Product Costing Accounting in SAP FI/CO

Product costing is used to calculate the cost of goods sold and manufactured for each unit of goods manufactured.
It is used to keep the track of cost at each and every point of production.

Costing sheet , cost component, Activity types and cost elements are used for product costing.

Costing sheet is used for the overheads purposes.
Cost Component is used for the breaking of expenses into various cost elements for more transparency of the cost structure.
Activity types are defined as per cost center.

The cost component split will give the transparency on the cost incurred on different levels such as machinery set up cost, labor costetc.

BOM is used to know the quantity of the material used for the production. Routing is used to define the sequence of steps required to perform certain operations. For Eg How many labor hours will be required for a finished product etc.

The entries which flow for product costing are as follows:

For Material issue

Raw Material Inventory(Credit)
To Raw Material Consumption (Debit)

Activities Performed

Respective cost center (Credit)
To Set Up cost (Debit)
Machining Cost (Debit)

Good Receipt

Cost of Production (Credit)
To Inventory of Finished Goods (Debit)

Please note that this entry will come from MM module and at Standard Price.

Settlement Of Production Order

Cost of Production( Variance)
To Price Difference Account

Post goods Issued

Inventory of Finished Goods (Credit)
To Cost of goods Sold (Debit)

SAP CO Consultant Certification

Certification Test
SAP Consultant Certification Solution Consultant Financials -
Management Accounting with my SAP ERP 2005

Software
* Software components: SAP ERP Central Component 6.0

Number of Questions
80

Duration
180 minutes

Notes

* Please note that you are not allowed to use any reference
materials during the certification test (no access to online
documentation or to any SAP system).
* The certification test Solution Consultant Financials -
Management Accounting with my SAP ERP 2005 verifies the knowledge in
the area of the mySAP ERP Financials for the consultant profile
Management Accounting. This certificate proves that the candidate has
a basic understanding within this consultant profile, and can
implement this knowledge practically in projects.

Competency Areas
The following list helps you to identify the competency areas covered
in this test. The percentage indicates the portion of the test
dedicated to a particular competency area.

Competency

Material Cost Estimate With Quantity Structure
Analyses and error handling TFIN20 AC505
BOM TFIN20 AC505
BOM and task list determination TFIN20 AC505
Cost component split TFIN20 AC505
Costing variant TFIN20 AC505
Create costing run TFIN20 AC505
Overhead costing sheet TFIN20 AC505
Price update TFIN20 AC505
Routing TFIN20 AC505

Cost Center Accounting / Profit Center Accounting
Account assignment help TFIN20 AC405
Accrual calculation TFIN20 AC405
Adjustment postings TFIN20 AC405
Assessment TFIN20 AC405
Direct activity allocation TFIN20 AC405
Distribution TFIN20 AC405
Integrated plan allocation cycle TFIN20 AC405 AC040
Introduction to planning in Management Accounting TFIN20 AC405 AC040
Master data cost elements, cost centers, activity types and stat
TFIN20 AC405
Organizational units TFIN20 AC405 AC040
Periodic reposting TFIN20 AC405 AC040
Planning methods in cost center planning TFIN20 AC405
Profit center assignment TFIN20 AC610
Profit center master data TFIN20 AC610
Reconciliation ledger TFIN20 AC405
Recording primary postings TFIN20 AC405

Cost Object Accounting: Make-to-Stock Production with Periodic C
Decoupling scenarios TFIN22 AC520
Period-end closing for periodic Controlling TFIN22 AC520
Preliminary costing on cost object TFIN22 AC520
Product cost collector TFIN22 AC520
Simultaneous costing on cost object TFIN22 AC520
Cost Object Controlling: Make-to-Stock Production with Order Con
11-20%
Cost objects with order view TFIN22 AC520
Period-end closing with order Controlling TFIN22 AC520
Preliminary costing of cost objects TFIN22 AC520
Simultaneous costing TFIN22 AC520


Cost Object Controlling: Sales-Order-Related Production
Delivery and billing documents TFIN22 AC520
Period-end closed with product cost by sales order TFIN22 AC520
Preliminary costing of sales order TFIN22 AC520
Sales order as cost object TFIN22 AC520
Simultaneous costing of sales order TFIN22 AC520


