AC530 - Actual Costing - Material Ledger

AC530 Actual Actual costing/Mat costing/Material erial Ledger

AC530

Release 470 04/11/2006

AC530 Ac Actu tual al c o st in ing/ g/Mater Material ial Le Ledg dg er

Actual Costing / Material Ledger

SAP SA P AG AG 200 2003 3 © SAP AG©2003

 SAP R/3 Enterprise  2003/Q4  Material number 50063840

Copyright

Copyri ght 2004 2004 SAP AG. All righ ts reserved. reserved. No part of this p ublication may be reproduced reproduced or t ransmit ransmit ted in any f orm or fo r any purpose without the express express permission of SAP SAP AG. The The info rmation cont ained herein herein may m ay be chang changed ed withou t prior notice.

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Course Prerequisites

 Cost and r evenue evenue element element accounti acco unti ng

Co st Planni Plan nin ng  AC505 Pro d uc t Cost (recommended) interrelationship s  Basic know ledge of the interrelationship and value value flows in cont rolling

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Target Group

 Participants: 

Members Members of th e project team



SAP consultants



Partners

 Length: Length: 3 days days

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Note: program. They are only complete when are not designed designed for a self-study program.  The course materials are not supplemented by the instructor‘s explanations. explanations. In your materials, you have room to note down this additional information.  It is possible, that there is not enough time in the course to perform all of the exercises. The exercises consist of additional examples to those covered in this course. Participants can also use these exercises after the course to consolidate what they have learned.

Course Overview

Contents:  Course Goal  Course Objectives  Table Table of Contents  Course Overview Diagram  Main Business Scenario

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Course Goals

This cour se will prepare you to:  Configure Configur e and and use the Actual Cost Cost ing

func tion in the Mate Material rial Ledger.  Revaluate inventories of raw materials,

semifinished semifinished pro ducts, and fin ished products at actual actual cost.  Anal An alyze yze ac a c tu al c osts os ts us ing in g the th e actu ac tual al c ost os t

compon co mponent ent split sp lit in CO-PC CO-PC or CO-PA. CO-PA.

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Topic Objectives At the th e con c onc c lusi lu si o n o f th t h is c our ou r se, yo y o u w i l l be be able to: 

Explain the capabilities and limitations of traditional inventory valuation method s with out the material material ledger.



Understand the pur pose and design of the material material ledger.



Explain ho w pric e differences differences of materials can be included in th e inv entory value of produc ts in whic h those materials materials were used.



Explain the concepts of actual costi ng, periodic un it price, and and actual cost c ompon ent split i n SAP R/3 R/3.



Perform Perform the posting s for the period-end clos e in th e material ledger, includin g revaluation revaluation of the inventor ies with actual actual prices.



Understand ho w the material material ledger is i ntegrated with other SAP applications, particularly MM, FI, and CO-PA.



Use special functi ons such as alternative alternative valuation run opti ons and the distribution of con sumption variances. variances.

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Course Content

Introduction Unit 1

Course Overview

Unit 5

Unit 2

Fundamentals of Material Valuation

Structured Value Chains

Unit 6

Perio Perio d-End d-End Close

Unit 7

Special Functions

Unit 8

Summary

Unit 3 Unit 4

Desig Desig n and Purpos e of the Material Ledger Recordi Recordi ng Busi ness Transactions

App Ap p end i x © SAP AG 2003

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Course Overview

AC530 Act Ac t u al Cos Co s t i n g /Mater /Mat erii al L edg ed g er Fundamentals Fundamentals of Material Material Valuatio Valuation n Design Design and Purpose of the Materia Materiall L edger Recording Business Business Tra Transactions nsactions Structured Value Value Chains Chains Perio Period-E d-End nd Close in Actu al Costi Costi ng Special Functions

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Business Busin ess Scenario Scenario Resu Result lt (FI) (FI)

Result (CO-PA) (CO-PA)

Cost Centers

Cost Center: Act iv it y Label Type

Cost Center: Recording

Production

Stock Accounts

Demo CD Production Orders

Act iv it y Type

CD Label

CD Blank Blan k

External External Procur ement ement

Cost Elements © SAP AG 2001

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Main Business B usiness Scena Scenario rio

 IDES IDES management management has decided d ecided to implement impl ement

SAP's SAP's actual costing f unction unct ion to b e able able to calculate the variances variances of flu ctuating raw material material prices and internal internal production for the fin ished ished products (CD (CD production ). You want to know the true actual actual prices of your finished products and analyze analyze them with the actual cost c omponent split.  You have been temporarily temporarily assign ed to the pr oject

team team to participate p articipate in the imp lementation lementation and assist in making any required changes.  Once the system is live, you wi ll be one of the

primary users of actual actual cost ing in the multilevel CD production process. © SAP AG 2001

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Fundamentals of o f Material Material Valuation

Contents:  Overview of Material Valuatio Valuation n Strategies without witho ut the Material Material Ledger. Ledger.  Standard Standard cost acco unting and variances.

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Fundamentals Funda mentals of Material Material Valua aluatio tion: n: Unit Objecti Objecti ves

At the th e con c on c lusi lu sio o n of th is un i t, yo y o u w i l l be be able to:  Explain Explain the possib ilities and and l imitations of the

price controls Standard Standard pric e and Moving average price.  Explain the value value flow of standard c osts and

differences diff erences in the R/3 R/3 System System without witho ut using u sing actual costin g in the Material Material Ledger.

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Course Overview


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Fundamentals Fundamenta ls of Mate Material rial Valua Valuatio tion: n: Busi Business ness Scena Scenario rio

 To begin, you wil l review several several basic

material material valuation valuation pr incip les without t he use of actual co sting in the Material Material Ledger.  You w ill r ecapitulate the advantages advantages and

disadvantages of the price contr ol techniques standard p rice (S Price) Price) and moving movi ng average pri ce (V Pric Pric e), e), as currently used in your company.

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Valuation Strategies without the Material Ledger

Materi Material al Master

Price control

Moving average average price (V Price):

Standard price (S Price): - Consta Constant nt - Recommende Recommended d for finished and semi-finished semi-finished produc ts and raw materials (all material types)

- Adjusted with every every receipt receipt - Only recommen recommends ds for raw materials and materials materials pr ocured externally © SAP AG 2001

materials in the SAP system (raw materials, semi-finished products and finished products) essentially depends on the price control that is set for the respective material in the material master.

 The valuation of

 With moving average price control (V), a new material price is calculated after every receipt.

The price is an average value calculated from the total inventory value and the total quantity of the material in stock.  If the valuation of goods movements takes place at the standard the standard price (S), (S) , this price remains

constant for at least one period . The standard price is typically the result of a standard cost estimate for estimate for the material.  The main difference between both valuation procedures is that the moving average price (V)

represents the current delivered price, while the standard price (S) is based on planned values and does not account for any actual prices. Differences between the planned price and the actual prices are not assigned to the material stock in Financial Accounting, but are collected on a price difference account. With the use of the moving average price (V), the material stock in Financial Accounting should reflect the actual prices of a material.

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 The differences between both of these procedures are further explained through the use of

posting examples in the following slides.

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Posting Example: Example: Mov oving ing Average Price I Pr o c ed u r e 1 B eg i n n i n g In v en t o r y : 10 100 Pc at 2.00 2 Go o d s Rec ei p t : 100 Pc at 3.00 3 In v o i c e Rec ei p t : 100 Pc at 4.00 4 Go o d s Is s u e: 150 Pc at 3.00

St o c k 1

200

2

300

3

100

St o c k

St o c k Val u e

V Pr i c e

100

200

2.00

200

500

2.50

200

600

3.00

50

150

3.00

GR/IR A c c o u n t

Stock coverage 450 4

If the invoi ce receipt receipt i s for 100 pieces, the stock coverage is 200 pieces all difference differences s -> stock

3

300

Raw Raw Mat. Cons Cons umptio n 4

450

300

2

Vendor

ok

400

3

© SAP AG 2001

 The example above demonstrates how the material stock value and material price can mirror the

actual prices of a material with a valuation at the moving the moving average price (V).  With the scenario of invoice receipt after goods receipt, the GR/IR account is charged with the

goods receipt amount (300.00) as an offsetting entry to the inventory posting during goods receipt. receipt.  The GR/IR clearing account is settled at the purchase price during invoice receipt, and the

vendor account is updated at invoice at invoice price (400.00).  During both receipt postings (goods receipt and invoice receipt), the moving average price (V)

in the material master is adjusted (2.00 to 2.5 0 to 3.00 UNI).  If a goods issue occurs now, this is valuated with the current moving average price (3.00 UNI).  The moving average price (V) is therefore, more useful if you want your material stock values

and material prices to reflect the most up-to-date data.

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Posting Example: Example: Mov oving ing Average Price II Pr o c ed u r e

St o c k

St o c k Val u e

V Pr i c e

1 B eg i n n i n g In v en t o r y :

100

200

2,00

2 Go o d s Rec ei p t :

100 Pc at 3.00

200

500

2.50

3 Go o d s Is s u e:

150 Pc at 2.50

50

125

2.50

4 In v o i c e Rec ei p t :

100 Pc at 4.00

50

175

3.50

stock shortage stock 1

200

2

300

4

50

3

375

Pric e difference: 4

50

With a delayed invoice receipt of 4 100 100 PC the stock shortage is 50 Pieces Pieces price diff erences erences despite moving average pric e Raw Raw Mat. Cons Cons umptio n 3

375

GR/IR GR/IR Accoun t 300

300

2

Vendor 400

4

© SAP AG 2001

 In certain cases the cases the moving average price price (V) (V) in the material master can lead to price

difference postings.  The main disadvantage of using the moving average price is that the price used to valuate a

material consumption is almost completely dependent on the time at which the goods issue is posted in the system. If, for example, an invoice receipt is posted for an externally procured material after a goods issue was entered, that invoice value is not reflected in the value v alue of the material issued. For this reason, the issued material is not valuated at its actual procurement cost.  This case of stock shortage is illustrated in the posting example above. The invoice receipt (4)

in this example is first posted after the material material was already issued (3). After a subsequent system-internal stock coverage check, the price difference of 100.00 is only partially debited to the material (50.00). The rest (50.00) flows into a price difference account.

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Posting Example: Example: Mov oving ing Average Price Price II III Op er at i o n

St o c k

Beg i n n i n g In v en t o r y

St o c k Val u e 100

Go o d s Rec ei p t s : 100 Pc at 2.20

200

Go o d s Rec ei p t s : 100 Pc at 2.40

300

Go o d s Is s u e: 200 Pc at 2.20 100 In v o i c e R ec ei p t s : 100 Pc at 3.00

100

In v o i c e R ec ei p t s : 100 Pc at 3.00

100

? 80 in stock 220 ? 60 in stock

200

V Pr i c e 2.00

420

2.10

660

2.20 2.20

300

3.00

360

3.60

stock coverage When multiple invoice receipts are delayed there is a dangerr of incorrect valua dange valuation! tion!

Even tho ugh all receipts between between 2.00 and 3.00 were valuated!

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 In particular, the moving average price ( V) can lead to unrealistic material prices in cases of multilevel

production or when there are variances that do not appear immediately. immediately. Such unrealistic prices occur, occur, for example, when, in the context of stock coverage, where a subsequent adjustment to material stock takes place due to an incorrect base quantity being used.  In the current period, there are a number of goods receipts for receipts for a material that are valuated with the

Moving average price (V).  Afterwards, a goods issue occurs for 200 units of this material  Only then are the invoice receipts for the goods receipts above posted, so that in both cases, the invoice

price varies from the purchase order order price.  Because there is stock coverage at the time of invoice receipt in both cases (stock quantity is at least as

large as the invoice quantity) , the price variances of all invoices invoices are completely adjusted to stock. stock. The existing stock quantity is adjusted with a variance of 140 DM.  This results in a valuation of the remaining material stock and material consumption at an

unrealistically high price (3.60).

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Characteristics Cha racteristics o f Price Contr Control ol V

Moving Average Price Price

+ + +

-

The stock v alue is adjus ted each each t ime good s are received received Real-time Real-time price fluctu ations are posted to the stock Price differences only occur in exceptional circumstances

Price fluctuatio ns can not be adjusted to the fini shed produ cts of hig her l evels evels (S-P (S-Price). Only recommended for raw materials or materials materials pro cured externally (real-time (real-time price for goods r eceipt eceipt s known) False False entries with s evere consequences (compoun ded errors) Danger Danger of in correct v aluatio ns when invoi ce receipt is delayed delayed

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 The illustrated situation demonstrates how the decision to use the moving average price (V) to have your

material stock values and material prices reflect the most up-to-date data can be a mistaken one.  For this reason, SAP recommends only using the moving average price (V) for material valuation of raw

materials and materials and trading goods, as the delivered prices for these are usually known close to the time of the goods receipt.  For materials produced in-house, such as semi-finished and finished products there is a great risk that,

at period-end closing, a large number of variances from order settlements (follow-up costs) are posted to a relatively small stock which can lead to either price variances or faulty valuations.  A further disadvantage of the moving average price (V) is that incorrect entries (i.e. typing errors

during posting) that are not noticed, can lead to an unrealistic stock value. Subsequent goods issues are then valuated with these incorrect prices ( compound errors). errors).

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Posting Posti ng Example: Example: Sta Standard ndard Price Price Op er at i o n

St o c k

St o c k Val u e

St an d ar d Pr i c e

1 St ar t i n g Po s i t i o n :

100

200

2.00

2 Go o d s Rec ei p t s : 10 100 Pc at 2.40

200

400

2.00

3 In v o i c e Rec ei p t s : 10 1 00 Pc at 2.20

200

400

2.00

stock 1

200

2

200

GR/IR GR/IR Accoun t 3

Pric e difference: 2

40

20

240

240

2

Vendor 3

220

3

© SAP AG 2001

price:  The following applies to valuations at the standard price: All stock postings take place at standard price Variances are posted to price difference accounts. Variances are updated. Price changes can be observed and monitored.  If a material has standard price control, the value of the material is calculated with the standard

price. For subsequent goods movements or invoice rec eipts where the price varies from the standard price, the differences are posted to a price difference account.  The following situation is illustrated above. A goods receipt posting with a price of (2.40) that is not the same as the standard price (2.00) leads to price variances that are carried on a price difference account (+40.-). The subsequent invoice receipt with a varying price (2.20) is also not posted to material stock; instead, the variance is written to the price difference accou nt (20.00).

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Characteristics Cha racteristics o f Price Contr Control ol S

Standard Price

+ Al l sts t ock oc k pos p os ti ng s take t ake plac p lac e at st and ard pr ic e + Prices remain constant fo r at least least one period (e.g. orders)-> + Price fluctu ations do n ot credit/debit th e cost objects (e.g. consistent controlling with the standard price as benchmark

+ Calculation of the standard price with cost component splits + Recomm Recomm ended for all m aterial aterial types -

Price differences can not be subsequently adj usted to the ending inventories or t he consumed products (sales, (sales, production with drawals) drawals) © SAP AG 2001

 If the material valuation takes place at standard price, all goods movements are valuated with the same

price The standard price control control makes consistent controlling of the production process possible; variances within production are transparent. The use of a periodic price is particularly recommended for periodic controlling. controlling.  The standard price can also be used as a benchmark by benchmark by which you can measure different measure different methods of

production, or production, or compare the contribution margins of a material in different market segments in Profitability Analysis (CO-PA).  One disadvantage of standard price control is that the variances or price differences cannot be

allocated to the subsequent production levels. levels . This becomes increasingly problematic with each additional production production level in multilevel production. In this case, real-time cost controlling for the finished product cannot be guaranteed.

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Period-End Pe riod-End Close Close : Valua Valuation tion Problems Finished Goods Raw Material I

Distribution of Price Differences?

Actual Prices?

Valuation period

Ending Inventory Raw Materials

Raw material II © SAP AG 2001

 While the danger exists of an incorrect inco rrect valuation being carried out with the moving average

price, both valuation strategies lead to variances, the assignment of which causes problems, particularly at period-end. The material stock value does not reflect the current procurement costs, as variances from the standard price are collected in a price difference account in Financial Accounting and do not, therefore lead to a correction of the material stock account.  With multilevel production, the variances can no longer be assigned to the products that should carry them. The assignment of these price differences to the ending inventories of raw materials, semi-finished products and finished products is just as impossible as a corresponding assignment to the sold the sold or discontinued goods.

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Standard Sta ndard Cost Accountin Acc ounting g Variances Variances Result (CO-PA) (CO-PA) Var i an c e c at eg o r i es

Cost Centers

Cost Center

Production

Order

(FI) (FI)

Pr i c e d i f f er en c e ac c o u n t

Stock Accounts

S price

Act iv ity Type

Order Cost Center

=

Resu Result lt) Result (FI) (FI

S price

Act iv ity Type

V price External External Procur ement ement

Cost Elements © SAP AG 2001

 With a multilevel production structure, variances can appear on different objects.  With external procurement, variances appear as a result of a change in the market and vendor prices.  





Inflation scenarios can particularly cause significant variances. The variances of internal production can arise in the area of cost responsibility (cost centers) or in the area of production (variances from cost objects, such as production orders). Because these standard cost accounting variances cannot be posted to the material stock, they are posted as price differences to Profitability Analysis. Analysis. Even though they can be divided into different variance Analysis, they cannot, however, be categories (price variances, quantity variances, etc.) in Profitability Analysis, they assigned to their corresponding products. In Financial Accounting, these variance categories correspond to the balance of a price difference account that, from an external accounting point of view, cannot be proportionally allocated to ending (assets) or consumption (period inventory (assets) or consumption (period expense). Standard cost accounting can be advantageous in that it enables y ou to carry out a consistent and efficient controlling of the production procedures by comparing the current actual prices with their respective standard prices.

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Fundamentals Fundame ntals of Material Material Va Valuation: luation: Summa Summary ry

You are now able to:  Explain Explain the possib ilities and and l imitations of the

price controls Standard Standard pric e and Moving average price.  Explain the value value flow of standard c osts and

differences diff erences in the R/3 R/3 System System without witho ut using u sing actual costin g in the Material Material Ledger.

© SAP AG 2001

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Design De sign and Purpo Purpose se of the Material Material Ledger

Contents:  Concept and Valuation Valuation App roaches of the Material Ledger. Ledg er.  Concept of Actual Cost Cost ing.

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Desig De sig n and Purpo Purpo se of th e Ma Material terial Ledger: Ledger: Unit Objecti Objecti ves

At the th e con c on c lusi lu sio o n of th is un it , you yo u w i l l be b e able ab le to: t o: Describe the co ncept and design of th e  Describe material ledger.  Describ Describ e and and co nfigure nfigur e the currency cur rency and valuation setting s in the t he material material ledger. ledger.  Explain the conc ept of actual actual costin g in the material ledger.

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Course Overview


© SAP AG 2003

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Design De sign and Purpo Purpose se of the Material Material Ledger: Ledger: Busi Business ness Scena Scenario rio

 You will no w look at the basic settin settings gs for the

materia materiall ledger ledger in Customizing. Think about which whic h valuations in th e material material ledger ledger you want to update, and and how they t hey interact with your custo mizing mizing settings in other modules. modules.  You will then think about the conc ept of actual actual

costing costi ng as provid ed by the material material ledger. ledger.

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Concept and Valuatio Valuation n App roaches of t he Material Material Ledger: Topic Objectives

At the th e co c o nc lusi lu si on of th is top to p ic, ic , you yo u wil wi l l be be able to:  Describ Describe e different multip le-cur le-currency rency scenarios and ho w they are updated in the material ledger.  Describe Describe dif ferent mult iple-valuation iple-valuation

scenarios and ho w they are updated in the material ledger.  Describ Describe e how the valuation appro aches in

the material material ledger are con figured, and configure them.

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Concept of o f the Material Material Ledger Mat Mat Wage Wage Dep OH

Act Ac t ual ua l Cos Co s t i ng

Trans Tr ans p arenc ar enc y

With possible inventory revaluation using actual prices

of value-added value-added process

An aly si s o f act ac t ual co st component split

Material Ma terial Ledger Inventory

Multiple Currencies

Multiple ulti ple Valuatio aluatio n

Translation using his toric al exchange exchange rates rates

Transfer prices

Group

Legal

Prof it Center

© SAP AG 2001

ledger is a tool that collects data for materials that have master data stored in a material  The material ledger is master. The material ledger uses this data to calculate calculate prices for the valuation of of these materials. The material ledger is the basis of actual costing and enables inventory to be valuated in up to three currencies and/or valuations.  As a subsidiary ledger for materials, materials, the material ledger is the prerequisite for multiple valuation of

material inventories. Without the material ledger, the inventory values of materials managed on a value basis are updated in only one currency (company code currency). With With the material ledger, the inventory inventory values can be carried in two additional currencies in the R/3 System. This is realized by updating all goods movements in up to three currencies/valuations in the material ledger. The values are translated into foreign currency amounts at historical exchange rates (at the time of the posting). The material ledger can thus provide businesses located in high-inflation countries with additional information on their inventories in a hard currency. This reveals the influence of inflation on inventories.  The actual costing function takes the periodic values collected and automatically calculates new

inventory values and valuation prices independently of each other in the different currencies and valuations.

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Materia ateriall Ledger: Valuation Assign ment

2 0 e p y y h e y t i n t h c n n e e i n g C u r r r b e u s e d u n t i n t o o A c c c a n n n c i a a l n e n t a n o m p o F i n c

Material Ledger (Valuation Area) 10 Local Currency 30 Group Currency UNI 40 Hard Hard Curr ency USD

Cu rrency Currency Translation Translati on

Cost Management (Cont (Cont rolling roll ing Area) Area)

Financial Financial Accou nting (Company Code) 10 Local Currency

10 Local Currency

30 Group Currency UNI 40 Hard Hard Curr ency USD

30 Group Currency UNI

© SAP AG 2001

 When monetary amounts are transferred between different components of the R/3 System, integration is

achieved by means of the currency type. type. The currency type is a key that describes a currency amount regarding the role of the currency in the system (such as the currency of the company code) and – if you are using the multiple valuation function – the valuation approach on which the amount is based (legal valuation, group valuation, or profit center valuation).  In Customizing, you specify which currency types are used separately in the different applications. It is important to make sure that the settings in Financial Accounting, Controlling, and Material Ledger harmonize with each other.  If you want to use currency types that types that are defined in Financial Accounting, Accounting, set the Crcy type indicator in FI. In this case the currency types are taken from Financial Accounting automatically. In the standard system, this setting is covered by material ledger type 0000. If you want to use a combination of the currency types in Controlling and the currency types in Financial Accounting, set the Crcy type indicator in FI and the Crcy type indicator in CO. In this case you must check the settings manually. ensure integration of information information between Materials Materials Management, Management, Financial  Recommendation: To ensure Accounting, and Controlling, Controlling, specify the the currency type of the group currency as the company code currency.  If you want to use other currency types, set the Manual indicator and choose an individual value. You can enter additional currency types beyond the currency type for the company code currency (10).

(C) SAP AG

AC530

3-7

Mul ultiple tiple Currencies and Valuations Valuations

Currency

Company cod Company e code currency

Group currency

Hard currency

Valuation Legal

10

30

Group

11

31

Profit center

12

32

40

© SAP AG 2001

 A total of three fields for currencies/valuations are available.  If you want to use only the functions for multiple currencies and not those for multiple valuation, the

currency type simply represents a currency amount. amount. Such currency types end with a zero.  If you want to use the functions for multiple currencies and multiple and multiple valuations (for example, for intercompany transfer prices), the currency type also contains information regarding the valuation on which an amount is based.  The graphic illustrates this:  Currency type 10 is defined as the legal valuation in the currency of the company code (the local currency).  Currency type 31 is a different currency, which is based on a valuation for the corporate group (to eliminate internal profits).  Currency type 32 uses the same currency as currency type 31 but is based on profit center valuation. Internal transfers of goods and services between profit centers are valuated with a price for management purposes.  For more information on multiple valuation, see the course AC650 Tranfser Prices.

(C) SAP AG

AC530

3-8

Actt u al Cost Ac Co st in g in t he Mat eri erial al Ledg L edg er: To Top p ic Obj ect iv es

At the th e co c o nc lusi lu si on of th is top to p ic, ic , you yo u wil wi l l be be able to:  Describ Describe e the concept of actu al costing.  Explain the dif ference between between singlesin gle-

level level and and mult ilevel product prod uction ion scenarios.

© SAP AG 2001

(C) SAP AG

AC530

3-9

Levels in the Production Produc tion Process Proc ess Co s t Cen t er s

Cost Center

Cost Center

Act iv it y Type

Act iv it y Type

Co s t Obj ect s

In v ent o r y

Level 3 Order

Level 2

Order

Level 1 External Procurement © SAP AG 2001

 Actual Costing/Material Ledger uses the terms single-level and multilevel. procurement. Material procurement is not  The material ledger focuses on materials and their procurement.

restricted to external procurement but also includes internal procurement (production, company transfer, and so on).  The term single-level always refers to an individual material and its procurement process. This means that all values and quantities that arise during the procurement of the material are collected on the basis of that single level.  The above example shows three single levels: levels: one for external procurement and two for internal production.

(C) SAP AG

AC530

3-10

Preliminary Valuation Valuation Price Pric e Cost Cente Centerr Accounting Cost Objec Objectt Controlling

Cost Center

Act iv it y Type

Material Ledger

Mat Mat Wage Wage Dep OH

Order

Standard Price

Mat Mat Wage Wage Dep OH

Cost Center

Act iv it y Type

Order

Standard Price

Actu Ac tual alal cost co ststss Actu Ac tual cost co PPrelimi reliminary naryValuation Valuation Standard Price

External Procurement © SAP AG 2001

costing, all materials are valuated with a preliminary periodic unit price. price. This  When you use actual costing, price must remain constant during a given period.  This price can be a price calculated in a standard cost estimate with a cost component split (standard price), a manual price, price, or an actual price from the previous period. period.  Like the standard price, this price has the advantage that a closed standard cost accounting system can be implemented without the problem of price fluctuations preventing cost controlling of the production process.

(C) SAP AG

AC530

3-11

Updating Single-Level Variances Cost Cente Centerr Accounting Cost Objec Objectt Controlling

Material Ledger Inven Inventory tory Price Dif. Dif.

Cost Center

Act iv it y Type

Order

Inven Inventory tory Price Dif. Dif.

Cost Center

Act iv it y Type

Order

Inventor y Price Dif. Dif.

Inventory Price Dif.


