Project Cost Controlling

Your company develops and produces forklifts using various production processes. You need to learn about suitable mapping methods for product design, engineering, and prototyping processes in the SAP S/4HANA application. For this reason, you require the following knowledge:

• An understanding of project controlling as part of overhead costing

• An understanding of project controlling as part of cost object controlling

• An understanding of the terms "project", "investments", and "cost controller"

• An understanding of the terms "product cost by project", "work breakdown structure", and "network"

• An understanding of the difference between product-level and order-level controlling

The controlling architecture explains how quantities and values flow between the components of the SAP S/4HANA application with respect to accounting. Controlling adds the quantity flows in terms of preliminary costing, simultaneous costing, and final costing.

The typical quantity flows of logistics follow the supply chain sequence for procurement, production, stock movements, sales, and billing.

• Valuates material movements
• Provides cost component splits for valuation in Profitability Analysis (CO-PA)
• Allocates overhead costs from cost centers and business processes to cost objects (such as production orders, sales order items, and projects)
• Determines Work in Process (WIP)
• Determines variances and their settlement to CO-PA

• Valuation of manufacturing efficiency
  • Set relevant standards to measure performance
  • Variance analysis
  • Reports for individual plants, product groups, products, or orders
• Supports strategic decision-making
  • Primary cost component split and cost component splits by organizational unit
  • Scrap costs, process costs, and overhead allocation
• Inventory valuation
  • Alternative valuations according to commercial law, group, and profit center
  • Three parallel currencies
  • Standard costs
  • Actual costs using the actual costing or Material Ledger component
• Valuation of finished and semi-finished goods
  • Standard prices provided by cost estimates
  • Creation of alternative cost estimates for balance sheet purposes for closing activities
• Determination and valuation of WIP at period-end closing
• Period-based accrual calculation with provisions for imminent losses
  • In an engineer-to-order (ETO) or make-to-order (MTO) environment
  • Corresponding updates of balance sheet as well as profit and loss statements.

• Helps plan the costing of goods manufactured and services

• Allows planning to be performed without any reference to a production order (costing is carried out independently of any production order)

• Allows costing to be carried out automatically when quantity structure data (such as networks) exists in the project system (PS) component of SAP

• Allows costing items to be entered manually in unit costing or ad hoc costing with no quantity structure

• Allows use of the batch input method to transfer the quantity structure from a remote system to the SAP S/4HANA application

In Cost Object Controlling, the system uses a cost object to collect the costs incurred when a product or service is created. The cost object to be used depends on your controlling requirements. Possible cost objects include sales orders, production orders, process orders, product cost collectors, and projects, among others. Cost Object Controlling allows simultaneous costing (mapping and valuating logistical quantity flows) and final costing (period-based accrual calculation and variance calculation). The results of period-end closing with the cost objects are settled to Financial Accounting (FI) and CO-PA.

Actual costing is used to calculate the actual cost of goods manufactured at the end of the period. The result can be saved in the material master as a periodic average price for the closed period. The quantity structure is derived dynamically from the material movements in the SAP S/4HANA application. The values connected with these movements are collected in the material ledger. With multilevel settlement, you allocate variances over multiple procurement levels.

Cost Object Controlling helps you answer the following questions:

• What actual costs did you incur in your area during the current period?

• What costs did you expect based on the quantity manufactured?

• Are some product groups performing significantly better than others?

• What is causing these variances?

• What are the scrap costs of your new production line?

• Did continuous improvement have an effect on the costs?

• What kind of profit is brought about by a concrete project?