SAP Product Cost Controlling: Book Guide and Key Concepts

By John Jordan

SAP Product Cost Controlling connects planned product costs with the costs recorded during manufacturing. It helps you understand standard cost estimates, cost component splits, work in process (WIP), production variances, and settlement.

This chapter-by-chapter guide summarizes Product Cost Controlling with SAP, third edition (2016). Explore 20 chapters covering master data, costing configuration, production order costs, closing, and reporting, with SAP screenshots and a glossary.

Choose the right edition: The original book focuses on SAP ERP processes. For SAP S/4HANA, see Product Cost Controlling with SAP S/4HANA, which I co-authored with Janet Salmon. The S/4HANA explanations on this page provide context; available transactions, apps, and accounting processes depend on your edition, release, and configuration.

  

Table of Contents by Chapter

• Chapter 1 Integrated Planning
• Chapter 2 Controlling Master Data
• Chapter 3 Material Master Data
• Chapter 4 Logistics Master Data
• Chapter 5 Costing Sheets
• Chapter 6 Cost Components
• Chapter 7 Costing Variant Components
• Chapter 8 Costing Variant Tabs
• Chapter 9 Standard Cost Estimates
• Chapter 10 Preliminary Cost Estimates
• Chapter 11 Unit Cost Estimates
• Chapter 12 Preliminary Costing
• Chapter 13 Simultaneous Costing
• Chapter 14 Overhead
• Chapter 15 Work in Process
• Chapter 16 Variance Calculation
• Chapter 17 Settlement
• Chapter 18 Special Topics
• Chapter 19 Information System
• Chapter 20 Trends in Product Cost Controlling
• Enhancement Packages and Business Function
• FIN_CO_COGM: Multiple Valuation of Cost of Goods Manufactured
• Glossary

 
PART I: Integrated Planning

We first create sales plan quantities in Profitability Analysis CO-PA or sales and operations planning S&OP. We convert these quantities into a production plan that is transferred to demand management. 

SAP Integrated Business Planning (SAP IBP) for Supply Chain provides modern planning capabilities, including demand, inventory, and supply planning. It complements or replaces certain traditional SAP ERP sales and operations planning (S&OP) processes, depending on the organization's system landscape and planning requirements.

Long-term planning determines work center loads and purchasing requirements. You transfer activity quantities to Cost Center Accounting CCA, where plan activity prices are determined.

Chapter 1 Integrated Planning

In Figure 1, follow a best-practice planning scenario, including S&OP, & long-term planning runs.

Figure 1 : Sales and Operations Planning

The third edition of Product Cost Controlling with SAP includes examples of flexible planning and uploading planning data from Microsoft Excel to Cost Center Accounting (CCA).

PART II: Product Cost Planning

You plan procurement and production costs, and set prices for materials and services.

You determine the purchase price for purchased items, and the manufacturing cost for assemblies.

The following master data and configuration chapters cover how to set up and create cost estimates.

Master Data

Master data consists of relatively stable information used across business processes, including product cost planning. The following three chapters examine master data and configuration settings used in SAP Product Cost Controlling, with practical examples covering Controlling, Material Master, and Logistics master data.

Chapter 2 Controlling Master Data

Chapter 2 introduces essential SAP Controlling (CO) master data, including cost elements, cost centers, activity types, and statistical key figures. In SAP S/4HANA, cost elements are integrated with G/L accounts, providing a unified foundation for Financial Accounting and Controlling, as illustrated in Figure 2.

 Figure 2: Maintain GL Accounts Centrally

The chapter also covers cost-of-sales cost elements, cost center standard hierarchy changes, and activity type groups.

Chapter 3 Material Master Data

As shown in Figure 3, we examine fields in material master views, including Material Requirements Planning (MRP), Controlling (CO), and Accounting.

The Material Master contains essential settings for SAP Product Cost Controlling, including price control, material valuation, and material price determination. To understand how price control S and V interact with price determination 2 and 3, see our guide to Material Price Determination in SAP S/4HANA Material Ledger.