 Variances arise during the period for this preliminary valuation price (or standard price). account and updates them separately for  The material ledger posts these variances to a price difference account and

each material. Single-level variances are all variances incurred for a material for the direct procurement of that material.  With raw materials, these variances are usually caused by price fluctuations in external procurement from vendors.  For semifinished and finished products, single-level variances are usually caused by internal cost fluctuations in production that are determined when the order is settled.  Single-level variances do not include the price differences of material from lower levels of production. For example, price variances in the procurement of raw materials are not included in order settlement because the raw materials are assigned assigned to the order with their preliminary preliminary valuation.

(C) SAP AG

AC530

3-12

Single-Level Material Material Price Pric e Determinatio Determination n Cost Cente Centerr Accounting Cost Objec Objectt Controlling

Material Ledger Ending Inv. Inv. Price Dif. Dif.

Cost Center

Act iv it y Type

Order

Ending Inv. Price rice Dif. Dif.

Cost Center

Act iv it y Type

Order

Ending Inv. Inv. Price Dif. Dif.

Ending Inv. Inv. Price Dif. Dif.


 At the end of the period, you can use the functions for single-level price determination to assign the

variances recorded for each material. This enables the cumulative price differences to be assigned proportionally to the ending inventory quantity and the material consumption of consumption of the period.  The inventory can be revaluated with the actual price of the period (the periodic unit price). Price differences allocated to consumption remain on the price difference account at this point.  When you settle an order, the system allocates the price differences that arise during the production process to the materials.

(C) SAP AG

AC530

3-13

Mul til tilevel evel Material Material Price Determin Determination ation Cost Cente Centerr Accounting Cost Objec Objectt Controlling

Material Ledger Ending Inv. Inv. Price Dif. Dif.

Cost Center

Act iv it y Type

Order

Periodic Unit Price Ending Inv. Price Dif. Dif.

Cost Center

Act iv it y Type

Order

Periodic Unit Price

Ending Inv. Inv. Price rice Dif. Dif.

Ending Inv. Inv. Price rice Dif. Dif.

External Procurement Periodic Periodic Unit Price © SAP AG 2001

 Multilevel material price determination can also extrapolate the variances that flowed into higher

structure. levels of the production process using a multilevel actual quantity structure.  This quantity structure, which can be thought of as a type of actual BOM, tells the system which materials were used to manufacture which higher-level products. The prices of finished products can then be calculated accordingly on the basis of the historical costs.  As a result, price differences (such as for raw materials) can be rolled up to the semifinished products and then to the finished products.  When you complete multilevel material price determination you can see the actual prices of the materials (raw materials, semifinished products, and finished products) at the end of the period. These actual prices reflect the prices actually incurred for the output actually produced or procured during the period.  As an option, you can revaluate your products or raw materials with these actual prices.  This procedure enables you to use actual costing as a supplement to your standard cost system in parallel, since the values from your standard cost system (cost (cost centers, orders) are not changed by by the revaluation.

(C) SAP AG

AC530

3-14

Anal An alyz yzin ing g the t he Ac Actt u al Cos Co s t Comp Co mpo o ne nent nt Sp Spll it Cost Cen Center ter Accounting Cost Objec Objectt Controlling

Material Ledger Mat wage dep OH

Cost Center

Act iv it y Type

Order Mat Mat wage wage d ep OH

Mat wage Af A GKZ

Cost Center

Act iv it y Type

Order Mat ´wag

dep OH

Actu Ac tual alal cost co ststss Actu Ac tual cost co Preliminary Preliminary valuation valuation


4.6C you can have the system calculate an actual cost component split for all periodic unit  In Release 4.6C you prices. This enables you to to compare the cost components of of the standard prices with the the cost components of the actual costs.  Analysis at the level of cost components makes it clear what caused the cost fluctuations. For example, you can see how much of the cost of your finished product was incurred by labor, material, and external processing.

(C) SAP AG

AC530

3-15

Actu Ac tu al Co st of Sale Sales s

Actt ual Co Ac Cos s t o f Sales i n Pro Proff i t ab abii li t y Anal A nal ys i s analysis  Contribution margin analysis Actu tu al c os t s b ro roken ken do down wn i n to co cost st co mp mpon on ent ents s  Ac  Plan-actual variances Qu an t i t y s o ld : Revenue: :

1,000 p c $100,000 Plan

Act A ctual ual

Var . %

Var . (A (A b s .)

Material cos ts Material Production costs Variable Va riable labor labor costs Process costs Material-overhead Materia Ma teriall overhe overhead ad

50.000 50 000 4.000 4000 4.000 4000 10.000 10 000 5.000 5000

45.000 45 000 5.000 5000 4.500 4500 7.000 7000 5.500 5500

50 .00000 -10 .00000 - 500 30 .00000 - 500

10 % - 25 % - 13 % 3300% - 10 %

Contribution margin I

27.000 27 000

33.000 33 000

6.000 6000

22 %

Fixed labor labor costs co sts Fixed Fi xed production costs

10.000 10 000 7.000 7000

10.000 10 000 7.000 7000

0 0

0% 0%

Contribution margin II

10.000 10 000

16.000 16 000

6,000 6000

60 %

© SAP AG 2001

CO-PA. This enables you to  You can use material ledger data for contribution margin analysis in CO-PA. determine the actual cost of goods manufactured for the products sold.  If you are using CO-PA, you must assign the actual cost component split to value fields in profitability analysis and revaluate the invoices or settled orders. For more information, see the unit Extended Customizing Customizing and CO-PA Integration Integration .

(C) SAP AG

AC530

3-16

Design De sign and Purpose of the Mate Material rial Ledger: Ledger: Summary

You are now able to:  Describ Describ e the concept and stru cture ctur e of the

material ledger.  Describ Describ e and and configu c onfigure re the currency and

valuation setting s in the t he material material ledger. ledger.  Explain the concept of mult ilevel actual actual

costin g in the material material ledger.

© SAP AG 2001

(C) SAP AG

AC530

3-17

Record Re cord ing Business Transaction Transaction s

Contents:  Material Price Determination Control  Preliminary Valuation  Cost Compon Compon ents  Price Differences

Rate Differences  Exchang e Rate

© SAP AG 2001

(C) SAP AG

AC530

4-1

Record Re cord ing Business Transa Transaction ction s: Unit Objectives Objectives

At the th e con c on c lusi lu sio o n of th is un i t, yo y o u w i l l be be able to:  Explain the reportin g of simple business transactions in the material material ledger.  Describ Describe e the Customizing Customizing s ettings etting s

required required for cost c omponents.  Explain the treatment treatment of price and

exchange rate differences differences for materials materials in the material ledger.

© SAP AG 2001

(C) SAP AG

AC530

4-2

Course Overview


© SAP AG 2003

(C) SAP AG

AC530

4-3

Record Re cord ing Busi Busi ness Tra Transactio nsactio ns: Busi Business ness Sce Scenario nario

 You review the concept of price pric e determination determination

in the material ledger.  You familiarize yourself wit h the pric e

determination structure display.  You analyse actual values values in the cost

component compo nent view of t he material material ledger.  For your first bus iness transaction, you learn learn

how to t o analyse price and exchange rate differences diff erences using th e material material ledger. ledger.

© SAP AG 2001

(C) SAP AG

AC530

4-4

Price Determination Control in the Material Ledger

Price control

S

V

price determin.

2 Transaction-based

St an d ar d Pr i c e

Mov i n g av er ag e p r i c e

(as without th e Material Material Ledger)

3 Single/multilevel

Mat . Wag e Dep r. r. OH.

Standard Standard Price Actu Ac tual co ssttiin ngg tu al cos cost Actu Ac tu al cos co sstt tual cost component split

cannot be changed manually

© SAP AG 2001

determination functions in the same way as the system without  Setting 2 for transaction-based price determination functions the material ledger, but has the added advantage of allowing you to carry standard prices and moving average prices in multiple currencies or valuations . This option is possible for materials with the price control S or V.  With single-/multilevel material price determination (indicator 3 in the material master), a standard price is used for preliminary valuation, and a periodic a periodic unit price is calculated for material valuation of the closed period. This option is only possible for materials with the price control indicator S, and is only recommended when you want to use actual costing in combination with multiple currencies or valuations.  With single/-multilevel material price determination, the periodic unit price is updated for informational purposes and can be used for material valuation of the closed period.

(C) SAP AG

AC530

4-5

Customizing: Materia ateriall Price Price Dete Determination rmination Table view

Edit

Goto

Selection criter ia

Utilities

System

Help

Change Change View: View: Activation of Material Material Ledger Ledger

Val uation are a Company code

ML acti ve

Price determination

1000

1000

6000

6000

3

6100

6000

3

9000

9000

Price determination mandatory

Produ ctive Start-up pr od uc ti v e start st art up , chang ch ange e th e pri ce deter d etermi mi nat io n for f or mat erial s t hat  Aft er th e prod should be included in actual costing from 2 (default) (default) to 3!  Price control is t hen automatically changed changed to S  This funct ion can lead to a revaluation. © SAP AG 2001

 During activation of the material ledger for your valuation area in Customizing, you can specify what

type of material price determination is defaulted for the materials in this valuation area during the creation of a material.  You also have the option af specifying whether this price determination indicator is a mandatory setting that can not be changed. startup: the system automatically sets the indicator  Warning: This default is ignored during production startup: 2 in the material master of all existing materials.  If you want to change the indicator for a material retroactively, choose Accounting -> Controlling -> Actual Costing/Material Ledger -> Tools -> Change Price Determination.

(C) SAP AG

AC530

4-6

Price Determina Determination tion 2: Tra Transaction nsaction based

Moving average average price Mat.Wage WageDepr.OH. Depr. OH.

Perio Perio d 1

Perio Perio d 2

Standard Price Mat .Wag Wag eDepr. OH.

© SAP AG 2001

 Transaction-based material price determination (control 2) corresponds to the functionality without

multiple (up to three) currencies or valuations. the material ledger, with the advantage that you can use multiple (up  Price control 2 allows you to set the price control to standard price or price or moving average price. price.  If a material has price control 2, it cannot be included in actual costing. This means that a periodic unit price will price will not be not be calculated for these materials. In the same way, no actual cost component split will be generated.  The advantages and disadvantages of the standard price and moving average price have already been explained in the "Fundamentals of Material Valuation" unit.

(C) SAP AG

AC530

4-7

Price Determina Determination tion 3: Pre Preliminary liminary Valuation Valuation

Periodic Unit Price Mat. Mat .Wage Wag eDepr.OH. Depr. OH.

Perio Perio d 1 Pr el i m i n ar y Val u at i o n : Cu m u l at ed Di f f er en c es :

100 MXN /Un i t 500 MXN

Perio Period rio d 2 Pr el i m i n ar y Val u at i o n :

110 MXN /Un .

© SAP AG 2001

3 (recommended for actual costing), all valuation For materials with price determination control 3 (recommended relevant transactions are always first always first valuated valuated with the standard price.  During a period, the Material Ledger collects data for all activities that relate to the valuation of materials. The preliminary valuation price (standard price) must remain constant during a period. It can no longer be changed as soon as data in this period has been entered into the material ledger.  In the above example, the preliminary valuation price for the material is 100 MXN for Period 1, and 110 MXN for Period 2.  In addition to this, the differences between the preliminary valuation price and the actual price are recorded, per material, for material, for each posted activity. You can see the differences that were recorded during the period as soon as they are entered.  In the above example, all activities in Period 1 were recorded with a preliminary valuation price of 100 MXN per unit. During the period, various price differences were entered forming a cumulative difference of 500 MXN for all receipts. receipts. This difference could be be the result of higher procurement procurement prices being collected than originally originally planned for the the period. costing and the calculation of the actual cost  Materials with price control 3 can be included in actual costing and component split. split.

(C) SAP AG

AC530

4-8

Material ledger Disp lay

Material Mate rial Ledger: Price Det. Structur e Label for CD

Material Valuation Area

ACT-LCD-## 6000

Period Currency

01.2001 Company code curr ency

View:

Price Det. Structure

Price control Pric e determi determi n. Period Pe riod status: Currencies Period

Mexico MXN

Further data

Quantity Preliminary Valuation

Beginning Inventory Receipts Cumulative inventory Consumption Ending inventory

Price Diff.

Exch. rate diff.

Price

500

2500

0

0

5,00

2000

500

30

0

26,50

2500

0

0

5,00

0

0

0

0

0

500

2500

0

0

5,00

500

© SAP AG 2003

 In the material ledger display "Material Price determination", you can see all valuation-relevant

transactions for a material.  In addition to branching between the various value records, you records, you can also look at the data for various periods.  The screen contains general data for the material and a price determination display that shows the various quantities and values of recorded transactions in the columns and a listing of the business transactions grouped into various categories in the lines. lines.  This display gives you an overview of the value-added-relevant data for data for each material, period and value record, one which you could not receive without the use of the material ledger.

(C) SAP AG

AC530

4-9

Materia ateriall Ledger: Ca Categories tegories Carried fo rward Carried from previous period

Display Material Ledger Data Label for CD


ACT-LCD-## 6000

Period Currency


View:


Mexico

Documents for receipts that determine prices

MXN

Further data


Price Diff.

Exch. rate diff.

Price

“”” Beginning Inventory

0

0

Receipts

0

0

Cumulative inventory

0

0Documents0for

Consumption

0

0

Ending inventory

0

0

0 0 0 Beginning Inventory 0 + All receipts 0 0 0

0

0

0

0

0

0

0

all issues

Cumulative inventory - all issues issues

© SAP AG 2003

 The line display of the material ledger data groups various business transactions into categories. inventory is transferred from the the previous period. Postings  The information for the category Beginning inventory

from the previous period are also displayed  In the second category, all receipts such as goods receipts or invoice receipts for this period are displayed . receipts/consumption can be used to separately display specific goods  The optional category Other receipts/consumption receipts or goods issues that should be included in the calculation of the periodic unit price.  The cumulative inventory (statistical) is the total of the beginning inventory and the collected receipts. This is used during period-end closing to distribute price differences proportionally to the remaining inventory and consumption  All goods issues are displayed in the category Consumption. Goods issues are always valuated with the preliminary valuation price. price.  The values of the category Ending inventory are calculated by subtracting the values of consumption from the values of the cumulative inventory. inventory. The values of the ending inventory inventory are transferred into the the inventory of the next period through the period closing program. category Beginning inventory

(C) SAP AG

AC530

4-10

Materia ateriall Ledger: Price De Det. t. Structur e

Display Material Ledger Data

Av erag e Averag actual price for category

Real-time v aluation Real-time with preliminary Label for CD valuation valua tion price


ACT-LCD-## 6000

Period Currency


View:


Mexico

MXN

Further data


Price Diff.

Exch. rate diff.

Price

Beginning Inventory

500

2500

0

0

5,00

Receipts

500

2500

500

0

6,00

500

2500

500

0

6,00

1000

5000

500

0

5,50

0

0

0

0

5000

0

0

5,00

Purchase order Cumulative inventory Consumption Ending inventory

© SAP AG 2003

0 1000

Differences between preliminary valuation price and actual price

Exchange rate differences between GR and IR

ledger display are explained in in the above example. The following  The columns of the material ledger transactions were entered for a material that was valuated with a standard price of MXN 5:  In this period the beginning inventory was 500 pieces, valuated at a standard price of 5.  One or more postings appear under the category Receipts that were preliminarily valuated in real-time with the standard price. The result of a preliminary valuation of the receipts for 500 units is MXN 2500 (500 units * MXN 5).  However, the actual costs for the receipts was MXN 3000, so a price difference of MXN 500 has been recorded. An exchange rate difference (a s a result of exchange rate fluctuations) has not appeared in the valuation view.  In the Price column, a statistically calculated actual price is displayed for the first 4 (price-forming) categories that contain receipts or stocks with quantity entries. This is provided (at first) for informational purposes and is not updated by the system. In the Price column, you can see that an average price of MXN 6.00 ((MXN 2500 + MXN 500) / 500 units) has been incurred for the category Receipts. In the Cumulative inventory column you can see that the average procurement price taking into account the the beginning inventory inventory equals MXN 5.50.  These price differences are not assigned to consumption and ending inventory (at first). For this reason, the ending inventory inventory is valuated with the preliminary preliminary price of MXN 5.

(C) SAP AG

AC530

4-11

Interactive Informatio n Cat egor y

Qu ant it y

Beg in nin g In v ent or y

PrelimVal

Price dif.

Price

20

2000

Receipt s

100

10000

1000

110

Cumu lat i v e i nven t or y

170

17000

3400

120

Materi Ma terial al Ledger

30

3000

100

140

1,000

100

Pric e dete determi rmi nation structure

Con su mpt io n Endin g inv ent o r y

100

Materi Material al Master MM

Document Header

Period

Standard Standard Cost Estimate CO CO--

Material Ledger Document Overview

Document Items

PCP

Source Document PP

CO

Acco Ac co unti un ti ng Documents MM

COCO-

CO

FI

© SAP AG 2001

 You can go to the views displayed above from the material ledger display of the price determination

structure:  You can go to the accounting view of the material master.  You can display an existing standard cost estimate.  You can go to the material ledger document and, using variable display variants (ABAP List Viewer), branch to:  Header information for the material ledger document  The source document (i.e. document for goods receipt)  Various material ledger document items  Additional accounting documents (CO-PA, FI, CO...)  In addition, you can look at the business transactions in the different value records and records and branch to

subsequent or previous periods. previous periods.

(C) SAP AG

AC530

4-12

Materia ateriall Ledger: Ledger: Cost Component Component View

Material Mate rial pri ce analysi analysi s Label for CD


ACT-LCD-## 6000

Period Currency


Value: View:

Mexico

M at . Wag e Dep r . OH. MXN

Act ual v alue alu e - Lev el & l ow er lev el-f ixed/v ix ed/v ariab le Cost component-main cost component split

Further data

Quantity

Value:

Material

Wages

Machine Costs Overheads

Beginning inventory

500

2500

2500

0

0

0

Receipts

500

30 3000

3000

0

0

0

5500

0

0

0

0

0

0

0

0

0

0

0

Cumulative inventory 1000 55 5 500 Cost component d ata as alternative for: Consumption 0 0 Actu Ac tual al v alu e Preliminary valuation 1000 5000 Ending inventory differences Pric e differences Exchange rate diff erences erences © SAP AG 2003

split per material from the menu in the  You can analyze the results of an actual cost component split per Material Ledger. In addition to this, you can transfer the results of the actual cost component split to COPA in the same way as you can for a cost component split for planned costs.  You can analyze the results of the cost component split according to different criteria in the Material

Ledger display. For example, you can view view the fixed or variable To do this you can branch to fixed or variable parts of the cost component split, or analyze the differences per material movement, between an actual cost component split and cost component split for planned costs.

(C) SAP AG

AC530

4-13

Actt iv at atin in g Co C o st Com Comp p o n ent St Strr u ct ctu u r es Customizing: Ac Planning: Define cost component structures CO- Product Cost Planning: COPCP Cost component Primary cost structure

active

Desc ription

component split

...

....

ML

IDES Mexico COCOOM

MX

Primary costs IDES Mexico

n As si gn men t: Org anizat an izatii on al u ni ts - Cost Co st co mp. mp . str s tr uc ture tu re P l a Assi

= u a l t c A

Company code

6000

Plant

++++

Costing vari ant

Main cost comp. split

ML

++++

CO- Mate COMaterial rial Ledger: Ledger: Activate actual actual cost compon ent split PC-PC Activate actual cost ACT Valu Valuat ation ion Area Area Compa Company ny cod codee component split

6000

Auxiliary cost comp. split

MX

COCOPA

6000

© SAP AG 2001

 The settings for cost components splits can be used for both actual and standard cost estimates. Material

cost estimates are created in Product Cost Planning (CO-PC-PCP). You (CO-PC-PCP). You can display cost components in the standard cost estimate, analyse them using the information system and transfer them to Profitability Analysis (CO-PA).  The cost component is arranged according to the results of the cost estimate, for example raw materials,

material overheads, services, set up costs, machine costs, personnel costs, production costs and other costs. costing in the Material Ledger you can activate a actual cost component  If you have activated actual costing in split per valuation area. If you have defined several variants for the cost estimate, whereby you update the standard price, you must have allowed marking of standard cost estimates. The component structure for actual cost component splits is generated using the selected costing variant. If you want to start using the Material Ledger, set the „activate actual costing“ indicator in this step.  If you are already using the Material Ledger and you want to start using actual cost component splits, splits,

set the „activate actual cost component split“ indicator indicator in this step. You must then execute report "MLCCS_STARTUP" , which will create the data needed for the actual cost component split.  If you are already using actual cost components splits and change from price control 2 to 3, all existing

cost component split data will be deleted! (C) SAP AG

AC530

4-14

Customizing: Assigning Cost Components Components Product Cost Planning: Planning: Define cost component structures Cost component structure

Primary cost component split

active

ML

Desc ription

IDES Mexico

Assi As si gn men t: Cost Co st elemen ele men t -> c o mpon mp on ent Cost component Ch. Accts structure

From cost element

To cost element Component

Description

ML

INT

400000

409000

10

Material component

ML

INT

420000

434000

20

Wages

ML

INT

650000

655000

40

Overheads

...

INT

...

...

..

...

M at at Wag e Dep r. r. OH.

© SAP AG 2001

splits provide a structure that arrangs costs of an activity type, a process or a material  Cost component splits provide according to cost components. In particular, a cost component split allows you to see the value added by each manufacturing level during production.  Cost component splits can either be a cost component split for cost of goods sold, or a primary cost

component split (with transfer of original split costs from the cost center activity prices). the cost component component split, individual cost cost elements must be assigned to  In order to be able to generate the the various cost components.

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Goods Issue



ACT-LCD-## 6000

Period Currency


Sales Sale s order stock Price control Period status

Standard Standard pr ice Quantities and values entered

Standard Sta ndard pric e

MXN 5

Mexico MXN

Consumption an and d ending inventory are valuated at at standard st andard price

Further data

Quantity Preliminary valuation

Price diff.

Exch. rate diff.

Price

Beginning inventory

500

2500

0

0

5,00

Receipts

500

2500

500

0

6,00

0

0

0

0

5000

500

0

5,50

50

250

0

0

5,00

950

4750

0

0

5,00

Other receipts/consumption Cumulative inventory Consumption Ending inventory

0 1000

© SAP AG 2003

 Goods issues during a period are always valuated with the preliminary valuation price, regardless of

the prices with which the receipts were valuated.  Goods issues are displayed in the category Consumption.  The cumulative inventory minus all consumptions equals the ending inventory that is also valuated with the preliminary valuation price during a period.

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Topic: Exchange Ra Rate te Diffe Differences rences

 Logistics Invoice Verification  Calculation Calculation of exc hange rate differences differences

© SAP AG 2001

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AC530

4-17

Logistics Invoice Verification

Goods Receipt Receipt

Materi Ma terial al Ledger In v oi ce ce Rec ei p t

L o g i s t i cs cs In v oi ce ce Ver i fifi ca cat io io n

factual factually ly and mathe mathemat matica icallycorre llycorrect? ct?

Invoice Invoice documents documents updated updated in Materials Managem Managem ent and Ac co un ting ti ng

b e used with the Material Material Ledger Must be Differences Differences to conventional invoice v erification

Invoice verification across company codes Distributed scenarios o f p urch ur ch ase or ders der s / deli d eliv v eries eri es i n o ne t rans act io n  Any nu mb er of Manual invo ice reduction Manual Total-base Total-based d invoice reductio n Supports transfer prices © SAP AG 2001

Verification. The "old" invoice  When using the Material Ledger, you must use Logistics Invoice Verification. verification does not work here.  Differences to conventional invoice verification  Logistics invoice verification was developed, because some requirements of invoice verification (i.e. MM and FI on separate systems) are not realizable with conventional invoice verification for technical reasons.  New functions are only available available in logistics invoice invoice verification, including including multiple selection, selection, manual invoice reduction, total-based invoice reduction, background processing, invoices with instalment conditions and cross company code invoice verification. Logistics invoice verification will replace the conventionainvoice conventionainvoice verification at some point in the future.

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Price Differences

 Initial nit ial entr entry y of stoc k balances balances (external (external v alue posted)

 Transfers (standard price in other plants)

e s i r h a g . u . o . r h t

 External procurement (order / invoi ce valu value) e)

 Subcontracting (order / invoi ce valu value) e)

 In-house producti prod uction on (settlement of orders)

 Material Debits/ Credits

(MR22)

© SAP AG 2001

 Price differences stored in the Material Ledger can occur in the cases mentioned above.

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Exchange Exchang e Rate Rate Differences

Goods receipts f or pu rchase order, if...

exchange rate of the good s The exchange receipt and invo ice ic e receipt are differe dif ferent nt (standard) (standard) e s i r h a g . u . o . r h t

exchange hange rate rate at at the t he point po int o f The exc invoice invoi ce receipt receipt is d ifferent ifferent to t he planned pl anned exchange exch ange rate (P) (P) Prerequisite: Actt i v at Ac atii o n o f ex exc c han hang g e rat r ate e di d i ff er erenc enc e entry in Customizing for Logisti cs Invoi nvoice ce Verific Verific ation

© SAP AG 2001

 In order to enter exchange rate differences, you must activate the entry for exchange rate differences

in Customizing for Materials Management / Invoice Verification.  When the treatment of exchange rate differences is activated, the exchange rate valid at the time the invoice is posted is posted is compared with one of the following: the time of the goods receipt  the exchange rate valid at the time rate (type P). This exchange exchange rate is usually  the exchange rate which is set as a planned exchange rate (type used for planning purposes in Controlling. Controlling. It is used to simulate and document currency fluctuations.

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Example: Calcu Calculation lation o f Exchange Exchang e Rate Rate Differences USD

M Type Exchange rate valid at IR MXN 100 = USD 12

480 IR price

2. "True" Pric e diff erence erence:: USD 120

Planned exch. rate drop

Exch. rate diff ere erence: nce: USD 80(4000* 0.12) 0.12) - (4000* 0.10) 0.10)

1.

P Type

(MXN 1000 * 0.12)

3. 360

Plan exch. rate valid at IR MXN 100 = USD 10

Price difference: USD 40

GR price

(- Exch. rate diff. + "True" pr ice difference) difference)

3000

4000 IR price

GR price

MXN

© SAP AG 2001

 This example explains how exchange rate differences are calculated using exchange rate type P. The

numbers are based on the optional exercise in the course exercises for participants.  Explanation:  1) The price difference actually translated (the "true" price difference) is USD 120 (MXN 1000 price difference * 0.12).  2) The invoice receipt of MXN 4000 shows a price difference of MXN 1000. Since the planned exchange rate takes into account a fall in the exchange rate (MXN 100 drops from USD 12.00 to USD 10), an exchange rate difference of USD 80 is reported in the material ledger: (4000 * 0.12) - (4000 * 0.10) or USD 480 - USD 400 = USD 80.  3) The "true" price difference less the exchange rate difference results in a remaining price difference of USD 40 (-USD 80 + USD 120). 120). This price difference is reported in the material ledger.

