cost Center

Direct activity allocationCost Object - 4711 / 10Plan Revenue Actual Revenue

500

Plan Costs Actual CostsMaterial-X 200 Material 210 Labor 300 Labor 400

Cross Application Timesheet

CATSCATS

Sales Order - 4711


SDSD

You may use the cross application timesheet (CATS) to post the internal activities to the sales order item or you may post the activities with a direct activity allocation.

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Results Analysis/Settlement (I)

FIFI

Expense WIP change

Price Differences

CreditWIP

Customers

Work in ProcessWork in Process

Cost Object - 4711 / 10Plan Revenue Actual Revenue

500


WIP 610

Sales Order - 4711


SDSD

You can use results analysis to calculate the value of the costs that can be capitalized for each sales order item. You can capitalize the costs if you settle to Financial Accounting (FI).

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Invoices with Resource Related Billing

FIFI


Sales revenues

CreditStock

Invoices

Customers

Item 10 Material-X 1 PC 400Item 20 Service-Hour 5 h 800

Debit Memo

Item 10 Material-X 1 PC 400Item 20 Service-Hour 5 h 800


Plan Revenue Actual Revenue500 1,200


Sales Order - 4711


SDSD

You create a debit memo based on the CO line items.

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Results Analysis/Settlement (II)

FIFI

Expense WIP change

ReservesSales

revenues

CreditWIP

Profit. Segment

Revenue 1,200

Cost of Sales 610

COCO--PAPA


Plan Revenue Actual Revenue500 1,200


WIP - 610

Sales Order - 4711


SDSD

When a sales order item is finally billed, this means that no more revenue is expected for that sales order item. Only debit memos and credit memos can be entered. For this reason you can normally cancel all capitalized inventories.

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Costing


Automatic planning

Account Assignment

Requirement Class

CostingCosting-Id Costing Method 2 Costing Variant POC4Costing Sheet COGS Copy Costing SheetCndTypLineItemesCndTypLineItFix

Account Assgt. Category B Valuation Without Val.-Strategy Settlement Profile SD1Result Analysis Key KUND

Cost Object Controlling on Sales Order without Sales order related Manufacturing

Costing Method Unit Costing

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© SAP AG 1999

Account Assignement Category B




VKB1


Account Assignment Category ‘B‘Product Cost by Sales Order

No Special stock

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© SAP AG 1999

Method Based Customizing

Profit basisPlan value of object and dependent objectsSales order cost estimateStandard price of material for sales order

Valuation levelValuation at totals level Valuation at line ID level

Expert mode

Result analysis method

Result Analysis with statusCancel inventory with statusCancel inventory/reserves with status

Status ControlREL ReleasedFNBL Finally billedTECO Technical completed

14

Derive Cost of Sales from Resource-Related Billing of Dynamic Items

Controlling Area 1000 Version 0 Result analysis key MTO1

Valuation Method

Parameter only for special methods

DIP-Profil 000001

Cost of sales is derived from the resource-related billing. Cost of sales is the sum of the billed line items.

The cost of sales is derived from the resource-related billing. Definitions:

Revenues = Sum of the revenues of the billed line items Cost of Sales = Sum of the costs of the billed line items Work in Process = Actual Costs – Cost of Sales

The revenues are calculated in SD pricing on the basis of the billed line items.

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Customizing - DIP-Profile

Material determination

Selection criteria

Quotations or billingSales document types, warranty check

Usage

Sources

Selection criteria

Characteristics What fields are relevant? Summarization based on characteristicsPresentation in the overview screen

Profile

Based on which characteristic values are items created?

How are material numbers determined?

Which material numbers are found for which characteristic values?

How are dynamic items determined?

You can use the DIP profile to create quotations as well as for billing purposes. You decide on the type of sales documents that are to be generated (quotation, billing request and credit memo request) per usage. In addition, you can determine if the system should perform a warranty check during billing. All other data should be entered when you are creating a document.

Characteristics relevant to the determination of dynamic items are fixed for each usage. In addition, various characteristic attributes, and the way in which they are presented during the processing of the billing request, are defined. You can define your own characteristics and enter values for these characteristics using the customer exit AD010003.

The sources define the data used to determine dynamic items (for example, the actual costs of line items or totals records, planned costs and so on). You can also select the characteristic values from which dynamic items should be determined (that is, exclusion of other characteristic values from billing). Selection is performed using the sets to be determined for this purpose. You can define your own sources using the customer exit AD010005.

You can define which service materials are determined from characteristic values for billing request items or quotations. The selection criteria here are also entered in the form of sets.

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Sales Order Controlling without Manufacturing:Summary

Explain the quantity and value flow in this scenario

Understand when to use of resource-related billing


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Sales Order Controlling without Manufacturing Exercises

Unit: Sales Order Controlling without Manufacturing At the conclusion of this exercise, you will be able to:

Create a unit cost estimate to determine the costs of a service.

Execute resource-related billing.

In your plant S300, you offer consulting services. As you receive a sales order to request consulting, you plan costs for the sales order item using unit costing. In addition, you use Cross Application Time Sheets to post actual consulting time for the sales order item. Invoicing is managed using resource-related billing.

Note: this exercise takes place in controlling area S300 !

1-1 Start by creating and estimating the costs for a sales order for the consulting task.

1-1-1 Create a sales order for a consulting item: Use the following data: Order type: ZSP1 (SP: Service order) Sales organization: S300 Distribution channel: S3 Division: S3 Choose Enter. Now enter the following data: Sold-to party: 3221 Material: ISP-CONSLT Order quantity: 10 day Choose Enter.

1-1-2 Create a unit cost estimate to determine the costs of the consulting in detail. Menu path: Extras Costing

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In the Pop-Up enter the following data: Costing Variant: PCO4 Base plan object: consulting Choose: Enter Adjust the proposal of the template. You estimate 20 hours for senior consulting CONS2N, and 60 hours for consulting CONS1N. You do not anticipate any travel expenses.

Choose: Save

1-1-3 Save the sales order Choose: Save Make a note of the sales order number, which the system displays in the status row when you save your data: ______________________________________________________

1-2 Actual Postings

1-2-1 Employee 515991## will enter their time for activity CONS1N by using the Cross Application Time Sheet. Record their time using the Cross Application Time Sheet. Be sure to release your entries before saving: Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Time data Enter Now enter the following data: Data entry profile: ISP_SD Personnel number: 515991## Press Button Enter times (F5) Now enter the following data: Sales Order: your sales order number Sales Order item: 10 Quantity: 5 hours each day for the last three days

Confirm

Select Release View

Select the indicator next to the line with your time entries

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Select Release

Choose: Save

1-2-2 Approve the time entered using the CATS so that it can be transferred to accounting. Select the time entries by referring to your personnel number 515991##.

