Name: Introducing Product Cost Planning for Standard Cost Estimates with Focusing on Valuation Variants - SAP S/4HANA Cloud - Finance and Risk
Uploaded: 2022-9-26
Duration: 617 s
Description: In this Microlearning you will understand the impacts of the configuration for the valuation variant.

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<div>In this Microlearning you will understand the impacts of the configuration for the valuation variant.<br><br></div>

Introducing Product Cost Planning for Standard Cost Estimates with Focusing on Valuation Variants - SAP S/4HANA Cloud - Finance and Risk

Hello and welcome to this microlearning for SAP S/4HANA Cloud for finance, introducing product cost planning for Standard cost estimates, with focusing on valuation variants. If you haven't watched the micro learnings introducing product cost planning for standard cost estimates with focusing on costings variants Part 1 and 2, it is recommended to watch both of them first. In this microlearning, we will first have a short look on the configuration options for the valuation variant. Afterwards, we will analyze the options for adjusting the components of the valuation variant with focus on standard cost estimates. As a recap, standard cost estimates, establish standard prices for semi-finished and finished products. The costs calculated in standard cost estimates are used to value materials with Standard price control. Let's have a small recap on the costing variant. When you want to plan costs for a material, you need to specify a costing variant. The costing variant contains all the information needed to cost the material. That means to create the material cost estimate. In this micro learning, we will focus on the case that you want to plan costs for materials without a reference to an order. you have to create an execute a product costing run for the materials used in your company or plant to set prices for your materials based on the bill of material, the routing, and the costing sheets that were maintained for the material before. You find a description on how to create and execute a product costing run for materials without reference to orders in the master data script BNU and in scope item BEG. As we want to focus on the valuation variant in this micro learning, let's have a closer look on it. Valuation variants enable you to define which prices are selected to value materials, internal activities, subcontracting and  external processing, and which costing sheets are used to calculate overhead. There are two SSCUIs available to maintain the valuation variant. SSCUI 102607, which is named define valuation variants for material cost estimates should be considered more as a template. For maintaining the valuation variant, you should better use SSCUI 102608 which is named define valuation variants per plant. We will also use this throughout this micro learning, we will continue using the costing variant PYC1 in this micro learning which is assigned to valuation variant 0Y1. And we will have a look at all the components of the valuation variant one after another. In the material variation tab, you define a strategy sequence that determines the valuation of the materials used in the cost estimate. For determining material costs, the materials used are valuated using the price in the material master record or the values calculated in a material cost estimate. You can enter either a single strategy or more than one strategy in the form of a strategy sequence. If you enter multiple strategies, the priority of the strategy determines what prices or what values are selected. This handling also applies to the next steps and will not be repeated there. You have several options to choose from like standard price and moving average price. In case you use materials with a different price control, it could be useful to keep the standard setting valuation price according to price Control in material master. Let's have a look on this example. When you cost a material, the system determines the bill of material for this material and selects a price for the valuation of the material components through the variation variant. Here you can see a cost estimate that contains a material with moving average price control marked in green. And a material with standard price control marked in red. You only need the one strategy sequence valuation price according to price control in material master so that the cost estimate can take the appropriate prices from the material master and multiplies them with the quantities of the cost estimate. If you have costs that cannot be calculated by the system like freight charges, insurance costs, stock transfer costs, incomplete or changed bill of materials and routings, you can use additive costing to add costs manually to a material cost estimate. If you set the include additive costs indicator in the valuation variant the system looks for any existing additive cost estimates for the material. The costs in the automatic cost estimate and the manually entered additive cost estimate are added together for each cost component. with the app create additive costs, you can add costs manually to a material cost estimate. To ensure that the additive costs are considered, make sure to include additive costs in the costing variant. If you select the price from purchasing info records strategy, you also need to define a substrategy sequence for purchasing info record valuation. You can, for example, use prices from the purchase order or the quotation that is assigned to the purchasing info record. In the internal activity tab, you use strategy sequences that determine how internal activities and processes are valuated in costing. The standard setting is the strategy sequence plan price as average of all fiscal year periods. You can verify with strategy was taken by displaying the column price strategy in the cost estimate. In this cost estimate, three internal activities have to be performed with a respective quantity. The activities used are valuated with the prices from cost center accounting to determine the production costs using the app manage cost rates plan. In this case, there are no periodic specific price maintained so that the rate valid from first January 2021 is taken for all three activities. In the tab subcontracting, you set the strategy sequence that determines the valuation of subcontracting in costing. You can take the quotation prices from a purchasing info record or the current prices from the purchase order. You use the planned quota arrangement or actual quota arrangement indicator to specify whether the selection of the source of supply or the vendor uses the actual quota or the planned quota in the source list. To trigger subcontracting from the routing, the flag for subcontracting has to be set in the respective operation. In the tab external processing, you set the strategy sequence that determines the valuation of externally processed operations in costing. To calculate the costs for external processing, the externality processed operations are valuated with the price in the operation or with the price calculated in the quotation or in the purchase order. In strategy 1, price from operation, the system only accesses the price in the operation if no purchasing info record exists for the operation. For performing external operations, you have to use a control key for the respective operation in the routing that is flagged for external processing. You also have to use such a control key for a subcontracting operation from the previous step. The last tab of the valuation variant is overhead. You can assign costing sheets for raw materials, finished and semi-finished goods to control how overhead is calculated. The indicator overhead on subcontracted materials specifies whether, in respect of materials subject to subcontracting, overhead is applied. Let's have a look on how overhead is calculated using a costing sheet. The costing sheet consists of three components, a base, an overhead rate and a credit entry. For the base for material consumptions, you can enter either an interval of cost elements or a cost element group. In the costing sheet that is assigned to valuation variant 0Y1, a cost element group is entered to which several Cost Elements are assigned. Let's have a look on an example cost estimate. Here you can see that the consumption of all components was posted to only one cost element because the materials are assigned to the same cost element by Automatic account determination. To further subdivide material costs, you can use origin groups. You enter the origin group in the costing 1 view of the material master record. If you have, for example, maintained origin groups for raw materials, you can define the calculation base here in the costing sheet for each of these origin groups. This enables you to define different overhead rates for each origin group. You then create a costing sheet for overhead rates with the desired origin group and assign it as the costing sheets for overhead on material components. In this example, the overhead rate for material consumption is set to seven % This cost element and cost center will be credited. The total of 620 Euro is the base for the overhead rate calculation of seven %, which is posted to the cost center and cost element stored in the credit entry of the costing sheet. The same logic applies to the other costing sheet rows. In our example, there are three cost elements posted for production costs that form the base for the production overhead calculation. In this example, the overhead rate for production is set to ten%. This cost element and cost center will be credited. The total of 68,60 Euros is the base for the overhead rate calculation of ten %, which is posted to the cost center and cost element stored in the credit entry of the costing sheet. Thanks for listening. This concludes the topic of introducing product cost planning for standard cost estimates, with focusing on valuation variants. You have now understood the impacts of the configuration for the valuation variant. For more information, please check the configuration, help.