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Record Re cord ing Business Transa Transaction ction s: Summa Summary ry

You are now able to:  Explain the reportin g of simple business

transactions in the material material ledger.  Describ Describe e the Customizing setting s required for

cost c omponents. omponents.  Explain the treatment of pr ice and exchange

rate differences for materials materials in the material material ledger.

© SAP AG 2001

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Recording Business Transactions: Exercises Transactions: Exercises Unit: Recording Business Transactions

At the conclusion of these exercises, you will be able to: •

Call up valuation-relevant information for the individual materials using the material ledger data display

•

Determine which currencies and valuations are used in the SAP modules relevant to material valuation

•

Explain how the material ledger calculates price differences

•

Use the material ledger to analyze analyz e actual prices for externally procured materials and explain the cause of variances between actual and preliminary valuation prices

Your company has activated actual costing. You are responsible for the production of a demo CD that your company sends to customers. In this context, check the settings in your system that are relevant to valuation, and then carry out external procurement for one of the two input materials: the labels for the CDs.

1

Display of Inventory Quantities and Values Check the current inventory situation of the labels for your demo CD (material ACT-LCD##) in the Mexico City plant (plant 6000). To do so, call up the material ledger data for data for the label. To check the settings for the labels, also call up the material master and look for the valuation data in the two additional currencies. Current inventory:

PC

Company code currency: Standard price (S Price): Current inventory value:

MXN MXN

Group currency: currency : Standard price (S Price): Inventory value:

EUR EUR

Hard currency: currency : Standard price (S Price): Inventory value:

USD USD

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2

Currency Settings Check which currency and valuation settings have been made in Customizing under the relevant components FI; CO and ML (Note: the entry "0" appears as an empty/ blank field): Financial Accounting: Settings in Company Code 6000 Currency

Valuation

Currency Type

1. Local currency 2. Local currency 3. Local currency Controlling: Settings in Controlling Area 6000 Currency

Currency Type

Currency setting Material Ledger: Currency Types in Material Ledger Type 0000 Currency type from FI: ____

Currency type from CO: ____

Manual: ____

Which items are selected? What does this setting mean in the material ledger? ________________________________________________________ ____________________________ __________________________________________ ______________ ________________________________________________________ ____________________________ __________________________________________ ______________ ________________________________________________________ ____________________________ __________________________________________ ______________ ________________________________________________________ ____________________________ __________________________________________ ______________

3

External procurement with price differences 3-1

Creation of an order 3-1-1

(C) SAP AG

Order an additional 500 labels from the vendor 1096 Fabricas Mixtli. Use the following data: Purchase order type

Standard purchase order

Vendor

1096 / Fabricas Mixtli S.A.

Purchasing organization

IDES Mexico

Purchasing group

Compras Mexico DF

Company code

IDES Mexico

Material

ACT-LCD-## (CD label)

Quantity

500 pc

Plant

6000 Mexico City AC530

4-24

Storage location:

(C) SAP AG

0001

AC530

4-25

3-1-2

Confirm your entries. The system automatically determines a purchase order price. What is the price? PO price:

3-1-3

MXN

Per

PC

How is this price determined? _____________________________________________________ _________________________ _______________________________ ___ Save your purchase order and write down the purchase order number. Purchase order number: _____________________________________________ _________________________ ____________________

3-2

Goods Receipt and Price Differences 3-2-1

3-2-2

Post the goods receipt for your order (most of the data is taken from your order automatically): Enter your order number and select the the OK button in your item line. Posting date

Today's date

Purchase order number

See previous exercise

Column/field OK

Select

Plant

6000

Storage location

0001

Quantity

As in the purchase order

Movement type

101

Then look at the data in the material ledger display (in company code currency). How did these price differences occur? Reason: _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___

3-2-3

Call up the material ledger document for the goods receipt, and branch from there to the original source document. What type of document are you branching to? Document type: ____________________________________________________ _________________________ ___________________________

3-2-4

Call up the accounting document. Amount of price differences:

MXN

Price difference account number: Price difference account text: Return to the material price analysis.

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4

Cost Component for Price (Actual Cost Component Split and Cost Component Split for Planned Costs) 4-1

Actual Cost Component Split 4-1-1

structure view of the material price You are in the Price the Price determination structure view analysis for your labels. Write down the following value s for your goods receipt: Receipt quantity:

PC

Preliminary valuation: + Price differences:

MXN +.....................................................MXN

Total value: 4-1-2

MXN

Component view. Enter the following settings: Go to the Cost Component view. Period:

current

Currency/valuation:

Company code currency

Value:

Actual value; level + lower level, fixed + variable

View:

Cost component / main cost component split

The value for your goods receipt is under the Receipts category. What is the actual value of the receipts for the period? _________________________ Under what cost component is this value? ____________________________ _________________________ ___ 4-1-3

Change the value setting from the actual value to the preliminary valuation price. What is the preliminary valuation price of the receipts for the period? _____________________________________________________ _________________________ ________________________________ ____ Under what cost component is this value? ____________________________ _________________________ ___

4-1-4

Change the value setting to differences. What is difference between the preliminary and actual value for the receipts? _____________________________________________________ _________________________ _______________________________ ___

4-2

Planned Costs 4-2-1

Call up the current standard cost estimate for your label using the following parameters (Product Cost Planning: Material cost estimate with quantity structure) for you ACY-LCD-## label Costing variant:

(C) SAP AG

PPC1 AC530

4-27

(C) SAP AG

Costing version:

1

Valid from:

Today

AC530

4-28

4-2-2

Go to the Costs Tab and set the reference figure to the current actual inventory quantity (user input). Call up the Cost component view. view. What plan value was calculated for the current inventory? __________________________ _________________________ _ Under what cost component is this value? __________________________ _________________________ _ Change to the Itemization Itemization view. In which cost element is the value updated? __________________________ _________________________ _

4-3

Customizing for Cost Components 4-3-1

Go to Configure Automatic Postings in Postings in Customizing for Materials Management. Management. The account for the goods movements relating to the order is determined using the consumption cost element, a s for the cost estimate. The consumption cost element is found using operation GBB (offsetting GBB (offsetting entry for inventory posting) under modification VBR (consumption). Check which account or cost element was selected for the consumption of accounts . Plant 6000 is assigned to your label in the INT chart of accounts. valuation modification 0001, 0001 , and your label is assigned to valuation class 3000. 3000. Which account is updated for operation GBB/VBR and material ACTLCD-##? Debit: _____________________ Credit: _____________________

4-3-2

Go to Basic to Basic Settings for Material Cost Estimates in Estimates in Customizing for Product Cost Controlling. Maintain the cost component structures. Which cost component structure is used in company code 6000 for the standard cost estimate? Cost component structure for main cost component split: Cost component structure for auxiliary cost component split:

4-3-3

Go to Customizing for Actual Costing/Material Ledger , and check whether the actual cost component split is activated for the following valuation areas: Valuation Area 6000:

Yes / No

Valuation Area 6100:

Yes / No

Which cost component structure is used for the actual cost component split? Is it possible to select a specific cost component split for the actual cost component split? _____________________________________________________ _________________________ _______________________________ ___ (C) SAP AG

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_____________________________________________________ _________________________ _______________________________ ___

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4-3-4

Return to the maintenance of cost component structures. Display the components for the structure ML Component Name Component 10: Component 20: Component 30: Component 40: Component 100: Component 200: Component 300:

4-3-5

Go to the A ssignment cost component - cost element interval function function for the ML structure. To which cost component compo nent is the cost element for the consumption of your labels (see above) directed? _____________________________________________________ _________________________ _______________________________ ___

4-3-6

To summarize the exercise for cost element determination, complete the following table: Operation (MM)

Account/ Cost Element

Cost Component

GBB/VBR

5

Consumption at Cost Center 5-1

Your cost center 1000 withdraws 1000 withdraws 50 labels for labels for test purposes. Post this goods issue: issue: Material:

ACT-LCD-##

Posting date

Today's date

Movement type

201

Plant

6000

Storage location

0001

Receiver cost center

1000

Quantity

50 PC

Post. 5-2

Look at this goods issue in company code currency in the material ledger display (view: price determination structure). With what price was the goods issue posted? Price:

(C) SAP AG

MXN / PC

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Optional Exercises

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Unit: Recording Business Transactions Optional: Invoice Verification and Exchange Rate Differences At the conclusion of these exercises, you will be able to:

1

•

Use Logistics Invoice Verification

•

Explain how the system calculates exchange rate differences

Invoice verification 1-1

You receive the invoice for the order of your labels. What type of invoice verification do you select, and why? Reason: _______________________________________________________ ____________________________ ___________________________

1-2

Carry out invoice verification with the following data: Invoice Date:

Today

Posting date:

Today

Amount:

MXN 4,000

Purchase order:

Your purchase order number

Confirm. At item level, correct the default amount (order value) to MXN 4,000 and select the item to "Posting OK" Post the invoice. (Ignore invoice. (Ignore the possible warning messages about excee ding the tolerances by entering over them) 1-3

After saving the accounting document, call up the material price analysis in the material ledger again (view: price determination structure, company currency). Write down the price differences that were posted with the invoice receipt. Invoice price differences:

2

MXN

Exchange Rate Differences 2-1

In the material ledger display, change the display currency to hard currency. Look at the material ledger document for invoice verification. Have price/exchange rate differences occurred? Price differences:

(C) SAP AG

USD AC530

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Exchange rate differences:

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USD

AC530

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2-2

In Customizing (Materials Management / Logistics Invoice Verification), look at the settings for the calculation of exchange rate differences. Are exchange rate differences calculated in in company code 6000? If so, which exchange rate type is used? ________________________________________________________ ____________________________ ___________________________________ _______ ________________________________________________________ ____________________________ ___________________________________ _______ ________________________________________________________ ____________________________ ___________________________________ _______ ________________________________________________________ ____________________________ ___________________________________ _______

2-3

2-4

In Financial Accounting, check the exchange rates used to calculate exchange rate differences. (Tip: use the Position pushbutton). Exchange Rate Type

From Currency

To Currency

Current type M

MXN 100

USD

Current type P

MXN 100

USD

To calculate exchange rate differences, the system translates the values of the transaction currency (Mexican pesos) into the hard currency. To understand the calculation of exchange rate differences, fill out the following table: Currency

Invoice Value

Mexican pesos

MXN

USD for type M

USD

USD for type P

USD

Exchange rate difference in USD:

USD

The difference between the two values in USD is the exchange rate difference that the system calculates on the basis of the settings. You can see this difference in the material ledger display. 2-5

The total value in hard currency is arrived at using the following logic: The accounting value of the material cannot be changed by the calculation of exchange rate differences, because only a fictional exchange rate (the planned exchange rate) is used. For this reason, the calculated exchange rate differences must be canceled out by the inverse value. This is done by making a price difference posting. The total value of the Price differences column results from two values: The inverse value for the exchange rate differences and the "true" price differences that are posted with invoice receipt. Now, calculate the "true" price differences: Price differences in MXN

MXN

Exchange rate (type M)

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“True” price difference in USD:

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AC530

USD

4-37

2-6

Hence, the sum of the "true" price differences and the inverse (negative) value of the exchange rate differences is the value that can be seen in the Price differences column: Inverse value of the exchange rate differences

USD

"True" price differences

USD

Total price differences

USD

This amount can be seen in hard currency as price differences for the invoice receipt in the material ledger display and the accounting documents for invoice receipt. This posting logic makes it possible to separate price and exchange rate differences and assign them to the areas of responsibility.

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Recording Business Transactions: Solutions Unit: Recording Business Transactions

The following menu paths are used in the exercises and solutions: ACT/ML: Accounting Controlling Product Cost Controlling Actual Costing/Material Ledger IMG:

1

Tools Customizing Reference IMG

IMG

Edit Project

SAP

Display of Inventory Quantities and Values Material Ledger Display ACT/ML: Material Ledger Material:

ACT-LCD-##

Plant:

6000

Material price analysis

Period/Year: Current period/current year Goto

Material Master Current inventory:

500 PC

Company code currency:

Mexican pesos (MXN)

Standard price (S Price):

MXN 5

Current inventory value:

MXN 2500

Group currency:

EUR


EUR 0.60

Inventory value:

EUR 300

Hard currency:

USD


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AC530

USD 0.60

4-39

Inventory value:

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USD 300

AC530

4-40

2

Currency Settings You learn how to make currency settings in the Implementation Guide. Company code settings: IMG: Code

Financial Accounting Financial Accounting Global Settings Multiple Currencies Define Additional Local Currencies

Company

Select company code 6000 Financial Accounting: Settings in Company Code 6000

(C) SAP AG

Currency

Valuation

1. L o c al c u rr e n c y

MXN

Legal val.

10

2. L o c al c u rr e n c y

EUR

Legal val.

30

3. L o c al c u rr e

USD

Legal val.

40

AC530

Currency Type

4-41

n c y The valuation view “legal” is the setting “0”. Note that this character is displayed as a blank. Controlling Area Settings: IMG: Area

Controlling

General Controlling

Organization

Maintain Controlling

Maintain Controlling Area Select controlling area 6000 Go To Details Controlling: Settings in controlling area 6000 Currency Currency setting

Currency Type

EUR

30

Settings for the Material Ledger IMG: Controlling Product Cost Controlling Actual Costing / Material Ledger Assign Currency Types to Material Ledger Type Material Ledger: Currency Types in Material Ledger Type 0000 Currency type from FI: X

Currency type from CO: X

Manual: ____

With this setting, you specify that when the material ledger is activated, it copies the currency and valuation settings from Financial Acc ounting and Controlling. In addition, the material ledger checks whether the settings in these modules correspond to each other. Type 0000 has been activated for plants 6000 and 6100.

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3

External procurement with price differences 3-1

Creation of an order You create orders in Materials Management Management : Logistics Materials Management Vendor/Supplying Plant Known

Purchasing

Purchase Order

Create

Header data:

Make the following entries: Purchase order type


Vendor

1096 / Fabricas Mixtli S.A.


6000 IDES Mexico

Purchasing group

600 / Compras Mexico DF

Company code

6000 / IDES Mexico, SA de CV

Material

ACT-LCD-## (CD label)

Order quantity

500 PC

Delivery date:

Today's date

Plant

6000 Mexico City

Storage location:

0001

Item overview

3-1-2

Confirm your entries. The system automatically determines a purchase order price. PO price:

3-1-3

MXN 6

Per piece

This price is determined from a purchasing info record. Save your purchase order and write down the purchase order number. Purchase order number: ________________________________________

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3-2

Goods Receipt and Price Differences 3-2-1

Post the goods receipt for your purchase order: Logistics Materials Management Goods Movement Goods Receipt Number Known

Inventory Management For Purchase Order PO

Enter your purchase order number and confirm with enter . The system determines the following information. Check whether this information is complete and matches that of the purchase order. Complete the information as necessary (the information is in the line for the purchase order item). Posting date

Today's date



Plant

6000

Storage location

0001

Quantity


Movement type

101

Set the flag in the OK column (column to the right of the material or in item details) OK field

Select

Post. 3-2-2

Material Ledger Display: ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:

Current period/current year

Price differences: The purchase order value of the product is MXN 3000. The value at the current valuation price (S price) is MXN 2500. The difference of MXN 500 is shown in the column for price differences. 3-2-3

Calling up the source document from the material ledger document: Open the category Receipts Open the process category Purchase Order Double click on the material ledger document

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Go from the material ledger document to the source document: Goto

Source Document

The source document is the document that was created for the goods receipt. A Materials Management document.

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3-2-4

Calling up the accounting document from the material ledger document: Go from the material ledger document to the accounting document: Goto

Accounting documents Accounting document Amount of price differences:

MXN 500

Price difference account number:

231000

Price difference account text:

4

Loss from price differences external

Cost Component for Price (Actual Cost Component Split and Cost Component Split for Planned Costs) 4-1

Actual Cost Component Split 4-1-1

Data for goods receipt: ACT: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:


View: Price Det. Structure Receipt quantity:

500 PC

Preliminary valuation: + Price differences: Total value: 4-1-2

MXN 2,500 +

500 MXN MXN 3,000

Cost Components View: Cost Components Confirm Value setting: Actual value Period: Currency/valuation: Value:

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AC530

current Company code Actual value; level 4-46

+ lower level, fixed + variable View:

Actual value for periodic receipts:

Cost component / main cost component split MXN 3,000

Cost component in which the value exists: “Materials Components” 4-1-3

Value setting: Preliminary Valuation Price The preliminary value for periodic receipts MXN 2,500 equals: Cost component in which the value exists: “Materials Components”

4-1-4

Value setting: Differences The difference between the preliminary and actual value for the receipts equals: MXN 500

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4-2

Planned Costs 4-2-1

Standard cost estimate for your labels Accounting. Controlling Product Cost Controlling Product Cost Planning Material Costing Cost Estimate with Quantity Structure Display

4-2-2

Material:

ACT-LCD-##

Plant:

6000

Costing variant:

PPC1

Costing version:

1

Valid from:

Today

In the upper right section of the interface, select the tab "Costs" and and enter the quantity of the periodic inventory in the "Costs based on" field field by changing Costing Lot Size to User Entry. Call up the Cost component view. view. A planned value of MXN 5000 is displayed for the current inventory quantity of 1000 pieces. Components . This value exists in cost component 10/ Materials Components. In the "Itemization" view, you can see that the value is updated under the cost element 400000. 400000 .

4-3

Customizing for Cost Components 4-3-1

Account determination (1) IMG: Materials Management Valuation and Account Assignment Account Determination Account Determination without Wizard Configure Automatic Postings Execute and close the dialog box by canceling Click on the Account button, open the Offsetting entry for inventory posting line, Assignment Assignment button, INT chart of accounts, and scroll down to general modification VBR and valuation class 3000. The offsetting entry for the inventory posting (modification VBR) for the label is updated to account 400000 (credit and debit).

4-3-2

Maintaining the Component Structure IMG: Controlling Product Cost Controlling Product Cost Planning Basic settings for Material Costing Define Cost Component Structure

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In the Assignment dialog structure: Choose Organizational units - Cost Assignment dialog component structure The following structure is used in company code 6000:

(C) SAP AG

Cost component structure for main cost component split:

ML

Cost component structure for auxiliary cost component split:

MX

AC530

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4-3-3

Activating Actual Cost Component IMG: Controlling Product Cost Controlling Actual Costing/Material Ledger Actual Costing Activate Actual Cost Component Split The actual cost component split is activated for the following valuation areas: Valuation Area 6000:

Actual cost component split activated

Valuation Area 6100:

Actual cost component split activated

The actual cost component split uses the same structures as the standard cost estimate: ML and MX. It is not possible to use structures for actual costing that are different from product cost planning. 4-3-4

Cost component structure ML IMG: Controlling Product Cost Controlling Product Cost Planning Basic settings for Material Costing Define Cost Component Structure Select the cost component structure ML and choose the dialog structure Cost component structure → Components with Attributes Component Name

(C) SAP AG

Component 10:

Materials Components

Component 20:

Prod. Labor / Setup

Component 30:

Production Machines

Component 40:

Logistics Processes

Component 100:

Material Overhead

Component 200:

Admin + Sales Overhead

Component 300:

Other Costs

AC530

4-50

4-3-5

Cost component for material consumption In the dialog structure, double click on cost component structure, select the structure ML and choose Cost component with Attributes. Select Cost component 10 , then choose → Assignment Assignment : Cost Component - Cost Element Interval The cost element 400000, created for the consumption of raw materials, is assigned to cost component 10 Material Component Components. s.

4-3-6

(C) SAP AG

To summarize the exercise for cost element determination, complete the following table: Operation

Account/ Cost Element

GBB/VBR

400000

AC530

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5

Consumption at Cost Center 5-1

Goods Issue Posting: Logistics Materials Management Movement Goods Issue

Inventory Management

Posting date

Goods

Today's date

Movement type

201

Plant

6000

Storage location

0001

Confirm in order to get to the next screen: Receiver cost center

1000

Material:

ACT-LCD-##

Quantity

50 PC

Post. 5-2



Material:

ACT-LCD-##

Plant:

6000

Period/Year:


View Price determination structure Open the category Consumption Open the process category Cost Center Document "### GI for Cost Center 1000". Price:

(C) SAP AG

MXN 5/pc

AC530

4-52

Solutions for Optional Exercises

(C) SAP AG

AC530

4-53

(C) SAP AG

AC530

4-54

Unit: Recording Business Transactions Optional: Exchange Rate Differences


1


IMG

Edit Project

SAP

Invoice verification 1-1

Type of invoice verification: You use logistics invoice verification because conventional invoice verification cannot be used when the material ledger is active.

1-2

Logistics Invoice Verification Logistics Materials Management Document Entry Enter Invoice

Logistics Invoice Verification

Enter the following data under Basic data data above the item lines: (Company Code)

(6000)

Invoice date

today

Posting date

today

Amount

MXN 4,000

Purchase order

Your purchase order number

At item level, correct the default amount (order value) to MXN 4,000 and select the item to "Posting OK" Ignore the warning messages generated due to the tolerance value being exceeded and post the invoice 1-3

Material Ledger Display: ACT: Material Ledger

(C) SAP AG


Material:

ACT-LCD-##

Plant:

6000 AC530

4-55

Period/Year:


Company code currency (MXN) Open the category Receipts Document "### Invoice Invoice …"

Open the process category Purchase Order

Invoice price differences:

(C) SAP AG

MXN 1,000

AC530

4-56

2-1

Price and exchange rate differences: In the material ledger display, change the display currency to hard currency (USD).

2-2

Price differences:

USD 40

Exchange rate differences:

USD 80

Checking the settings for handling exchange rate differences in the Implementation Guide: IMG: Material Management Logistics Invoice Verification Incoming Invoice Configure How Exchange Rate Differences Are Treated: Exchange rate differences are calculated at the time of the invoice receipt. The two values used for calculation are: The invoice receipt value calculated with the exchange rate valid on the day of invoice verification, and Invoice receipt value calculated with the planned exchange rate (first column: “X”) using exchange rate type P (second column: “P”)

2-3

Exchange rates: Accounting Financial Accounting General Ledger Current Settings Enter Translation Rates

Environment

(Tip: use the "Position" key or the selection function and enter data for the exchange rate type and currencies criteria to find the correct position quickly) Exchange Rate Type

From Currency

To Curr ency

Current type M

MXN 100

USD 12.0 0

Current type P

MXN 100

USD 10.0 0

Exchange rate type P, for example, is used in the planning cycle to translate the result of a standard cost estimate from controlling area currency to the company code currency. 2-4

Calculation of the exchange rate differences: Currency

Calculation/exchange rate

Invoice value

Mexican pesos (C) SAP AG

MXN 4000 AC530

4-57

USD for type M

(MXN4000) * (USD12.00/MXN100)

USD 480

USD for type P

(MXN4000) * (USD 10.00/MXN100)

USD 400

Exchange rate differenc e in USD:

(C) SAP AG

USD 80

AC530

4-58

2-5

"True" price differences: Price differences in MXN

2-6

MXN 1000

Exchange rate (type M)

MXN 100 = USD 12.00

“True” price difference in USD:

MXN1000 * (USD 12.00 /MXN100) = USD 120

Price differences: Negative value of exchange rate differences

USD 120

"True" price differences

USD 40

Price Differences

(C) SAP AG

USD (-) 80

AC530

4-59

Structur ed Value Chains Chains

Contents:  Controlling Levels and Procurement Alternatives

Scenarios  Production Scenarios  Plant Transf Transf ers, Sale Sales s and Analysi s of t he Actual Cost Component Split

© SAP AG 2001

(C) SAP AG

AC530

5-1

Structured Value Value Chains: Chains: Unit Obje Objectives ctives

At t h e co n clus cl usii on o f thi th i s unit un it,, you yo u wil w il l b e able abl e to: to :  Explain the components concept of the actual quantity structure in the material ledger.

igu re the Cont Cont rolling rolli ng areas areas fo r a  Explain and conf igure material. Carry out o ut a a product pro duct ion sc enario enario and explain th e  Carry variances disp layed in the material material ledger.  Sell Sell manufactured manuf actured prod uct s and analyse analyse the result s in CO-P CO-PA. A.

© SAP AG 2001

(C) SAP AG

AC530

5-2

Course Overview


© SAP AG 2003

(C) SAP AG

AC530

5-3

Structured Value Value Chains: Chains: Busine Business ss Scenario Scenario

 In order to stru cture the most import ant produ ction cost information, you set up differentiate differentiated d contr olling l evels for your materials materials and work with procurement alternatives.  You carry carry out p roductio n of your d emo CDs CDs with pro duct ion ord ers and and calcul ate overhead and and variances variances periodically on the releva relevant nt pro duct cost collector.  When product cost coll ectors are settled, settled, singlelevel level variances variances arise arise that that can can be displ ayed ayed in the mate materia riall ledger, ledger, but do not yet yet contain contain the varia variance nces s of lower-levels.  In addition, you become become acqua acquainte inted d with the handling of materia materiall upd ates ates th rough stock transfers transfers to other plants plants and materials. materials. © SAP AG 1999

(C) SAP AG

AC530

5-4

Controlling Leve Levels ls and Procurement Procurement Alte Alternative rnatives: s: Objectives

At th e con co n clu cl u sion si on o f thi th i s, you yo u wil w il l b e able abl e to: to : Describe th e structured reporting of quantity  Describe stru ctu res in the material material ledger. ledger.  Explain and set set the cont rolling roll ing leve l evels ls of materials.  Use the process process typ es, characteristics characteristics of controlling levels levels and procurement procurement alterna lternative tives s for the display of a structured structured value chain chain for specific specific purposes.

© SAP AG 1999

(C) SAP AG

AC530

5-5

Product Pro duct Cost Controlling: Controlling: Compone omponents nts Product Cost Planning

Cost Object Controlling

Ac tu al Cost Co stin in g/ Material Ledger

Quantity Structure: PP Master Master d ata

Preliminary Costing Simultaneous Costing

Quantity Structure: Material Movements

BOM

routing

Order

Planned costs

Material Int. OH Process Total

Actu Ac tual al costs Value structure

$ $ $ $

Final Costing Perio Perio d-End d-End Close Scrap Variances Variances

Material Ledger

Settlement

Standard Standard Price Standard Price Mat er i al

In t .

OH

Value structure Material Movements

Work in Progress

Material Material pr ices Acti Ac tivi vi ty pr ic es Process pr ices Overhead

Process

Pr o c es s

Price diff.

Material Material settlement Actu Ac tual al pr ic e Material

In t .