Menu path

Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Approval Selection using Personal Data Select the posting indicator Up to today

Enter your Personnel number

Execute From the General Hierarchy Display, select your personnel number. The approval screen is now displayed.

Menu path

Edit Select All Choose Approve

Save.

1-2-3 Transfer the time sheet data to Accounting

Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Transfer Accounting Now enter the following data: Personal no.: 515991## Choose Execute

1-2-4 Enter an activity allocation of activity CONS2N for your sales order. Set the controlling area to S300 by using the menu item "extras set controlling area". 4 hours have been consumed from the sending cost center S-3310. Use screen variant Sales Order/Cost Object to process this activity allocation.

1-2-5 Go to the information system for Product cost by sales order and review the planned to actual cost report for your sales order.

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Menu 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 For Sales Order Plan/Actual Comparison Enter the following data: Sales order: your sales order number Item: 10 Choose: Execute

1-3 Period-end closing before invoicing

1-3-1 Carry out results analysis and analyze the results. Note the COS and WIP values. Use the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Choose Execute Save the results analysis data:

1-3-2 Carry out sales order settlement. To view the settled amounts, display the detail lists. Note the amounts settled to PA reflect the COS and revenue calculated by results analysis. Use the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Background processing: deselect Test run: deselect Detailed lists: select Check trans. data: deselect Choose Execute

1-4 Resource-related billing

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1-4-1 Create a debit memo request for the consulting activities. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Resource-related billing document Now enter the following data: Sales Order number: your sales order number Sales Order item: 10 Choose Save Billing Request Confirm the Popup ‘Do you really want to create a billing request?’ (if appears) and save the billing request.

1-4-2 Create an invoice based on the debit memo request. Note the invoice value matches the WIP value calculated during Results Analysis. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing document Choose Save

1-4-3 Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order. Check whether the revenues for the invoices were updated on the corresponding sales order item.

1-5 Period-end closing after invoicing.

1-5-1 Carry out results analysis again and review the logs and analyze the results. Since all costs have been billed, the WIP value should be zero.

Use the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Choose Execute Save the results analysis data:

1-5-2 Carry out sales order settlement. Display the settled amounts by double clicking on the sender.

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Use the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Background processing: deselect Test run: deselect Detailed lists: select Check trans. data: deselect Choose Execute

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Sales Order Controlling without Manufacturing Solutions

Unit: Sales Order Controlling without Manufacturing

1-1 Start by creating a sales order for the consulting task.

1-1-1 Create a sales order for the consulting item: Menu path: Logistics Sales and distribution Sales Order Create Now enter the following data: Order type: ZSP1 (SP: Service order) Sales organization: S300 Distribution channel: S3 Division: S3 Choose Enter. Now enter the following data: Sold-to party: 3221 Material: ISP-CONSLT Order quantity: 10 day Choose Enter.

1-1-2 Create a unit cost estimate to determine the costs of the consulting in detail. Menu path: Extras Costing In the Pop-Up enter the following data: Costing Variant: PCO4 Base plan object: consulting Choose: Enter Adjust the proposal of the template. You estimate 20 hours for senior consulting CONS2N, and 60 hours for consulting CONS1N. Delete the entry for the travel costs.

Choose: Save

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1-1-3 Save the sales order Choose: Save Make a note of the sales order number, which the system displays in the status row when you save your data: ______________________________________________________

1-2 Actual Postings

1-2-1 Confirm the internal activity by using the Cross Application Time Sheet to record the consulting time. Be sure to release your entries before saving: Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Time data Enter Now enter the following data: Data entry profile: ISP_SD Personnel number: 515991## Press Button Enter times (F5) Now enter the following data: Sales Order: your sales order number Sales Order item: 10 Quantity: 5 hours each day for the last three days

Confirm

Select Release View

Select the indicator next to the line with your time entries

Select Release

Choose: Save

1-2-2 Approve the time entered using the CATS so that it can be transferred to accounting. Select the time entries by referring to your personnel number 515991##.

Menu path

Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Approval Selection using Personal Data Select the posting Up to today

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Enter your Personnel number

Execute From the General Hierarchy Display, select your personnel number. The approval screen is now displayed.

Menu path

Edit Select All Choose Approve

Save.

1-2-3 Transfer Time Sheet data to Accounting

Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Actual Posting Time Sheet

Transfer Accounting Now enter the following data: Personal no.: 515991## Choose Execute

1-2-4 Enter an activity allocation for your sales order.

Accounting → Controlling →Product Cost Controlling →Cost Object Controlling → Product Cost by Sales Order → Actual Postings → Activity and business process allocation → Enter

Set the controlling area to S300 by using the menu item "extras set controlling area".

Document date: today’s date

Posting date: today’s date

Screen variant: Sales order/cost object

Quantity: 4 hours

Sending Cost center: S-3310

Activity type: CONS2N

Receiver sales order: your sales order number and item number

Save

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1-2-5 Go to the information system for Product cost by sales order and review the planned to actual cost report for your sales order. Menu 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 For Sales Order Plan/Actual Comparison

Enter the following data: Sales order: your sales order number Item: 10 Choose: Execute

1-3 Period-end closing before invoicing

1-3-1 Carry out results analysis and review the logs and analyze the results. Note the COS and WIP values. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing Now enter data the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Choose Execute Save the results analysis data: Choose Save

Note the debit material ISP-CONS1N. This material was derived from the configuration of the DIP profile, based on the cost element assigned to the activity CONS1N. The sales price is established for this material. The COS value reflects the cost of the consulting activity that has been posted to the sales order. No other actual costs have been posted to the sales order. The WIP value reflects the revenue that can be generated based on the sales price of ISP-CONS1N. From the revenue overview, you can see the revenue that remains to be billed. At this point, billing has not been executed for this sales item.

1-3-2 Carry out sales order settlement. To view the settled amounts, display the detail lists. Note the amounts settled to PA reflect the COS and revenue calculated by results analysis.

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Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Period-End Closing Single Functions Settlement Now enter data the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Background processing: deselect Test run: deselect Detailed lists: select Check trans. data: deselect Choose Execute

To view the settled amounts, select Detail Lists

Select the settlement line, and choose either Sender, Receiver or Accounting docs to review the settlement values.