Material Cost Estimate Without Quantity Structure
Base object costing and simulation costing TFIN20 AC505
Material master - fields relevant to costing TFIN20 AC505
Multiple-level unit costing TFIN20 AC505
Single-level unit costing TFIN20 AC505

Overhead Cost Orders
Billing for overhead cost orders TFIN20 AC405
Budgeting and availability control TFIN20 AC405
Commitments management TFIN20 AC405
Master data maintenance TFIN20 AC405
Overhead rates on overhead cost orders TFIN20 AC405



Source:
http://www.sap.com/services/education/certification/

Controlling Terms in SAP CO

Controlling Area: An organizational unit within a company, used to represent a closed system for cost accounting purposes. A controlling area may include single or multiple company codes that may use different currencies. These company codes must use the same operative chart of accounts.

Cost center std Hierarchy : Indicated hierarchy of cost center groups in which all cost centers in a controlling area are gathered together.

Cost element : A cost element classifies the organization's valuated consumption of production factors within a controlling area. A cost element corresponds to a cost-relevant item in the chart of accounts.

Primary cost element: A cost element whose costs originate outside of CO and accrual costs that are used only for controlling purposes

Secondary cost element: A cost element that is used to allocate costs for internal activities. Secondary cost elements do not correspond to any G/L account in Financial Accounting. They are used only in Controlling and consequently cannot be defined in FI as an account.

Cost element category: The classification of cost elements according to their usage or origin.

Examples of cost element categories are:

• Material cost elements
• Settlement cost elements for orders

Cost elements for allocating internal activities

Reconciliation ledger: A ledger used for summarized display of values that appear in more detailed form in the transaction data.

The reconciliation ledger has the following functions:

• Reconciles Controlling with Financial Accounting: The reconciliation ledger provides reports for monitoring the reconciliation of Controlling with Financial Accounting by account.

• It can identify and display value flows in Controlling across company code, functional area, or business area boundaries

• Provides an overview of all costs incurred : Reconciliation ledger reports provide an overview of the costs and are therefore a useful starting point for cost analysis. For example, an item in the profit and loss statement from the Financial Information System (FIS) can be examined in the reconciliation ledger reports with respect to the relevant costs. For more detailed analysis, reports from other components within Controlling can be accessed from the reconciliation ledger reports.

Cost Center: An organizational unit within a controlling area that represents a defined location of cost incurrence.

The definition can be based on:

• Functional requirements

• Allocation criteria

• Physical location

• Responsibility for costs

Cost center category: An attribute that determines the type of cost center.

Example

• F - Production cost center
• H - Service cost center

Controlling area: An organizational unit within a company, used to represent a closed system for cost accounting purposes.

A controlling area may include single or multiple company codes that may use different currencies. These company codes must use the same operative chart of accounts.

All internal allocations refer exclusively to objects in the same controlling area.

Statistical key figure: The statistical values describing:

• Cost centers
• Orders
• Business processes
• Profit centers

There are the following types of statistical key figures:

• Fixed value - Fixed values are carried forward from the current posting period to all subsequent periods.
• Total value -

Totals values are posted in the current posting period only

Activity type: A unit in a controlling area that classifies the activities performed in a cost center.

Example

Activity types in production cost centers are machine hours or finished units.

Allocation cost element : A cost element used to illustrate activity allocation in terms of values. The allocation cost element is a secondary cost element , under which the activity type or business process is allocated.

The allocation cost element is the central characteristic used in all CO postings. It is therefore also an important criterion for reporting - for example, many reports are structured according to the posted cost elements.

Assessment cost element: A secondary cost element for costs that are assessed between Controlling objects.

Reposting: A posting aid in which primary costs are posted to a receiver object under the original cost element (the cost element of the sender object).

Repostings are used to rectify incorrect postings. The following methods are available:

• Transaction-based reposting -

Each posting is made in real time during the current period.

• Periodic reposting -

Produces the same results as transaction-based reposting. The costs being transferred are collected on a clearing cost center and then transferred at the end of the period according to allocation bases defined by the user.

Distribution: A business transaction that allocates primary costs.

• The original cost element is retained in the receiver cost center.
• Information about the sender and the receiver is documented in the Controlling document.

Assessment: A method of internal cost allocation by which you allocate the costs of a sender cost center to receiver CO objects (such as orders and other cost centers) using an assessment cost element.

The SAP System supports the following:

• Hierarchical method (where the user determines the assessment sequence)
• Iterative method (where the SAP System determines the sequence of assessment using iteration).