OH Pr o c es s

© SAP AG 2001

 Product Cost Planning is an area of Product Cost Controlling in which non-order-related cost planning

and price setting for materials are carried out. It accesses the master data of other R/3 applications, that is BOMs, routings and work centers from Production Planning, and cost centers, activity types and business processes from Overhead Overhead Cost Controlling. Controlling. The goal of Product Cost Planning Planning is to update the standard price and create a cost component split to supply basic information for other R/3 applications such as Cost Object Controlling, Profitability Analysis, and Sales and Distribution.  Cost Object Controlling offers constant and real-time controlling for the cost of goods manufactured. You can carry out lot-based or periodic cost object controlling. Standard costing is the basis of Cost Object Controlling in the R/3 system. With this, the actual quantity produced is multiplied by the standard costs per unit in order to calculate the target costs. This value is compared with the actual costs during cost analysis. analysis. If you have set price control S (standard (standard price) in the material master record for for semi-finished and finished products, this means that, in Cost Object Controlling, all materials produced are valuated with the standard standard price when they are delivered to to stock. During settlement of the the cost object, variances to this standard price are posted to Financial Accounting (price difference) and Profitability Analysis (variance categories).  The component Actual Costing / Material Ledger makes it possible to calculate a period price of the previous period. After you have determined the actual actual price you have the option option revaluating the stocks. stocks.

(C) SAP AG

AC530

5-6

Actu Ac tu al Quan Qu antt it y Str St r uc tu turr e

Materia teriall Ledge Ledger r  Order settlement, different different pr oduction scenarios receipts,  Goods / invoice receipts, different vendors

Transparency of Value-Added

FERT

HAL B 1

ROH1

HAL B 2

HAL B1 B1-1 ROH2-1

ROH1-1

ROH2-2

ROH1-2

© SAP AG 1999

 To make the most of Product Cost Controlling; it may be necessary to differentiate between the various

methods of procurement for procurement for a material. This can help you find the most cost-effective procurement method.  In addition, it may be necessary to analyze the costs of an entire value chain. chain. For this, the actual quantity and value flows for each material must be reported in a structured manner. This reporting can take place in the material ledger and offers the basis for a later rollup of the existing variances.  With this, for example, the price differences from differences from the purchase order of a raw material can be rolled up to the semi-finished and finished products in whose production the raw material was entered during the period.  In order to carry out a specific analysis of possible procurement alternatives, a structured display of procurement alternatives can be be configured in the material ledger. ledger. The level of detail of such an analysis analysis can be specified for each material. This is referred to as the controlling level of the material.

(C) SAP AG

AC530

5-7

Procurement Process f or Materia aterials ls

Output Materials Materials

Procurement Alternative

Procurement/ Production process

Version 1

Version 2

e.g. Process Process categories: - Production- Stock Stock Transfer Transfer - Purchase Purchase order - Subcontracting ubcontracting

Input Materials Materials

© SAP AG 2001

 The central element in the value chain is the procurement process. Procurement processes are used in

Product Cost Controlling to determine and show procurement costs. Procurement processes characterize the procurement transaction transaction for a material or possibly for multiple multiple materials. The system uses process categories to differentiate differentiate between the different types of of procurement. Procurement processes deal with with both internal and external procurement. procurement. Examples of procurement processes processes are sub contracting, inhouse production, stock transfers or orders. the different types of procurement or consumption of  Process categories differentiate between the different materials. There are, for example, the process categories Production or Purchase Order. The different types of procurement and consumption are handled by the system in different ways; in other words, different data is updated. The system uses this data to derive characteristics that can be used for the creation of procurement processes, procurement alternatives and consumption alternatives. the process category automatically depending on the  Upon goods movements, the the system determines the process movement type. Depending on the process category, there is a single-level or multilevel procurement process. For example, Purchase Order is a single-level procurement , and Production Production is a multilevel procurement.

(C) SAP AG

AC530

5-8

Possible Procurement / Produ Production ction Processe Processes s

Material Procurement alternative Procuremen rocurementt / production process

Hierarchy structure

Multiple procurement methods

Joint production

Cyclical production

© SAP AG 1999

alternative presents the different options for procuring a material. Procurement  A procurement alternative presents alternatives are situated hierarchically above process categories. A single procurement process can produce multiple materials materials (such as with joint production), production), while the procurement procurement alternative represents represents the production of just one material.  The procurement process for the process category Production is called production process. If the

material ledger is ledger is active with multilevel actual costing, every production order is assigned to a production process. process. If a goods receipt from an order is posted to to a material, that goods receipt is receipt is then alternative. assigned to the associated procurement alternative.  You can choose the level of detail used detail used to create the procurement alternative by defining the

Controlling level. level. Through the Controlling level, you specify for each material which of these characteristics is used for the creation of procurement alternatives or processes.

(C) SAP AG

AC530

5-9

Process Types for Procu reme rement nt

Display Material Ledger DataProcur Procureme ement nt

Process

Label for CD


ACT-LCD## 6000

Period Currency

01.2001 Purch ase order Company code curr ency MXN

Price control Period status:

Standard Standard Price

Types Mexico

Material Mate rial Transfer Postin g Production

Quantities and Values entered Subcontracting MXN 5 Price unit 100 PC

Standard Price

Transferr posting - special Transfe Quantity Preliminary Valuation inventory

Price diff.

Exch. rate diff.

Price

Beginning Beginning in ventory Stock Transfer Receipts

Procurement

Production Purchase order Stock Transfer Subcontracting

© SAP AG 2001

the process category automatically depending on the  Upon goods movements, the system determines the process movement type. Depending on the process category, there is a single-level or multilevel procurement process. For example, Purchase Order is a single-level procurement , and Production Production is a multilevel procurement. This system-internal differentiation differentiation plays a role role in actual costing.  During procurement, the system distinguishes between the process categories mentioned above and

automatically updates them in the material ledger display. Customizing for detailed information on how and under what conditions you  See the section Extended Customizing can make adjustments to this view, if necessary.

(C) SAP AG

AC530

5-10

Controll ing Leve L evell of Mate aterial rial Process category

Characteristics of the controlling level Procurement alternatives

Purchase order Plant/material Purchasing Purchasing organization/vendor organization/vendor Subcontracting Plant/material Purchasing Purchasing organization/vendor organization/vendor

Vendo Vendo r A, Vendo Vendo r B, etc. ...

Stock transfer Plant/material Withdrawal plant

Transfer Transfer postin g/ Material

Maintain ow n texts

...

Plant/material Withdrawal plant/material

Production

...

Plant/material Production p lant/planning lant/planning p lant BOM/routing Production version

... ...

© SAP AG 2003

 The level of detail for a procurement process can be determined by choosing the controlling level. The

controlling level determines the characteristics with which the procurement alternatives and alternatives and procurement processes are generated, and for which data is updated. In product cost planning (mixed costing), the controlling level determines the characteristics of the procurement alternatives that are used for calculating a mixed price. In periodic product cost controlling, you use a controlling level when creating a product cost collector or using a production process, which is to be assigned to the lowest ledger, the controlling level is used to analyze actual node of a cost object hierarchy. In the material ledger, costs is the master data display. the Plant/Material  If you have not explicitly set the controlling level, the system automatically sets the Plant/Material level. You level. You should take into account that the data volume on your computer increases if you select a higher level of detail for the controlling level. Once you have defined a controlling level, it applies to all application components. To change a controlling level, choose Edit controlling controlling level of material. Enter a plant and a material and select a controlling controlling level from the selection selection window.  You cannot change a controlling level if procurement alternatives or procurement processes are already being used for this controlling controlling level. In the display, display, a controlling level that that cannot be changed is identified by the locked padlock symbol.  In Enterprise release, the controlling level can also be changed in collective processing.

(C) SAP AG

AC530

5-11

Structur ed Value Value Added


Material Valuation area

ACT-LCD-## 6000

Period Currency


Price control Period status

Standard Standard pr ice

Mexico MXN

Quantities and values entered MXN 5

Standard Sta ndard pric e

Quantity Preliminary valuation Beginning Beginning in ventory

Price diff.

Exch. rate diff.

Price

Category

Receipts

Process category

Production Purchase order Vendo Vendo r A/ PurOrg. 1

Procurement Alternative

Vendo Vendo r B/ PurOrg. 1 ....IR..

Goods Movements, Invoice Differences

....GR... © SAP AG 2003

 In the material ledger, the detailed reporting of the quantity structure is not just used for the periodic

rollup of costs. Rather, you can break down and evaluate evaluate the information in real-time, real-time, structured according to individual aspects, in the material ledger display.  With the material ledger, the process category for goods movements is determined automatically depending on the movement type.  When working with a detailed Controlling level, every goods movement is automatically is automatically assigned to a procurement alternative. In the example above, the Controlling level Purchasing Organization/Vendor has been selected for the process process category Purchase Order. For this reason, a goods receipt is automatically assigned to the related procurement alternative (in this example: Vendor B).  The procurement alternatives are, as shown in the slide, hierarchically arranged under the process categories

(C) SAP AG

AC530

5-12

Production: Pro duction: Ob Obje jective ctives s

At th e con co n clu cl u sion si on o f thi th i s, you yo u wil w il l b e able abl e to: to :  Explain the possi ble scenarios of Cost Object Controlling.  Crea Create and confirm a cost object object and and allocate allocate overhead.  Settle a cost object object and and analyz analyze e its its effe effects cts in the material ledg er. er.

© SAP AG 1999

(C) SAP AG

AC530

5-13

Cost Object Object Controlling: Controlling: Sce Scenarios narios Order Order - Based Based Controlling

Periodic Controlling

Sales order Controlling

Work center 1

Product line lot -size orientated

Product lin e W ork center 2

Production order

W ork center 3

Wareho us e

Production order

Wareho us e

Product Cost Collector

Wareho us e

Sales Order SD

 Flexible Flexible product ion environment  High set up costs  Complete assigment of costs per order is required  Controlling per production lot required

 High production rate onment  stabil production envir onment  No/ low set set up c osts Lot-based controlling i s not required  Lot-based  Cost collection to product cost collectors  Example: Example: repetitive manufacturing manufacturing

Example: Production order,  Example: process order

 Collection of costs/revenues per sales order item, independent independent fr om production scenario  Act ual sal es an d ad min is tr ati on costs to sales order items  special direct costs fr om sales per sales order item  Monitoring of funds co mmitment  Work in progress or transport and provisions thr ough results analysis analysis

© SAP AG 2001

 Cost Object Controlling offers order and period based controlling for the cost of goods manufactured

and plants.  In order-related product cost controlling you use manufacturing orders as cost objects. The costs updated on the manufacturing order are normal analysed and settled by lot. This means that variances are calculated after the total quantity planned for production has been delivered to the warehouse.  Periodic Cost Controlling collects Controlling collects costs over a longer period of time, using a cost object, whereby debits and credits are considered for each period. In periodic product controlling, you use a product cost collector as the cost object which allows the collection of costs at production level, regardless of the production type. Regardless Regardless of whether you use order-related, order-related, process or repetitive manufacturing, manufacturing, you can update costs to the product cost collector and also analyze these periodically. You can use cost object hierarchies to create costs, that can not be directly assigned, to highler levels (cost object nodes in the hierarchy).  Make-to-order production means that materials are produced in accordance to a sales order item. Such materials are called made-to-order materials or individual requirements. In this case, the cost object is a cost and revenue bearing sales order item.

(C) SAP AG

AC530

5-14

IDE DES S Scena Scenario: rio: CD Produ roduction ction

800 PC

COST

PROD 900 PC

900 PC

PV01 PV02

50 PC

BI: 500 500 PC PC

ACT-DCD 6000

ACT-BCD ACT-B CD 6000

ACT-LCD ACT-L CD 6000

500 PC ORDER

ORDER

500 PC

Deliv 1097

500 PC

Deliv 1098

© SAP AG 2001

production scenario that will be completed in the exercises for the  This diagram shows us the planned production unit. After you have procurred the raw materials, the "slug" using two procurement alternatives, the finished product is completed.  To do this, we use a product cost collector, that uses a specific production version. In production, 100 pieces are scrapped, so that from 900 900 input materials only 800 finished CDs are produced.

(C) SAP AG

AC530

5-15

Production Scenario: Scenario: Rel elationship ationship between between Product Cost Collectors and Produ Production ction Orders Material

COCOPC

Product Cost Collector

Production process

Profit center

Name of production process

Business area: Costing variant plan Costing variant actual Costing sheet

Name of 0001 production process Pversion: PREM PPP3 COGM

Overhead key Results analysis key

000003

Variance key

000001

6000

Company code Material

ACT-DC05

Order type

RM01

Order

701737

System status FREI ABGR ANRV ABWE ABWE

Orders/PV

Production Process

6000

Plant

Heade r

Data

Trgt Act. WIP Var.

$ $ $ $

ACT-LDC- ##

Cost estimate

Pversion: 0001 0001 Production process no.

100032914 Production plant

6000 6000

Planning plant Production version

FV01

Costing lot size

Settlement rule

Characteristics

PPPPSFC

Production order 1 Production order 2 Production order 3

PKOSA © SAP AG 2003

 A product cost collector can be created independently of the production type. This means that you can

collect costs on a product cost collector during order-related production, process manufacturing and repetitive manufacturing. The assignment of the production order to the product cost collector takes place through a production production process. The system automatically generates generates the production process when the product cost collector is created. Manufacturing orders that are linked to product cost collectors collectors receive the status PCC. This status prevents costs from being posted to the production order. The status of the product cost collector is relevant for period-end closing in Cost Object Controlling.  If you are working with the Controlling level Production Version , the product cost collector is created for the characteristics material/production material/production plant/planning plant/production plant/production version. SAP recommends using this Controlling level whenever whenever you are working with production versions. Alternatively, you can also use the Controlling levels BOM/routing or production production plant/planning plant.  If you have already created a product cost collector, then the system directly generates a link to the product cost collector collector when a production order is created created for the corresponding characteristic values. The costing variant Planned that was defined in the production order is not transferred from the product cost collector, but rather continues continues to be defaulted from from the order. It can be used, if necessary, to create a temporary planned order cost estimate that cannot be saved.

(C) SAP AG

AC530

5-16

Cost Object Object Controlling: Va Value lue Flow Flow Produc t Cost Planning Planning (CO-PC-PCP) Cost Estimate

Cost Object Controlling (CO-PC-OBJ) Cost Objects

Mate Materia rial: l: ACT-D CT-DCD CDLot Lot size 100 100 pc.Price: pc.Price: MXN MXN 25 25

Mat. Proc. Prod. OH. 12 3 7 3

Material Ledger Material: ACT-D ACT-DCD# CD## #

Inventory Price diff.

Quantity: Quantity: 100 100 PC PC

25

Mat er i al

13

Pr o c es s

4

Product roduction ion 9

Price Update

Ac t ual Cost Cos t in g/ Material Ledger (CO-PC-ACT)

OH

Mat. 13

6 Prod. 9

OH5

Pr oc oc .4

Profitability Profitability Analysis (CO-PA)

5 Variance Variance c ategories

Total Material master: ACT-DCD Standard Price: 25 MXN

31

Stock -25 Variances -6 MXN

Pr i c e Qu an t i t y St r u c t u re Sc rap L o t s i ze Output price var. To t al :

0 MXN 2 MXN 2 MXN 2 MXN 0 MXN 0 MXN MXN 6 MXN

© SAP AG 2001

 For materials with price control S, the goods receipt in the warehouse takes place at the standard price

at completion of of production. Generally, this results results from a standard standard cost estimate estimate that was released. released. The cost object is credited with the quantity delivered to the warehouse multiplied by the standard price. When the goods are received, the system automatically debits the inventory account and credits the inventory change account in Financial F inancial Accounting.  The value of the total variance is posted to a price difference account in Financial Accounting during settlement. Furthermore, the value of the total variance is updated in the material ledger. At the same split is determined from the cost elements for the settlement and time the actual cost component split is registered in the material ledger.  You can settle the variance categories to costing-based Profitability Analysis (CO-PA). Only the variances calculated with target cost version 0 are relevant for settlement to Profitabiliy Profitabiliy Analysis. You settle to costing-based Profitability Profitability Analysis by variance categories and cost element groups. groups. You control the variance categories through the value fields in Profitability Analysis. Analysis.

(C) SAP AG

AC530

5-17

Production Produc tion Va Variances riances in the t he Materia Materiall Ledger:

Cost Objects Debit

Credit:

 Materia Materiall co sts: Actual quantity*standa quantity*standard rd

 Goods Rece Receipts: ipts: Credit Credit with

price

standard standard pric e

 Inte Internal rnal activity: activity: Actua Actuall quantity* quantity*pla plan n

 Work in

Progr ess-WIP ess-WIP at at actu al costs (total settlement)-WIP at target costs (period (period ic settlement)

prices (revaluation with actual prices possible) Overheads s Actual overhead overhead according to  Overhead costing sheet

 Process costs: Actual process process quantities quantities with plan prices according to pr ocess template (revaluation (revaluation wi th actual proc ess possible) Variances: Debit ebit - Goods rece receipt ipt - WIP Mat. 13

Material Ledger

Single-level Single-le vel pri ce differences Inventory

© SAP AG 2001

Price Diff .

25

Prod. 9

OH 5

Proc. 4

Cost Component Component split acc. to Act ual Costs

6

collector, immediately debit the a product cost collector, immediately  All actual postings in the system that are related to a product product cost collector. collector. Logistical functions, functions, such as goods issue postings postings and confirmations confirmations continue to be carried out with reference to manufacturing manufacturing orders (or in repetitive repetitive manufacturing: production production versions). The resulting costs are updated on the product product cost collector. You can carry out goods issues, issues, confirmations and goods goods receipts independently independently of each other. However, you can also ascertain that that activity allocations and goods issues and/or goods receipts are automatically carried out during confirmations. You make the necessary settings for this in Logistics. Logistics. You can confirm order headers or individual operations. operations. When calculating work in process in Product Cost by Period, it is best to perform confirmations at the level of operations.  The period-end closing activities of Cost Object Controlling make the following possible: regular periodic reporting, revaluation revaluation of activities at actual actual activity prices, periodic periodic allocation of overhead and process costs, as well as the calculation calculation of work and process process and the variances between target target and actual costs.  During the settlement and transfer of the calculated data to other objects and application components, single-level price differences of the material are generated in the material ledger that contain the variances of the product cost collector, but not price variances of lower levels, such as those from the raw materials entered.

(C) SAP AG

AC530

5-18

Consumption

 Sales  Transfer to Other Plants

© SAP AG 2001

(C) SAP AG

AC530

5-19

Overview Ove rview of Data Flow to Profi tability Analysis CO

CO-PA CO-

Profitability segment

Profitability Profitability Analysis Analysis

Product Cost Controlling

Overhead Management • Processes • Cost Centers • Internal Orders CO CO--OM

Cost Object CO-PC CO-

Cost and revenue element accou accou nting

FI

Standard Cost Estimate Mat .

Wag e OH Pr o c .

Revenue Discounts

SD © SAP AG 2001

 The data from sales component (SD) is one of the most important sources of information for Profitability    

Analysis. Sales data is transferred to costing-based CO-PA from two main sales order processing tasks: Creating or changing an order (optional) and Billing. Sales data is transferred to account-based CO-PA from two main sales order processing tasks: Goods issues and Billing. Costs from other areas in CO can be transferred to CO-PA periodically, using activity and template allocation, settlement and stock transfers. In addition, it is also possible to carry out manual direct account assignments from FI to CO-PA.

(C) SAP AG

AC530

5-20

Sales Sale s Order Processing Processin g

Customer

FI

4

Payment SD Process c hain Logistics

2

1

Sales Order 1

Delivery 1 .

3

1

Billing/ 1 Settlement

t

© SAP AG 2001

relating to the  Effective sales order processing requires the integrated processing of all activities relating customer. The R/3 component SD (Sales and Distribution) is the perfect instrument to do this. this. R/3 uses documents that are linked together, which are then used to start the respective workflows. The SD component begins with the processes before the actual sale and ends with the processing of the customer payment for the goods or services services purchased. Each process takes takes place using an electronic document, document, that is linked to the previous or next document.  Sales order processing begins with the creation of a sales document. document.  When the goods are delivered a delivery document is document is created, and a billing document is document is generated to invoice the customer. payment is received, the money for the order is received and you post the incoming  When the customer payment is payment in FI.  The linked document flow in the R/3 System simplifies sales order processing for both you and your customers.

(C) SAP AG

AC530

5-21

Delivery De livery and Bill ing Quantit ntity y Revenu venue e Reb at e Co S

CO-PA CO(costing based)

EC-PCA EC-

Actu Ac tual al Co st of Sales X

Acc ti ng CO--PA CO

ML

Inventory X

FI

SD Quantity Flow

1

Sales Order

2

Delivery

+ + + +

Revenue X Rebate X Receivables X

3

Billing/ Settlement

t

© SAP AG 2001

 Data is updated in CO-PA for accounting purposes at the same time that data is posted in Financial

Accounting. This means, means, the system creates corresponding corresponding line items in CO-PA, at the same time time that it creates the accounting documents for goods issue and billing, billing, Note, that a line item will be created in CO-PA for each individual cost/revenue element. The number of received line items is identical to the number of items posted in FI. At this point, no line items are created for incoming orders, as these do not result in postings to FI.  The values in account-based CO-PA are assigned to profitability segments and are saved in the cost/revenue element, specified in MM (for goods issues) or SD (billing documents). Note, that the data is only transferred to account-based CO-PA if the general ledger account in FI is defined as a cost or revenue element in CO. (for more information, see the notes for general posting logic in Controlling). document. The Billing data is automatically  A business transaction is usually ended in SD with a billing document. transferred to FI, where the Revenue and receivables postings are made at the same time.  When creating a billing document, SD document, SD calculates all revenues, sales deductions and other values (e.g standard costs) costs) using the costing sheet, and stores these values in condition types. types. These condition Analysis, so that the System can types are assigned to value fields in costing-based Profitability Analysis, automatically transfer these values to CO-PA.

(C) SAP AG

AC530

5-22

Sales Sale s of Goods Goo ds and Services Servic es

Sales Order

Act Ac t ual Item. 10

Profitability Analy An alysi si s

reven rev enue ue

Bil ling Doc/ Order Settl Settleme ement nt CO-PA CO-

ACT-DCD 600 pieces Mat. Cost Estimate

Planned Planned Cost s Manufacturing costs Mat Prod. OH Proc

CO- PC CO-

500

250

177

.300

Material Ledger © SAP AG 2001

Mat. 600

?

Prod. OH Proc. 300 100 400

 Scenarios:  The sales item is based on products from make-to-stock production. The production process delivers the

finished goods, for example example controlled by a production production order, for sale to unrestricted-use stock. stock. In this case, the sales the sales order item is not a cost object. object. If the sales order item is not a cost object, the revenues from billing are billing are transferred directly to Profitability Analysis (CO-PA). Analysis (CO-PA). Posting of costs of goods estimate, already created in Product Cost Planning. manufactured in CO-PA can be based on a cost a cost estimate, Possible variances can be transferred to CO-PA when the production order is settled.  If the sales order item is a cost object, object, the cost of goods manufactured for the sales are only transferred to CO-PA at order settlement. settlement.  If you have activated the material ledger, it is possible to revaluate the billing document or order

settlement at period-end close using actual costs. costs. This option is discussed in the Unit "CO-PA Integration".

(C) SAP AG

AC530

5-23

Process Types Types for Consumpt ion Process Types for Display Material Ledger DataConsumption Material Valuation Area

AssLabel ets for CD ACT-DCD## 6000 Mexico

Period Currency

01.2001 Company code ency Costcurr Center

Price control Period status:

Standard Standard Price

Consumption Categories:

Sales Order

MXN

Preliminary valuation at standard stan dard pri ce

Material Transfer Transfer Posti ng

Production Quantities and Values entered 21.60 MXN Price unit 100 pc

Standard Price

Subcontracting

Transfer Posting - Spe Transfer Special cial Quantity Preliminary Valuation Inventory

Price Diff.

Exch. rate diff. Price

Stock Transfer Cumulative inventory Consumption

800

17280

2400

0

24.60

700

15120

0

0

21.60

Sales Order

600

12960

0

0

21.60

Stock Transfer

100

2160

0

0

21.60

60

1296

0

0

21.60

40

864

0

0

21.60

Plant A Plant B © SAP AG 2001

 When materials are consumed, the data is categorized (in the same way as for procurement) according

to different process different process categories.  The consumption alternative represents the different ways a material can be consumed and is used in the application component Actual Costing/Material Ledger for display in the material ledger master data display.  In multilevel processes, the consumption alternative and the procurement alternative are the same; in other words, the consumption alternative of a raw material is also the procurement alternative of a semifinished product.  All consumed material quantities, such as those for sales orders, stock transfers or consumption of cost centers, are valuated with the standard price.

(C) SAP AG

AC530

5-24

IDE DES S Scena Scenario: rio: CD Produ roductio ction n all Postin Postings gs 100 PC

SA L E

ACT-DCD 6100

TRA NS

600 PC ACT-DCD 6000

800 PC

COST

PROD 900 PC

50 PC

200 PC

ORDER 900 PC

PV 01 PV 02

ACT-LCD 6000

ACT-BCD 6000

1000 PC

ORDER

© SAP AG 2001

500 PC

ORDER

Del. 1097

500 PC

Del. 1098

made, along with the the corresponding corresponding  The above diagram shows an overview of the postings already made, quantity data. data. This data corresponds with the participant exercises completed during this course.  The aim of period-end close in the material ledger is to subsequently adjust t he actual costs or variances to variances to the standard cost.

(C) SAP AG

AC530

5-25

Structured Value Value Chains: Chains: Unit Sum Summa mary ry

You are now able to:  Explain the components concept of the actual quantity structure in the material ledger.

igu re the Cont Cont rolling rolli ng areas areas fo r a  Explain and conf igure material. Carry out o ut a a product pro duct ion sc enario enario and explain th e  Carry variances disp layed in the material material ledger.  Sell Sell manufactured manuf actured prod uct s and analyse analyse the result s in CO-P CO-PA. A.

© SAP AG 2001

(C) SAP AG

AC530

5-26

Structured Value Chains: Exercises Unit: Structured Value Chains

At the conclusion of these exercises, you will be able to: Understand how value chains are structured by the material

•

ledger • •

Master the settings for controlling levels of a material Explain how the Material Ledger and Cost Object Controlling (product cost collectors) are integrated Your company has decided that it wants detailed cost information for the second input material (CD blanks) and the demo CDs. In procurement controlling, the capabilities of the material ledger are to be utilized and more detailed controlling levels determined. You produce the demo CDs and post goods issues.

