The cost component structure is used to indicate which costs should be included, whether to include the variable or total costs, and how to group costs in cost components. You can create cost components for major cost categories like raw materials, packaging, overhead, labor, and setup.
The cost component structure is configured in transaction OKTZ or through the IMG menu path SPRO • CONTROLLING • PRODUCT COST CONTROLLING • PRODUCT COST PLANNING • BASIC SETTINGS FOR MATERIAL COSTING • DEFINE COST COMPONENT STRUCTURE.
In addition to standard cost components like raw materials, packaging, labor, overhead, and setup, you may want to see separate cost components for critical or high cost components. You can also create separate cost components for things like royalties and intercompany markup so these costs are easily identifiable.
The cost components can be configured in any order, and the system evaluates them at the same time during a costing run. There is no need to indicate an order in which they are calculated. However, in a costing run, SAP does sequence material costs using costing levels. In other words, SAP starts with the lowest level raw materials and costs up through semi-finished goods, and then finally finished goods. This sequencing is automatic based on the BOM structure. Additional sequencing of costing runs may be required if you have semi-finished goods produced in one plant/company code that are inputs to finished goods in another plant/company code.