Example:

The costs from the cafeteria cost center could be assessed based on the statistical key figure "employee", which was set up on the receiver cost center.

Receiver cost center I has 10 employees, receiver cost center II has 90. The costs of the cafeteria cost center would be transferred (assessed) to receiver cost center I (10%) and receiver cost center II (90%). The credit on the cafeteria cost center and the debit of the two receiver cost centers are posted using an assessment cost element. Depending on the system setting, the total costs or some of the costs for the cafeteria cost center would be

Internal order: An instrument used to monitor costs and, in some instances, the revenues of an organization.

Internal orders can be used for the following purposes:

• Monitoring the costs of short-term jobs
• Monitoring the costs and revenues of a specific service
• Ongoing cost control

Internal orders are divided into the following categories:

• Overhead orders - For short-term monitoring of the indirect costs arising from jobs. They can also be used for continuous monitoring of subareas of indirect costs. Overhead orders can collect plan and actual costs independently of organizational cost center structures and business processes, enabling continuous cost control in the enterprise.

• Investment orders - Monitor investment costs that can be capitalized and settled to fixed assets.

• Accrual orders - Monitor period-based accrual between expenses posted in Financial Accounting and accrual costs in Controlling.

• Orders with revenues - Monitor the costs and revenues arising from activities for partners outside the organization, or from activities not belonging to the core business of the organization.

Order type: A tool that categorizes orders according to purpose.

The order type contains information which is necessary for managing orders. Order types are client-specific. The same order type can be used in all controlling areas in one client.

Example

• Production orders
• Maintenance orders
• Capital investment orders
• Marketing orders

•  

Cost of sales accounting: A type of profit and loss statement that matches the sales revenues to the costs or expenses involved in making the revenue (cost of sales).

The expenses are listed in functional areas such as:

• Manufacturing
• Management
• Sales and distribution
• Research and development

Cost of sales accounting displays how the costs were incurred. It represents the economic outflow of resources.