1-4 Resource-related billing

1-4-1 Create a debit memo request for the consulting activities. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Resource-related billing document Now enter the following data: Sales Order number: your sales order number Sales Order item: 10 Choose Save Billing Request Confirm the Popup ‘Do you really want to create a billing request?’ (if appears) and save the billing request.

1-4-2 Create an invoice based on the debit memo request. Note the invoice value matches the WIP value calculated during Results Analysis. Menu path: Logistics Sales and Distribution Sales Order Subsequent functions Billing document Choose Save

(C) SAP AG AC515 7-38

1-4-3 Go to the information system for Product Cost by Sales Order and review the planned to actual cost report for your sales order. Check whether the revenues for the invoices were updated on the corresponding sales order item. Menu 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 For Sales Order Plan/Actual Comparison Now enter the following data: Sales order: your sales order number Item: 10 Choose: Execute

The revenue has been updated to the sales order item.

1-5 Period-end closing after invoicing.

1-5-1 Carry out results analysis again and review the logs and analyze the results. Since all costs have been billed, the WIP value should be zero.

Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Period-End Closing Single Functions Results Analysis Execute Individual Processing Now enter data the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Choose Execute Save the results analysis data: Choose Save

From the cost overview, note the WIP value of zero. Also, from the Revenue Overview, zero remains to be billed.

1-5-2 Carry out sales order settlement. Display the settled amounts by double clicking on the sender.

(C) SAP AG AC515 7-39

Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Period-End Closing Single Functions Settlement Now enter data the following data: Sales Order: your sales order number Item: 10 Period: current period Fiscal Year: current fiscal year Results Analysis Version: 0 Background processing: deselect Test run: deselect Detailed lists: select Check trans. data: deselect Choose Execute

To view the settled amounts, select Detail Lists

Select the settlement line, and choose either Sender, Receiver or Accounting docs to review the settlement values.


© SAP AG 1999

Information System

Structure of the information system

Sales order selection with ABAP List Viewer

Overview standard reports for effective controlling

Contents:


© SAP AG 1999

Information System: Objectives

At the end of this unit, you will be able to:

Explain the structure of the information system

Use the standard reports for effective controlling

Understand the technique used by the information system

Customize the information system to suit your needs


© SAP AG 1999

Information System: Business Scenario

You have a new employee who will be responsible for reporting.

As an orientation, you are reviewing the delivered reports and reporting tools with this employee. You need to discuss:

What reporting structures are available

What is the procedure for accessing a report

How standard reports are processed

Since reporting requirements are constantly changing, you will introduce your new staff member to the functions provided for creating and maintaining reports.

You will also address special features which simplify and speed up report processing, including giving some guidelines for selecting among the provided tools.


© SAP AG 1999

Information System: Roadmap

© SAP AG 1999

Structure of the Info-System

Info-System Controlling by Sales Order

Customizing


© SAP AG 1999

Using CO-PC Info-System

Which reporting techniques are used ?

What can CO-PC-IS do for me ?

How is the info-systemstructured?


© SAP AG 1999

What can CO-PC-IS do for me?

What’s going on in my plant?

Can I supportmy regular decisions based on periodic reporting?

my day-to-day activities effectively?

Can I really concentrate on the critical 5% ?

Do I have enough reporting flexibility to meet all my specific requirements?

Can I get the right reports to the right places?

Can I enhance the standard reporting system with my own reports?


© SAP AG 1999

How is the info-system structured?

Σ

...

Summarized Analysis

Reports which show summarized data (such as a plant)

Branch to detailed reportsObject Lists

List of objects according to the selection criteria

Branch to detailed reportsDetailed Reports

Reports for specified objectsComparison Reports

Object comparisonsOther Reports

Special reports (such as line items)

The report categories subdivide the application report trees on the first level according to the most common reporting needs. For consistency and convenience, each application tree is structured according to the same report categories.

The report category is structured according to the report contents. The detailed reports for Product Cost by Period, for example, is subdivided into the following report contents: Variance analysis Work in process Planned costs Actual costs

Under these headings, you will find either the corresponding reports or further subdivisions.


© SAP AG 1999

Which reporting techniques are used?

ALVALV

Report

Trees

Report Writer

ProductDrilldown

HierarchyGraphics

R/3

CO-PC

How do Ihandle this?? Report Trees

Different Report Tools used

ABAP List Viewer

Hierarchy Graphics

Product Drilldown

Report Writer

In the Information System CO-PC, different Report Tools are used. Every report tool has its own features and range of applications.

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© SAP AG 1999

Online Documentation

InformationSystemCO-PC

Separate documentation for the CO-PC Information System Contents:

Structure of the Information SystemPurpose and output of the reportsConcept of the summarized analysisInteractive product drilldownOrder hierarchiesReport tools

The online documentation was set up completely new in Rel. 4.0 and was continuously improved since then

You can find it from the R/3 Library: -> Financials -> Controlling -> Product Cost Controlling -> Product Cost Controlling Information System (CO-PC-IS) .

The documentation provides you with information about the structure of the Information System. In Report Contents, you will find a description of reports that are standard for the application report trees in the Information System for Product Cost Controlling.

Context sensitive help is not supported

(C) SAP AG AC515 8-11

© SAP AG 1999

Reporting Features

Exception reporting

Drilldown

Use flexibleFilters

Sorting criteria

Grouping criteria

Display variants

Download functions

Exception Reporting Exception conditions specify whether an object deserves special notice. You can enter this information in a key figure in a line or a column. Those fields of note will be colored so that you can quickly recognize items such as variances that are above a certain value.

Drilldown reporting is an interactive information system that helps you evaluate the data collected in your application. This information system is capable of analyzing data according to any of the characteristics that describe the data. You can also use key figures to categorize your data.

