SAP mixed costing allows you to cost a material using multiple alternative methods, for example when you manufacture a material with different internal processes. You specify these through separate production versions, with different master recipes. When you execute a cost estimate the system calculates the cost for each production version then calculates an average unit cost using weighting factors. When you display a cost estimate with transaction CK13N, you display the total cost and details of each procurement alternative.


You create two items of master data: 

For actuals, a process order is produced with a specific production version. The target costs for the process order are calculated based on the cost estimate data related to that production version. The credit for production uses the weighted average standard cost calculated.  The difference between the two multiplied by the production quantity is calculated and reported as mixed price variance when executing the variance calculation transaction (KKS1 / KKS2) using the standard delivered variance categories. When the unit cost of the production version used is higher than the standard cost, unfavorable mixed price variance is calculated; when it is lower, favorable mixed price variance is calculated.