SAP Product Costing Actual Costing Material Ledger
SAP Product Costing (CO-PC)
Product Costing is the backbone of a strong standard cost system. This is the process by which production activities are recorded at standard values and variances from actual costs are isolated.
For planning purposes, the corporation wants a preliminary target of what they think it will cost to produce X units of a product.
To set attainable standards by which efficiencies within the production operations can be measured.
To provide feedback to management on the actual performance of the production process in relation to those targets. Identified variances may indicate inefficiencies that have to be investigated. Corrective action may have to be taken.
Actual Costing/Material Ledger
The application component Actual Costing/Material Ledger fulfills two basic objectives: the ability to carry material prices in multiple currencies/valuations, and actual costing.
Multiple currencies/valuations
If you use transfer prices to represent value flows in your company in different valuation views, you need the material ledger. It allows you to carry your inventories in three different valuations: legal valuation, valuation for reporting purposes, and profit center valuation.
Before activating the Material Ledger, make sure you know which currencies/valuations you want to use, as you cannot go back and change the setting later.
Actual costing
Actual costing expands upon the functionality of the application components with the purpose of determining actual costs for externally procured materials and materials produced in-house. In addition, actual costing uses actual costs to valuate inventories of raw materials; semi finished products, and finished products. Actual costing calculates an actual price (periodic unit price) for each material, into which all actual costs for the particular period flow.
SAP E Books has following document available on these area
SAP Product Cost Material Ledger Concept Presentation
SAP Product Costing (CO-PC) Configuration Documents
SAP Material Ledger Configuration Document
Material Ledger (CO-ML) End User Documents
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