Download functions Spreadsheet Word processing HTML formats

(C) SAP AG AC515 8-13

© SAP AG 1999


Line ItemsLine Items

Sales Order SelectionCockpit

Detailed Reports

Sales Order/ -Item- Plan/Actual Comparison for Sales Order- Work in Process - Profit Results for Sales Orders - Reserves for Imminent Loss - Reserves for Unrealized Costs - Plan Costs - Actual Costs

- Funds commitment

Production Order- Plan/Actual Comp.- Target/Actual Comp.- Target/Actual/Prod. Variance- Plan Costs- Actual Costs- Work in Process- Variance Categories

Sales Order with Assigned Orders

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© SAP AG 1999

Sales Order Selection I

ExceptionsExceptions

FilterFilter

Order Customer Plan ActualOrder Customer Plan Actual

4711 ZZ-Low 1,000 1,2003459 XYZ 1,200 1,2503986 CBA 900 8504679 MNO 950 1,800

4711 ZZ-Low 1,000 1,2003459 XYZ 1,200 1,2503986 CBA 900 8504679 MNO 950 1,800

Powerful Exception Reporting

List with Key Figuressales order header

sales order items

Display VariantsStandard display variants

Customer specific

User specific

Different Views:Sales Document Items

Sales Documents and Items

Sales Documents

Sales Order Selection provides you with powerful means to build up a list of sales orders which interest you. In conjunction with exceptions and filters, a variety of selection criteria supports your efforts to analyze only the critical sales orders. The number of selection criteria regarding the sales order items was enhanced again in 4.6c.

You get a list of sales orders according to your selection criteria and you get a first impression by looking at key indicators. Having identified those critical sales orders that you want to examine more closely - just drilldown to detailed cost element reports to view them.

You can use the features of the ABAP List Viewer. The list can easily be suited to your needs. It is therefore recommended that you define your own display variants.

You can also go to different views without having to make a new selection.

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© SAP AG 1999

Sales Order Selection II

Sales Document Item Material Plant Actual Revenue Actual Costs Actual %

COPC-FINI-110 1000 12,000.00 10,000.00 204571

COPC-CONFIG-120 1200 24,000.00 26,000.00 8-4571

COPC-FINI-210 1000 30,000.00 29,500.00 24621

COPC-FINI-110 1000 24,000.00 20,000.00 204627

COPC-CONFIG-120 1200 35,000.00 30,000.00 164627

COPC-CONFIG-130 1200 40,000.00 36.000,00 114627

COPC-FINI-110 1000 24,000.00 23,500.00 24665

COPC-FINI-220 1000 28,000.00 27,200.00 34665

COPC-FINI-110 1200 24,000.00 20,000.00 204721

COPC-FINI-210 1200 40,000.00 36,000.00 114731

COPC-CONFIG-110 1200 30,000.00 36,000.00 17-4745

COPC-CONFIG-220 1200 40,000.00 36,000.00 114745

COPC-FINI-110 1000 12,000.00 10,000.00 204763

COPC-FINI-110 1000 25,000.00 24,700.004767

Subtotals

Select or savedisplay variant

Sort

Use of filters

Totaling of lineitems

Main Features:

The ABAP List Viewer standardizes and simplifies the operation of lists in the R/3-System. A standardized interface and list format is made available to you for all lists. It contains convenient features for dynamic creation of display variants. Some of the important functions for the ABAP List Viewer are: Create display variant Using display variants, you can change the format of your list.

Sort You can have the lines sorted in ascending or descending order according to column value.

Set filter You can choose to have only those lines displayed that meet certain criteria.

Total and subtotal values Within a list, you can calculate totals and subtotals over one or more chosen columns.

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© SAP AG 1999

Report Tools - ABAP List Viewer

Presentation Tool for Lists with Generic Functionality

Dynamic Creation of Display Variants

Predefined Standard Variants

Only Presentation - Removed from Selection

Combination of Characteristics and Key Figures possible

View Changeable in the Report Without a New Selection

The ABAP List Viewer standardizes and simplifies the operation of lists in the R/3 System. A standardized user interface and list layout is available for all lists. It contains features for dynamic creation of display variants.

In the standard many Report Writer reports have already been substituted by ALV reports. ABAP List Viewer is used in CO-PC for the following reports:

Sales Order Selection List of Existing Product Cost Estimates Line Items in Cost Estimate for Product Analysis of a Costing Run Line Item Reports Order Selection ...

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© SAP AG 1999

ALV: Defining Display Variants

Supply of fields

Column content Lgth

Displayed fieldsColumn content Pos Lgth SumMaterial 1 12

Plant 3 4

Mat. description 2 39

...

Costing version 7

10

Costs

Costing version

8

74

5

...

...

Costs

Save as a display variant

Using display variants, you can change the format of your list. You can choose which fields will be displayed. You can change the sequence of fields You can modify the column widths to suit your needs. There are two types of display variants:

Customer specific display variants accessible to all users.

User specific display variants accessible only to the user who created the display variant.

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© SAP AG 1999

Customize Your ABAP List Viewer Reports

Choose the selection characteristics you want

to use

Define Your Own Selection Variant

Choose the key figures and characteristics you

want to use

Define Your Own Display Variant

Selection Presentation

Assign your selection variant to the report treestarting the report with your defined display variant

Report Tree

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© SAP AG 1999

Use of Extract in different report (I)

Save asExtract

Sold-to partySales document

Selection by header data

First Step: Selection

Use BackgroundProcessing !

ExtractDatabase

To reduce runtimes, you can generate extracts when accessing reports. An extract is a saved dataset containing the report data selected at the time the extract was generated.

You generate an extract when you execute a report with reference to the report selection parameters. For that it is possible to generate multiple extracts if you execute the report with different selection criteria.

When you display the report data in the extract, you have the same navigation and formatting functions as with online execution of the report.

If you make changes in the data structure in Customizing for the Information System (especially the field selection for order selection or for the selection of classification characteristics), inconsistencies may arise between the current data structure and the structure in the extract. The data of the extract can then no longer be displayed.

Note, that an extract is normally only valid for the duration of one Release. This means that after a release upgrade you usually cannot access extracts generated in a previous release. Therefore after a release upgrade you should generate new extracts with the desired selection criteria.

You can generate extracts in the order selection, the sales order selection and the report ‘Analyze Costing Run’.