 Figure 3: Change MRP2 View

We also examine:

• ABC indicator
  
• Fixed lot size
  
• Discontinued Materials
  
• Material Ledger Documents
  
• Actual cost component split
  
  

 Chapter 4 Logistics Master Data

Chapter 4 examines logistics master data used in SAP Product Cost Controlling, including bills of materials (BOMs), routings, product cost collectors, and purchasing information records. These master data objects help determine material quantities, production activities, and procurement costs used in product cost estimates, as illustrated in Figure 4.

Figure 4 Example BOM and Routing

Topics include recursive BOMs, product cost collector lists, plant-specific purchasing info records, & source lists.

Configuration

SAP Product Cost Controlling configuration determines how product costs are planned, calculated, allocated, and analyzed. Configuration settings are typically established during implementation and maintained through controlled change processes to support consistent costing and reporting. The following four chapters introduce key configuration components used in product costing.

Chapter 5 Costing Sheets

Chapter 5 explains how costing sheets are used to calculate and allocate overhead costs in SAP Product Cost Controlling. Costing sheets define calculation bases, overhead rates, and credits to assign indirect costs to products and cost objects, as illustrated in Figure 5.

 Figure 5 Costing Sheet

This chapter includes:

• Dependency
  
• Overhead groups and keys
  
• Default costing sheets
  
• Quantity-based overhead
  

Chapter 6 Cost Components

Chapter 6 explains how cost component structures organize product costs into categories such as raw materials, labor, and overhead. Cost component splits provide visibility into the composition of product costs and support cost estimates, inventory valuation, and cost analysis, as illustrated in Figure 6.

 Figure 6: Cost Components

Discover how cost component groups improve reporting with cost components in cost estimate lists.

Chapter 7 Costing Variant Components

Chapter 7 explains how costing variants control the creation of product cost estimates in SAP Product Cost Controlling. A costing variant combines configuration settings that determine the costing type, valuation strategy, costing dates, quantity structure, and transfer of existing cost estimates.

• Costing Type
  
• Valuation Variant
  
• Date Control
  
• Quantity Structure Control
  
• Transfer Control
  
• Reference Variant
  

Transaction OKKN displays the costing variant configuration, as illustrated in Figure 7.

Figure 7 Standard Costing Variant PPC1

The valuation variant determines how material and activity prices are selected during cost estimation, including the treatment of purchasing prices and delivery costs for externally procured materials.

Chapter 8 Costing Variant Tabs

Chapter 8 examines the configuration tabs of an SAP costing variant and how their settings control product cost estimates. These tabs define costing behavior, quantity structure determination, additive costs, cost estimate updates, and other settings used in Product Cost Planning.

• Control
  
• Quantity Structure
  
• Additive Costs
  
• Update
  
• Assignments
  
• Miscellaneous
  

Chapter 9 Standard Cost Estimates

Chapter 9 explains how to create, mark, and release standard cost estimates in SAP Product Cost Controlling. Releasing a marked standard cost estimate updates the material's standard price and may trigger inventory revaluation, depending on the material's valuation settings and existing inventory, as illustrated in Figure 9.

Figure 9 Create Standard Cost Estimate

This chapter also covers marking allowances, costing runs, and the mass processing of standard cost estimates. Costing runs help organizations calculate, analyze, mark, and release cost estimates efficiently across large numbers of materials.

For more information about inventory valuation methods, see our guide to Choosing Standard or Moving Average Price in SAP S/4HANA.

Chapter 10 Preliminary Cost Estimates

Chapter 10 explains how preliminary cost estimates calculate planned manufacturing costs for production orders and product cost collectors. These estimates provide a basis for analyzing planned costs, comparing them with actual costs, and evaluating production performance, as illustrated in Figure 10.

 

 Figure 10: Change Product Cost Collector

Chapter 11 Unit Cost Estimates

Chapter 11 explores unit cost estimates used to plan and analyze costs during product development and early-stage costing. Unit costing enables detailed cost calculations based on manually entered items, quantities, and prices, supporting preliminary cost analysis before a complete quantity structure is available.

