Summarizing the Basics of Product Cost Planning

Explaining Material Cost Estimates with Quantity Structure

Describing the Quantity Structure

Comprehending the Cost Estimate with Quantity Structure

Analyzing Cost Estimates and Updating Standard Prices in Material Master records

Defining the structure of a Cost Estimate in the Display Material Cost Estimates Fiori App

Objective

After completing this lesson, you will be able to use the Display Material Cost Estimates app

Lesson Overview

The new product prototype was successful, and production is about to start. Your task is to calculate the cost of the new bike. You can use an automatic cost estimate since work scheduling established the bills of materials (BOMs) and the routings. After completing the cost estimate, the engineering department tells you to add extra materials and costs. The quantity structure data does not reflect these changes, and you must update the data. To incorporate the additional costs, use multilevel unit costing in the current cost estimate.

In this lesson, learn more about the Display Material Cost Estimates Fiori app. This application is available from the Manage Material Cost Estimates app which provides an overview on a list of material cost estimates. From this launcher app, it is then possible to select a specific one to navigate from the results list to the cost estimates details.

The screenshot illustrates the display of the Manage Material Cost Estimates app, filtering on a specific plant 1010 and listing the available material cost estimates. From there, selecting the Details button, it shows a second screenshot detailing the Cost Estimate for this product in the Display Material app in SAP Fiori.

Cost Estimate Structure

Each cost estimate is based on a material master with a costing view, an accounting view, and a costing variant.

In the Display Material Cost Estimates Fiori app, to view a cost estimate with a quantity structure, you must specify the costing variant, material, and plant. The costing variant includes control parameters to automatically determine the quantity structure and update prices in the material master. These parameters contain information about prices for materials, activities, and business processes. The settings depend on whether you're creating a material or a base object cost estimate.

Enter the lot size when creating a cost estimate. If left blank, the system uses the material master lot size from the Costing 1 view. A larger lot size impacts the unit cost since the lot-size-independent fixed costs (for example, setup costs) are distributed to more units. Save the data to ensure that the database displays the updated cost estimate.

Each costing variant contains a valuation variant and a costing type. The valuation variant determines at which price the system values materials, activity types, processes, subcontracting, and external activities. For example, the latest price or the average price calculated for the entire fiscal year. The costing type determines the purpose of the costing, such as base object costing or material costing, and the price update permitted.

Analyzing Material Cost Estimates with Quantity Structures

The image displays the four elements to be keyed in to determine the correct valuation dates: Costing variant, plant, material and lot size. Based on this selection, it implies different types of analysis that are represented in the lower part: Cost component split, itemization, log for messages and explanation.

You can analyze the costing results with standard reports and display variants. You can use different cost component views (such as the cost of goods manufactured, or the cost of goods sold) for the costing results.

After obtaining the costing results, you can use different buttons to display system views.

When analyzing the cost estimate, remember that you can use the following functions:

Define your own display variants and initial variants.
Use the navigational options to access reports.
Navigate through the multilevel BOM (costing structure) to the reports and error logs.

Itemization and Cost Component Views for Cost Estimates

Image illustrating an overview of Cost Component View in the Display Material Cost Estimate app. To display the respective analysis report in the lower part of the screen, choose either Itemization or Cost Components.

You can now navigate the Display Material Cost Estimates app and identify its main components.

Summary

The Display Material Cost Estimates app, available from the Manage Material Cost Estimates app, shows a detailed breakdown of costs for a single material with its quantity structure.
The Costs tab provides access to the Cost Component View for deeper analysis.
Customize the display to show all cost elements, not just materials.
Enter lot size to impact unit cost; larger lot sizes distribute fixed costs over more units.

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