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Use of Extract in different report (II)

ReadExtract

Sales Order Revenue Costs12,000.00 10,000.004571

24,000.00 26,000.00

30,000.00 29,500.0024,000.00 20,000.00

4671

4781

4981

Second Step: Presentation

Save asExtract

Sold-to partySales document

Selection by header data

First Step: Selection

ExtractDatabase

(C) SAP AG AC515 8-21

© SAP AG 1999

Summarization Hierarchy for Sales Orders

Controlling Area

Sales Organization

Material

Fields from Master data tables

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© SAP AG 1999

Summarization of different Object Types

Production orders

Process orders

Product cost collectors

QM-OrdersSales Orders with orwithout dependent ordersProjectsInternal ordersMaintenance and serviceorders

Object Types

Data Collection

Controlling Area

Sales Organization

Material

Summarization Hierarchy

(C) SAP AG AC515 8-23

© SAP AG 1999

Sales Order Selection

Detailed Reports

Sales Order/ -Item- Plan/Actual Comparison for Sales Order- Work in Process - Profit Results for Sales Orders - Reserves for Imminent Loss - Reserves for Unrealized Costs - Plan Costs - Actual Costs - Funds commitment


Cockpit

Line Items

Sales Order with Assigned Orders (I)


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© SAP AG 1999

Sales Order with Assigned Orders (II)

4711 / 10: P-100 1,800 1,9504711 / 20: P-200 1,500 1,4504711 / 30: P-300 1,320 1,400

Order 346 Order 98452

Plan ActualPlan Actual

Sales Order 4711

++-


Set-Structure in Sales Order

Showing all assigned Production Orders and Internal Orders

Sales Order Hierarchy

Use Exceptions

Features of Hierarchy Graphics

Drilldown to Cost Element Reports

++

A sales order hierarchy report gives you an impression of the structure of an individual sales order. It gives you a structure of the sales order items and the related production or internal orders.

The report shows predefined views: Plan/Actual Costs Plan/Actual Quantities Planned Costs fixed/variable Actual Costs fixed/variable Planned/Actual Revenues

You can create display variants with the figures you are most interested in. Sets of Sales Orders are supported in the report. By drilling down, you access detailed cost element reports for the sales order, for the sales order items, or for the assigned orders.

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© SAP AG 1999

Report Tools - Hierarchy Graphics

Uses Tree Graphic

For Presentation of structural Information

Predefined View with corresponding figures

Expand / Collapse nodes

Set CurrencyCO-Area CurrencyCompany Code Currency

Display VariantsStandard display variantsCustomer specificUser specific

The following reports use hierarchy graphics in CO-PC: Sales Order with assigned Orders Multilevel Costed BOM Order Hierarchy Cost Object Hierarchy Collective Order Partner Cost Component Split

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© SAP AG 1999

Detailed Reports

Sales Order Selection

Detailed Reports

Sales Order/ -Item- Plan/Actual Comparison for Sales Order- Work in Process - Profit Results for Sales Orders - Reserves for Imminent Loss - Reserves for Unrealized Costs - Plan Costs - Actual Costs - Funds commitment


Cockpit


Line Items

The following detailed reports could be used: Plan/Actual Comparison for Sales Order: Compares the planned and actual data of one or more items in a sales order that are relevant to account assignment.

Work in Process: Shows WIP and Reserves for unrealized costs updated by results analysis.

Profit Results for Sales Orders: Analyzes the results analysis data for sales order/-item.

Reserves for Imminent Loss: Shows the reserves for imminent loss updated by results analysis under the corresponding results analysis cost elements.

Reserves for Unrealized Costs: Shows the reserves for unrealized costs updated by results analysis under the corresponding results analysis cost elements.

Plan Costs: Shows the updated planned costs and figures and can serve as an analysis of the planning state.

Actual Costs: Shows the updated actual costs and figures and can serve as an analysis of the cost situation in your actuals.

(C) SAP AG AC515 8-27

Funds commitment: Contractual or scheduled commitment, that is not yet reflected in financial accounting, but that will lead to actual expenditures in the future.

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© SAP AG 1999

Funds Commitment

CostElement

PlannedCost

PurchaseRequisition

FundsCommitment

ActualCosts

Revenues

Steel

PurchaseOrder

Electrical

Subcontr.PurchaseFin. Goods

- 1000,-

800,-Total - 200,-

250,-100,-

200,-

200,-250,- 100,- 200,- 200,-

required, not ordered yet

ordered,not delivered

yet

Sales order stock

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© SAP AG 1999

Customizing

Stop You have to customize the Information System.

If it is not customized, you will not see anything in the Information System.

Following steps are necessary Product Drilldown: Import/transport reports Order selection and summarization

• Define Selection Profiles • Define Selection Screens for Order List • Define Exception Rules • Create Order Hierarchies

Product Cost by Order • Import Reports for Product Cost by Order • Generate Reports for Product Cost by Order

Product Cost by Sales Order • Import Reports for Product Cost by Sales Order • Generate Reports for Product Cost by Sales Order

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© SAP AG 1999

Customizing Maintain Report Parameters for CO-PC

[+] Product Cost Planning

[+] Settings for Summarized Analysis / Order Selection[+] Product Cost by Period[+] Product Cost by Order[+] Product Cost by Sales Order[+] Cost of Intangible Goods & Serv.

[-] Cost Object Controlling

[+] Actual Costing / Material Ledger[+] User-Defined Reports

Information System

Customizing the CO-PC Information System

All settings for the Information System are grouped together. They are structured by component. Changes to the component hierarchy are reflected in Customizing.

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© SAP AG 1999

Information System: Summary

We have described the new structure of the information system in CO-PC

You understand the technique used by the information system

You could use the standard report for effective controlling

You are able to customize the information system to suit your needs

(C) SAP AG AC515 8-33

Information System Exercises

Unit: Information System At the conclusion of this exercise, you will be able to:

• Use the report for the sales order selection

• Create a user specific display variant

You have to report the results analysis figures for a range of sales order items. You need a report which contains the following columns:

• Sales Order Number

• Sales Order Item

• Revenue affecting Net Income

• Cost of sales

• WIP (Work in Process)

• Reserves for unrealized costs

1-1 The report for the sales order selection is written with the ABAP List Viewer. We will use the ABAP List Viewer functionality to create a user specific display variant with the column order specified above.

1-1-1 Start by executing the report for the sales order selection. Enter the following data: Sold-to party: 1171 Choose Execute

1-1-2 Next, create a user specific display variant which will display the fields: Revenue affecting net income, Cost of Sales, WIP, and Reserves for unrealized costs.

1-1-3 Save the user specific display variant that you just created. Display variant: AC515-## User-specific: x Description: Overview Results Analysis

(C) SAP AG AC515 8-34

1-1-4 Execute the report again, but enter your new display variant AC515-## on the intial screen. In this manner, your new display variant will be the initial report display. Sold-to party: 1171 Display variant: AC515-## Choose Execute

(C) SAP AG AC515 8-35

Information System Solutions

Unit: Information System

1-1 The report for the sales order selection is written with the ABAP List Viewer. We will use the ABAP list viewer functionality to create a user specific display variant with the column order specified above.

