SAP Subcontracting

By John Jordan

Table of Contents

1. What is Subcontracting in SAP

2. Overhead in Subcontracting in SAP

3. Special Procurement Type in Subcontracting

4. Outsourced Manufacturing

5. Glossary

What is Subcontracting in SAP?

SAP Subcontracting involves sending components to a vendor to manufacture an assembly for you. The vendor returns the completed assembly, and during goods receipt GR, the components are issued from subcontract inventory. Subcontracting is a purchasing process with the manufacturing ocurring at the vendor location.

SAP Cost Estimates & MRP Procurement Type

by John Jordan

Table of Contents

1. Introduction
2. MRP 2 View
3. In-house Production
4. External Procurement
5. Both Procurement Types
6. Special Procurement
7. Special Procurement for Costing
8. Glossary

Introduction

SAP cost estimates determine how the procurement type sources the material. Material requirements planning (MRP) guarantees material availability by monitoring stocks and requirements and by generating planned orders for procurement and production. A cost estimate needs data on how the material is procured as the first step in determining material cost.

Let’s see how to display procurement types and then look at how cost estimates use this information.

SAP Actual Cost Component Split

By John Jordan

SAP Actual Costing with SAP Material Ledger allows variances to flow to semi-finished and finished products based on the consumption of lower-level components. While multi-level price determination allows you to see the actual price of all materials at the end of the period, you cannot display price differences rolled up separately from the lowest to highest-level materials. You only see price differences assigned from the next lowest level.

SAP Costing Sheets Allocate Overhead

by John Jordan

There are three methods to distribute overhead costs to the cost of goods sold for the standard price.

In increasing level of flexibility and complexity, they are as follows:

Activity Rate:

You can either increase the planned activity price to include overhead or create separate overhead activity types. Manufacturing orders are debited, and production cost centers are credited during activity confirmation.

Add SAP Cost Component Groups to Cost Components

By John Jordan

Cost components group similar cost types together by cost element. Typically:

• Materials
  
  
• Labor
  
  
• Overhead
  
  

Cost components are not available as columns in standard cost estimate list reports. However, they are useful when analyzing production or purchasing performance across a range of products. You add cost components to standard cost estimate list reports and costed multilevel BOM reports by:

• Create cost component groups
  
  
• Assign them to cost components

Actual Costing with SAP Material Ledger

By John Jordan

SAP Material Ledger has two main functions:

• Carry inventory in multiple currencies and valuations
  
  
• Actual Costing

In this blog we'll discuss Actual Costing in detail:

Actual costing generates a material ledger document for all goods movements at standard price (preliminary valuation). At period-end, the actual price is calculated for each material based on the actual costs of the period. The actual price is called the Periodic Unit Price (PUP) and can be used for the following two functions at period-end:

SAP Material Ledger Period-End Closing

By John Jordan

Table of Contents

1. Introduction
2. No Period-End Processing
3. Single-level price determination
4. Multiple-level price determination
5. Glossary

Introduction

The three period-end options you have when you activate SAP Material Ledger are:

1.  No Actual Costing - no period-end processing
   
   
2.  Single-level price determination
   
   
3.  Multilevel price determination

Here's more details of each option:

SAP Standard vs Moving Average Price

By John Jordan

You choose either standard or moving average price for inventory valuation. Let’s consider each in detail.

You change the price control indicator with Transaction MM02 or by following menu path: 

Logistics • Material Master • Material • Change

Navigate to the Costing 2 view to display the screen shown in Figure 1.

Post SAP Purchase Price Variance PPV to Purchasing

By John Jordan

Introduction

You typically obtain the SAP standard price for purchased materials from purchasing info records during a costing run. Purchasing info records store vendor quotations per material and estimate your plan purchase price.

You post purchase price variance (PPV) during goods and invoice receipts if the actual purchase price is different from standard. You use it to measure Purchasing performance and have Purchasing explain an increase in unfavorable PPV postings.

Businesses leverage Enterprise Performance Management (EPM) to improve profitability by bringing significant improvement in financial and operational insight. With EPM improved operability and reduction of the cost of ownership with direct integration into SAP, S/4HANA provides integrated analytics solutions.

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