Figure 11 Unit Cost Estimate for Product Development

Unit cost estimates provide a flexible, spreadsheet-like interface for entering and adjusting costing items, quantities, and prices. This flexibility makes them particularly useful during product development, when detailed material and production specifications may still be evolving, as illustrated in Figure 11.

Part III: Cost Object Controlling

SAP Cost Object Controlling enables organizations to plan, collect, and analyze manufacturing costs for production orders and product cost collectors. It supports planned and actual cost analysis, work in process (WIP), variance calculation, and settlement to improve manufacturing cost transparency and period-end closing.

Planned and Actual Costs

In these chapters, we determine how to plan and post actual costs to cost objects:

Chapter 12 Preliminary Costing

Chapter 12 explains how preliminary costing calculates planned manufacturing costs for production orders and product cost collectors using order-specific configuration and quantity structures. These planned costs provide a basis for comparing actual manufacturing costs, analyzing production performance, and calculating variances, as illustrated in Figure 12.

 Figure 12: Preliminary Cost Estimate

Chapter 13 Simultaneous Costing

Chapter 13 explains how simultaneous costing collects actual manufacturing costs during production. Valuated material goods issues, cost-relevant activity confirmations, and other production-related transactions post costs to production and process orders as manufacturing activities occur. These postings support actual cost analysis and subsequent variance calculation and settlement, as illustrated in Figure 13.

Figure 13 Goods Issue to Production Order

This chapter also covers default activity assignments, operation sequences, Margin Analysis, and detailed reporting to help analyze manufacturing costs posted to production orders.

Period-End Processing

Period-end processing in SAP Product Cost Controlling includes overhead calculation, work in process (WIP), variance calculation, and settlement. These activities help organizations allocate manufacturing costs, value unfinished production, analyze production variances, and complete period-end financial reporting. The following four chapters explain these processes.

Chapter 14 Overhead

Chapter 14 explains how actual overhead costs are calculated and applied to production orders and other cost objects during period-end processing. Overhead calculation uses costing sheets and configured overhead rates to allocate indirect manufacturing costs, building on the costing sheet configuration introduced in Chapter 5, as illustrated in Figure 14.

Figure 14 Overhead Calculation Results Screen

The example illustrates classic overhead processing. Supported event-based approaches and SAP Fiori apps depend on your S/4HANA edition, release, and configuration.

Chapter 15 Work in Process

Chapter 15 explains how work in process (WIP) is calculated and accounted for during period-end closing in SAP Product Cost Controlling. WIP represents the value of production costs associated with unfinished manufacturing activities. The chapter examines WIP configuration and period-end calculation, as illustrated in Figure 15.

Figure 15  : Assign Cost Elements For WIP and Results Analysis

The screenshot illustrates classic period-end WIP processing. Event-based processing follows a different model; confirm the prerequisites for your edition and release.

Chapter 16 Variance Calculation

Chapter 16 examines production variance calculation in SAP Product Cost Controlling, including configuration, period-end processing, and variance analysis. Variance calculation compares actual manufacturing costs with target costs to identify differences such as input price, input quantity, resource usage, and remaining variances, as illustrated in Figure 16.

Figure 16 Variance Calculation Selection Screen

We also discuss how SAP S/4HANA improves variance calculation performance.

For practical reporting examples, see our guide to SAP Fiori apps for manufacturing variance analysis.

Chapter 17 Settlement

Chapter 17 explains how settlement transfers costs from production orders and other cost objects to permitted receivers. Settlement uses settlement rules, settlement profiles, and allocation structures. In costing-based CO-PA, PA transfer structures map costs and variance categories to value fields. Margin Analysis uses G/L accounts and profitability characteristics rather than CO-PA value fields. Figure 17 shows settlement rule parameters.

Figure 17: Settlement Rule Parameters

The chapter also examines settlement transactions and functionality available in SAP S/4HANA, including improvements to period-end processing.