1-1-1 Start by executing the report for the sales order selection. Menu path: Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Sales Order Information System Reports for Product Cost by Sales Order Object List Sales Order Selection Now enter the following data: Sold-to party: 1171 Choose Execute

1-1-2 Next, create a user specific display variant which will display the fields: Revenue affecting net income, Cost of Sales, WIP, and Reserves for unrealized costs. Press icon "change layout" To begin with, remove from the current display variant the following columns: Material, Plant, Planned profit pct (base: plan costs), Actual profit pct (base: actual costs), Actual revenue (with sales deduction), Actual costs. Then change the field group to ‘Results analysis’. From the list, select the columns Revenue affecting net income, Cost of sales, WIP, Reserves for unrealized costs. Confirm the selection with Continue.

The report data is updated to display the requested fields.

(C) SAP AG AC515 8-36

1-1-3 Save the user specific display variant that you just created. Press icon "save layout" Display variant: AC515-## User-specific: x Description: Overview Results Analysis Choose: Continue

1-1-4 Execute the report again, but enter your new display variant AC515-## on the initial screen for sales document items. In this manner, your new display variant will be the initial report display.

Proceed like in Step 1-1-1. Sold-to party: 1171 Display variant: AC515-## Choose Execute


© SAP AG 1999

Appendix

This section contains supplementary material to be used as reference

This material is not part of the standard course

Therefore, the instructor might not cover this during the course presentation


© SAP AG 1999


Explain the quantity and value flow in a Make-to-Order Scenario with unvaluated Sales Order Stock

Identify the necessary setting in customizing

MTO with unvaluated Sales Order Stock: Objectives


© SAP AG 1999

Roadmap: MTO with Sales Order Controlling

© SAP AG 1999

Unvaluated Sales Order StockOverview Business Scenario


Planning

Actual Postings

Customizing

Transfer Postings

Customizing WIP, Variances


© SAP AG 1999

MTO With Unvaluated Sales Order Stock


Order Stock

Valuated

Unvaluated

Without With

Not supported

X X

X

When to Use ?


Special sales costs

Funds commitment




Sales Order Controlling is recommended if the following information is essential to your business: How high is my profit margin with this special sales order? How can I control my special sales efforts? How high is my fund commitment? Is this sales order performing well from a costing point of view?

Where did late customer changes effect my production costs heavily? In this scenario you have the ability to:

allocate sales overhead to the sales document item allocate process costs to the sales document item assign special direct costs of sales and distribution to the sales document item

Moreover you can use results analysis to: create automatically reserves for expected losses manually add reserves for foreseen risk calculate Goods in Transit when goods are already shipped but not yet invoiced


© SAP AG 1999

Unvaluated Sales Order Stock

Cost Object Controlling by Sales Order Item is necessary

The quantity flow is separated from the value flow

The quantity flow (goods receipts, goods issues) is made via individual customer stock

The value flow is made via the sales order item and all assigned orders.

Costs are not posted to the sales order item until order settlement or until the invoice is received

No variance calculation on assigned production orders


© SAP AG 1999

Separated Quantity and Value Flow for Sales Order Stock

Material Management

Material $ 110

Labor $ 180

Settlement $ 290

Material: Product-X

Sales Order StockItem Quantity

4763 30 3 4783 20 2 4711 10 1 4815 10 1

Cost ObjectSales Order 4815 / 10

Settlement $ 290

Debits



Goods receipt

Production Order

Debits:

Credits:



© SAP AG 1999

What and how is the data updated?

How is the sales order

item updated?

Product CostingCost component split

Cost itemization

Sales Order Item

Cost elements

(Planned Costs)

Unit CostingCost itemization

Sales Order Item

Cost elements

(Planned Costs)

Rule of thumb:

Planned costs are updated the same way as the actual costs are posted.


© SAP AG 1999

Example: Cost elements on sales order item

SD Order 4711Item 10 FIN-1 1 PC

SDSD

SEMI-I 0 $RAW-C 10 $ACTIVITY 40 $OVERHEAD 10 $

ItemizationFIN-I 4711 / 10

RAW-I 0 $ACTIVITY 40 $OVERHEAD 10 $

ItemizationSEMI-I 4711 / 10

Purchase orderRAW-I 4711/10 50 $

MMMMBOM

FIN-I

SEMI-I RAW-C

RAW-I

PPPP

CO Object

Plan Revenue500$

Plan CostsRAW-C 10$ACTIVITY 40$OVERHEAD 10$

RAW-I 50$ACTIVITY 40$OVERHEAD 10$

Costing sheet / Sales Order item

All itemizations of the individual required materials are pulled up to the sales order item level including surcharges.

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Example: Surcharges in Detail

SD Order 4711Item 10 FIN-1 1 PC

SDSD

SEMI-I 0 $RAW-C 10 $ACTIVITY 40 $OVERHEAD 10 $

ItemizationFIN-I 4711 / 10

RAW-I 0 $ACTIVITY 40 $

OVERHEAD 10 $

ItemizationSEMI-I 4711 / 10

Purchase orderRAW-I 4711/10 50 $

MMMM

CO Object

Plan Revenue500$

Plan CostsRAW-C 10$ACTIVITY 40$OVERHEAD 10$

RAW-I 50$ACTIVITY 40$OVERHEAD 10$

OVERHEADSALES 20,-

Costing sheet / Sales Order itemCosting Sheet

in valuation method of costing variant formanufacturing overheads

Costing Sheet in therequirement class forsales overhead

Recommendation: Overheads for sales and administration are calculated with the costing sheets of the requirement class Overheads for goods manufactured are calculated with the costing sheet of the valuation variant of the costing variant

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© SAP AG 1999

Example: Unvaluated Sales Order Stock

SDSD


Material:


Material:


BOM

FIN-I

SEMI-I RAW-C

RAW-I

PPPP

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© SAP AG 1999


Cost Object - 4711 / 10Plan Revenue

500

Plan CostsRAW-I 60Special Costs 10

Actual Revenue

Actual Costs

SDSD


BOM Routing


Unit Cost Estimate

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Materials Requirements Planning


Actual Costs



Purchase order

RAW-I 4711/10

MMMM

PPPP

BOMFIN-I

SEMI-I RAW-C

RAW-I

PPPP


Actual Costs

Components with individual requirements are not costed when

using the unvaluated sales order stock

Components with individual requirements are not costed when

using the unvaluated sales order stock

SDSD


MRP (Material Requirement Planning) creates 2 production orders and 1 purchase order. This example is only using the planned costs of the production order. There is no sales order estimate.

