Product Cost Controlling

Transcription

1 Product Chapter Overview 3 Product Overview Product Cost Controlling Product Cost Controlling is part of R/3 s Controlling application component and is a tool for managing costs related to the manufacturing process and the rendering of services. It uses information from the Overhead Cost Controlling tool to calculate such costs as labor, machine, or factory overhead, and it supplies information to Profitability Analysis so that tool can calculate contribution margins. Product Cost Controlling includes the following tools: Product Cost Planning Cost Object Controlling Actual Costing Information System Product Cost Controlling can help you: Plan your product costs accurately Compare alternative cost estimates to optimize your business decisions Monitor your product costs in every stage of the manufacturing process Carry out detailed variance analysis on each order, product, and product group Calculate actual costs by period Put alternative values on your inventory for balance sheet purposes Answer recurring questions on the cost of goods manufactured by plant, product group, product, or even order Answer one-off questions about the cost of goods manufactured Definition Tools of Product Cost Controlling Product Cost Planning Product Cost Planning is a planning tool that helps you predict the costs incurred when you manufacture a product or provide a service. Organizations use it to: Set prices for the valuation of finished and semifinished goods in the Materials Management application component Set prices for finished and semifinished goods in the Sales and Distribution application component Calculate the cost of goods manufactured or the cost of goods sold for the Profitability Analysis function in Controlling Set a standard to measure production efficiency in Cost Object Controlling Product Cost Planning shows you: The cost composition of each product The value added in each manufacturing step 3-1

2 3 Product Overview The value added in each overhead process The value added by each profit center, plant, business area, and company You can also create an inventory cost estimate at the end of your fiscal year to provide alternative valuations of your inventory for balance sheet purposes. Other functions include reference and simulation costing, which allow you to simulate the cost impact of changing one production factor or modifying the amount of overhead allocated to a product. Cost Object Controlling Cost Object Controlling is a management tool that traces the costs incurred when you manufacture a product or provide a service. It helps you answer recurring questions, such as: How high are the actual costs by period in my area? How high should the costs have been given the actual production output? Do some product groups perform significantly better than others? Can I identify the cause of these variances? Cost Object Controlling also gives you the tools to answer special questions like: How high are the costs of scrap on the new production line? Have changes to the manufacturing process for Product Group X really reduced costs? Have capacity bottlenecks significantly affected the costs of my key products? And when you close a period, Cost Object Controlling: Gives you regular, period-based reports Allocates costs from Overhead Cost Controlling to cost objects Transfers data from the cost objects to Profitability Analysis, Profit Center Accounting, and Financial Accounting Actual Costing/Material Ledger Traditionally, R/3 has valued material movements in real time with standard costs. Starting with R/3 Release 4.0, you can apply actual costs to materials when you close a period. Initially, the system values goods movements with a standard price and collects all variances against this standard price into a ledger. R/3 uses these values to calculate the actual costs for each material at the end of the period. You can the use the actual costs to adjust the stock values for each material. These functions use the Material Ledger, which lets you manage your inventory in multiple currencies using historical exchange rates. It can also perform parallel valuation, which gives you legal, group, and intercompany (profit center) views of your business. 3-2

3 Product Overview 3 SAP will enhance these functions in the future to handle follow-up costs for semifinished and finished products. R/3 will trace the price differences for the raw materials to the semifinished and finished products that used them. To determine which products used which materials, R/3 will reconstruct the quantity structure based on the material movements recorded in the period. (In R/3, a quantity structure is the bill of material and the production process that form the basis for calculating product costs.) You can then use the actual raw material prices to cost this structure and determine the actual costs for the semifinished and finished products. Information System The Information System helps you perform high-level analyses of the costs by plant, area of responsibility, product group, and so on. It provides a variety of reports that display the details of individual orders and postings. Using the Information System s summarized reports, you can move quickly from the big picture to the details behind it. For example, from a drill-down report showing the costs in each of your plants, you can display the costs by product group and then by product. From there you can access the details of individual orders and postings. List reports help you find all the sales orders placed by a particular customer, all the cost estimates for a particular material, or all the production orders with a particular status. Once you have narrowed the focus of your search, you can access detailed reports for the orders or cost estimates, or you can use comparison reports to review the costs for similar orders or materials. High-level analyses Business Framework Architecture SAP s Business Framework is an open, component-based architecture that allows software components from SAP and other vendors to interact with each other. SAP Business Objects represent central business objects in the real world. The system accesses them using stable, standardized interfaces. Product Cost Controlling provides two Business Objects: Cost Estimate Cost Object Hierarchy SAP Business Application Programming Interfaces (BAPIs) also access R/3 s business processes using standard interfaces. Many BAPIs access the Cost Estimate business object in Product Cost Planning. For example: To select cost estimates for materials in the R/3 System, use BAPI_COSTESTIMATE_GETLIST. To display the cost component split for the cost estimates, use BAPI_COSTESTIMATE_GETDETAIL. This shows the total and fixed costs by cost component. 3-3

4 3 Product Overview Open Environment Scenarios To display the itemization for the cost estimates selected, use BAPI_COSTESTIMATE_ITEMIZATION. This shows detailed information on each costing item. To explode the bill of material structure used as a basis for the cost estimate, use BAPI_COSTESTIMATE_EXPLOSION. This expands the structure level by level. R/3 s Interface Adviser tool offers a number of scenarios for Product Cost Controlling in an open environment: In Product Cost Planning you can create material cost estimates in R/3 using production planning and purchasing information from a non-sap system. In this situation, you import bills of material into R/3 to determine the material costs for each product and enter the costs of labor, machine time, and so on into R/3 as additive costs. Once you calculate a standard price for the material and determine the relevant cost components in R/3, you can export this information back to the non-sap system using BAPIs. In the future, you will be able to import information on the quantity structure for each product and then create a material cost estimate in R/3. With a multilevel product structure, you must cost materials from the bottom up. The BAPI must therefore use the structure of the bills of material in the non-sap system to determine the correct sequence for costing the finished and semifinished products. In Cost Object Controlling you can track product costs by period using a production cost collector in R/3 even though your manufacturing processes are in a non-sap system. In this situation, the non-sap system handles production planning and materials requirements planning, while R/3 controls financial accounting, inventory valuation, purchasing, invoice verification, cost center accounting, and cost object controlling. You maintain bills of material and routings in the non- SAP system and then import them into R/3. Confirmations, goods issues, and goods receipts are posted in the non-sap system and imported to R/3. A production cost collector compiles the costs for each production version of a product. You import information on the material usage into R/3 and post it to the production cost collector. Then you calculate machine and labor costs either by importing the times into R/3 and allocating them directly to the production cost collector or by importing the quantities of goods produced to R/3 and using a material cost estimate to calculate the times. R/3 handles the valuation of the goods receipt to stock and the settlement of any variances. To ensure that the value flow in R/3 is correct, you must implement Cost Center Accounting, which calculates the activity prices for the machine and labor time confirmed as well as any overhead. You must also implement Financial Accounting in order to track the value for the goods movements and record any variances when you close a period. 3-4

5 Product Overview 3 Application Link Enabling (ALE) is SAP s method for exchanging business data messages across loosely coupled SAP applications. You can use ALE in Product Cost Planning to transfer a material cost estimate between systems. You can also use ALE in group costing to supply information on the product costs from the systems used for Production Planning to a central Controlling system at headquarters. This configuration assumes that all systems use the same controlling area. It also supplies information on product costs to Profitability Analysis, if this is carried out in a separate system. 3-5