Creating Mixed Costing Estimates

Objectives

After completing this lesson, you will be able to:
  • Configure mixed costing
  • Create a mixed cost estimate

Mixed Costing

This image illustrates a mixed costing process flow, consisting of four steps: creating quantity structure type and assigning costing version, creating procurement alternatives, defining mixing ratios for procurement alternatives, and executing material cost estimate with quantity structure.

You use the quantity structure type to manage mixing ratios.

Mixing ratios can be maintained in the following ways:

  • Per fiscal year

  • Per period

  • Without reference to a period

To create a mixed cost estimate, you assign the quantity structure types in the costing version. This ensures that various quantity structures or mixing ratios can also be costed using various costing versions.

This diagram shows different process categories in procurement, including plant-to-plant stock transfer, production, subcontracting, joint production, and purchase order.

A material can be manufactured using various processes and can be procured from various supply sources. The price of a material is affected by the supply source or production process. Consequently, any valuation or costing of a material must take these factors into account. To do this, you create one or more procurement alternatives for each process category.

Note

Procurement in this context is referring to sourcing in general, that is, process categories. To create a Quantity structure (like MIX2), go to Define Quantity Structure Types → Display Existing Quantity Structure Types.

The following are examples of the procurement alternatives:

  • Example 1:

    There are two regular vendors, A and B, for material X, which is an important material that you procure only externally. You create two procurement alternatives for the Purchase order process category for vendors A and B, and enter the normal purchase quantity as the costing lot size.

  • Example 2:

    You produce most of material Y using two production versions, 01 and 02. Plant Z provides the rest of the material. You create two procurement alternatives for the process category Production, for production version 01, which has the lot size 'n' and production version 02, which has the lot size 'm'. You also create another procurement alternative for the Stock transfer process category for plant Z with the remaining stock transfer quantity as the costing lot size.

Note

If you use product cost collectors for the materials in Cost Object Controlling, verify whether you use production versions or BOMs and routings when you create the procurement alternatives. For more information, refer to SAP Library under Cost Object Controlling.

Procurement Alternatives: Processing

A diagram illustrating procurement alternatives, linking material and plant to production and purchase orders, with emphasis on process categories like production and lot size specifications.

Depending on the process category, you can make various entries for the procurement alternative data.

Mixing of Ratios

Two quantity structure types, displaying mixing ratios for production and purchase orders across 2017-19, linked to two costing versions, with a note explaining the specifications of the quantity structure type regarding time-dependency and a 100% check.

Procurement alternatives are weighted by equivalence numbers. You maintain the equivalence numbers in percent or in numerical form for each procurement alternative.

If you select the '100% check' indicator in the quantity structure type, the equivalence numbers should have a total of 100.

In the figure, mixing ratios are entered in the following two quantity structure types for the same material:

  • Quantity structure type A enables mixing ratios to be maintained on a fiscal year basis and is assigned to costing version 01.
  • Quantity structure type B does not depend on time and is assigned to costing version 02.

Mixed Cost Estimates

This image shows the mixed cost estimate for Gearbox T-FL230 using costing version 01 and quantity structure date 2018, displaying production and purchase order costs, including material, activity, overhead, and process components, resulting in a total value of 225.

When you carry out a material cost estimate, the system first determines the procurement alternatives from the quantity structure type. The system then costs the alternatives individually, generating a cost component split and an itemization for each alternative. The costing lot size is taken from the procurement alternative.

The system creates a mixed cost estimate for the material using the mixing ratios.

A graphic depicting a mixed cost estimate for a gearbox, including item details like quantity, unit, total value, and breakdowns of material, activity, overhead, and process costs, with a unique indicator highlighted.

The multilevel BOM (Bill of Material) displays one row of data for each procurement alternative. The quantities are displayed as a proportion of the costed mixing ratio.

The cost estimate indicator in the cost estimate specifies whether the estimate is a mixed cost estimate or a costed procurement alternative.

You can include the mixed costing or procurement alternative characteristics in the personal display variants in the object list, multilevel BOM, and itemization reports. If you call a detail report for the material cost estimate directly by choosing Extras, you can access a specific procurement alternative.

To analyze individual cost estimates for procurement alternatives, navigate through the object lists or the costed multilevel BOM.

Create a Mixed Cost Estimate

ExerciseStart Exercise

Summary

  • Understand procurement alternatives to reflect external sourcing in mixed costing estimates.
  • Maintain mixing ratios using quantity structure types for accurate cost estimation.
  • Execute mixed cost estimates by assigning quantity structure types in costing versions.
  • Analyze individual cost estimates using procurement alternatives and mixing ratios.

Learning

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