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Goods Receipt / Invoice Receipt Raw Material

Stock change

Customers Vendors

GR/IRExpense

FIFI



Plan Costs Actual CostsRAW-I 60 RAW-I 60 Special Costs 10

SDSD


Goods Receipt

1 PC RAW-I 60

Invoice Verification

1 PC RAW-I 60

RAW-C100 PC 10

SEMI-I

FIN-I


MMMM

RAW-I4711/10 1 PC 60


The goods receipt creates a debit to sales order. The inventory is stored as sales order stock, however it is not valued. If price differences occurs for the material, (during invoice receipt), the price difference will be posted to the sales order.

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Goods Issue Raw Material

RAW-C100 PC 10


RAW-I4711/10 0 PC

MMMM

Plan Costs

ACTIVITY 100

Actual Costs


PPPP


CustomersSales

Revenue

CreditStock

FIFI

SEMI-I

FIN-I



Plan Costs Actual CostsRAW-I 60 RAW-I 60Special Costs 10

SDSD


Since the raw material inventory (RAW-I) does not have value, the goods issue of the unvaluated raw material does not create an accounting entry.

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Goods Receipt Semi-finished Material


CustomersSales

Revenue

CreditStock

Plan CostsACTIVITY 100

Actual CostsACTIVITY 120


PPPP

RAW-C100 PC 10


RAW-I4711/10 0 PC

MMMM

SEMI-I 4711/10 1 PC

FIFI

FIN-I




SDSD


Since the sub-assembly is non valuated sales order stock, no accounting entry is created during the goods receipt of the sub-assembly. The actual costs will remain on the production order until settlement.

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Goods Issue: Components to the Finished Good

Plan CostsRAW-C 10 ACTIVITY 40

Actual CostsRAW-C 10


PPPP

RAW-C99 PC 10


RAW-I4711/10 0 PC

MMMM

SEMI-I 4711/10 0 PC


Sales Revenue

CreditStock

FIFI

FIN-I

Customers







PPPP

SDSD


Goods issues in Materials Management (MM) for dependent requirements of the finished product result in corresponding debits of the manufacturing orders if the components are collective stock. If the price control indicator of the material is set to S, the production order is debited with the standard price; if the price control indicator is set to V, the production order is debited with the current moving average price. The manufacturing orders therefore always show the full actual costs. Note that if the price control indicator of the material is set to S, the actual costs are calculated by multiplying the confirmed quantity by the standard price.

Goods issues of unvaluated sales order stock do not create an accounting entry.

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© SAP AG 1999

Goods Receipt Finished Good


Sales Revenue

CreditStock

RAW-C99 PC 10


RAW-I4711/10 0 PC

MMMM

SEMI-I 4711/10 0 PC

FIN-I 4711/10 1 PC

Plan CostsRAW-C 10

ACTIVITY 40

Actual CostsRAW-C 10 ACTIVITY 50


PPPP

FIFI

Customers




SDSD


Since the finished material is unvaluated sales order stock, there is no accounting entry during the goods receipt for the finished material. The actual costs will remain on the production order until settlement.

(C) SAP AG AC515 9-20

© SAP AG 1999


FIFI


Sales revenues

CreditStock

Delivery

Item 10 FIN-I 1 PC

RAW-C99 PC 10

MMMM

SEMI-I 4711/10 0 PC

RAW-I4711/10 0 PC

FIN-I 4711/10 0 PC


Customers




SDSD


Since the finished good is not valuated, there is no accounting document created during the delivery to the customer.

(C) SAP AG AC515 9-21

© SAP AG 1999

Results Analysis/Settlement

FIFI


Price Differences

CreditStock

Customers

Work in Process

Goods in Transit




WIP 180


Actual CostsRAW-C 10ACTIVITY 50


PPPP




PPPP

SDSD


You can use results analysis to calculate the value of the costs that can be capitalized for each sales order item. You can activate the costs that have an option to capitalize by means of settlement to Financial Accounting (FI). For manufacturing enterprises, results analysis is recommended when you want to capitalize goods that have been delivered but not yet invoiced.

For unvaluated sales stock, you use results analysis to calculate the value of the sales order inventory at the end of a period. Via the settlement process, this inventory value can be posted to FI. This is the same concept as WIP calculation.

You can also use results analysis to calculate the COS value. Since the delivery is made without updating the COS in Financial Accounting, you can use results analysis and settlement to post the COS in FI.

(C) SAP AG AC515 9-22

© SAP AG 1999

Invoices

FIFI


Sales revenues

CreditStock

Invoices

Delivery

Item 10 FIN-I 1 PC

10 FIN-I 1 PC 500

Customers




SDSD


The actual revenues are updated on the sales order item by the invoice. Billing invoices the customer for the goods and services delivered for a sales order. In Sales and Distribution, you create an invoice (billing document) on the basis of a reference document. In order-related billing, the reference document is the standard order or the delivery document with delivery-related billing.

The data such as prices and quantities are transferred from the previous documents into the billing documents. The price can be calculated in the following ways: Using pricing on the basis of conditions (such as material or customer) On the basis of the incurred costs if you want to use resource-related billing

When you enter a billing document, the system proposes a billing type depending on the reference document. The billing type determines the following: Which pricing procedure is used for account determination for Financial Accounting Whether the invoices are passed immediately to Financial Accounting

(C) SAP AG AC515 9-23

© SAP AG 1999

Settlement Production Order

FIFI


ReservesSales

revenues

CreditStock




Settlement 180


Actual CostsRAW-C 10ACTIVITY 50

-60


PPPP



- 120


PPPP

SDSD


When a sales order item is finally billed, this means that no more revenue is expected for that sales order item. Only debit memos and credit memos can be entered. For this reason you can normally cancel all capitalized inventories. In case of follow-up costs it is possible to build reserves.

The settlement rule for the production orders will automatically assign the sales order as the receiver. In this manner, all actual costs from the production order are settled to the sales order item.

