In this lesson, you learn about the importance of accurately capturing both the quantity structure and value structure in Product cost accounting to calculate the total cost of production. This information is crucial for making pricing decisions, determining profitability, and evaluating cost-saving opportunities.
Understanding the quantity and value structures helps businesses make informed decisions about production processes, identify costs reduction areas, and improve efficiency. This can ultimately lead to better financial performance and competitiveness in the marketplace.
In the following video, we look at an overview of product cost planning.
In this video, the key points of product cost planning are summarized. When creating a cost estimate with a quantity structure, you need to specify the costing variant, the material to be costed, the plan, and the lot size. The costing variant helps SAP SAP S/4HANA determine the validity period, selection date, quantity structure date, and pricing date. The system automatically selects and values the quantity structure, including materials, activities, and overhead costs. The value structure breaks down production costs into direct and indirect costs. Finally, the cost estimate results can be analyzed and used for pricing, inventory valuation, profitability analysis, and product cost accounting.
