Revenues and discounts are transferred to profitability segments in Profitability Analysis (CO-PA) at the point of billing in sales order management. Quantities sold are valuated at the same time as the standard cost of goods sold (COGS). These are based on the cost component split from Product Cost Planning (CO-PCP).
Using SAP S/4HANA Enterprise Management, if the value fields are assigned to the elements of the cost component split, the COGS cannot be transferred to costing-based CO-PA. Assign the elements of the cost component split to general ledger accounts using the Define Accounts for Splitting the Cost of Goods Sold transaction. You can use them in the Margin Analysis, as well as in the General Ledger Accounting.
The fixed and variable cost are distinguished using the Total Value and Fixed Value characteristics. To define a line in the report that selects the variable value, define a form in the report that subtracts the fixed value from the total value within the same general ledger account.
In Overhead Cost Controlling (CO-OM), primary posting is posted to the objects in CO-OM. It is allocated to the cost object by the most source-related means available. The actual cost of goods manufactured is also allocated to the cost object, and the cost centers that perform the activity are credited.
In CO-PA, production variances lead to under-absorption or over-absorption for the cost centers performing the activity, and to production variances for the corresponding cost objects, such as production orders.
Production variance is the difference between the actual cost of manufactured goods and the standard cost determined for cost objects. In this case, production orders are divided into variance categories and settled to profitability segments.
Overhead costs remaining in CO-OM objects are allocated to the originating profitability segments.
Flow of Actual Values: Results
The method of determining the results of the operating period in CO-PA is based on the assumption that the success of a company can be measured by its transactions with other companies. The aim is to supply the sales, marketing, product management, controlling, and corporate planning teams with information to support their decision-making.
The sales-oriented approach in CO-PA means that until a sales transaction completes, contributions to the success of the organization are not received. As a result, the sold products are transferred to CO-PA in accordance with the cost-of-sales accounting method. They provide information about sales revenues and sales deductions.
Once the information about sold products has been transferred to CO-PA, you can compare this net revenue with the cost of sales. The cost of the products consists of the cost of goods manufactured, products sold, or services rendered in addition to any known production variances. To complete your profitability data, assign overhead costs to profitability segments during your period-end closing activities.
Sources of Value Fields
The value fields in costing-based CO-PA contain the amounts and quantities that you want to report on. The value fields represent the finest level of detail at which costs and revenues are broken down. The assignment of costs to value fields depend on the cost component of the cost component split. Each cost component consists of fixed and variable costs. You can assign the variable and fixed cost field to different value fields, which enables calculation of the contribution margin. As mentioned above, the contribution margin can also be analyzed in Margin Analysis. In Margin Analysis, you are using Total amount and Fixed amount to calculate, in a formula of a report, the variable costs.
COGS (Cost of Goods Sold) can be analyzed in costing-based CO-PA using the assignment of cost element plus a variance category to value fields in a PA Transfer Structure. In Margin Analysis, you can settle the different variance categories using the customizing transaction Define Accounts for Splitting Price Differences.