SAP FICO Configuration Tips and Transaction Codes

Table 1	General and Cross-Module Configuration Transaction Codes
	Transaction Code	Description
	SB09	Process Flow View of the Business Navigator
	SB10	Component View of the Business Navigator
	SE10	Customizing Organizer
	SPRO	Enter the IMG
	SM30	Table Maintenance
	SM31	Extended Table Maintenance
	SE12	Data Dictionary change and display
	SE11	Data Dictionary Display
	SE16	The DataBrowser
	OSS1	Log on to OSS
	SU53	Authorization Object Request
	SE38	Run/Change/Display a Programme
	SA38	Run a Programme
	SM35	Batch Input Session Overview
	SE01	View Transport Logs
	GGB0	Create / Change Validation
	GGB1	Create / Change Substitution
	GGB4	Activate Validations and Substitutions
	SNRO	Maintain Number Range Objects
Table 2	General and Cross-Module Configuration Tables
	Transaction Code	Description
	E071 and E071K	Transport tables; displays all transports affecting a given object
	V_GB01C	Customizing table for Boolean fields in substitutions and validations
	GB01	SAP Delivered table that lists all fields that can be used in substitutions and validations
	SADR	Address data (which doesn't transport well)
Table 3	General and Cross-Module Configuration Program
	Transaction Code	Description
	RGUGBR00	Programme to regenerate sets, validations and substitutions
Table 4	FI Enterprise Structure Transaction Codes
	Transaction Code	Description
	OBY7	Copy Chart of Accounts
	OB29	Fiscal Year Variant
	OBBO	Posting Period Variant
	OX02	Company Codes - Create Check and Delete
	OBY6	Company Code Global Parameters
	EC01	Copy Company code
	OY01	Country Definitions
	OB22	Parallel Currencies
	OX03	Business Areas
	OKBD	Functional Areas
Table 4	FI Enterprise Structure Transaction Codes (Continued)
	Transaction Code	Description
	OBBG	Assign Country to Tax Calculation Procedure
	OBCO	Specify Structure for Tax Jurisdiction Codes
	OBCP	Define Tax Jurisdiction Codes
	FTXP	Maintain Tax Rates
	OBCL	Set Tax Codes for Non-Taxable Transactions
Table 5	General Ledger / Chart of Accounts Transaction Codes
	Transaction Code	Description
	OBD4	Account Groups
	OB53	Retained Earnings Variant
	OB15	Sample Account Rule Types
	FSK2	Sample Account Data Transfer Rules
	OB67	Allocate a Company Code to a Sample Account Rule Type
	OBY9	Transport Chart of Accounts
	OBY2	Copy GL Accounts from the Chart to the Company Code
	OBC4	Field Status Variants
	OB41	Posting Keys
	FBKP	Automatic Account Assignments
	OB40	Define Tax Accounts
	OBYA	Cross Company Code Automatic Account Assignment
	OBYC	MM Automatic Account Assignment
	VKOA	SD Revenue Account Assignment
	OB58	Financial Statement Version
	O7Z3	Line Item Layouts
	OBVU	Special Fields
	O7S7	Sort Variants
	O7R1	Totals Variants
	OBA4	Tolerance Groups
	OB57	Allocate Users to Tolerance Groups
	FBN1	GL Number Ranges
	OBA7	Document Types
	OBU1	Assign Default Posting Keys to Document Types
	O7E6	Fast Entry Screens
	ORFB	Financial Accounting Configuration Menu
	OBL1	Automatic Postings Documentation
	OB32	Maintain Document Change Rules
Table 6	General Ledger / Chart of Accounts Programms
	Transaction Code	Description
	RFBISA10
	RFBISA20
	RFTAXIMP
Table 7	General Ledger / Chart of Accounts Tables
	Transaction Code	Description
	BSEG	GL Document Line Item Table
	TTXD	Tax Jurisdiction Code Structure Table
	T030	Automatic Account Assignments Table
	TZUN	GL Account Sort Key (Allocation Field) Table
Table 8	Accounts Payable Transaction Codes
	Transaction Code	Description
	FI12	House Banks
	FCHI	Check Lots
	FCHV	Void Reason Codes
	FBZP	Payment Programme
	OBD3	Vendor Groups
	XKN1	Create Number Ranges for Vendor Groups
	OBAS	Assign Number Ranges to Vendor Account Groups
	FK15	Copy Vendor Master Records Creation Programme
	FK16	Copy Vendor Master Records Creation Programme
Table 9	Accounts Receivable and Credit Management Transaction Codes
	Transaction Code	Description
	OBB8	Terms of Payment AP and AR
	OB46	Interest Indicator
	OB82	Make Interest Indicator Available to the Interest Calculation Program
	OBAC	Reference Interest Rates
	OB81	Assign Reference Interest Rates to Interest Indicators
	OBV1	Interest Calculation Automatic Account Assignment
	OBBE	Reason Codes
	OBCR	Reason Code Conversion Version
	OBCS	Map External Reason Codes to Internal Reason Codes
	OBXL	Assign GL Accounts to Reason Codes
	OBXI	Cash Discount Amount
	OBA3	Customer Tolerance Groups
	OB45	Credit Control Areas
	OB01	Credit Risk Categories
	OB02	Credit Representative Groups
	OB51	Assign Employees to Credit Representative Groups
	OB39	Days in Arrears Calculation
	OBD2	Customer Groups
