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Standard Cost Estimate

Standard cost estimate are created at the beginning of a fiscal year or a new season.  The standard cost estimate is then valid for the entire year or season.  It is used to determine a standard price for materials in this period.

The standard cost estimate will write the results of the cost estimate into the costing details screen of the material master record as the future standard price once it is marked.  This price is then active for internal material valuation.  For example, it can be used to valuate a material components in the cost estimate.

Once the cost estimate is released, the system transfers the result of the standard cost estimate into the material master record of the material as the standard price.  This price is then active for Financial Accounting and is used for valuation of the material until the next time a standard cost estimate is released.

In this period, all transactions involving products produced in-house in the Logistics module are valuated using the results of the standard cost estimate.  If a material with standard price control is delivered to stock, for example, inventories of this material are valuated with the standard price determined by the standard cost estimate.

The standard prices calculated in the standard cost estimate applies only for materials with S price control.

Cost Estimate with Quantitative Structure

The cost estimate is a tool for establishing prices for materials.  It is used to calculate the costs of goods manufactured and the costs of goods sold for each product unit.

In order to establish the cost estimate with quantity structure of a material, the bills of materials and routing of the material must exists for the materials to be costed.

The cost estimate with quantity structure uses the material master data to determine the material consumption and internal activities required to produce the product.

Costing calculates the cost of goods manufactured for each material made in-house in the BOM structure.

The materials in a BOM are called BOM components, these can consist of a material without its own BOM (material components), or a material with its own BOM (assembly).  If the product has a multilevel BOM, then the costs for the material components are calculated and taken into account when the next highest assembly is costed.  The structure of the BOM determines the sequence in which the materials are costed.  The BOM components with the largest low-level code (that is, the material components) are costed first, then the BOM components with the next low-level code and so on.

Costing can also determine the cost of goods manufactured for materials produced in another plant if the two plants are assigned to the same controlling area and the company codes of the plants use the same cost component structure.  In this case, the structure of the cost component split must be the same in both plants.

For raw materials, the system determines the procurement price using the entry in the material master record.  A cost component split is created automatically for the material costs.  You can add manually entered costs to the material costs by means of an additive cost estimate that contains separate cost components.  This enables you to include such costs as freight charges and insurance costs with raw materials or stock transfer costs with semi-finished products.  Other reasons for adding manually entered costs to the material cost estimate include missing routings or BOM components.

Normally, a multi-level production structure is costed using costing with a quantity structure.  The costs are rolled up automatically using the low-level codes.

This process is continued until the calculated costs of the highest material in the structure (such as the finished product) contain the costs of goods manufactured for every material in the structure.

Creating a cost estimate for a single material and its child parts with quantitative structure

Result Marking a standard cost estimate for a single material master and its child parts Releasing a standard cost estimate for a single Material Master and its child parts. Costing Run Steps Correcting the Cost Estimate SOME material ONE material Costing Run

Costing run is used to process mass data.  The costing run enables you to cost more than one material at the same time, either online or in the background.  It reproduces the entire process of costing with a quantity structure.

Process Flow Overview

Create costing run

Some material
Select specific assemblies for the costing run
Quantity structure determination for the selected assemblies

All materials
Select all assemblies for the costing run

After completing the steps for either Some material or All materials
Carry out costing run

Mark and release costing

The costing run involves separate steps, being the selection of materials for costing, determining material components via the BOM explosion, and then carrying out costing level by level.

BOM explosion is only necessary if a complete selection of materials is not carried out, such as the selection of finished products only.

Logs are generated for each step of the costing run, and can be printed out and saved in the system.  With Extras you can print the logs for selection and quantity structure determination, for costing and for marking and release (online or background mode).

Creating a costing run

Selecting Materials for a costing run
Procedure Displaying the results of selection
Procedure Exploding BOMs for a costing run (only necessary if ALL materials are NOT selected)
Procedure Choose the selected materials or low-level codes for costing
Procedure Executing a costing run
Procedure Marking multiple standard cost estimates
Procedure Releasing standard cost estimate
Procedure Deleting material cost estimates from the database
Procedure Status Management in costing

The costing status provides the following information:

The status is set for each low-level code.  This means that you can release the costing results for specific low-level codes even though the costing run itself has the status KF.

The following costing status can be set by the system:

Status              Meaning

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