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Product Costing Master Data in SAP

Product Costing Master Data in SAP

Following are the important related master data to Product Cost Controlling Integration.

a. Material Master view related to Product Costing
b. Bill of Material
c. Work Center
d. Routing
e. Production Order
f. Product cost collector

Material Master View related to Product Costing

Following views of material master are important for Product Costing.

1. Accounting Views
2. Costing Views

1.    Accounting Views :

Accounting View 1:

a.    Valuation Class field determines which GL account will be debited/ credited.
b.    Price Control : If material master is created for raw material category, price control should be selected as V which determines valuation of the raw material will be done on Moving Average Price. If material master is created for SFG or FG, price control should be selected as S which determines valuation of the SFG or FG will be done on Standard Price.

Accounting View 2 :

a. Tax Price 1 to 3 : Valuation of inventory for taxation.
b. Commercial Price 1 to 3 : Valuation of inventory for commercials.

2. Costing Views :

Costing View 1:

a. Overhead Group : Key which groups materials to which the same overhead is   applied. While valuing SFG or FG through product cost sheet overhead group key determines which overhead rate is to be applied.
b. Variance Key : Key that controls variance calculation.

Costing View 2 :

a.    Future Planned Price : Updated when current cost estimate is marked.
b.    Current Price : Updated when current cost estimate is released. Inventory of FG & SFG is valued at this price.
c.    Previous Price : When current cost estimate is released, the previous current price at which inventory was valued will be updated in this field.
d.    Planned Prices 1 to 3 : To capture other type of cost estimates prices which can be used for simulation purpose.

Bill of Material (BOM)

Bill of Material is the list of standard input material & their quantity required to produce specified units of the given output material. While costing any semi finished / finished goods, the input material required for costing is picked up from BOM of the output material.

Work Center

A machine or a group of machines on which operation activities are performed to convert input materials to finished goods. Cost center and activity type are maintained in the respective work center for costing.


Routing gives sequence of operations & quantum of activities performed in respective work center to produce given output of specified material. While computing standard conversion costs, standard operations performed in a process, along with their standard timings, are given by routing.

Production Order and Product Cost Collector

Production Order is a cost object through which actual quantity to be produced and actual cost of production is determined.

Product Cost Collector is a cost object used in repetitive manufacturing to determine actual quantity and cost of production for a period.

Following are the important costing fields in Production order and Product Cost Collector under the control data screen.

a. Costing variant for Planned/Actual costs

This field specifies which costing variant used to determine the planned/actual costs. Costing variant contains all control parameters for costing, including parameters that control how cost estimates are executed and the material prices or activity prices that are used to valuate the costing items. It combines all the parameters for evaluating materials, internal activities and external activities in preliminary and actual costing.

b. Costing Sheet

Overhead Cost Sheet is used to calculate production overhead.

c. Overhead Key

Overhead rate specified in overhead cost sheet can be determined for specific material or production order through overhead group or key.

d. Result Analysis Key

RA Key determines WIP value of Production Order.

f. Variance Key

It is used to calculate variance between standard cost and actual production cost after production order confirmation or periodically for Product Cost Collector.

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