SAP Product Costing Overview

SAP Product Costing

• Product Costing is the tool utilized as a part of SAP for planning costs and setting up material costs. It helps in assessing the Cost of merchandise sold manufactured and COGS of each for every product unit.

• SAP gives two unique kinds of material costing process vizMaterial cost estimate with amount structure and Material cost estimate without amount structure.

• Material cost assesses with amount structure works in a blend of BOM (Bill of Material) and Routing assigned to it.

Integration

SAP Product Costing is incorporated intently to different SAP modules as beginning of data originates from below SAP module:-

Material Management (MM) module for material master record/buy info record.
Production Planning (PP) module for Bill of material (BOM), routing and work center.
Cost Center Accounting (CO) module as data of cost centers, its linkage of the work center, activity types and activity wise cost centers help in deciding conversion costs related to assembling process.

Results from Product Costing can likewise give valuable information to different SAP modules:-

Material Management (MM) module for material and stock valuation.
Sales and Distribution (SD) module
Cost object controlling for calculating variances and WIP

Steps for Product Costing in SAP FICO

http://www.sapvits.com/project/sap-product-costing-online-training/

The five stages in understanding Product costing in SAP FICO are:

Step 1: Cost Center Planning

Step 2: Activity Rate Calculation

Step 3: Quantity Structure

Step 4: Costing Run

Step 5: Actual Cost

About SAPVITS

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