Chapter 18 Special Topics

Chapter 18 explores additional SAP Product Cost Controlling topics, including configuration, cost calculation, and period-end processing for the following scenarios:

• Sales Order Controlling
  
• Subcontracting
  
• SAP Material Ledger
  
  
  Figure 18 SAP Material Ledger Actual Costing Without Revaluation

SAP Material Ledger supports actual cost analysis by collecting and allocating price differences across material movements and inventory. Actual Costing can calculate periodic actual costs, with revaluation depending on the selected settings and processes, as illustrated in Figure 18.

• Delivery costs
  
• Overhead Templates
  
• Mixed cost estimates
  
• Cost estimate user exits
  

This third edition includes information on how SAP S/4HANA improves sales order controlling, SAP Material Ledger processing, and reporting.

Part IV: Information System and Trends

Part IV explores reporting and analytical capabilities in SAP Product Cost Controlling, including cost estimates, manufacturing cost analysis, variance reporting, and SAP S/4HANA innovations. These capabilities help organizations monitor product costs, evaluate manufacturing performance, and improve cost transparency.

Chapter 19 Information System

Chapter 19 examines reporting capabilities for Product Cost Planning and Cost Object Controlling in SAP. Standard reports enable users to analyze product cost estimates, production order costs, cost elements, and manufacturing variances, with drilldown capabilities from summarized information to detailed line items. The chapter also covers the production order information system and Cost Center Accounting (CCA) reports, as illustrated in Figure 19.

Figure 19 Standard Cost Center Report 

The chapter also highlights SAP S/4HANA reporting improvements, including production order summarization and detailed line-item reporting, to support manufacturing cost analysis and financial transparency.

 

Chapter 20 Trends in Product Cost Controlling

Chapter 20 examines the evolution of SAP Product Cost Controlling, from SAP ERP Enhancement Packages (EHPs) and business functions to SAP S/4HANA innovations. It introduces the Universal Journal (table ACDOCA), which integrates financial and controlling information and provides a foundation for more consistent financial reporting and product cost analysis.

• Explore FIN_CO_COGM as an example of the historical SAP ERP business functions that extended Controlling functionality.
• Understand how the SAP S/4HANA Universal Journal (table ACDOCA) integrates financial and controlling data, as illustrated in Figure 20.
•  

 Figure 20 Universal Journal Table ACDOCA

SAP S/4HANA integrates financial and controlling data through the Universal Journal (ACDOCA), providing a consistent foundation for financial reporting and product cost analysis. SAP Fiori applications provide role-based access to reporting and analytical capabilities.

Enhancement Packages and Business Functions

Before SAP S/4HANA, SAP ERP Enhancement Packages (EHPs) and business functions enabled organizations to introduce additional functionality without a complete system upgrade. Business functions could be activated selectively to support new capabilities in areas such as Product Cost Controlling. This approach helped organizations adopt improvements while managing the testing and change management requirements associated with SAP system enhancements.

One example of these historical enhancements is the FIN_CO_COGM business function, which extended valuation capabilities for Product Cost Controlling in SAP ERP.

1. FIN_CO_COGM: Multiple Valuation of Cost of Goods Manufactured

Introduced with SAP ERP Enhancement Package 5, the FIN_CO_COGM business function provided additional capabilities for multiple valuation of the cost of goods manufactured (COGM). It supported the use of different accounting principles in manufacturing cost calculations, including relevant depreciation and activity price valuations.

This functionality illustrates how SAP ERP evolved to support more complex product costing and financial reporting requirements before SAP S/4HANA.

SAP reference documentation: Material Ledger and optional Actual Costing; Material valuation and account determination.

Glossary

Actual Costing

An optional Material Ledger process that calculates periodic actual material costs using collected price differences. Revaluation of inventory or consumption depends on the selected processing options and configuration.

