Identifying Costing Items in Cost Estimates

After completing this lesson, you will know what costing items are, how they behave according to their item category, and how they are used to create a cost estimate.

A cost estimate evaluates the resources required to produce a product or a service. Each element is depicted as a costing item based on existing master data and corresponding prices from the SAP S/4HANA application.

A costing item can, for example, represent internal activity, service, or material costs.

Costing Items Structure

When adding a costing item to a cost estimate, you must provide specific details. An item category must be included, which determines what data you enter and what data the system uses or calculates.

Costing Item Details:

• Item category (required for each line item).
• Resource (such as material name or cost center).
• Work center (for activities processed internally).
• Plant
• Cost element
• Quantity
• Unit of measure
• Total price
• Fixed price
• Total value
• Fixed value
• Currency

The main item categories are detailed in the above list. There are additional item categories used in cost estimates with a quantity structure. You can display these in the itemization view of a cost estimate.

The following table also lists item categories, what is to be entered, and what is derived by the system:

For some costing items, a cost element(account) is automatically determined, depending on the item category. The information source used to derive the cost element varies, as mentioned in the following list.

Cost Element Sources

• Internal Activity: Activity Type Master Record
• External activity: Your manual entry
• Subcontracting: Your manual entry
• Overhead: Costing sheet
• Material: Automatic account determination
• Service: Service master
• Variable item: Your manual entry

The listed item categories do not require manual entry for resource, plant/activity type, quantity, and unit.

There are also system-costing item categories, which include:

• Overhead (G)
• Raw materials cost estimate (I)
• Total items (S)
• Operation items (O)

Overhead costs, although not directly tied to production costs, significantly impact manufacturing expenses. To distribute these costs, the costing sheet functionality is employed, which is explained later in the course.

Item Categories in a Unit Costing Scenario

The image shows a material cost estimate using the Display Material Cost Estimates SAP Fiori app, focusing on the split between the Costing Structure and the Costing items basic view for the product Bike B100. A pop-up window of item category options is included.

System: Item Categories

Item Category	Determined by the System	Derived by the System
G Overhead	Costing Sheet	Text, cost element, value
I (Raw material cost estimate)	Purchasing Info Record	Price, unit of measure, text, cost element, value

System: Item Categories 2

Item Category	Your Entry	Determined by the System
S (Total)	Formula, text	Totals
O (Formula)	Formula, text, cost element	Formula result