Selecting the Right Product Cost Planning Method

The material cost estimate with quantity structure costing method is used when a material master as well as a BOM and routing exist for a product. It is used for planning costs and setting prices for materials without reference to production orders, for calculating cost of goods manufactured and cost of goods sold, and for valuating inventory at standard prices.

The material cost estimate without quantity structure costing method is used when a material master exists for a product, but a BOM and routing do not. For example, you can use this costing method for products that are still in the prototype phase, but for whom a cost estimate is required.

You can also use this method for valuating intangible goods such as services for which there is no BOM or routing. With this method you can carry out a cost estimate for materials even if the quantity structure data (such as BOMs and routings) is located in a non-SAP Production Planning system. You create this type of cost estimate in the SAP system using the reference cost estimate.

• Material costing with quantity structures uses BOM and routing for planning costs and setting standard prices.
• Material costing without quantity structures is suitable for prototypes and intangible goods without BOM or routing.
• Reference cost estimates allow cost estimation in SAP even if quantity structure data is in a non-SAP system.