Activity Type

An activity type represents a service or activity provided by a cost center, such as machine hours or labor hours. In SAP S/4HANA, activity allocations charge costs to receiving objects, such as production orders, using secondary cost elements represented by G/L accounts.

Allocation Structure

An allocation structure defines how costs are grouped and assigned to settlement receivers during settlement. It maps source cost elements or cost element groups to settlement cost elements or G/L accounts, depending on the settlement scenario.

Alternative Hierarchy

An alternative cost center hierarchy groups cost centers for reporting and analysis independently of the standard hierarchy. Organizations can create multiple alternative hierarchies using cost center groups to support different management reporting requirements.

Assembly Scrap

Assembly scrap represents the expected percentage of finished or semi-finished assemblies that will not meet quality requirements during production. In SAP, assembly scrap can be maintained in the material master and considered in material requirements planning and product costing.

Automatic Account Assignment

Automatic account assignment enables SAP to derive default account assignments, such as cost centers, for relevant expense postings. Transaction OKB9 is used to maintain default account assignments for cost elements represented by G/L accounts in SAP S/4HANA.

Availability control

Availability control monitors actual costs and commitments against defined budgets for relevant controlling objects, such as internal orders and projects. Depending on configuration, SAP issues warnings or errors when budget tolerance limits are exceeded.

Bill of Material (BOM)

A bill of material (BOM) defines the components and quantities required to manufacture or assemble a product. In SAP Product Cost Planning, BOMs provide the material quantities used to calculate material costs in product cost estimates.

CKM3N - Material Price Analysis

Material Price Analysis displays material valuation, price history, and, where Actual Costing is active, relevant price differences and cost information by period. The available views depend on the material settings and system release.

Controlling Area Currency

The controlling area currency is the currency used for cost accounting within an SAP controlling area. It is defined in controlling area configuration and supports consistent cost planning, allocation, and reporting across assigned company codes.

Cost Center

A cost center is an organizational unit in SAP Controlling used to collect, plan, and monitor costs for a defined area of responsibility. Cost centers support cost allocation, activity pricing, and plan-versus-actual cost analysis.

Cost Component

A cost component identifies costs of similar types, such as material, labor, and overhead costs by grouping together cost elements in the cost component structure.

Cost Component Group

Cost component groups allow you to display cost components in standard reports. In the simplest implementation, you create a cost component group for each cost component and assign each group to a corresponding cost component. You assign cost component groups as columns in cost estimate list reports and costed multilevel BOMs.

Cost Component Split

A breakdown of a material's cost into configured cost components, such as materials, activities, and overhead. It explains the composition of the total rather than only the total value.

Cost Component Structure

You define which cost components make up a cost component split by assigning them to a cost component structure. Within the cost component structure, you assign cost elements and origin groups to cost components.

Cost Component View

A reporting view that selects relevant portions of a cost component split, such as cost of goods manufactured or inventory valuation, according to cost component configuration.

Cost Element

Cost elements are included as part of a general ledger account. Primary cost elements identify external costs, while secondary cost elements identify costs allocated within controlling, such as activity allocations from cost centers to manufacturing orders.

Cost Estimate

A material cost estimate calculates planned procurement or manufacturing costs using the applicable quantity structure and valuation strategy. Material prices are selected according to the valuation variant; they are not necessarily standard prices.

Costed Multilevel BOM

A costed multilevel BOM is a hierarchical overview of the values of all items of a costed material according to the materials costed quantity structure (BOM and routing). You display a costed multilevel Bill of Materials (BOM) on the left side of the cost estimate screen. You can also view a costed multilevel BOM separately with Transaction CK86_99.

Costing BOM

Costing BOMs are assigned a BOM usage of costing and are usually copied from BOMs with a usage of production. You can make adjustments to costing BOMs if you require them to be different from production BOMs. With system-supplied settings, standard cost estimates search for costing BOMs before production BOMs.