1

Change Settings for Controlling Levels 1-1

Look at the Controlling levels of your CD labels and blank CDs. Which characteristics are updated with these settings when goods a re received for the process purchase order category? category? What are the settings? Controlling Level for Purchase Orders: ACT-LCD-## Characteristic 1 Characteristic 2 Controlling Level for Purchase Orders: ACT-BCD-## Characteristic 1 Characteristic 2

1-2

(C) SAP AG

You want to carry out procurement controlling for your blank CDs at a greater level for purchase level of detail. To do so, change the setting for the Controlling level for orders for your blank CD ACT-BCD-## to Purchasing organization/vendor .

AC530

5-27

2

External Procurement 2-1

Creation of Two Purchase Orders 2-1-1

(C) SAP AG

Order 500 blank CDs ACT-BCD-## from Puebla Digital and another 500 from Productos Argentinos. Use the following data: Purch ase Order 1

Purcha se Order 2

Purc hase orde r type

Standa rd purcha se order

Standar d purchas e order

Ven dor

1097 (Puebl a Digital S.A.)

1098 (Produc tos Argenti nos)

Purc hasi ng orga nizat ion

6000 IDES Mexico

Purc hasi ng grou p

600 Compras Mexico

Com pany code

6000 IDES Mexico

Mate rial

ACT-BCD-## (blank CD)

Qua ntity

500 pc each

Plant

6000

Stor age locat

0001

AC530

5-28

ion: When you confirm your entries, the system pulls the valid prices from the vendor info record. Price

MXN _____ ____ /100 PC

MXN ______ ___ /100 PC

Save your purchase order and write down the purchase order number. Purchase order 1: __________________________________________ Purchase order 2: __________________________________________ 2-2

Goods Receipts 2-2-1

Post the goods the goods receipt for the first purchase order (most of the data is automatically taken from the purchase order): o rder): Posting date

Today's date



OK field

Select

Plant

6000

Storage location

0001

Quantity


Movement type

101

Repeat this procedure for the second purchase order. order .

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AC530

5-29

2-2-2

Then look at the ACT-BCD-## data ACT-BCD-## data in the material ledger display. display . You now have more detailed information for the procurement alternatives . What names do the procurement alternatives have? Doubleclick on the lines of the procurement alternatives. Specific characteristics have been defined for the the procurement alternatives. Which characteristic values do the procurement alternatives have in these cases? Procurement Alternative 1 Name: Characteristic

Value

Process category Controlling level ... ...

Procurement Alternative 2 Name: Characteristic

Value

Process category Controlling level ... ...

3

Change Procurement and Consumption Alternatives 3-1

You want to change the names of the procurement alternatives for ACT-BCD-## in the material ledger display. To do so, maintain the names of the two procurement alternatives with the following two texts . Name of procurement alternative 1097/6000

1097: Puebla Digital

Name of procurement alternative 1098/6000

1098: Productos Argentinos

Then look at the data for ACT-BCD-## in the material price analysis .

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AC530

5-30

4

In-House Production Basic data for in-house production You now want to begin production of the demo CDs. You have decided to cost the products by period and create a product cost collector for the demo CD. Later you will create a production order for this product produc t cost collector and complete processing. The following data is available:

4-1

Cost Center Group:

CCG53 0-##

Cost centers:

CC530##

Work centers:

WP530##

Activity types:

ATL##; ATR-##

Production version:

0001 new machine

Controlling level of the demo CD Display the Controlling level of your demo de mo CD for the process category Production (material ACT-DCD-##): Controlli ng level

4-2

Product Cost by Period with Product Cost Collectors 4-2-1

(C) SAP AG

Create a product cost collector for your demo CDs. Enter the following data in the dialog box: Materi al

ACT-DCD-##

Plant

6000

Order type

RM01

Contro lling level

Production version

Planni ng

6000

AC530

5-31

plant Produc tion version

01

Maintain the following entries in the Data tab: Profit center:

No entry

Business area:

7000

Costing variant plan:

PREM

Costing variant actual:

PPP3

Costing sheet:

COGM

Overhead key:

SAP10

Results analysis key:

No entry

Variance key:

000003

When you save, the system asks if you want to create a preliminary cost estimate. estimate. Answer Yes. Create preliminary cost estimate?

(C) SAP AG

AC530

Yes

5-32

Write down the purchase order number of the product cost collector. Order number of product cost collector:

___ ___ ___ ___ ___

Look at the cost estimate. What is the cost of goods manufactured for the demo CD? Cost of goods mfd for DEMO CD: per 100 pc 4-3

MX N

Production of the demo CDs 4-3-1

Create a production order for the production of the demo CDs (ACTDCD-##). Use the following data: Material

ACT-DCD-##

Order type

PP08

Production plant

6000

Quantity

900 PC

Finish (date)

today

Release the order and save. Write down the order number: number: _____________________________________________________ _________________________ ____________________________ 4-4

Actual Postings for the Production Order 4-4-1

confirmation for your production order. Use the following Create a final confirmation for data: Confirma tion type

Final confirmati on

Yield to confirm

800 PC

Confirme d Scrap

100 PC

Posting date

today

The Goods Movements icon displays information on which goods issues and goods receipts the system will perform when yo u save the confirmation. (C) SAP AG

AC530

5-33

Goods receipt ACTDCD-##:

8 0 0 P C

Goods issue ACTLCD-##:

9 0 0 P C

Goods issue ACTBCD-##:

9 0 0 P C

(Do not confirm more than 950 pieces of the raw material, otherwise you will not have enough materials available.)

save your confirmation as Check that all goods movements are correct and save your a final confirmation. 4-4-2

(C) SAP AG

Call up the material ledger display for all of your materials. Do price differences exist for the goods receipt for the order? Why?

AC530

5-34

4-5

Update the Cost Component Split for Goods Issue Go to the material price analysis for your demo CD ACT-DCD-##, and choose actual and then the preliminary values. values . Enter view Cost component. Display the actual and the values in the following table: Cost Component

Act ual val ue

Preliminar y Valuation

Material component: Production setup: Machine production: Material overheads: Miscellaneous costs: Why are the cost component split values the same at this point in time (excluding possible rounding errors)? ________________________________________________________ ____________________________ ___________________________________ _______ ________________________________________________________ ____________________________ ___________________________________ _______ ________________________________________________________ ____________________________ ___________________________________ _______ 4-6

Period-End Closing in Cost Object Controlling It is the end of the period, and you want to settle the product cost collector for ACTDCD-##. To do this, perform the following steps using the data in the corresponding tables. 4-6-1

(C) SAP AG

Calculation of Overhead Controlling area

6000

Material

ACT-DCD-##

Plant

6000

Period/Fisca l year

Current period

Background processing

_ (no)

AC530

5-35

Test run

_ (no)

Dialog display

X (yes)

Detail list

X (yes)

Which type of overhead is calculated? What is the amount? Type of overhead: Overhead rate:

%

Amount: Currency: Click the Change Display Variant icon icon to display the amount in object currency (MXN) Overhead: MXN ________________

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4-6-2

Variance Calculation Material

ACT-DCD##

Plant

6000

Period/Fiscal year

Current period

Selected target cost versions

000

Test run

__ (no)

Detail list

X (yes)

How high are the calculated variances?

Target costs

Actual costs

Variances (Act. cost - alloc. act. costs - scrap) 4-6-3

(C) SAP AG

Settlement Material

ACT-DCD##

Plant

6000

Settlement period

Current period


_ (no)

Test run

_ (no)

Detail lists

X (yes)

AC530

5-37

Check transaction data

_ (no)

Go to the detail list and make a note of the settled values: You can see the values in local currency by changing the display variant. Amount/currency Sende r Settle d to materi al

EUR _____________ / MXN ____________

Settle d to profit ability segme nt

EUR _____________ / MXN ____________

Go to the material ledger display and write down the price variances in company code currency. currency . Price Differe nces

(C) SAP AG

AC530

MXN

5-38

4-7

Actual Cost Component Split: Split : Updating the Cost Components after Settlement 4-7-1

Go to the material price analysis for your demo CD, and choose Cost components view. Display the actual and then the differences. Enter the values in the following table: Cost Component

Ac tu al val ue

D if fe r e n c e s

Input materials: Production setup: Machine production: Material overheads: Miscellaneous costs: How can you explain the differences that did not exist before the settlement of the product cost collector? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ 4-7-2

In Material Price Analysis, go to Evaluated Evaluated Quantity Structure by selecting the relevant button. Change the base quantity to price unit 1. Answer the following questions: Price difference per CD

EUR ______

Label quantity per CD

______ PC

Blank quantity per CD

______ PC

Recording quantity per CD ______ H Labeling quantity per CD

5-1 (C) SAP AG

______ H

Create a Sales Order AC530

5-39

Create a sales order with the following data: On the selection screen: Order type:

OR

Sales Organization:

6000

Confirm the entries and enter the following data: Sold-to-party

6666

Purchase order number:

Order ## (your group number)

Material:

ACT-DCD-##

Quantity:

600 PC

Confirm your entries.

(C) SAP AG

AC530

5-40

The system automatically determines a sales price using price a nd account determination. What is the price? _________________________________________________/ ____________________________ _____________________/ PC Save the order and write down the order number: __________________ 5-2

Delivery for Sales Order Post the delivery for your order. Make the following entries: On the selection screen: Shipping point:

6000

Selection date:

A date in the next month

Order:

Your sales order number

Confirm your entries. On the Picking tab, enter the suggested delivery d elivery quantity (total quantity of your quantity. Click on the post goods goods issue icon. order) as the picking quantity delivery : Write down the number of the delivery: ____________________________ Go to the price determination view of the material price analysis of your demo CD and check the data for your delivery. At what unit price was the delivery valuated? MXN __________________________________ 5-3

Billing the Sales Order In order to be able to see the revenue generated by the sale in Profitability Analysis (CO-PA), you must create a billing document. 5-3-1

Create a Billing document for your delivery and save the document. Write down the document number: number : _____________________

5-3-2

(C) SAP AG

Execute report IDES-530 in the information system for CO-PA. Make the following entries: From period:

Current period (MM.YYYY)

From/t o produc t:

ACT-DCD-##

Curren cy:

10 Company code currency

AC530

5-41

How does the system find the differentiated values for material component, wages, etc. ? _____________________________________________________ _________________________ ____________________________ Why do no actual values for contribution margin accounting exist at this time? _____________________________________________________ _________________________ _____________________________ _

(C) SAP AG

AC530

5-42

Enter the following values in the table:

6

Sales revenue:

MXN

Total costs of goods manufactured in target:

MXN

Contribution margin II - target:

MXN

Further Goods Movements for the Demo CD 6-1

External Procurement of the Demo CD 6-1-1

Because your production capacity has been used up and the demand for the demo CD has not yet been met, you decide to get the demo CDs from vendor Studio Chapultepec. Create a purchase order with the following data: Purchase order type


Vendor

1099 (Studio Chapultepec)

Purchasing organizatio n

IDES Mexico

Purchasing group

Compras Mexico

Company code

IDES Mexico

Material

ACT-DCD-## (demo CD)

Quantity

200 PC

Price

According to the purchasing info record

Plant

6000

Storage location:

0001

When you confirm, the system issues a warning message. Ignore the message. Which price was taken from the purchasing info record? (C) SAP AG

AC530

5-43

PO price:

MXN / PC

Save your purchase order. Purchase order number: 6-1-2

Post the goods receipt for your purchase order: Posting date

Today's date



OK field

Select

Plant

6000

Storage location

0001

Quantity


Movement type

101

Post the goods issue.

(C) SAP AG

AC530

5-44

Then look at the data in the material ledger display. You can now analyze whether external procurement or in-house production is cheaper for you. External procurement price:

MXN / PC

In-house production price:

MXN / PC

Average receipt price:

MXN / PC

However, note that the price of in-house production does not contain the price differences of the raw materials used at this point in time. time. 6-2

Transferring part of your demo CD 6-2-1

6-2-2

The manager of your second plant in Mexico has advised you that there is an urgent need for demo CDs. Therefore, you place part of your inventory at his disposal and enter the following posting: Posting date

Today's date

Movement type

301 (Transfer posting, plant to plant)

Plant

6000

Storage location

0001

Receiver plant/ storage location

6100/0001

Material

ACT-DCD-##

Quantity

100 PC

After saving the transfer posting, look at the data in the material ledger display again. Display the data for plant 6000 and look at the accounting document for the posting. Then switch to the data display for plant 6100. What is the cause of the price differences? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ Display the cost structure in plant 6100. Where do the different cost component split values come from? _____________________________________________________ _________________________ _______________________________ ___

(C) SAP AG

AC530

5-45

(C) SAP AG

AC530

5-46

Structured Value Chains: Solutions Chains: Solutions Unit: Structured Value Chains


1

Tools

Customizing

Edit Project

SAP Reference IMG

Settings for the Controlling Level 1-1

Display Controlling Level ACT/ML

Environment

Edit Controlling Level for Material

In the table, you see that the checkmark for the process category Purchase Order is is next to the characteristics Plant/Material . Controlling Level for Purchase Orders: ACT-LCD-## Characteristic 1

Plant

Characteristic 2

Material

Controlling Level for Purchase Orders: ACT-BCD-##

1-2

Characteristic 1

Plant

Characteristic 2

Material

Change Controlling Level Select the process category Purchase Order for ACT-BCD-## and click on the icon Change Controlling Level . Choose the setting Purchasing Organization/Vendor as the new Controlling level. The checkmark is now next to the set level. The purchasing organization organization and vendor are characteristics purchasing are now updated in addition to the previous characteristics.

(C) SAP AG

AC530

5-47

2

External Procurement 2-1

Creation of Two Purchase Orders Logistics Materials Management Vendor/Supplying Plant Known First Order:

Purchasing

Purchase Order

Create

Header data:

Purchase order type


Vendor

1097 / Puebla Digital S.A.

under Organization data: Purchasing organization

6000 IDES Mexico

Purchasing group


Company code

6000 IDES Mexico

First Order:

Item overview

Material


Order quantity

500 PC

Plant

6000

Storage location:

0001

Confirm your entries. The system automatically calculates the purchase order price from the purchasing info record. PO price:

MXN 11

1 pc each

Save the order! Purchase order number 1: _______________________ __________________________________________ ___________________ Second Purchase Order:

Header data:

Purchase order type


Vendor

1098 / Productos Argentinos Imp. S.A.

under Organization data:

(C) SAP AG


6000 IDES Mexico

Purchasing group


Company code

6000 IDES Mexico

AC530

5-48

Second Purchase Order:

Item overview

Material


Order quantity

500 PC

Plant

6000

Storage location:

0001

Confirm your entries. The system automatically calculates the purchase order price from the purchasing info record. PO price:

MXN 14

1 pc each

Save the order! Purchase order number 2: _______________________ __________________________________________ ___________________ 2-2

Goods Receipts 2-2-1

Goods receipt for the first purchase order: Logistics Materials Management Goods Movement Goods Receipt Number Known


Enter your purchase order number and confirm. The system determines the following information. Check this information in the line for the purchase order item. Posting date

Today's date



Plant

6000

Storage location

0001

Quantity


Movement type

101

Set the flag in the OK column (column to the right of the material) OK field

Select

Save. Repeat this procedure for the second purchase order.

(C) SAP AG

AC530

5-49

2-2-2

Procurement alternatives in the material ledger display: ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:


Open the category Receipts Order

Open the process category Purchase

purchasing organization organization and vendor, the By adding the characteristics purchasing corresponding procurement alternatives are generated and shown in the material ledger display. For more information, double-click on the procurement alternatives.

Procurement Alternative 1 Description

Vendor:0000001097 Purchasing Org.:6000

Characteristic

Value

Process category

BB purchase order

Controlling level

purchase order purchasing organization/vendor


6000 IDES Mexico

Vendor

1097 Puebla Digital S.A. Procurement Alternative 2

Description

Vendor:0000001098 Purchasing Org.:6000

Characteristic

Value

Process category

BB purchase order

Controlling level

purchase order purchasing organization/vendor


6000 IDES Mexico

Vendor

(C) SAP AG

1098 Productos Argentinos

AC530

5-50

3

Change Procurement and Consumption Alternatives ACT/ML

Material Ledger

Edit Procurement Alternatives/Consumption Alternatives

Enter material ACT-BCD-## and plant 6000. Select the first procurement alternative and click on the icon Display/Change Display/Change. Enter a name in the field Changeable name . Click on Confirm. Then double-click on the second procurement alternative and enter a text there as well. Then save. Name of procurement alternative 1097/6000

1097: Puebla Digital

Name of procurement alternative 1098/6000

1098: Productos Argentinos

In the material ledger display, open the category Receipts for ACT-BCD-## and then the process category Purchase order . The procurement alternatives are now shown with your maintained text. 4

In-House Production Cost Center Group:

CCG530-##

Cost centers:

CC530-##

Work centers:

WP530-##

Activity types:

ATL-##; ATR-##

Production version:

0001 new machine

4-1

Controlling level of the finished demo CD ACT/ML

Environment

Edit Controlling Level for Material

Enter material ACT-DCD-## and plant 6000. Controlling level Production

Production version

The controlling level cannot be changed if product cost collectors have already been created, or if a mixed costing uses a controlling level. In the current example, the standard price of the demo CD has been updated with a mixed costing.

(C) SAP AG

AC530

5-51

4-2

Product Cost by Period with Product Cost Collectors 4-2-1

Create product cost collectors. Accounting Controlling Product Cost Controlling Controlling Product Cost by Period Master Data Collector Edit

Cost Object Product Cost

Enter your material ACT-DCD-## and plant 6000, and click on the Create icon. Product Cost Collector icon. Enter the following data in the dialog box: Material

ACT-DCD-##

Plant

6000

Order type

RM01

Controlling level

Production version

Planning plant

6000

Production version

01

Click on icon Confirm. Maintain the following entries in the Data tab: Profit center:

No entry

Business area:

7000

Costing variant plan:

PREM

Costing variant actual:

PPP3

Costing sheet:

COGM

Overhead key:

SAP10

Results analysis key:

No entry

Variance key:

000003

Save your entries and create a preliminary cost estimate for the product cost collector. Order number of product cost collector: You display the preliminary cost estimate for the product cost collector by clicking on the Cost Estimate button on the Header Tab. Cost of goods mfd for DEMO CD: per 100 pc

(C) SAP AG

AC530

MXN 2066.67

5-52

4-3

Production of the demo CDs 4-3-1

Creation of a production order for the demo CDs ACT DCD-## Logistics Production With Material

Production Control

Material

ACT-DCD-##

Order type

PP08

Production plant

6000

Order

Create

Confirm the entries. Quantity

800 PC

Finish (date)

today

Click on the Release order icon and save your order. Order number: order icon _______________________________________ _________________________ ______________ 4-4

Actual Postings for the Production Order 4-4-1

Confirmation for the production order: Logistics Production Enter For Order

Production Control

Confirmation

Enter your order number and confirm. Confirmation type

Final confirmation

Yield to confirm

800 PC

Confirmed scrap

100 PC

Posting date

today

Enter. Click on the Goods movements icon. The following goods movements are performed when you save the confirmation: Goods receipt ACT-DCD-##:

800 PC

Goods issue ACT-LCD-##:

900 PC

Goods issue ACT-BCD-##:

900 PC

(Do not confirm more than 950 pieces of the raw material, otherwise you will not have enough materials available.)

Save the confirmation. Note the message in the status bar: Confirmation saved, Goods Movements: 3, Errors: 0

(C) SAP AG

AC530

5-53

4-4-2

Material Ledger Display: ACT/ML: Material Material Ledger Ledger → Material Material price analysis

Material:

ACT-DCD-##

Plant:

6000

Period/Year:


Open the category Receipts → Open the process category Production The order was delivered according to price control S at the standard price. Possible Possible higher higher follow up costs costs are only only posted at order settlement settlement or material ledger settlement. There are, therefore no price differences at this time.

4-5

Update the Cost Component Split for Goods Issue ACT/ML: Material Ledger


Material:

ACT-DCD-##

Plant:

6000

Period/Year:


View: Cost Component Value: Actual value and then Value: preliminary valuation Cost Component

Actual value

Preliminary valuation

MXN 13,200

MXN 13,200

MXN 900

MXN 900

Production Machines:

MXN 2100

MXN 2100

Material Overhead:

MXN 1,080

MXN 1,080

MXN 0

MXN 0

Material Components: Prod. Labor / Setup:

Other costs:

As the material has price control S, the goods issues are valuated at the standard price. The standard price is also used to determine the preliminary value, which means that there can be no differences in the cost component split.

(C) SAP AG

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5-54

4-6

Period-End Closing in Cost Object Controlling 4-6-1

Calculation of Overhead Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Period-End Closing Single Functions: Product cost collector Overheads Individual Processing Controlling area

6000

Material

ACT-DCD-##

Plant

6000

Period/Fiscal year

Current period


_ (no)

Test run

_ (no)

Dialog display

X (yes)

Detail list

X (yes)

Execute. You see the costing structure. Type of overhead:

Material overhead

Overhead rate

10%

Amount:

162.00

Currency:

EUR

Click the Layout icon icon to add the fields Value in Obj Currency and Object Currency. Overhead: MXN 1350.00 Click on the green arrow to return to the menu.

(C) SAP AG

AC530

5-55

4-6-2

Variance Calculation Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Period-End Closing Single Functions: Product cost collector Variances Individual Processing Material

ACT-DCD-##

Plant

6000

Period/Fiscal year

Current period

Selected target cost versions

000

Test run

__ (no)

Detail list

X (yes)

Execute. On the variance calculation list, you see the amount of the variances. You can have this amount displayed in the different currencies. Amount (controlling area)

Amount (company code)

Target costs

≈EUR

1984.00

≈MXN

16533.36

Actual costs

≈EUR

2231.00

≈MXN

18600.00

Variances

≈EUR

160.00

≈MXN

1320.00

(Act. cost - alloc. act. costs scrap) .

Click on the green arrow to return to the menu. For more detail, choose the Cost Types report and the Variance Category layout. There you can see that the main variances are quantities, structure, and mixed variances.

(C) SAP AG

AC530

5-56

4-6-3

Settlement Accounting Controlling Product Cost Controlling Cost Object Controlling Product Cost by Period Period-End Closing Single Functions: Product cost collector Settlement Individual Processing Material

ACT-DCD-##

Plant

6000

Settlement period

Current period


_ (no)

Test run

_ (no)

Detail lists

X (yes)

Check transaction data

_ (no)

Execute. Click on the detail list icon icon on the basic list for settlement and write down the settled values: Amount/currency Sender

The number of your product cost collector

Settled to material

EUR 160 / MXN 1320

Settled to profitability segment

EUR 160 / MXN 1320



Material:

ACT-DCD-##

Plant:

6000

Period/Year:


View:


Open the category Receipts → Open the process category Production Price differences:

(C) SAP AG

≈MXN

AC530

1320

5-57

4-7 4-7-1

Actual Cost Component Split: Updating the Cost Components after Settlement ACT/ML: Material Ledger


Material:

ACT-DCD-##

Plant:

6000

Period/Year:

Current period/current year View: Cost Component

Value:

Actual Value, Differences

Cost Component

Actual value

Material Components:

Differences

MXN 13,500

MXN 300

Prod. Labor / Setup:

MXN 1,125

MXN 225

Production Machines:

MXN 2,625

MXN 525

Material Overhead:

MXN 1,350

MXN 270

MXN 0

MXN 0

Other Costs:

When settling the product cost collector, the difference between the actual debits and target credits are determined as variances, and are transferred into the material ledger using the different cost elements. The differences are a result of the variances between the values for the actual cost component split, and the cost component split for planned prices. 4-7-2

Material Price Analysis: Button: Show/ Hide Evaluated Evaluated Quantity Structure Scroll the the right to choose Button: Change Base Quantity Select Price Unit and Confirm Price difference per CD

EUR 1.65

Label quantity per CD

1.125 pc

Blank quantity per CD

1.125 pc

Recording quantity per CD 0.011 H Labeling quantity per CD

(C) SAP AG

AC530

0.011 H

5-58

5

Sales Order Processing 5-1

Create a Sales Order Logistics

Sales and Distribution

Sales

Order

Create

On the selection screen: Order type:

OR 6000

Sales Organization: Confirm the entries and enter the following data:

6666

Sold-to-party

Order ## (your group number)

Purchase order number: Material:

ACT-DCD-##

Quantity:

600 PC

Confirm your entries. Choose Item Conditions Conditions icon The sales price for your demo CD is MXN 30 / 100 pieces. Save the order and write down the order number: __________________ 5-2

Delivery for Sales Order Logistics Sales and Distribution Outbound Delivery

Sales

Order

Subsequent Functions

On the selection screen: Shipping point:

6000

Selection date:

A date in the next month

Order:

Your sales order number

Confirm your entries. On the Picking tab, enter the suggested delivery d elivery quantity (total quantity of your issue icon. order) as the picking quantity the post goods issue icon. quantity. Click on the post

(C) SAP AG

AC530

5-59

Valuation price for goods issue: ACT/ML: Material Ledger


Material:

ACT-DCD-##

Plant:

6000

Period/Year:


View: Price determination structure The delivery is valuated at the standard price - 21.60 MXN per piece. 5-3

Billing the Sales Order 5-3-1

Billing Document Logistics Functions

Sales and Distribution Billing

Sales

Order

Subsequent

Enter the document number for your delivery and save. The billing document is created. 5-3-2

CO-PA Report IDES-530 Controlling Profitability Analysis Information System Execute Report (Operating Concern IDEA, Costing-based Profitability Analysis) Choose Report IDES-530 From/to period

Current Period

From/to product:

ACT-DCD-##

Currency:

10 Company code currency

How does the system find the differentiated values for material component, wages, etc.? From the cost elements that were transferred from the standard cost estimate. _____________________________________________________ _________________________ ____________________________ Why do no actual values for contribution margin accounting exist at this time? The actual cost component split values have not been transferred yet.