Table 10	Treasury Transaction Codes
	Transaction Code	Description
	OB10	Create Lockbox Accounts
	OBAY	Define Lockbox Control Parameters
	OBAX	Lockbox Posting Data
	OT05	Source Symbols
	OT14	Planning Levels
	OT13	Planning Groups
	OT47	Assign Logistics Transactions to Planning Levels
	OT17	Treasury Groupings
	OT18	Treasury Grouping Headers
	OT16	Cash Management Account Names
	OT29	Activate Company Code Treasury Updates
	OBBY	Electronic Bank Statement Transaction Types
	OT55	Assign Transaction Types to House Banks
	OT57	Electronic Bank Statement Posting Rules
	OT51	Map External Transactions to Posting Rules
	OT59	Posting Rules Automatic Account Assignment
	GCRF	Currency Translation Ratios
Table 11	CO Enterprise Structure Transaction Codes
	Transaction Code	Description
	OX06	Controlling Areas
	OKKP	Activate CO Components for Controlling Areas
	KANK	CO Document Number Ranges
	KEP8	Operating Concern Definition
	OKEQ	Planning Versions
Table 12	Cost Element Accounting Transaction Codes
	Transaction Code	Description
	OKB2	Automatic Cost Element Creation
	OKB3	Create Batch Input Session for Automatic Cost Element Creation
	KA06	Create Secondary Cost Elements
	KA01	Create Primary Cost Elements
	KSAZ	Overhead Costing Sheet
	KALA	Activate Reconciliation Ledger
	OBYB	Maintain Automatic Account Assignments for the Reconciliation Ledger
	OK13	Number Ranges for Reconciliation Ledger Activity
Table 13	Cost Center Accounting Transaction Codes
	Transaction Code	Description
	KSH2	Cost Center Standard Hirearchy
	OKE5	Profit Center Accounting Settings for the Controlling Area
	KCH2	Profit Center Standard Hierarchy
	KE59	Create Dummy Profit Center
	OKA2	Cost Center Categories
Table 13	Cost Center Accounting Transaction Codes (Continued)
	Transaction Code	Description
	OKEG	Cost Center Time Dependency Fields
	KS01	Create Cost Center
	KK01	Statistical Key Figures
	OKE1	Activity Types Time Dependency Fields
	KL01	Activity Types
	KCAU	Assessment Receiver Types
	KSW1	Periodic Repostings
	KSV1	Distributions
	KSU1	Assessments
	KP97	Copy Plan Data
	KPU1	Planning Revaluation
	KP65	Cost Planning Layout
	KP34	Planning Profiles
	OKB9	Cost Element Automatic Account Assignment
Table 14	Internal Orders Transaction Code
	Transaction Code	Description
	OKO6	Settlement Structure
	OKEU	Origin Structure
	OKO7	Settlement Profile
	SNUM	Settlement Document Number Ranges
	OKOS	Internal Order Planning Profile
	OKOB	Budget Profile
	OKOC	Availability Control
	OK14	Budget Manager Maintenance
	OPTK	Exempt Cost Elements for Availability Control
	KANK	Planning Number Ranges
	OK11	Maintain Number Ranges for Planning and Budgeting Objects
	KOT2	Order Status Management
	KOV2	Transaction Groups
	OK02	Status Profile
	BS52	Authorization keys for Status Management
	KOT2	Order Types
Table 15	Profitability Analysis Transaction Codes
	Transaction Code	Description
	KEA0	Operating Concern Maintenance
	KE4K	Derivation Table
	KE04	Create Derivation Structures
	KE05	Change Derivation Structures
	KE07	Create Derivation Rules
	KE08	Change Derivation Rules
	KE41	Assign Condition Types to Value Fields
	KE4M	Map SD Quantity Fields to CO-PA Quantity Value Fields
	KE4W	Reset (Zero out) Value Fields
	KEI1	CO-PA Settlement Structure
	KEU1	Create Cost Center to CO-PA Assessment
	KEF1	Planning Revaluations
	KE14	Create Planning Layouts
	KP34	Planning Profiles
	KE4D	External Data Transfer Data Structures
	KE4Z	External Data Transfer Assignment Groups
	KE4E	Map External Data Transfer Fields to Characteristic and Value Fields
	KEN2	CO-PA Planning Number Ranges
	KEKK	Assign Controlling Area to Operating Concern
	KEN1	CO-PA Actual Data Number Ranges
	KER1	Report Line Structures
	KE34	Create Forms
	KE31	Create Report
	KE3I	Create Transports
Table 16	Profit Center Accounting Transaction Codes
	Transaction Code	Description
	1KE1	Analyze Basic Settings
	0KE4	Update Settings
	ORK1	Profit Center Time-Based Fields
	1KEB	Fast Assignment
	0KEM	Sales Order Substitution
	OKEL	Activate Sales Order Substitution
	1KE4	Assignment Monitor
	1KEF	Control Parameters for Actual Data Transfer
	GCBX	Actual Document Types
	GB02	Number Range Assignments
	OKB9	Assign Revenue Elements
	3KEH	Assign Additional Balance Sheet and P&L Accounts to PCA
	2KET	Activate Balance Carry Forward for PCA
	OKEQ	Maintain Versions
	GCBA	Plan Document Types
	GP41	Plan Parameters
Table 17	Profit Center Accounting Transaction Codes
	Transaction Code	Description
	OITA	Investment Profile
	OIP1	IM Plan Profile
	OIB1	Budget Profile
	OIT8	Budget Categories
	OIT5	Assign Actual Values to Budget Categories
	OK11	Number Ranges