Costing Lot Size

The costing lot size should be set as close as possible to actual purchase or production quantities to reduce lot size variance. Unfavorable variances may result if you create a production order for a quantity that is less than the costing lot size. You need setup time to prepare equipment and machinery for production of assemblies, and that preparation is generally the same regardless of the quantity produced. Setup time spread over a smaller production quantity increases the unit cost. This also applies to externally procured items because vendors typically quote higher unit prices for smaller quantities.

Costing Run

A costing run is a collective processing of cost estimates, which you maintain with Transaction CK40N.

Costing Sheet

Configuration that defines the calculation bases, percentage- or quantity-based overhead rates, and credits used to apply overhead to cost estimates or cost objects. The credit key identifies the credited object and cost element or account.

Costing Type

The costing type determines if the cost estimate can update the standard price.

Costing Variant

A set of controls for creating a cost estimate, including costing type, valuation variant, dates, quantity structure, and transfer control. The valuation variant specifies the price search strategies; not every costing variant updates the standard price.

Currency Type

The currency type identifies the role of the currency such as local or global.

Demand Management

Demand management involves planning the quantities and dates of assemblies, as well as defining the strategy for designing and producing or procuring a finished product.

Dependent Requirements

Dependent requirements are caused by higher-level dependent and independent requirements when running MRP. Independent requirements, created by sales orders or manually planned independent requirement entries in demand management, determine lower-level dependent material requirements.

Detailed Reports

Detailed reports display cost element details of manufacturing orders and product cost collectors. During variance analysis, you can drill down on cost elements to display line-item reports.

Distribution Rule

You maintain distribution rules in settlement rules, as well as in manufacturing orders and product cost collectors.

Enhancement Package

A collection of new and improved business functions for SAP Business Suite and SAP ERP.  These optional enhancement packages can be configured in a wholly modular fashion by activating only the latest features and functionalities customers want.

Event-Based Processing

Event-based production cost posting recognizes overhead, work in process, and production variances as relevant transactions occur. Availability, prerequisites, and closing tasks depend on the SAP S/4HANA release, deployment, and configuration.

External Processing

An external vendor performs external processing of a manufacturing order operation. This is distinct from subcontracting, which involves sending material parts to an external vendor, who manufactures the complete assembly via a purchase order.

F.13 - Automatic Clearing

Transaction F.13 performs automatic clearing of open items in G/L, customer, and vendor accounts based on configured clearing criteria. It helps automate reconciliation and period-end closing activities.

F.19 - Analyze GR/IR Account and Accrual

Transaction F.19 analyzes goods receipt/invoice receipt (GR/IR) clearing accounts to identify balances requiring adjustment at period-end. It supports the preparation of adjustment postings for goods received but not invoiced and goods invoiced but not received.

FBL3N – G/L Account Line Item Display

Transaction FBL3N displays G/L account line items in SAP ERP and supported SAP S/4HANA environments. The report enables users to review individual postings for selected G/L accounts. In SAP S/4HANA, transaction FAGLL03 and SAP Fiori applications provide additional G/L line-item reporting capabilities.

FS10N - G/L Account Balance Display

Transaction FS10N displays G/L account balances by posting period, including debit, credit, and cumulative balances. It helps users analyze account activity and review financial balances. In SAP S/4HANA, FAGLB03 and SAP Fiori applications provide additional balance reporting capabilities.

Goods Issue

A goods issue is the movement (removal) of goods or materials from inventory to manufacturing or a customer. When goods are issued, the stock in the warehouse is reduced.

Goods Receipt

A goods receipt records the receipt of materials from a supplier, production order, or another source. Depending on the movement type and material valuation settings, the posting updates inventory quantities, inventory values, and relevant accounting documents.

GR/IR

The goods receipt/invoice receipt clearing account records offsetting entries for goods receipts and supplier invoices. Matching postings clear the balance; outstanding quantity or value differences require investigation.

GR/IR Account Maintenance

Transaction MR11 supports maintenance of goods receipt/invoice receipt (GR/IR) clearing account balances when differences between goods receipts and invoices cannot be resolved through normal follow-up postings. It can generate account maintenance postings to clear qualifying quantity differences.