(C) SAP AG

AC530

5-60

Enter the following values in the table:

6

Sales revenue:

MXN 18,000

Total costs of goods manufactured in target:

MXN 12,960

Contribution margin II target:

MXN 5,040

Further Goods Movements for the Demo CD 6-1

External Procurement of the Demo CD 6-1-1

Create Purchase Order Logistics Create

Materials Management Purchasing Vendor/Supplying Plant Known

Purchase Order

Header data: Purchase order type


Vendor

1099 / Studios Chapultepec


6000 IDES Mexico

Purchasing group


Company code

6000 IDES Mexico

Item overview Material

ACT-DCD-## (CD label)

Order quantity

200 PC

Plant

6000

Storage location:

0001

Confirm your entries. The system automatically calculates a purcha se order price from the purchasing info record. PO price:

MXN 30

1 pc each

Save your purchase order and write down the purchase order number. Purchase order number: ________________________________________ _________________________ _______________

(C) SAP AG

AC530

5-61

6-1-2

Goods Receipt for Purchase Order: Logistics Materials Management Goods Movement Goods Receipt Number Known


Enter your purchase order number and confirm. The system determines the following information. Check this information in the line for the purchase order item. Posting date

Today's date



Plant

6000

Storage location

0001

Quantity


Movement type

101

Set the flag in the OK column (column to the right of the material or in item details) OK field

Select

Post. Material Ledger Display: ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:


Procurement price analysis: External procurement price:

(C) SAP AG

MXN 30.00 / PC

In-house production price:

MXN 23.25 / 1 pc

Average receipt price:

MXN 24.60 / 1 pc

AC530

5-62

6-2

Transferring Part of Your Demo CD 6-2-1

Post Goods Issue/Receipt Logistics Materials Management Inventory Management Goods Movement Transfer Posting Posting date

Today's date

Movement type

301

Plant

6000

Storage location

0001

Confirm. Receiver plant/storage location

6100/0001

Material

ACT-DCD-##

Unit of Entry

100 PC

Post. 6-2-2



Material:

ACT-DCD-##

Plant:

6100

Period/Year:


Open the category Receipts → Stock Transfer material ledger document

→ Double-click

on the

Branch from the material ledger document to the accounting document. Goto

Accounting documents

Accounting document The material is delivered to plant 6100 with the value calculated in plant 6000 (standard price: MXN 21.60). In plant 6100, a preliminary valuation takes place with the standard price valid there (MXN 20.00). The difference between these two value bases is displayed as the price difference. The cost component split is transferred from the delivering plant.

(C) SAP AG

AC530

5-63

Period-End Pe riod-End Close in Actual Cost ing

Contents:  Act Ac t u al Pri Pr i ce Determ Det ermii n ation ati on

Periodi c Unit Price  Concept of the Periodi  Costing Run for the Multi-Level Actual Costing:

© SAP AG 2003

(C) SAP AG

AC530

6-1

Period-End PeriodEnd Close Close in Actual Costing: Costing: Unit Objectives

At t h e co n clus cl usii on o f thi th i s unit un it,, you yo u wil w il l b e able abl e to: to :  Explain actual price determin determination ation  Explain Explain how the periodic unit price is calcul calcul ated ated

period-end nd clo se with or with out  Run the period-e revaluation  Create Create a costin cos ting g run for fo r multi level actu actu al costing co sting , execute it, and analyze it

© SAP AG 2003

(C) SAP AG

AC530

6-2

Course Overview


© SAP AG 2003

(C) SAP AG

AC530

6-3

Period-E riod-End nd Close in in Actual Costing: Costing: Business Scenario Scenario

 Once the period cl osing p rogram has been been run, you can carry carry out the period-e period-end nd clo sing activities in the mate m aterial rial ledger.  We will first concentrate on the posting logic. You wil l analyze analyze the effects of th e clo sing entry i n the material ledger dependi depending ng on wh ether ether th e option opt ion to revaluate revaluate was cho sen.

Then you'll work with th e multilevel multilevel actual actual costing  Then func tion across across multiple plants. plants. You'll learn learn how to create create a cost ing run, execute it, and analyze analyze it.

© SAP AG 2001

(C) SAP AG

AC530

6-4

Periodic Unit Price Periodic Price and Closing Closing Entries: Entries: Topic Objectives

At th e con co n clu cl u sion si on o f thi th i s top t opii c, you yo u wil w il l b e able abl e to: to : determination ation  Explain actual price determin  Explain Explain how the periodic unit price is calcul calcul ated ated  Determin Determine e singl e-level e-level material material p rices  Generate closing entries with and without revaluation revaluation o f th e ending ending inventory  Analy An alyze ze pri p ri ce di d i f f erence eren ce po st ing in g s

© SAP AG 2003

(C) SAP AG

AC530

6-5

Period-End Pe riod-End Close in Cost Center Center Accounti Acc ounti ng Cost Center Accounting

Act iv it y Type

$

Co st st Ob Obj ec ec t Co Co nt nt ro ro l lili ng ng

Planned Planned pr ices (= Planned costs/Actual costs)

Order

Cost Center

Actu Ac tu al pr ic es (= Actual cos ts/Actual activity)

Cost Center

Act iv it y Type

Mat er er ia ial L ed ed ge ger

Standard Standard p rice

?

$

Planned Planned pr ices (= Planned costs/Actual costs)

Order Standard Standard p rice

Actu Ac tu al pr ic es (= Actual cos ts/Actual activity)

? Standard price

External External Procur ement ement © SAP AG 2003

price. This  Cost center accounting is used to valuate all cost objects (orders) at a preliminary planned price. determination with a cost component price can be set manually, or it can be the the result of planned price determination with split.  Like the standard price, this planned price has the advantage that a closed standard cost accounting system can be implemented without the problem of price fluctuations preventing cost controlling of the production process. process.  However, if actual costs and actual activity are known at the end of the period, you can determine the actual price in cost center accounting and use this price to revaluate the cost objects, if appropriate.

(C) SAP AG

AC530

6-6

Actu Ac tu al Pr ic e Deter mi min n ati ation on Service: Actu Ac tual al co cos s ts ts:: 24.500,-

h k w 0 0 2 0

Energy:

$ 100 100 SerH

5 0 S e r H

ATR

kwh kw h

Actu Ac tu al co cos s ts ts:: 77.000,-

H e r S 2 0

SerH

$

5 0 0 0 k w h

CD Producti on: Ac tu tual al co cost st s: 52.000,-

$

200 h recording reco rding 50 h labeling

ATL

$

© SAP AG 2003

prices, the system takes into account all activity flows between cost centers  When calculating actual prices, and determines the price in an iterative process by process by dividing actual costs by actual activity. activity. Actual prices are determined as follows: follows:  First divide primary costs by the activity quantity. Use the resulting preliminary price to revaluate the

activity input of other cost centers.  In the following steps, the prices determined are used to calculate other activity flows in an iterative

process, until the exact price price has been determined for a cost center. center.  Price calculation procedure:  The periodic differentiated price is price is determined by dividing the costs of each period by the activity

quantities of the period. Use of this method means that different prices can occur in different periods.  The cumulated price is price is determined by dividing the cumulated costs of the current and previous

periods by the cumulated activity activity quantities. This This method smoothes smoothes price fluctuations in the the course of the fiscal year. In the current period adjustments are made for activity allocations posted in previous periods. This method ensures ensures that the sender cost center center is fully credited at the end of each period. period. The cumulated price can only be used in actual.

(C) SAP AG

AC530

6-7

Ac t iv Act ivat ate e Actu Ac tual al Cos ti tin n g / Ac Actt iv it ity y Ty Type pe Qu Quan anti titt y Update Option al actual actual pri ce revaluation revaluation

Cost center

Order

Act iv it y type

Act iv it ies: ies : - "380h "380h recording" recording" - with plan plan or actua actuall price price from order

1.) 1.) Activit y typ e quantit quantit y update

Ac tu al pr p r i ces ces,, pri pr i ce r elev elevant ant

Cost center

Order

Act iv it ytype

no revaluation

2.) Activity type quantity update, price releva relevant nt

Act iv it ies : - "380h "380h recording" - direct direct actual actual price

© SAP AG 1999

 With Release 4.6, it is possible to update activity consumptions of cost centers as well as process

consumptions of business processes (that are necessary for the production of a material) material ) in the quantity structure of Actual Costing/Material Ledger. Ledger. You have the following possibilities:  You can have the system update the activity quantities without quantities without including them in price determination. determination. You can use this setting if you want to receive information about the complete actual quantity structure. price, you can later debit the respective cost object with the Through revaluation of the actual activity price, variances between the planned price of the cost center/activity type or the process and the actual price calculated at the end of the period.  If you choose the setting relevant to price determination, determination, the variances between the planned price of the cost center/activity type or business process and the actual price calculated at period end are recalculated. The cost center or process is credited and the material (for which consumption took place) is correspondingly debited. If you choose this setting, you can no longer revaluate actual prices in period-end closing of of Cost Object Controlling, Controlling, because the variances of the cost cost centers/processes are debited directly to the material. If you have made this setting, all allocations to manufacturing orders, that are settled to the material, are posted with a price that remains constant throughout the period. A price change that occurs during the period is not accounted accounted for in allocations to orders settled to the material.  You can deactivate actual costing at anytime in anytime in order to, for example, avoid larger activity quantities during the update of actual quantity structures. In this case, you must do without the functions of actual costing for the respective period. The indicator for the updating of activity types must not be changed or deleted within a period. This would lead to false material debits during price determination. (C) SAP AG

AC530

6-8

Period Status in the Material Material Ledger New Period opened (Period (P eriod Closin g Program)

Period status:

Price changes made Quantities and values entered entered

O l d P e r i o d

Single-Level Single-Le vel Price Determin Determina atio tion n Multilevel price determination Closing entry performed (Deletion possible)

© SAP AG 2001

 Material Ledger data is automatically assigned automatically assigned a period status. This status. This status shows which functions have

been completed for the material and which which functions can still still be completed. The Material Ledger Ledger recognises whether valuation relevant operations have been completed for the material or whether the period closing program has run. registers the funcctions of the period closing program and allows valuation  The status Period opened registers relevant operations to be created for the period opened.  The status price changes made, documents that the valuation price for a material has been changed. Valuation relelvant operations can only be created using this changed price.  Quantities and values created means that valuation relevant operations have already been posted. It is no longer possible to change the price in the current period. shows that a single-level price has already been  Status single-level price determination completed shows calculated. Further values can still be entered and the price can still be redetermined. This status is a prerequisite for multilevel multilevel material price determination.  The "Multilevel price determination" determination" status allows the entry of further valuation-relevant transactions for the closed posting period. Multilevel price differences are calculated for the material. status prevents the entry of further further valuation-relevant transactions transactions for  The "Closing entry performed" performed" status prevents the closed posting period. However, the closing entry can be reversed and repeated (status Closing entry reversed)

(C) SAP AG

AC530

6-9

Determination De termination of the Periodic Periodic Unit Price Perio d op ene Perio ened d (Beginning Inv.)

Receipts

Single-level Singleprice ddetermin. etermin. ete rmin.

Variances (Act. cost - alloc. act. costs costs - scrap )

Preliminary valuation of the cumulated inventor y + cumulated variances variances Cumulative inventory

= Pe Perio riodi dic c Unit Price © SAP AG 2001

price is determined once a period has ended. It reflects the actual costs of a material  The periodic unit price is for the closed period.  To determine the periodic unit price, the system uses the cumulative inventory (all goods received plus beginning inventory) inventory) and the cumlative difference difference (all differences between the standard price price and the entered price for all goods received and the beginning inventory).  You have to set the set the material price determination for determination for each period (in the "Organizational tasks" menu or directly from a "costing run").  Single-level material price determination includes variance amounts from differences in price, exchange rates and revaluation differences that have arisen due to the (single-level) procurement of a material in this period. differences are added to the cumulative inventory for inventory for  Once a period has been closed, the cumulative differences are that period. The system uses this to calculate the weighted average price, which can be used for valuating the ending inventory. The valuation for the current period remains period remains unchanged during single-level material price determination.

(C) SAP AG

AC530

6-10

Period Pe riodic ic Unit Price: Price: Assig ning Single-Level Single-Level Variances Variances

Material: aterial: ACTACT-LCD LCD

!

w - Period Period status: determined determined single-leve single-levell N e - Price control: S pric price e - Standa tandard rd price: 5.00 MXN - Inventory nventory value: value: MXN 250 (50 pc) - Periodic unit price = MXN 6.5 6.50 0 ( also in material master)

! w e N

Price QuantityPrelimi nary Valuation Valuation Difference

Price

B eg i n ni n g In v en t o r y

500

2500

Rec ei pt s

500

2500

1500

8,00

0

0

0

0

1000

5000

1500

6,50

950

4750

1425

6,50

50

250

75

6,50

Ot her r ec ei p t s /c o n s u m . Cu m u l at i v e i n v en t or y Not allocated En d i n g i n v en t o r y Co n s um pt i o n

5,00

© SAP AG 2001

price. The moving price field  Material price determination is the step that calculates the periodic unit price. in the material master is updated with the calculated price. The price control of the material remains set to S.  The periodic unit price is also used to calculate a statistical total value. value. This value is for informational purposes only and reflects reflects the value of the material in inventory inventory at the current periodic periodic unit price.  Single-level material price determination sets the status determined status determined single-level . Price determination can be repeated as many times as you want.  The line Not line Not allocated is inserted under the consumption category because with single-level determination, the price differences cannot be attributed to the different consumptions.  The functions of single-level material price determination serve as the basis for multilevel actual costing.

(C) SAP AG

AC530

6-11

Acc Ac c ou oun n t As Assi sign gn men ment: t: Valu Valuat atio ion n Gr Grou oup p in ing g Cod e

281000

231000

xxxxxx

300000

Valuation Ar ea 1

Valuation Grouping Code

Valuation Ar ea 2

Valuation Ar ea 3

400000

Valuation Ar ea 4

© SAP AG 2001

•

Valuation Grouping Code of the Valuation Area

 If you want automatic account determination within a chart of accounts to proceed differently for

particular company codes or plants plants (valuation areas), you assign assign different account grouping grouping codes to those valuation areas.  You must define automatic account determination separately for each valuation grouping code within a

given chart of accounts. Automatic account determination applies to all valuation areas that are assigned to that valuation grouping code.  If the user specifies a company code or plant when he enters a transaction, the system derives the

valuation area and the valuation grouping code from that information.  Automatic account determination can be performed simultaneously for valuation groups (called

valuation grouping codes) with multiple valuation areas. areas.  All valuation areas that use the same automatic account determination should be assigned to the same mination. account grouping codes. This simplifies the maintenance of automatic account deter mination.

(C) SAP AG

AC530

6-12

Acco Ac co un t Ass A ssii g nm ent ent:: Mov Movemen ementt Ty p es > Tran s Keys K eys

Movem Movem ent type Goods receipt

Items

BSX PRD ...

Material inventory accounts Price diff erences (external) (external) ...

Generalized posting lines

Transaction Transaction Key

© SAP AG 2001

accounting, the  When transactions in inventory management and invoice verification are relevant to accounting, system posts the G/L accounts in financial accounting and cost accounting automatically. automatically. When users enter goods movements, they do not need to specify a G/L account because the R/3 System finds the account automatically based on the following data: When the user enters a transaction and specifies a company code or plant, the R/3 System automatically finds the chart of accounts valid for the company code. You must define automatic account determination separately for each chart of accounts. accounts. •

•

Transaction key: The posting procedures for the accounting-relevant transactions in inventory management and invoice verification are predefined. Posting records are a ssigned to each relevant movement type in inventory management and each transaction in invoice verification. These posting strings. Rather than actual G/L account numbers, the records are generalized in what are called value strings. value strings contain keys for the posting procedure (such as a stock posting or consumption posting). You do not need to define these transaction keys, as they are automatically derived from the transaction (invoice verification) or the movement type (inventory management). You only need to assign to each posting procedure the the G/L account to be posted. Account grouping (only grouping (only for offsetting entries for stock postings, consignment liabilities, liabilities, and price differences). If you want to post price differences differences for goods receipts for for purchase orders, goods receipts receipts for production orders, and other movements to different price difference accounts, you can define different account groupings for the transaction key.

(C) SAP AG

AC530

6-13

Auto Au to mat matic ic Ac Acc c o un untt Deter Det ermi min n ati atio on

Valu Valuation ation Grouping Code

Material Master

Acco Ac co un ting ti ng 1 Valuation Valuation cl ass

Valuation Classes

Example: Transaction BSX = Mat. Mat. inv entory accou nts

3000

3000 300000 00 Raw materials 1

3001

3000 300010 10 Raw materials 2 303000 Operating supplies

3030 7900

790000 790000 Semif Semif ini shed sh ed products

7920

792000 Finished products

© SAP AG 2001

 Each material master record contains a valuation class that plays a role in G/L account determination.

Automatic account determination is defined separately for each valuation grouping code. code. Different accounts are assigned to the valuation class for each valuation/transaction key.  The slide shows the account determination for valuation/transaction valuation/transaction key BSX (stock BSX (stock posting). This transaction assigns material inventory inventory accounts to stock postings. This assignment assignment is based on the valuation class specified class specified in the material master record.  The valuation class enables you to define automatic account determination differently depending on the

material. material. For example, you can post the receipt of a raw material to a different inventory account than the receipt of a trading good even though the user enters the same transaction in each case.  You can achieve this by assigning different valuation classes to the materials and then assigning a

different G/L account to the transaction for each valuation class.  If you don't want automatic account determination to be differentiated by valuation class for a

transaction, you don't need to specify a valuation class for the corresponding posting procedure.

(C) SAP AG

AC530

6-14

Special Account Accoun t Determinatio Determinatio n using usi ng th e Ma Material terial Ledger

The fol followi lowi ng tasks shoul sh ould db bee maintained the material ledger for sho uld maint maintaine ained d in th e material account dete determination: rmination: PRD PRY PRV

for pri for price ce dif diffe fere rence nce pos postin tings gs Fo r si si ng ng l ee-l ev ev el el pr pr ic ic e d i ff ff er er en en c es es Fo r mu mu l ti ti l ev ev el el pr pr i ce ce d i ff ff er en en ce ces

KDM KD M

for tra transa nsaction ction--ba base sed d excha exchange nge ra rate te diff diffe ere rence nce post postings ings (invoi (invoice ces, s, orde orderr settlement) for ex excha change nge ra ratt diffe differe rence nce pos posting tings s (closi (closing ng entr entrie ies s in ma mate teria riall ledge ledger) r)

KDV KD V LKW LK W

(invoice (invo ices, s, or orde derr se settl ttle eme ment, nt,....) (c l os os i ng ng en en tr tr ie ies i n t he he ma mat er er ia ial l ed ed ge ger ) (c l o si si ng ng en en t r ie ies i n t he he m at at er ia ial l ed ed g er er )

for all for all diffe differe rence nce po post sting ings s from from the the clos closing ing ent entrie ries s withou withoutt inve invento ntory ry revaluation

GBB/AUI GBB/ AUI For the reva revaluation luation of actual prices and actual actual process prices in the material ledger ledger (modi ficatio n AUI) AUI)

© SAP AG 2001

 Above, you can see the operation keys that must be maintained when using actual costing.

(C) SAP AG

AC530

6-15

Closing Entries: Entries: Proce Process ss Steps Steps

 Collect Price and Exchange Rate Differences 

In price dif ference ference accounts, or withi n categories categories in material material ledger

 Perio Period d Closing Prog ram 

Opens new period

 Release Release Futur e Prices 

Standard Standard cost estimate or marked marked actual pric e

 Execut Execut e Price Determin Determination ation  

?

Single-level, later multi-level Determines V price (repeat as required)

Post Closing Entry   

Mandatory for every period Reverse Reverse posting not po ssible Deletion Deletion possib le 

With Revaluation Revaluation  



Price differences differences posted pro portionally t o remaining stock Price control (old period) on V price? price? Revaluation Revaluation

With out Revaluation Revaluation  

Price differences differences posted p roportionally to accruals account Price control remains with S price

 Mark future price © SAP AG 2003

price. The  During period 1, the system provisionally evaluates all transactions with the standard price. periodic unit price is not determined determined during the period, period, rather it is calculated during during material price determination. Thus, the system registers all preliminary valuation price differences in price and exchange rate difference accounts, and updates them in specific categories in the material ledger data.  During period end closing, you run the period closing program. closing program. You can then release a marked future price for price for period 2 (for example, from a standard cost estimate), or the valuation price remains unchanged for preliminary valuation. In period 2, you make postings for the previous period 1 where necessary.  Material price determination updates determination updates the periodic unit price in the material master record (in the company code currency) as a statistical valuation price for the period being closed (period 1). Price determination creates no entries in Financial Accounting. entries and determine whether you need to revaluate the  You check the results, post them as closing entries and material inventories for period 1. The closing entry must be made for each period. After you post closing entries, entries, it is no longer possible to post to the previous period.  In the following slides, you see the effects of closing entries. These can vary depending on whether a revaluation takes place. (PRC – AVR/activity price differences) (PRC – AVR price diff. )

(C) SAP AG

AC530

6-16

Example of Entry Before Closing Entri es

Material: aterial: ACTACT-LCD LCD Sta tanda ndard rd price (S (S Price Price): ): MX MXN N5 Per . un un i t p r i c e: M XN 6. 6.50

B eg i n n i n g In In v ent o r y : Re Goods Recpt/Purch. Recpt/Purch. Ord er: IR In v o i c e Rec ei p t s : for Co Co n s u m p t i o n : En d i n g In v ent o r y :

GR/IR GR/IR Account Accou nt

Inventory BI Re Re

Re RE IIR R

2500 4750 2500

500 p c / MXN 2500 500 500 pc / MXN MXN 3000 3000 500 p c / MXN 4000 950 p c / MXN 4750 50 p c

Co Co

IR IR

3000

3000

Vendor R E Re

Price diff.

Material Consumption

500 1000

CCo o

?

Inventory v alue alue:: MXN MX N 250

4000

R IIR

4750

© SAP AG 2003

 Closing entries at the end of the period result in postings to accounts. The example above shows data for

material ACT-LCD-## at the end of the period and period and the corresponding accounts before closing entries. entries.  The price difference account shows variances that arise during the period: MXN 10 was entered as price differences for goods receipts, MXN 20 for invoice receipts. The material was more expensive than the price used for the posting of the goods receipt (standard (standard price).  950 pieces were consumed from the cumulative inventory of 1000 pieces, resulting in an ending inventory of 50 pieces.  The cumulative variance of MXN 1500 is added to the preliminary valuation for the cumulative inventory (MXN 5000) and distributed to the cumulative inventory of 1000 pieces via material price determination. determination. This results in a periodic unit price of: price of: MXN 1500 + MXN 5000 1000 pieces = MXN 6.50 Closing entries are created using this periodic unit price.

(C) SAP AG

AC530

6-17

Closing Entr ies With Revaluation Revaluation

Material: aterial: ACTACT-LCD LCD Status: Closing Entry Pe Status: Performed Price control: control: V (prev. period on ly) w! e N V price: 6. 6.5 50 MXN MXN Beginning Beginning Inve Inventor ntory y (BI): (BI): Goods Recpt/Purc h. Ord Ord er: In v o i c e Rec ei p t s : Co n s u m p t i o n : En d i n g In v ent o r y :

500 500 pc pc / 2500 2500 MXN MXN 500 pc / 3000 3000 MXN 500 p c / 4000 MXN 950 p c / 4750 MXN 50 p c

locked

! w e N Inventory v alue alue:: 325 MXN (50 PC * 6.50 = +75 MXN)

Inventory

BI

2500 4750 2500 75

Pric e Diff. (PRD) (PRD) 500 1000

d e g n a h c n u

Price Diff. (PRY) BI

75

© SAP AG 2001

revaluation process,, the system makes the following postings: postings:  During the revaluation process account is debited with the proportional price differences (75 MXN) .  The material stock account is account (transaction key PRY) is credited with the same amount.  The price difference account (transaction  Note, only part of the price differences are differences are posted to material stock. Prices differences that must be

assigned to consumption remain in price difference accounts (at least for single-level calculation).  The system changes the price control for control for the material in the previous period from S to V. V. Thus the periodic unit price (calculated (calculated during material price determination) determination) becomes the valuation valuation price for the previous period.  In the Accounting view for the material master record, you can see the periodic unit price and price control V for for the closed period. The standard price remains unchanged and can still be displayed.  The example above shows data for material ACT-LCD## at the end of the period and the corresponding debits and credits for the accounts involved.

(C) SAP AG

AC530

6-18

Closing Entries Withou t Revaluation Revaluation

Material: aterial: ACTACT-LCD LCD

locked

Status: Closing entry Status: entry performed performed Price contr control: ol: S S price: MX MXN N 5. 5.00 00 Beginning Beginning Inve Inventory ntory (BI) (BI): Goods Recpt/Purc h. Ord Ord er: In v o i c e Rec ei p t s : Co n s u m p t i o n : En d i n g In v ent o r y :

500 500 pc / MXN 2500 500 500 pc / MXN MXN 3000 3000 500 p c / 4000 MXN 950 p c / MXN 4750 50 p c

Inventory v alue: MXN 250 (50 PC * 5.00)

Inventory 2500 4750 2500 e d

g n a h c n u

Pric e diff. diff . (PRD) (PRD) 500 1000

d e g n a h c n u

Pric e diff. diff . (PRY (PRY)) BI

75

Ac cr ual ML (L KW) BI

75

© SAP AG 2003

price of the closed period  If you decide not to revaluate your materials at period end, the periodic unit price of S. No changes are made to the material master is purely for information. Price control remains on S. record. The periodic unit price is also used to calculate a statistical total value. This value is for informational purposes only and reflects the value of the material in inventory at the current periodic unit price.  The "Closing entry performed" performed" status prevents status prevents the entry of further further valuation-relevant transactions transactions for the closed posting period. However, the closing entry can be reversed and repeated (status Closing entry reversed)  Closing entries at the end of the period result in postings to accounts. accounts. The example above shows data for material ACT-LCD-## at the end of the period and the corresponding accounts. The price difference of MXN 75, proportionally allotted to the ending inventory ((MXN 6.50 - MXN 5.00) * 50 units), is posted to price difference account account ML accrual (transaction key LKW ) in this case .  If you decide not to revaluate your materials with the actual price, the amount which would have been posted to the material stock stock account is posted to another another price difference account using posting key LKW. It is up to you which account you chose for this posting.

(C) SAP AG

AC530

6-19

Closing Entries: Entries: Next Period Period - Status: Status: Quantiti Quantiti es and values values entere entered d - Price control: control: S price d o i r - Standard Standard price: 5.00 .00 MXN MXN e P t - Inventory Inventory value: value: 250 250 MXN x e N - Period. Period. V price = 6.5 6.50 0 MXN MXN Preliminary Valuation

Quantity

B eg i n ni n g In v ent o r y

Cumulative inventory

250

75,00

6,50

0

0

0

0

Closing entry performed performed.. 0 - Doc. incl. offsetting offse0tting entry0 for prev. period period 700 175 75,00

Consumption Ending inventory

Price

50

Receipts Other receipts/consum.

Price Difference

0 6,50

0

0

0

0

50

250

0

0

© SAP AG 2001

 Before a period is closed, the ending inventory value of period 1 is transferred to the category Beginning

inventory in the subsequent subsequent period. In the example above, the standard price was 25.00 MXN as in the previous period. Generally, the first material movements movements were also posted at this standard standard price, so that it can no longer be changed.  After closing the revaluated period 1, the beginning inventory of period 2 is still valuated using the preliminary valuation price price (standard price of 5.00 MXN). In the system, the revaluation posting of the old period is no longer valid when the date becomes the first day of the current period.  However, as the actual price (periodic unit price of period 1) is known (6.50 MXN), the difference between the preliminary valuation valuation price and the periodic periodic unit price of period 1 (175 (175 MXN) is entered as the Beginning inventory category. a price difference in the Beginning  In this way, actual price determination does not change the preliminary valuation of the beginning inventory.