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© SAP AG 1999

Customizing

© SAP AG 1999



Planning

Actual Postings

Customizing

Transfer Postings


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Costing


Automatic planning

Account Assignment

Requirement Class

CostingCosting-Id BCosting Method 1Costing Variant PPC4Costing Sheet COGSCopy Costing SheetCndTypLineItemesCndTypLineItFix

Automatic Pre-Costing of Sales Order Item

Account Assgt. Category EValuation Val.-Strategy Settlement Profile SD1Result Analysis Key SDOR1

Unvaluated Sales Order Stock with Cost Object Controlling on Sales Order

(C) SAP AG AC515 9-26

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Account Assignment Category E




VKB1E


Account Assignment Category ‘E‘ Product Cost by Sales Order

Special stock

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© SAP AG 1999© SAP AG 1999



Planning

Actual Postings

Customizing

Transfer Postings


Transfer Postings

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Transfer Postings

Sales Order Stock 4712 /10

Collective Stock

Movement Type 411 / E


Sales Order Stock 6790/30



Project Stock E-1400


In this Slide only 3 typical transfer postings are mentioned, which you could use to move a material from one sales order stock to another stock.

Beside these movement types you could also use the following movement types for the reversal postings: 412/E Transfer Posting sales order to own - reversal 414/E Transfer Posting sales order to sales order - reversal 416/E Transfer Posting sales order to project - reversal

For the complete list of available transfer postings have look in the MM-Documentation.

(C) SAP AG AC515 9-30

© SAP AG 1999

Assignment of WIP

Original CostElements

400000 400000 ––415000415000

Mat

610000 610000 ––620000620000

Lab

660000 660000 ––662000662000 OH

LineID

CO-Area

1000

1000

1000

RA-Version

0

0

0

CreditDebit

Variablefixed

Calc.motive

RA-Key

+

+

+

+

+

+

+

+

+

Capitalize %Req. Opt. not

20

You must create line IDs in Customizing for each group of original cost elements. You must also define an additional line ID for the primary cost element under which the credit for the delivery to stock is updated.

Under Define assignment you assign the original cost elements to line IDs. For material cost elements you can define an assignment for each origin group. For internal activities you can define an assignment for each cost center and activity type. Otherwise you must mask these entries with four plus signs (++++).

In the columns ReqToCap, OptToCap and CannotBeCap you specify whether the work in process for the costs of this line ID can be capitalized—and therefore to which results analysis category the work in process is assigned.

You can use indicators, to post debits, credits fix and variable cost and calculation motive (costs and revenues)

to different accounts (because of using different categories in the update of WIP) and different value fields for reporting - especially in CO-PA.

You must define posting rules to be able to settle this data to Financial Accounting.

(C) SAP AG AC515 9-31

© SAP AG 1999

Update WIP

Cost elementfor reserves

672110673110

672130673130

672120673120

CO-Area

1000

1000

1000

RA-Version

0

0

0

RA-Key

FERT

FERT

FERT

Mat

Lab

OH

LineID

Cat.

K

K

K

Inventory:Reserves:

Inventory:Reserves:

Inventory:Reserves:

Apportionmentnumber %

When the system calculates the WIP, it may create reserves for unrealized costs for certain orders. This happens when the actual cost incurred to date for the production order is less than the credit posting at the time of the goods receipt. The system creates these reserves because higher costs than the actual costs to date are expected on the basis of the information in the standard cost estimate used for material valuation.

Under Define update you specify the cost element under which the work in process is updated for the line ID (such as 672110 for direct costs, 672130 for production costs and 672120 for overhead). If the actual costs for the order are less than the credit postings, reserves for unrealized costs can be created and updated under the appropriate cost elements.

Example:In the first two periods, work in process is calculated and passed on to Financial Accounting and Profit Center Accounting as a change to stock. In the third period, the last goods receipt is entered for the order. The work in process created previously is canceled. Period Status WIP (cumulative) Inventory change 1 Released 200 200- 2 Released 300 100- 3 Delivered 0 300

(C) SAP AG AC515 9-32

© SAP AG 1999

Posting Rules of WIP

Posting Rules

893000 (Profit/Loss)793000 (balance

sheet)

Not to beNot to becapitalizedcapitalized

893005 (Profit/Loss)793005 (balance

sheet)

To beTo becapitalizedcapitalized

CO-Area

1000

1000

1000

Company

1000

1000

1000

RA-Version

0

0

0

RA-Category

WIPR

WIPO

WIPP

In the step "Define assignment", you define the results analysis category of the data by entering the line ID in an appropriate column. The work in process for a particular group of costs, for example, can be assigned by means of an entry in the corresponding column of one of the following categories: WIPR Work in process with requirement to capitalize costs WIPO Work in process with option to capitalize costs WIPP Work in process with prohibition to capitalize costs

In Customizing for Product Cost Controlling, you must make sure that the default rule is PP1 (full settlement) for the order type of the production order. This ensures that a distribution rule is generated for settlement with settlement type Full settlement.

The work in process is usually passed on to the accounts for unfinished products (balance sheet) and stock changes (P&L).

Reserves for unrealized costs are usually passed on to the accounts for reserves for unrealized costs (balance sheet) and reserves expense (P&L).

(C) SAP AG AC515 9-33

© SAP AG 1999

Variances - Target Cost Versions

Costing estimate whichdetermines the value of

the goods receipt

Production OrderPlanned Costs Target Costs

Production OrderActual Costs

Product CostingOther Cost Estimate

Target Version 2 Based on: Plan Quantity• Input Variances• Output Variances

Target Version 1Based on: Actual Quantity• Input Variances

Target Version 0Based on: Actual Quantity• Input Variances• Output Variances• WIP• Scrap

Totals

Scheduling Production Alternative TotalsTarget Version 3Based on: Actual Quantity• Input Variances

The purpose of calculating target costs is to provide a common basis for the calculation of variances between the actual costs and the planned costs. In the R/3 system you control how the target costs are calculated by means of a target cost version.

To calculate the total variances (target cost version 0), the system compares the actual costs of the production order with the target costs according to the cost estimate, which determines the value for the goods receipts for the material produced. In make-to-stock production this is the standard cost estimate. In make-to-order production the cost estimate depends on the valuation strategy. The planned costs from this cost estimate are converted to the actual order quantity (the quantity delivered) to calculate the target costs. The results of this target cost version can be settled to Profitability Analysis.

To calculate the production-based variances (target cost version 1), the system compares the actual costs with the target costs of the production order. The planned costs in the order are converted to the actual order quantity (the quantity delivered) to calculate the target costs.

To calculate the planning-based variances (target cost version 2), the system compares the planned costs for the production order with the target costs according to the cost estimate for the material produced. The planned costs from the standard cost estimate are converted to the planned order quantity to calculate the target costs.

To calculate the planning-based variances (target cost version 3), the system compares the actual costs for the production order with the target costs according to another cost estimate calculated by a specific costing variant and costing version.

AC515 - SAP CO

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