Internal Order

An internal order monitors an organization's costs and revenue for short—to medium-term jobs. You can carry out planning at a cost element and detailed level and budgeting at an overall level with availability control.

Invoice Receipt

You enter a vendor invoice in SAP with Transaction MIRO or via the menu path

Logistics - Materials Management - Logistic Invoice Verification - Document Entry - Enter Invoice

Long-Term Planning

Long-term planning enables you to develop medium- to long-term production plans and simulate future production requirements using long-term MRP. You can determine future purchasing requirements for vendor RFQs, update purchasing info records, and transfer planned activity requirements to cost center accounting.

Margin Analysis

Account-based profitability analysis in SAP S/4HANA. It analyzes costs and revenues by G/L account and profitability characteristics using the Universal Journal. Correct assignments and consistent report selections remain essential; it is distinct from costing-based CO-PA, which uses value fields.

Master Data

Relatively stable information shared across business processes, such as materials, cost centers, activity types, BOMs, and routings. Purchasing info records link supplier and material purchasing information, including applicable conditions.

Material Ledger

The material valuation foundation in SAP S/4HANA, supporting valuation in multiple currencies and integration with accounting. Material Ledger is mandatory in SAP S/4HANA; Actual Costing remains optional.

Material Master

A material master contains all the information required to manage a material. Information is stored in views, each corresponding to a department or area of business responsibility. Views conveniently group information together for users in different departments, for example, sales and purchasing.

Material Requirements Planning (MRP)

Planning that compares requirements with available stock and receipts and creates procurement proposals, such as planned orders or purchase requisitions, according to the configured planning procedure.

MB5S - List of GR/IR Balances

MB5S displays any difference between GR and IR quantities & their values.

ME23N - Display PO History

Transaction ME23N displays a purchase order and its history, including relevant goods receipts and invoice receipts. Use the linked accounting documents and supplier line-item reporting to investigate payment and clearing status.

MR11SHOW - Display/Reverse MR11 document

MR11 documents can be reversed using MR11_SHOW or by clicking on Account Maintenance, which documents the PO history. Be cautious if more than one PO has been corrected in an MR11 document, as it may reverse the entire document.

PA Transfer Structure

Configuration that maps costs and variance categories to value fields in costing-based Profitability Analysis. Margin Analysis reports by G/L account rather than these value fields.

Process Order

A process order is a type of manufacturing order used in process industries. A master recipe and materials list are copied from the master data to the order. A process order contains operations that are divided into phases. A phase is a self-contained work step that defines the details of one part of the production process using a primary resource.
In process manufacturing, only phases are costed, not operations. A phase is assigned to a subordinate operation and contains standard values for activities, which are used to determine dates, capacity requirements, and costs.

Procurement Alternative

A procurement alternative represents one of several methods for procuring a material. You can control the level of detail in which the procurement alternatives are represented through the controlling level. Depending on the processing category, there are single-level and multilevel procurement alternatives. For example, a purchase order is a single-level procurement, whereas production involves multilevel procurement.

Product Drilldown Reports

Product drilldown reports allow you to slice and dice data based on characteristics such as product group, material, plant, cost component, and period. Product drilldown reports are based on predefined summarization levels and are relatively simple to set up and run.

Production Order

A production order is used for discrete manufacturing. A BOM and routing are copied from master data to the order. A sequence of operations is supplied by the routing, which describes how to carry out work-steps.
An operation can refer to a work center at which it is to be performed. An operation contains planned activities required to carry out the operation. Costs are based on the material components and activity price multiplied by a standard value.

Production Variance

In classic period-end variance calculation, target cost version 1 compares net actual costs with target costs based on the preliminary cost estimate and delivered quantity. It is used for analysis; target cost version 0 determines the variances relevant to settlement. Event-based production accounting uses different processing logic.

Production Version

A production version determines which alternative Bill of Materials (BOM) is used, along with which task list or master recipe, to produce a material or create a master production schedule. You can have multiple production versions with varying validity periods and lot-size ranges for one material.