(C) SAP AG

AC530

6-20

Costing Run Run for Multilev Multilevel el Actual Costi Costi ng: Topic Objectives Objectives

At th e con co n clu cl u sion si on o f thi th i s top t opii c, you yo u wil w il l b e able abl e to: to : Create and and execut execut e a costing costin g run for mult m ulti-leve i-levell  Create actual costin g.  Analy An alyze ze th e run ru n resul res ul ts .

© SAP AG 2001

(C) SAP AG

AC530

6-21

Actu Ac tu al Co st in ing: g: Pr Proc oc ess Ste Steps ps Costing Cos ting Cockpit: Actual Costing Costing

Costing run

AC530

Period General General data

AC530: Plant s 6000 & 6100

01 2000 Process steps

Process s tep

Param eter

Results

Execute

Redetermine status data Status

Selection:

Success ful

W ith errors

Still open

0

Determine sequence

0

Single-level Single-level price determin. determin.

0

0

1. Genera nerall data data:: - As si si0gn gn p l an t 0 2. Proce rocess steps: steps: 0 0 se sele 0ion crite - Choose hoo select ction criteria ria - Execu xecute te 3. Results: sults: - St at u s - L og - Results sults overvi overview ew - M at at er er ia ial l is is t 0

Multi-level Multi-level price determin. determin. Revaluation of consumption Perform closing entry Mark material price

© SAP AG 2003

run. The differences  You can execute multilevel actual costing for one or more plants in the costing run. The between the preliminary valuation valuation price for the material and and the material inventory and consumption consumption are calculated. This is done using single-level or multilevel material price determination. The actual prices calculated by these steps can then be used to revaluate the closed periods and also for future valuations.  You can display selected periods under general data. data. Here you can see which plants were assigned to the costing run, which plants can still be assigned to the costing run and which plants you can not assign to the costing run.  The Process view shows you the status of the corresponding process steps for single or multilevel price determination or the closing entries. Status data for the hierarchy display is not automatically created when entering the costing results or after executing a costing function. In order to display the most up to data information, you should regenerate the status data. The other views display the number of materials, for which each step was successful or unsuccessful, or is still outstanding or was not included.  The results of the costing run are displayed, in a hierarchical overview under results. You results. You can use the costing run display to display materials that have errors, and/or for log evaluation. You can select various filters for the material list display, for example, you can display all materials that contain errors, or only materials with goods movements.

(C) SAP AG

AC530

6-22

Selection: General General d ata

Results: Plants

Selected Selected m aterials: only price control 3

Process steps Pr o c es s s t ep

Par amet er

Ex ec u t e

St at u s

Selection:

Su c c es s f u l

Wi t h er r o r s St i l l o p en

1088

Determine sequence

0

0

0

0

0

0

0

0

0

Single-level Single-level price determin. determin. Multi-level Multi-level price determin. determin. Revaluation Revaluation of consu mption

L og

Perform closing entry Mark material price

© SAP AG 2003

 Before performing multilevel actual costing, select the relevant plants from the selection screen

Available plants. plants. You can assign each plant to to exactly one costing run for for each period. If you have already carried out a process step for for a costing run, the plant assignment assignment can no longer be changed. changed. You can only change the plant assignment, if you completely delete the costing run.  Select the parameters under Process and Selection. Specify the method of processing. With larger volumes of data, you can have the system carry out the function in the background.  When you Execute, Execute, you see a list of the relevant plants with information on how m any materials were selected. You can find additional information on the materials for each plant displayed in hierarchy form. Note that only materials with price determination control 3 (single-level/multilevel) (single-level/multilevel) in the material master are selected here that. possible errors and, if  You can also see the log for further information. Check the results, remove possible necessary, select again. costing sequence.  Next, determine the costing

(C) SAP AG

AC530

6-23

Determine the sequence Determine sequence for the t he costing costin g run assigns Results Results overview AC530 L ev el 0 L ev el 1 L ev el 2 L ev el 3

1088 50 450 550 38

Material Material li st Material not moved moved procured, but not multilevel Procured, multilevel " (higher levels)

....

P l a nt

ACT-BCD-## ACT-LCD-## ACT-DCD-## ACT-DCD-## ...

Level

6000 6000 6000 6100

Single-level Multi Closing

1 1 2 3

Material ledger display Process steps Pr o c es s s t ep

Par amet er

Ex ec u t e

St at u s

Selection

Su c c es s f u l

Wi t h er r o r s s t i l l o p en

1088

Determine sequence

1088

Single-level Single-level price determin. determin. 0

0

1088

0

0

588

Multi-level Multi-level price determin. determin. Revaluation Revaluation of consu mption Perform closing entry Mark material price © SAP AG 2003

 When you determine the sequence, sequence, the system generates the costing level and assigns the selected

materials to these levels. The sequence is determined using material ledger data, in other words the periodic update of goods goods movements and other material related related operations.  The following costing levels are generated:  Level 0: All materials that have been assigned price control 3 in the material master but for which no values or quantities have been created in the period.  Level 1: All materials for which quantities and/or values have been created during the period but that were not procured on a multilevel basis. Multilevel procurement occurs if you use one material in order to procure another (example: if you use a raw material to produce a semi-finished product).  Level 2 and higher: All selected materials that were procured on a multilevel basis. basis.  This results in a list of all costing levels (for example level 1 raw materials, level 2 semi-finished goods and so on) with information about the assigned materials. From the level overview you can go to the other overviews.

(C) SAP AG

AC530

6-24

Single-Level Price Determination Results Results overview

Material Material li st SL

AC530 L ev el el 0 L ev ev el el 1 L ev ev el el 2 L ev el el 3

ML BI

1088 50 450 550 38

Material


....

Plant

Level

6000 6000 6000 6100

S pr price

1 1 2 3

Per.V pr price

10.00 5.00 21.60 20.00

% var.

12.50 6.50 24.60 21.60

25.00 30.00 13.89 8.00

Status: Price determined single-level

Tolerances Tolera nces can be set Process steps Pr o c es s s t ep

Par amet er

Ex ec u t e

St at u s

Selection

Su c c es s f u l


1088

Determine sequence

1088


1088

0

0

0

0

588


 Before you use single-level price determination, you need to enable the material price determination.

This is only relevant for materials that have material price determination 3. To display the allowed tasks, see Allowed tasks. If tasks. If necessary, set material price determination. After this, you can run the multi-level and the single-level material price determination for the cost run in the specified period.  The system calculates periodic allocation prices for prices for the processed period and updates them in the material ledger data for information purposes in all currencies.  Multi-level price determination is based on single-level price determination for determination for all materials. Check the results of the single-level material price determination and then run the multi-level price determination.

(C) SAP AG

AC530

6-25

Multi-Level Price Determination Results Results overview



ML BI

1088 50 450 550 38

Material

ACT-BCD-## ACT-LCD-## ACT-DCD-## ACT-DCD-## 36.34 ...

....

Plant

Level

6000 6000 6000 6100

S price

1 1 2 3

Per.V price

10.00 5.00 21.60 20.00

% var.

12.50 6.50 29.45 29.45

25.00 30.00 47.25

Status: Price determined multi-level

Tolerances can be set Process steps Pr o c es s s t ep

Par amet er

Ex ec u t e

St at u s

Selection

Su c c es s f u l


1088

Determine sequence

1088

Single-level Single-level price determin. determin. 1088

0

0

588

0

0


determination, the results of the single-level material price determination are  During multi-level price determination, the 



 

used to calculate new prices for all materials in costing level 2 and above. The multi-level material price determination works consecutively through the costing levels, starting at the lowest one. This enables the calculated actual prices of materials from the lower levels to be included in the price determination of higher levels. The price variances of, for example, raw materials are thus transferred to semi-finished products and then in turn to finished products. When the results of multi-level material price determination are checked, the system provides you with a hierarchical overview of the costing run results. You can use the costing run display to display materials that have errors, and for log evaluation. Ledger for an overview of the goods movements You can use the display of master data for Material Ledger for and to navigate into the relevant documents. The overview provides overview provides the statuses of the single-level or multi-level price determination. The other views display the number of materials for each level, for which each action was successful or unsuccessful, or is still outstanding or was not intended. You can select various filters for the material list display, for example, you can display all materials that contain errors, or only materials with goods movements.

(C) SAP AG

AC530

6-26

Revaluation of consumption For closing entry: Revaluate FI G/L accounts

Single-level consumption: As si gn header header accou nt or ori ginal ginal account

(optio nal with CO accou accou nt ass.)

Process steps Process st step

Parameter

Execute

Status

Successf ul With er errors

still op open

Selection

1088

Determine sequence

1088

Single-level price determin.

10 88

0

0

5 88

0

0

10 88

0

0

Multi-level Multi-level price determin. Revaluation of consumption Perform closing entry Mark material price © SAP AG 2003

 As an option, you can adjust the single-level consumption values in actual costing with the periodic unit

price in all value records. Make the adjustment adjustment at the end of the period. period. The actual costing run determines the relevant amounts and records the results in a document. In the closing entry you can post the amounts determined for the revaluation of consumption to financial accounting, in addition to the other transactions. As part of this process, the material price determination allocates the differences incurred to the categories Consumption and Ending inventory in proportion to quantities.  In the revaluation of consumption, the portion allocated to the category Consumption is allocated to the

individual consumption alternatives in proportion to quantities consumed. The allocation is made only to single-level consumption alternatives because multilevel consumption amounts have already been revaluated as part of multilevel price determination. You can perform the revaluation of consumption on original and on collective account assignment.  Revaluation on original account assignment  Here the original account assignment objects (the FI account posted on goods issue) are updated as key

features of the consumption alternative. To do this, you have to specify in customizing which movement types are relevant for revaluation in this way. The amounts determined in revaluation of consumption can now be recalculated for these consumption alternatives of the original account assignment. As an option, you can additionally specify in customizing whether you also want to perform a recalculation in the CO account assignment. assignment. (C) SAP AG

AC530

6-27

 Revaluation on collective account

revaluation, the revaluation amounts  For all consumption alternatives not marked as relevant for revaluation, determined are posted to a collective account during account during closing entry. The collective account must be stored in the customizing of the account determination for transaction key COC COC.. entry is made, the relevant documents of consumption revaluation are posted in  When the closing entry is financial accounting.

(C) SAP AG

AC530

6-28

Closing Entries Results Results overview



ML BI

1088 50 450 550 38

....

Material


q Revaluate Process run steps q Test qPReversal r o c es s s t ep Par amet er Ex ec u t e Consumption q Selection Select lect CO account assignment q Se

Plant

6000 6000 6000 6100

Level

S p ri c e

1 1 2 3

10.00 5.00 21.60 20.00

Per.V price

12.50 6.50 29.45 29.45

% var.

25.00 30.00 47.25 36.34

Status: Closing entry p erformed St at u s

Su c c es s f u l


1088

FI

Determine sequence

1088


1088

0

0

588

0

0

1088

0

0

Multi-level Multi-level price determin. determin. Perform closing entry

CO PA

Mark material price © SAP AG 2003

entries, you need to enable closing entries. To do so, double-click on the  Before you can make closing entries, closed padlock, which will then be opened. possible to post to the previous previous period. You  After you post closing entries for entries for period 1, it is no longer possible check the prices determined, post them as closing entries and determine whether you need to revaluate the material inventories for period under review. The closing entry must be made for every period and can only be made for the previous period. Different results and documents are generated depending on whether a revaluation takes place (also see the beginning of the unit).  You can reverse the reverse the results of the closing entry. However, you can only do this for the last posting

period.

(C) SAP AG

AC530

6-29

Anal An aly y si s of o f the t he Var Varian ianc c es Results Results overview


AC530 L ev el 0 L ev ev el el 1 L ev ev el el 2 L ev el el 3

ML BI

1088 50 450 550 38

....

Material

Pl a n t


6000 6000 6000 6100

Level

S p ri c e

1 1 2 3

10.00 5.00 21.60 20.00

Per.V price

12.50 6.50 24.60 21.60

% var.

25.00 30.00 13.89 8.00

Ac tual tu al BOM B OM Multilevel difference

Single-level difference

Quantity

Price

0

0

0

0

1000

3000

4850

29,45

Document: Document:Production Receipt Receipt from lower levels (costed actu al BOM) BOM) 1 2 5 0 3000 ACT-DCD-## FVersi FVer si on 01

4850

29,45

3000

4850

29,45

2100

1455

29,45

900

3395

29,45

Beginning Beginning in ventory Receipts

Qt y Version1 Pr o c es s 0001: 800 PC ACT-LCD: 9002PC Version ACT-BCD: 900 PC ....IR.. L ab el i n g 9H Rec o r d i n g 9 ....GR... H

Si n g .-l ev . 1350.00 2250.00 347.34 902.66

Mu l t i l ev . 4858 0.5 00 0 0.00 0.00 0 0.00 0.00 700

© SAP AG 2003

costs, you can jump to the material list directly from the costing run. From there you  To analyze actual costs, display. can go directly to the material ledger display.  The material ledger display provides more comprehensive means of analyzing the variances of your materials. With multilevel procurement and variances, you can jump to the origin of the procurement with the Actual the Actual BOM button. BOM button.  There you see an overview showing the quantities of materials, activity types, or business processes that were required to produce a particular output. You can also see the single-level or multilevel price differences for each receipt or consumption that resulted from the subsequent adjustment.

(C) SAP AG

AC530

6-30

PeriodPe riod-End End Close Close in Actua Actuall Costing: Unit Summa Summary ry

You are now able to:  Explain Explain how the periodic unit price is calcul calcul ated. ated.  Run and analyze analyze the period-end period-end clo se with or withou t revaluation. revaluation.  Create Create a costin cos ting g run for fo r multi level actu actu al costing co sting , execute it, and analyze it.  Analy An alyze ze pri p ri ce di d i f f erence eren ce po st ing in g s.

© SAP AG 2001

(C) SAP AG

AC530

6-31

Period-End Closing in Actual Costing: Exercises Unit: Period-End Close in Actual Costing

At the conclusion of these exercises, you will be able to: •

Perform single-level period-end closing for the material ledger

•

Create a run for multilevel actual costing

•

Analyze the results of multilevel actual costing

Your cost accounting manager carries out a run for multilevel actual costing. He is not happy as different actual prices have resulted for your CDs.

Period-end closing of the material is performed for the previou s posting period. You can complete the first step, material price determination, as often as you want, and at any time. The second step, however, in which you post period-end closing as accounting-relevant, can only be carried out for the previous posting period. Your trainer will now close the current posting period and begin a new one. As a result, the current month (the period in which you have carried out all postings) becomes the previous posting period. This allows you to make closing entries. The next month becomes the current posting period. Period-end closing of the material ledger in release 4.0 is carried out with the two steps Single-Level Price Determin Price Determination ation and Post Post Closing . This function does not take into account any multilevel price or exchange rate differences. During this exercise, you will perform and ana lyze the closing for one of your materials using the menu path that contains c ontains the functions of release 4.0. Later, your trainer will perform multilevel actual costing for all course participants' materials.

(C) SAP AG

AC530

6-32

1

Preparation for Close in Cost Center Accounting 1-1

Cost Center Situation before Period-Close Enter the following settings for the cost center information system in your user parameters: Cost center group:

CCG530-##

Controlling area

6000

Report time period

Current period in current fiscal year

Report currency:

Object currency

Save. 1-1-1

Call up the report to analyze the plan/actual variances for your cost center. Controlling area:

6000

Period/fiscal year:

Current month

Plan version:

0

Cost center group:

CCG530-##

Cost element:

No entry

Why does your cost center have planned costs but no actual costs? Why? _____________________________________________________ _________________________ _______________________________ ___ What is the amount of the activity ac tivity output for your cost center? Activity types

Plan/Actual

ATL-##

Plan

Hours

Actual

Hours

Plan

Hours

Actual

Hours

ATR-##

1-1-2

Quantity

Under which activity was the actual activity posted? _____________________________________________________ _________________________ _______________________________ ___

1-2

Posting of Actual Costs to Cost Centers Create a G/L account document. Use the template AC530 and make the following changes: (To do this, you should make sure you are in company code 6000) Document date: At item level

Today's date Replace cost center CC530-30 with your cost center CC530-##.

Post the document. (C) SAP AG

AC530

6-33

1-3

Actual Price Determination 1-3-1

Call up a report that displays the existing prices for the activity types of your cost center. Make the following entries: Cost center:

CC530-##

Activity type:

-

Version:

0

Period/fiscal year:

Posting period

Price indicator

No entry

Price unit:

1 Display all selected prices

A price is displayed for each activity ac tivity type. Fill out the following table. Activity types

Total price

Currency

Price indicator

AT-##: ATR-##: What is the meaning of the price indicator? What type of price is it used for? _____________________________________________________ _________________________ ______________________________ __ Display the cost component split for the planned price of ATL-##. Is there a cost component split? _____________________________________________________ _________________________ ________________________________ ____ 1-3-2

Complete actual price determination for your cost center group. Cost centers:

Cost center group CCG530-##

Business processes:

No business processes

Parameters:

Current period

Process control:

•

No background processing

•

No test run

•

Detail lists

Execute, post and then leave screen. You will analyze the prices in the next exercise.

(C) SAP AG

AC530

6-34

1-3-3

Call up the price report again, using the same parameters as before: Cost center:

CC530-##

Activity types:

-

Version:

0

Period/fiscal year:

Previous posting period

Price indicator:

No entry

Price unit:

1 Only display the prices to be allocated

A further price with the indicator 5 is displayed for each of the activity types. Complete the table: Activity types

Total price

Currency

Price indicator

ATL-##:

5

ATR-##:

5

What is the meaning of the price indicator? What type of price is it used for? Does a cost component split exist now? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ The difference between the planned and actual prices can be calculated in a later step of period end close in actual costing.

(C) SAP AG

AC530

6-35

2

Period-End Closing in the Material Ledger (Single-Level Actual Costing) 2-1

Organizational Measures (Menu Path: ACT/ML Periodic Material Valuation) Check whether single-level material price determination and the closing entry are allowed for the previous posting period (current month) in plant 6000. If not, establish the allowance to do this.

2-2

Single-Level Calculation of Material Prices for Your Labels 2-2-1

Check to see which standard price and moving average price is valid for the previous posting period and which is valid for the current posting period. You can find this information by choosing the Prices and inventory value icon in the material ledger display for your labels (ACTLCD-##, plant 6000). When doing so, fill out the following table. Values before price determination

Previous posting period (current month)

Current posting period

Period status: S price:

MXN

MXN

V price:

MXN

MXN


MXN

MXN

Inventory value (statistical):

MXN

MXN

Price control:

2-2-2

Open the category Consumption for the previous posting period so that you can see the values for the process categories (production, cost center). Write down the amount of the price differences and the prices of the following lines: Price differences

Price

Category Cumulative inventory :

MXN

MXN

Category Consumption :

MXN

MXN

→ Process

category Production :

MXN

MXN

→ Process

category Cost

MXN

MXN

MXN

MXN

center : inventory: Category Ending inventory

session for the following exercises. Leave this session and open a new session for

(C) SAP AG

AC530

6-36

2-2-3

Carry out single-level material price determination for your labels in your second session. Use the following data: Material:

ACT-LCD-##

Plant:

6000

Treating materials already processed:

Process again

Period/fiscal year:


Warning when variance larger than:

1%

Error when variance larger than:

No entry

Check against:

S price

Background processing:

No

Save log:

Yes

Execute. Are there warning messages? Reason for the warning: __________________________________ _________________________ _________ 2-2-4

Look at the material ledger data for the previous posting period (current month). Were there any changes as a result of price determination? Under Prices and Inventory Values , you can see which standard price and which moving average price is valid for the previous period and which is valid for the current posting period. Fill out the following table. Values after price determination



Period status: S price:

MXN

MXN

V price:

MXN

MXN

Inventory value:

MXN

MXN


MXN

MXN

Price control:

(C) SAP AG

AC530

6-37

2-2-5

Previous posting period in the material ledger display: How are the price differences now distributed and at which price are the lines valuated? Category Cumulative inventory :

MXN

MXN/pc


MXN

MXN/pc

MXN

MXN/pc

category

MXN

MXN/pc

category Cost

MXN

MXN/pc

MXN

MXN/pc

→ The

allocated: line Not allocated:

→ Process

Production : → Process

center :

Category Ending inventory inventory: included mean? What does the line Not included mean?

_____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ 2-2-6

Look at the material ledger document that was written for price determination (you find it if you open the category Ending inventory inventory in a second session). Go to the detail detail screen of the document. Was an accounting document written for the price determination? Yes/no: _______________ Reason: _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___

(C) SAP AG

AC530

6-38

2-3

General Ledger Account Balance before Closing Entry 2-3-1

First check to which account the price differences for goods receipts, activity that the account invoices and settlement were posted. The activity that determination from material management uses to find the price difference account is PRD. PRD. Plant Mexico is assigned to the valuation grouping code 0001. 0001. To which account in the INT chart of accounts is this activity posted? Account Determination MM - Activity PRD Material

2-3-2

Valuation class

ACT-LCD-##

3000

ACT-BCD-##

3000

ACT-DCD-##

7920

Account/ debit

Account/ credit

accounts for the For the raw materials: Call up the balance for both PRD accounts for previous posting period (use multiple selection): Accounts

Balance

231000 and 281000 2-3-3

MXN

Go to the line item overview for the balance of the current month, and choose display variant G/L Account Standard. Document type for posting

2-3-4

Check which account the price difference for activity PRY - Single-level price differences/Material Ledger - are posted to. Account Determination MM - Activity PRY

2-3-5

Valuation class

Account

No differentiation

S:

H:

Display the balance of the accounts for the previous (current) posting period. Account

Balance

231520 and 281520

MXN

How do you explain this balance? _____________________________________________________ _________________________ _______________________________ ___

(C) SAP AG

AC530

6-39

2-4

Making Closing Entries for Your Labels (with Revaluation) 2-4-1

Make the closing entries with revaluation for your labels. Use the following data: Material

ACT-LCD-##

Plant

6000


Process again

Period/Fiscal year


Revaluate material

X (yes)

Revaluate consumption

No

Select CO account assignment

No


No

Test run

No

Save log

Yes

Execute. 2-4-2

Call up the material ledger display for your labels for the previous posting period. Which period status does the material have now? ________________________________________________ _________________________ _______________________

2-4-3

Accounting 1 view in the material master. Fill out the following Go to the Accounting table:



S price:

MXN

MXN

V price:

MXN

MXN

Stock value:

MXN

MXN

Value per unit price:

MXN

MXN

Change through closing entry Yes/no?

Price control:

(C) SAP AG

AC530

6-40

2-4-4

The closing entry revaluates the ending inventory, whereby the price and exchange rate differences are posted to the inventory stock account. Go into the previous posting period in the material ledger display. Click on the Closing doc. icon and go from there to the accounting documents. Choose the accounting document with the lowest number and choose Goto – Display as List - display variant 530 Demo. Write down the following data: Posting date Account

Activity

Amount

Was the account, that the price differences were originally posted to (G/L account 231000 / Activity PRD) created by the closing entry? ___________________________________________________ _________________________ __________________________ Which activity was used by the closing entry for the stock revaluation? ____________________________________________________ _________________________ ___________________________ 2-4-5

Display the balance of the accounts for activity PRY again and call up the line item overview for the current period. Which document type was used for the posting? Document type for posting:

2-4-6

In order to fully understand how the periodic price differences are distributed to FI accounts at period-end, and to be able to explain the line "not included" (material price analysis), complete the following sentence : Of the periodic price difference amount of MXN ______________ posted, MXN ___________ ___________ could could be assigned assigned to the period close close inventory inventory of the raw materials. The remaining price difference amount of MXN ___________ is consumed by the material quantity used during the period and remains in single level actual costing as price differences.

2-4-7

Now, choose the accounting document with the highest document number. What posting date does this document have? Posting date How do you explain this second posting? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___

(C) SAP AG

AC530

6-41

2-4-8

Materials that have the period status Closing Entry Posted are are not included in multilevel actual costing. To check the period p eriod status of your materials, call up the appropriate report in the information system of the material ledger. Select all materials that start with ACT*. Which status do your labels ha ve? _____________________________________________________ _________________________ _______________________________ ___

2-4-9

Reversal of Closing Entries Now reverse the closing entries for your material ACT-LCD-##. To check the period status of your materials and make sure that they are included in multilevel actual costing, call up the Listing of Materials Materials by Period Status report with the same selection criteria again. Which status do your labels now have? _____________________________________________________ _________________________ _______________________________ ___

3

Period-End Closing in the Material Ledger (Multilevel Actual Costing) When carrying out multilevel actual costing, you cannot select individual materials. You can only select by plant. For this reason, your trainer will carry out multilevel actual costing for all course participants' materials. Your task is to understand the posting logic and analyze the results. 3-1

Multilevel Actual Costing: General Data for the Run Go into the costing run AC530 for the previous posting period. Which plants are assigned to the run? Plant 1 Plant 2

3-2

Multilevel Actual Costing: Process Steps 3-2-1

Selection: Look at the process steps for multilevel actual costing. How many materials were selected for the run? What are the criteria that determine whether a material is selected? Number of selected materials All materials are selected that _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___

3-2-2

Parameters: Check the parameters for single-level price determination. During price determination, which prices can you check to see whether a variance of a certain amount should lead to warning or error messages? Price 1

(C) SAP AG

AC530

6-42

Price 2

(C) SAP AG

AC530

6-43

3-3

Multilevel Actual Costing: Costing Results: 3-3-1

Select the view Costing run overview and the hierarchy setting Costing run/level/cycle number . Which costing levels were determined? How many materials are assigned to the levels? Level

Number of Assigned Materials

Level 0 Level 1 Level 2 Level 3 When are the materials assigned to level 0? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ When are the materials assigned to level 1? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ When are the materials assigned to the other levels? _____________________________________________________ _________________________ _______________________________ ___ _____________________________________________________ _________________________ _______________________________ ___ 3-3-2

Set the hierarchy to Costing Run/Plant/Material Type/Valuation Class/Origin Group and check whether the material types were successfully included in the costing run. Level

Material type/number

Plant 6000

Raw materials

Status of Status of single-level multilevel settlement settlement

Status of closing entry

Semi finished products Fini Finish shed ed prod produc uctt Plan Plantt 6100 6100

(C) SAP AG

Fini Finish shed ed produ product ct

AC530

6-44

3-3-3

Now select the top hierarchy node (the number of the run) and display the material list for the run. Use the filter Only materials with goods results list in the left portion movements . For a better overview, hide the results of the screen and enlarge the material list display. Which status do your materials have? Material

Status of single-level settlement

Status of multilevel settlement


ACT-LCD-## ACT-BCD-## ACT-DCD-## (6000) ACT-DCD-## (6100) 3-3-4

Choose the display variant Movement Data Data. Which material has the largest receipt quantities? _____________________________________________________ _________________________ _______________________________ ___

3-3-5

Choose the display variant Price Analysis . According to which criterion are the materials sorted here? Sorting criterion: _____________________________________________________ _________________________ _______________________________ ___ How high are the price variances v ariances for your materials? Material

3-3-6

Standard price

Periodic unit price

Absolute Relative var. var.

