SAP S4 CO -Full fledged Costing Techniques

SAP CO Product Costing, Material Ledger and COPA Scenarios in S/4 HANA

The Product Costing module allows organizations to determine the production costs of products. This is integral for controlling and for assessing profitability. Material Ledger enables actual costing and supports multiple valuations in parallel.

Product Costing Techniques:

1. Product costing by order (Make to Stock): Costs are determined based on manufacturing orders. It's suitable for non-repetitive production.

2. Product costing by Sales order (Make to Order): Costing is done for specific sales orders. Typically used for customized products.

3. Product costing with Sales order controlling vaulted stock with sale order controlling: When both anticipated stock and actual sales order-driven stock exist.

4. Product costing with sales order controlling non-vaulted stock with sale order controlling: For products produced directly against sales orders without anticipation.

5. Product costing by period: Periodic costing for products irrespective of orders.

6. Repetitive manufacturing without reporting points consideration: Costs for products that are manufactured repetitively and without specific checkpoints.

7. Repetitive manufacturing with reporting points (work in process) consideration: Costs are captured at different stages or checkpoints of the production process.

8. Joint Production Process: Multiple main products are derived from one production order.

9. CO-Product costing process and By Product Costing Process: Co-products are main products with similar value, whereas by-products have minor value compared to the main product.

10. Mixed Costing process- Split Valuation: When a material can be procured/manufactured in more than one way.

11. Sub-Contracting, External Operations Product costing process: Costs when a part of the manufacturing process is subcontracted to external suppliers.

12. Cross plants –Special Procurement product costing: Costs are determined when procuring from a different plant within the same company.

13. Additives cost estimation: The costs of additive materials in the manufacturing process.

SAP CO S/4 HANA 2021 -Material Ledger

1. Multiple Currencies:

   • Company Code Currency: Primary currency for a company code.

   • Group Currency: Consolidation currency.

   • Global company Currency: Company currency

2. Multiple Valuations:

   • Legal Valuation: As per local regulations.

   • Group Valuation: Consolidated valuation.

   • Profit Center Valuation: Based on profit center reporting needs.

3. Transfer pricing:

   • Inter Company: Pricing between different company codes.

   • Intra Company: Pricing within the same company code.

4. Physical Inventory count integrated with Material Ledger/Actual Costing: Actual stock valuation as per physical count.

5. Distribution Usage variances: The differences between planned and actual usage of materials and activity types in production.

6. Activity Types: Quantitative measures of services provided by a cost center. Adjustments made for variances between planned and actual activity provided.

7. Material Ledger- Actual Costing Execution and CKM3: The CKM3 transaction provides a detailed material price analysis showing the evolution of material prices.

8. CKMLCPAVR: Cumulative Actual Costing :

This overview provides a detailed but condensed understanding of the topics related to SAP CO: S/4 HANA 2022 in the context of Product Costing and Material Ledger. Each of these topics can further be elaborated into detailed processes, configurations, and examples based on real-time scenarios.
Product Cost by Sales Order is an essential aspect of SAP CO. It helps organizations accurately track costs related to specific sales orders, ensuring profitability and accurate financial reporting.

Product Cost by Sales Order:

1. Concept and Explanation of MAKE TO ORDER:

   • Make to Order (MTO) involves producing products only after receiving a specific customer order.

   • This strategy offers personalized products but may lead to longer lead times.

2. Product Cost by Sales Order Concept:

   • This is about determining costs at the sales order level.

   • Instead of general product costing, costs are tracked per specific sales orders.

3. Valuated and Non-Valuated Concept:

   • Valuated: The stock is valuated at the sales order level, meaning it has a monetary value assigned.

   • Non-Valuated: The stock isn't assigned a monetary value at the sales order level but at a higher (like the plant) level.

4-6. Sales Order Costing Processes:

• Without Sales Order Controlling Object (Valuated): Here, costs are determined at the sales order level but without an order controlling object.

• With Sales Order Controlling Object (Valuated): Costs are determined at the sales order level using a controlling object.

• With Sales Order Controlling Object (Non-Valuated): Costs are tracked with a controlling object but stock isn't valuated at the sales order level.

7. Result Analysis Calculation of Sales Order and its Settlement:

   • Ensures that all costs and revenues from a sales order are correctly recognized in financial accounting, even if they occur in different periods.

Sections A through J lay out the steps and configurations needed to implement Product Cost by Sales Order in SAP, from setting up Costing Variants to testing various scenarios and finally obtaining relevant reports.