Profit Center

A profit center represents an area of management responsibility. In SAP S/4HANA, profit center information is recorded in the Universal Journal (ACDOCA), supporting financial reporting by profit center.

Purchase Order

A purchase order (PO) is a formal document issued to a supplier specifying the materials or services to be purchased, quantities, prices, delivery dates, and other purchasing conditions. In SAP, the purchase order provides the basis for subsequent processes such as goods receipt and invoice receipt.

Purchase Price Variance

For a material valued at standard price, differences between the procurement value and standard inventory valuation generally post to price difference accounts. Additional price differences can arise at invoice receipt; they are not all recognized at goods receipt.

Purchasing Info Record

Purchasing master data that links a supplier and material and stores relevant purchasing conditions and other procurement information. A cost estimate can use applicable purchasing info record prices when its valuation strategy is configured to do so.

SAP Fiori

SAP’s user experience for role-based business applications, including transactional and analytical apps. App availability depends on the product, release, and assigned business roles.

SAP Universal Journal

The SAP S/4HANA Universal Journal integrates financial and management accounting actual line items in ACDOCA. ACDOCP stores planning data. Availability of period-end and event-based processes depends on the release and configuration.

Standard Cost Estimate

This is a material cost estimate used to calculate the standard price of a material. The cost estimate must be executed with a costing variant that updates the material master, and the cost estimate must be released. A standard cost estimate can be released only once per period and is typically created for each product at the beginning of a fiscal year or new season.

Standard Price

The standard price in the Costing 2 view determines the inventory valuation price if price control is set at standard (S). The standard price is updated when a standard cost estimate is released. You normally value manufactured goods at the standard price.

Statistical Key Figure

Statistical key figures define values describing cost centers, profit centers, and overhead orders such as the number of employees or minutes of long-distance phone calls. You can use statistical key figures as the tracing factor for periodic transactions such as cost center distribution or assessment. You can post both planned and actual statistical key figures.

Tracing Factor

Tracing factors determine the cost portions received by each receiver from senders during periodic allocations, such as assessments and distributions.

Unit Costing

Unit costing is a method that does not typically use BOMs or Routings when developing new products. You create a preliminary structure of materials and activities in a view similar to a spreadsheet layout.

Valuation Class

A material master accounting attribute used in automatic account determination. Together with other configuration, such as transaction keys and valuation grouping, it helps determine the G/L accounts used for relevant material postings.

Valuation Date

The valuation date determines which material and activity prices are selected when you create a cost estimate. Purchasing info records can contain different vendor-quoted prices for different dates. Different plan activity rates can be entered per fiscal period.

Valuation Grouping Code

The valuation grouping code allows you to assign the same general ledger account assignments across several plants with Transaction OMWD to minimize your work.
The grouping code can represent one or a group of plants.

Valuation Type

You use valuation types in the split valuation process, which enables the same material in a plant to have different valuations based on criteria such as batch. You assign valuation types to each valuation category, which specify the individual characteristics that exist for that valuation category. For example, you can valuate stocks of a material produced in-house separately from stocks of the same material purchased externally from vendors. You then select procurement type as the valuation category and internal and external as the valuation types.

Valuation Variant

A costing variant component that defines valuation strategies for materials, internal activities, subcontracting, and external processing. The configured strategy determines which available price sources are searched and in what sequence.

Valuation Variant for Scrap and WIP

This valuation variant allows a choice of cost estimates to valuate scrap and WIP in a WIP at target scenario. If the structure of a routing is changed after a costing run, WIP can still be valued with the valuation variant for scrap and WIP resulting in a more accurate WIP valuation.

Valuation View

In the context of multiple valuation and transfer prices, you can define the following views:
- Legal valuation view
- Group valuation view
- Profit center valuation view

Work in Process (WIP)

The value of unfinished production determined under the applicable production accounting rules. The valuation basis, calculation, and posting steps differ between classic period-end and supported event-based scenarios.