ACT-LCD-##

MXN

MXN

MXN

%

ACT-BCD-##

MXN

MXN

MXN

%

ACT-DCD-## (6000)

MXN

MXN

MXN

%

ACT-DCD-## (6100)

MXN

MXN

MXN

%

You want to analyze the origin of the price differences of your demo CD in plant 6100. Go to the material ledger display for your demo CD in plant 6100 by double clicking. Select the display variant Single-Level and Multilevel Price Price Differences Differences. Are the price differences of the product primarily single or multilevel in nature? Cumulated Price Differences Single-level

MXN

Multilevel

MXN

Look at the material ledger document for the multilevel price differences. From which material do these differences originate? Input material with multilevel price differences: (C) SAP AG

AC530

6-45

(C) SAP AG

AC530

6-46

3-3-7

Evaluated Quantity Structure (Multilevel) Use the Evaluated Evaluated Quantity Quantity Structure (Multilevel) (Multilevel) to analyze the amount of difference for each resource. Which input resources have yielded the highest differences for one CD? CD? Resource

Difference

1. 2. 3. 4. 3-3-8

3-3-9

Analyze the closing document of the material ledger. For which of your materials in plant 6000 has consumption be recalculated? Material

Consumption price differences

_____________________

_______________________

_____________________

_______________________

_____________________

_______________________

Which account was the price difference posted to? Now select Display as as and layout /530 Demo list and Demo in the FI document. Account for transaction key COC __________

(C) SAP AG

AC530

6-47

Period-End Close in Actual Costing: Solutions

(C) SAP AG

AC530

6-48

(C) SAP AG

AC530

6-49

Unit: Period-End Close in Actual Costing

The following menu paths are used in the solutions:

1

ACT:

Accounting Controlling Product Cost Controlling Actual Costing/Material Ledger

IMG:


IMG

Edit Project

SAP

Preparation for Close in Cost Center Accounting 1-1

Cost Center Situation before Period-Close Enter user parameters: Accounting User settings

Controlling

Cost Center Accounting

Information system

On the Basic data / Report Objects and Objects tabs enter Cost center group CCG530-## and controlling area 6000. Time Period set year . On the tab Report Time set the current the current period and current fiscal year.

On the tab Report Currency Currency set the currency to object currency. Save. 1-1-1

Report to Analyze Actual / Plan Variances: Accounting Controlling Cost Center Accounting Information System Reports for Cost Center Accounting Plan/ Actual Comparisons Cost Centers: Actual/Plan Variances Controlling area:

6000

Period/fiscal year:

Current month / Current year

Plan version:

0

Cost center (value):

CCG530-##

Cost element:

No entry

No actual debits exist for your cost center because no actual costs have been entered. _____________________________________________________ _________________________ _____________________________ _

(C) SAP AG

AC530

6-50

Activity output for your cost center: Activity types

Plan/Actual

ATL-##

Plan Actual

ATR-##

Plan Actual

1-1-2 1-2

Quantity 10 hours 9 hours 10 hours 9 hours

The activity output is posted to the production order during confirmation.

Posting of Actual Costs to Cost Centers Accounting Financial Accounting Enter G/L Account Document.

General Ledger

Document entry

Choose template AC530 from the templates for the item and make the following entries/changes: (You may need to change to company code 6000 via "Environment" before you do this)

Document date:

Today's date

At item level:

Replace cost center CC530-30 with your cost center CC530-##.

Post the document. 1-3

Actual Price Determination 1-3-1

Current planned prices Accounting Controlling Cost Center Accounting Information System Reports for Cost Center Accounting Prices Cost Centers: Activity Type Prices Cost center:

CC530-##

Activity types:

-

Version:

0

Period/fiscal year:

Posting period

Price indicator:

No entry

Price unit:

1

Display all selected prices

(C) SAP AG

AC530

6-51

The following values are displayed: Activity Activity types types Total Total price price

Currenc Currency y

Price Price indicato indicatorr

ATL-##:

15

EUR

1

ATR-##:

35

EUR

1

Price indicator 1 means that the displayed price is an iterative plan price (planned costs / planned activity). The planned prices have a cost component split as they were determined iteratively (price indicator 1) and because the cost component structure is active for the version. This cost component compon ent split will be transferred using a transfer structure to the auxiliary cost component split (primary cost component split), the cost estimate and to the material ledger. 1-3-2

Actual Price Determination Accounting Controlling Cost Center Accounting Closing Single Functions Price Calculation

Period End-

Cost center group:

Select the radial button cost center group, enter only your group CCG530-##

Business processes:

No business processes

Parameters:

Current period

Process control:

•

No background processing

•

No test run

•

Detail lists

Execute. This posts the prices. 1-3-3

Accounting Controlling Cost Center Accounting Information System Reports for Cost Center Accounting Prices Cost Centers: Activity Type Prices Call up the price report again, aga in, using the same parameters as before: A further price with the indicator 5 is displayed for each of the activity types. Complete the table: Activity types

Total price

Currency

Price indicator

ATL-##:

19.23

EUR

5

ATR-##:

47.43

EUR

5

Price indicator 5 means that the displayed price is an iterative actual price (actual costs / actual activity). These prices also have a cost component split, which you can display (goto - cost component split).

(C) SAP AG

AC530

6-52

2

Period-End Closing in the Material Ledger (Single-Level Material Price Determination) 2-1

Organizational Measures ACT/ML: Periodic Material Valuation Allowed Tasks

Organizational Measures

Display

Plant: 6000, Fiscal year: current 2-2

Determine single-level material prices 2-2-1

Data before price determination Material Ledger Display: ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:


Click on the Prices and Inventory value icon to receive the following data. You can use the arrows to switch between periods. Values before price determination



Period status:

Quantities and values entered

Period opened

S price:

MXN 5

MXN 5

V price:

MXN 5

MXN 5

S

S


MXN 2500

MXN 2500


MXN 2500

MXN 2500

Price control:

2-2-2

Open the category Consumption : Price differences Category Cumulative inventory: inventory:

(C) SAP AG

Price

MXN 1,500

MXN 6.50

Consumption: Category Consumption:

MXN 0.00

MXN 5.00

Process category Production: Production:

MXN 0.00

MXN 5.00

Process category Cost center: center:

MXN 0.00

MXN 5.00

Category Ending Category Ending inventory: inventory:

MXN 0.00

MXN 5.00

AC530

6-53

Keep this session open as it is and open a second session.

(C) SAP AG

AC530

6-54

2-2-3

Single-level material price determination for your labels: ACT/ML: Periodic Material Valuation Determine Material Prices (Single-Level) Material

ACT-LCD-##

Plant

6000


Process again

Period/fiscal year


Warning when variance larger than:

1%

Error when variance larger than:

No entry

Check against

S price


No

Save log

Yes

Execute. Material price determination issues three warnings: The calculated price varies from the comparison price by more than the threshold value (1%) in all three three currencies. Amount of variances (in company code currency): 30% (MXN 6.50) 2-2-4

Changes through Price Determination ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:

Previous period/current year

Click on the Prices and Inventory Values icon to receive the following data. You can use the arrows to switch between periods. Values after price determination


Current posting period (next month)

Period status:

Price determined single-level

Period opened

S price:

MXN 5.00

MXN 5.00

V price:

MXN 6.50

MXN 6.50

S

S

Inventory value:

MXN 250

MXN 250

Inventory value

MXN 325

MXN 325

Price control:

(C) SAP AG

AC530

6-55

(statistical): The price calculated through material price determination is updated as the V price in the material master and the material ledger.

(C) SAP AG

AC530

6-56

2-2-5

Distribution of Price Differences ACT/ML: Material Ledger


Material:

ACT-LCD-##

Plant:

6000

Period/Year:

Previous period (current month)/current year yea r

Open the category Consumption : Price differences Price Category Cumulative inventory :

MXN 1,500

MXN 6.50


MXN 1,425

MXN 6.50

The line Not Allocated: Allocated:

MXN 1,425

MXN 0.00

Process category Production :

MXN 0.00

MXN 5.00

Process category Cost center :

MXN 0.00

MXN 5.00

MXN 75

MXN 6.50

Category Ending inventory inventory: What does the line Not included mean? included mean?

The price differences that cannot be settled to consumption are written in included . No revaluation of higher material levels takes place the line Not included in single-level material price determination. For this reason, all price differences of consumption have not yet been assigned to the individual process categories, in other words, have not yet been distributed. 2-2-6

Documents for Price Determination No accounting document is written for the price determination document, because no postings are carried out during material price determination. All calculations of material price determination are only statistical.

2-3

General Ledger Account Balance before Closing Entry 2-3-1

Account Determination for Price Difference Account IMG: Materials Management Valuation and Account Assignment Account Determination Account Determination without Wizard Configure Automatic Postings Execute and close the dialog box by canceling. Click on the button PRD , INT Account assignment, assignment, open the line Cost (Price) Difference PRD, Chart of accounts Account Determination MM - Activity PRD

(C) SAP AG

Material

Valuation class

ACT-LCD-##

3000

231000

281000

ACT-BCD-##

3000

231000

281000

AC530

Account/ debit

Account/ credit

6-57

ACT-DCD-##

(C) SAP AG

7920

AC530

231500

281500

6-58

2-3-2

Account Balance for Raw Materials Accounting Financial Accounting Display Balances

General Ledger

Account

Enter both accounts 231000 and 281000, using multiple selection, select using company code 6000 and the current fiscal year. The account balance depends on the number of participants and can, therefore not be given as a solution. 2-3-3

Line Item Overview Double click on the field balance in the column for the current period. Then choose layout G/L Account Standard . The following document types were posted to the account Document type for posting

2-3-4

•

WE (goods receipt)

•

RE (invoice)

Account Determination MM - Activity PRY IMG: Materials Management Valuation and Account Assignment Account Determination Account Determination without Wizard Configure Automatic Postings Execute and close the dialog box by canceling. Click on the button Account assignment, assignment, open the line Cost (Price) Differences (Material Ledger), Ledger) , INT chart of accounts. Account Determination MM - Activity PRY Valuation class

Account

No differentiation 2-3-5

231520, 281520

Display the account balances: Accounting Financial Accounting Display Balances

General Ledger

Account

Enter the account, select company code 6000 and the current fiscal year. Account

Current period account balance

231520 and 281520

MXN 0

(unless the instructor has performed a closing entry!) Activity PRY is only used during the closing entry for the material ledger. As no closing entries have been made, no postings have occurred for the current month.

(C) SAP AG

AC530

6-59

2-4

Making Closing Entries for Your Labels (with Revaluation) 2-4-1

Make the closing entries for your labels. Use the following data: ACT/ML: Periodic Material Valuation

Post Closing

Material

ACT-LCD-##

Plant

6000

Period/fiscal year


Revaluate material

X (yes)

Revaluate consumption

No

Select CO account assignment

No


No

Test run

No

Save log

Yes

Execute. 2-4-2

Through the closing entries, the material receives the status Closing entry performed .

2-4-3

Material master: In the material ledger display, click on the Material icon. This takes you to the Accounting Master icon. Accounting 1 view. Fill out the following table: Previous posting period


Change through closing entry Yes/no?

S price

MXN 5.00

MXN 5.00

No

V price:

MXN 6.50

MXN 6.50

No

Price control

V

S

Yes

Stock value:

MXN 325

MXN 250

Yes

Value per unit price

MXN 325

MXN 325

No

The price control for the previous period was changed during the closing entries. In the previous posting period, the material now has price control V . The material is valuated with the periodic unit price of this posting period. The standard price is not changed through the material ledger closing entries in any of the periods.

(C) SAP AG

AC530

6-60

2-4-4

Closing document: If you specify that the material inventory should be revaluated, the following postings take place: 1. The sum of the the price and exchange rate differences for the the ending inventory is posted to the balance sheet account to revaluate the inventory of the closed posting period 1 in line with the calculated periodic unit price for posting period 1. 2. The differences differences for for consumption initially remain on the corresponding difference accounts. In multilevel material price determination, you can adjust the portion of consumption that was used for the production of other materials. To see these postings, click on the Closing document icon icon in the material ledger display. Next, click on the Accounting Accounting Documents Documents icon and open number . Choose the accounting document with the lowest document number. Goto – Display as List – and then layout 530 Demo. Posting date

Last day of previous posting period

Account

Activity

Amount

300000 Raw materials 1

BSX

MXN 75

281520 ML price differences

PRY

(-) MXN 75

280000 Exchange rate difference KDM

MXN 0

The price differences for activity PRD (231000) are not posted by the closing entry in the material ledger, instead the account for activity PRY (281520) is used. 2-4-5

Account Balance for Activity PRY Accounting Financial Accounting Display Balances

General Ledger

Account

Enter the accounts 231520 and 281520, select via company code 6000 and the current fiscal year. Document type for posting: 2-4-6

ML - Material Ledger

Distribution of Price Differences Accounting Financial Accounting Display Balances

General Ledger

Account

Complete the following sentence: Of the periodic price difference amount of MXN 1.500 posted MXN 75 could be assigned to the period close inventory of the raw materials. The remaining price difference amount of MXN 1.425 is consumed by the

(C) SAP AG

AC530

6-61

material quantity used during the period and remains in single level actual costing as price differences.

(C) SAP AG

AC530

6-62

2-4-7

The inventory postings in posting period 2 are automatically reversed so that the material valuation in posting period 2 is left unchanged. Posting date

First day of current period

How do you explain this second posting? The second posting causes the beginning inventory to be valuated again at standard price for accounting purposes. If the standard price is identical in both periods, the second document contains the same values as the first document but with the opposite sign. 2-4-8

Information system: Period status of materials ACT/ML: Information System Status

Object List

Materials by Period

Selection: All materials that start with ACT*. Period status of the labels (ACT-LCD-##): Closing entry completed. 2-4-9

Reversal of closing entries ACT/ML: Periodic Material Valuation

Post Closing

Material

ACT-LCD-##

Plant

6000

Period/fiscal year


Revaluate material

X (yes)


No

Test run

No

Save log

Yes

Reverse with: Menu: Closing Entry

Reverse

Call up the period status report again for your material ACT-LCD-##. Your material now has the status Closing entry reversed .

3

Period-End Closing in the Material Ledger (Multilevel Actual Costing) 3-1

Multilevel Actual Costing: General Data for the Run Costing run: ACT/ML: Actual Costing

Edit Costing Run

Costing run: AC530, previous posting period. Under General Data : Plant 1 (C) SAP AG

6000 AC530

6-63

Plant 2

(C) SAP AG

6100

AC530

6-64

3-2

Multilevel Actual Costing: Process steps: 3-2-1

Selection: Line selection, create/edit column column (Note: Update the status data by clicking on the button Execute directly). Number of selected materials

128

The system selects all materials that have price determination control single/multilevel (3). 3-2-2

Parameters: Single-level price determination line, icon in the first parameters parameters column Prices against which you can check:

3-3

Price 1

Standard price in posting period

Price 2

Periodic unit price in previous posting period

Multilevel Actual Costing: Costing Results 3-3-1

Select the view Costing run overview and the hierarchy setting Costing run/level/cycle number . Level

Number of Assigned Materials

Level 0 Level 1

Depends on the number of course participants

Level 2 Level 3

First, all materials are selected (see process steps below) that have price determination control 3. All of these materials are assigned to a level. Level 0: All selected materials for which no goods movements took place during the posting period. Level 1: All selected materials for which goods movements took place during the posting period that were not procured on a multilevel basis. Multilevel procurement exists when other materials are entered into a material. Remaining levels: All selected materials that were procured on a multilevel basis. For example, the demo CDs in plant 6000 are procured on a multilevel basis because input materials are used in their production. The demo CDs in plant 6100 are assigned to a higher level because they were procured from plant 6000. For this reason, the demo CDs in plant 6000 represent a lower level.

(C) SAP AG

AC530

6-65

3-3-2

Participation in costing Hierarchy: Costing run/plant/material type/valuation class/origin group Use the Display Legend icon to display the meanings of the status icons. Legend icon Level

Material type/number




Plant 6000

Finished product

Successful

Successful

Successful

Semifinished product

Successful

Not implemented

Successful

Raw materials

Successful

Not implemented

Successful

Finished product

Successful

Successful

Successful

Plant 6100 3-3-3

Material list: The material list shows information on the selected materials, while the hierarchy only displays the data on a summarized level. Select the top hierarchy node (the number of the run) and click on the icon for the material list (on the left). Choose the following from the dropdown list: Display material list with filter

Materials with goods movements

Maximizing of the material list display: The icons Hide hierarchy hierarchy and Increase size size. Status of your materials:

3-3-4

Material




ACT-LCD-##

Successful

Not implemented

Successful

ACT-BCD-##

Successful

Not implemented

Successful

ACT-DCD-## (6000)

Successful

Successful

Successful

ACT-DCD-## (6100)

Successful

Successful

Successful

Layouts: Transaction data Click on the layout icon icon in the material list and select Transaction data (/MOVEMENTS). The material with the highest receipt quantity app ears at the top of the list.

(C) SAP AG

AC530

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3-3-5

Layouts: Price analysis Choose the variant Price Analysis . The materials are sorted according to the size of the relative variances between the periodic unit price and the standard price. (You will receive the figures shown in the table if you have carried out the exercises exactly. If you have posted posted other quantities or values, the figures may be different.)

3-3-6

Material

Standard price

Periodic unit Absolute price var.

Relative var.

ACT-DCD-## (6100)

MXN 20.00

MXN 29.45

MXN 9.45

47.25 %

ACT-DCD-## (6000)

MXN 21.60

MXN 29.45

MXN 7.85

36.34 %

ACT-LCD-##

MXN 5.00

MXN 6.50

MXN 1.50

30.00 %

ACT-BCD-##

MXN 10.00

MXN 12.50

MXN 2.50

25.00 %

Cause of the price differences In the column Material in the material list, double-click on your demo CD in plant 6100. This takes you to the Material Ledger display. Choose layout Single- and multilevel price differences through the corresponding icon. In the line Cumulative inventory : Cumulated Price Differences Single-level

MXN 160

Multilevel

MXN 785

Open the category Receipts and the process category Stock Transfer . Double click on the document for multilevel material price determination Receipts from lower lower levels). ( Receipts Origin of multilevel price differences Input material with multilevel price differences:

ACT-DCD-## / plant 6000

All price differences from plant 6000 that were attributed to the demo CD in plant 6100 are multilevel price differences. differences. To analyze how the price differences in plant 6000 arose, you must switch to the material ledger display in plant 6000: Use the green arrow to return to the costing c osting run. In the column Material in the material list, double-click on your demo CD in plant 6000. This returns you to the material ledger display again.

(C) SAP AG

AC530

6-67

3-3-7

3-3-8

3-3-9

Evaluated Quantity Structure (Multilevel) Change to the display for ACT-DCD-## in plant 6000. Select the Evaluated Quantity Quantity Structure Structure icon and then base quantity: 1 pc. Resource

Difference

1. CD Blank

MXN 2.81

2. Label for CD

MXN 1.69

3. CD Recording

MXN 1.14

4. CD Labeling

MXN 0.39

From the material price analysis (CKM3), call up the closing document for one of your materials in plant 6000. Material

Consumption price differences

ACT-LCD-##

MXN 75

ACT-DCD-##

MXN 4,710

Now select the FI document from the closing document, select Select Accounting Accounting Documents Documents and layout /530 Demo Demo. Account for transaction key COC: 231099

(C) SAP AG

AC530

6-68

Speciall Functions Specia Function s

Contents:  Integrated Profit Profit ability Analysis i n CO-P CO-PA A  Price Update  Production Startup Startup  Alter Al tern n ati ve Valu Val u ation ati on Run

© SAP AG 2003

(C) SAP AG

AC530

7-1

Special Spe cial functions: Unit Objective Objectives s

At t h e co n clus cl usii on o f thi th i s unit un it,, you yo u wil w il l b e able abl e to: to : Set up an integrated i ntegrated connecti on to CO-P CO-PA A and  Set analyze analyze the prof itabili ty reports.  Descri Descri be the update of futu f uture re pri ces.  Descri Descri be the extend extended ed options option s such as the th e alternative alternative posting run  Prepare Prepare and execute execute produ ctio n startup fo r the material ledg er. er.

© SAP AG 2003

(C) SAP AG

AC530

7-2

Special Spe cial Functions: Functions: Business Scena Scenario rio

are famili famili ar with the functi ons of t he  Once you are material ledger, you examin examin e the extended extended func tions th at you can implement implement in Customizing.  You also see the setting s required to transf er calculated calculated actual cost s to profit ability analysis, and to i nclude the costs as actual actual co sts of sales. sales.

© SAP AG 2003

(C) SAP AG

AC530

7-3

Course Overview


© SAP AG 2003

(C) SAP AG

AC530

7-4

Actu Ac tu al Co st in ing g an d CO-PA Int Integr egr at atio ion n CO PA

CO PC

Profitability Profitability segment

Profitability Profitab Profitability Profitability ility Analysis Analysis Customer order

Standard Cost Estimate

Actu Ac tual al Co st Component Split

Plan Plan Cost Component Split

Mat Lohn AfA GK GKZ

Mat Lohn AfA GKZ

Material v aluation Material during the period

FI

Actu Ac tual al Co st in g / Material Ledger

Optio nal Revaluation Revaluation at Period Period cl ose

Financial Accounting

© SAP AG 2003

 In Financial Accounting goods movements (for example sales) are valuated with the standard price. In

Profitability Analysis the Analysis the billing documents are documents are normally valuated with the cost component split for the standard price (Target costs: Actual quantity * planned costs).  Actual costing in costing in the material ledger calculated the actual costs for the finished products (or other materials). Actual costs are determined periodically, and contain all follow-up costs and lower level material components.  As the actual cost component split already contains the variances for all materials, it is no longer necessary to subsequently allocate the production variances to the results each month. You can use a periodic revaluation with actual cost component split to split to analyze actual costs.  As with the cost component split for planned costs, CO-PA can decide for the actual cost component split will be used for the valuation. This allows the split whether, a main or auxiliary cost component split will actual cost component split to use the actual prices for the cost center ( Primary Cost Component Split). Split).

(C) SAP AG

AC530

7-5

Custo mizing Customizin g CO-PA: CO-PA: Actu Ac tu al Co st in ing g As Ass s ig ign n men mentt CO-PA CO-PA access access to act ual costi ng/material ng/material ledger: Def i n e v al u at i on v i ew Tr an s f er Mai n o r au x i l i ar y c o s t c o m p o n en t s p l i t Ass ig n v alu e fi eld s f or tr ansfer ans fer of aver age pri p rice ce

Tran s f er c o s t A c c o m p o n en t s p l i t t u a a c u l and aver age p rice ri ce c t i i v o C o e : s t c o m s t p o s t r n e c o r u n t u m c s p p s t a t u u o l i t a n r e n e e

e s d a r a s n t t i d c i n i m d a t e e o s t

Assi As si gn Cost Co st in g K ey to t o Mater M aterii al Typ T yp es Po i n t o f v al u at i on 02 Per i o d i c r ev al u at i o n 02 Per i o d i c r ev al u at i o n ...

Assi As si gn Value Val ue Fi eld s Point of Val. Val. 02 Perio Perio dic revaluatio n 02 ... ... ...

Ac t i v i t y Bi l l i n g Bi l l i n g ...

Mat er i al t y p e FERT HAL B ...

Cos t Co mp onent on ent Stru St ru ct ur e ML Cost compo nent Fix/Var... Fix/Var..... 10 Raw materials 20 Fi x ed Sal ar i es ... ...

Variable Fi x ... ...

In value field 100 Material Costs Actual variable VV120 Per s o n n el Co s t s Ac t u al Fi x

© SAP AG 2001

 Access to the periodic unit price and the actual cost estimate in the material ledger is defined by

maintaining the costing keys. Valuation keys. Valuation of your sales quantities using the periodic unit price/actual cost estimate, usually takes place place in CO-PA within a periodic revaluation at period close.  This assignment determines for which point of valuation, which activity type and for which plan version

the specific product costing (decided through the costing key) for a material type will type will be read.  The value fields for an operating concern can be assigned to the individual components of the relevant

fields function. It is important to note cost component structure for actual costing using the assign value fields function. that the value fields must be assigned separately for each point of valuation in profitability analysis.  It is possible to differentiate between variable and fixed cost portions when transferring the cost

components to profitability analysis.  More than one cost component can be included in a single value field for each cost estimate (N:1

Relationship). The values from the cost components are then cumulated and transferred to profitability analysis.

(C) SAP AG

AC530

7-6

Period Close in CO CO-PA -PA Perio Perio dic Revaluation Revaluation in CO-PA O-PA menu: Time Point Point 02: 02: Periodic Periodic Revaluation Revaluation

Sel ec t i o n Cr Cr i t er i a Fr o m Per i o d To Perio d Acti Ac tiv v it y typ t yp es

Val u e Fi el d s 003.2001 003.2001 003.2001 Ord er Sett Set t lemen le mentt

Own value field s or Delta docu ments (old value fields)

Test run Al l v alu e fi eld s mo m o di fi abl e

Characteristic Characteristic for Revaluation - Cu s t o m er * - Ar t i c l e * - Co l u m n * ... *

© SAP AG 2001

 Periodic valuation enables you to select actual data that has already been posted, and revaluate it using a

self defined valuation strategy for the point of valuation 02 (Periodic Revaluation - Act). This Act). This can be applied for activity types A (Customer order receipt), F (Billing data as well as for all user defined activity types.  For example, periodic revaluation allows you to revaluate line items, that were posted in profitability

analysis at the start of the period using the standard cost of goods manufactured, using actual costs or the actual cost of goods manufactured. The difference between the original value of the line items and the newly determined value is updated as Delta in Delta in a new line item. If periodic valuation is carried out more than once for a line item, a new delta line item will only be created if a difference occurs. The updated values from the periodic valuation can be seen in the Information System. cost estimate, you also have option to explicitly  Alternatively, if you use the valuation with material cost values . In order to do this you must create your own display the periodic values along side the original values. value fields, in which the values of the periodic valuation can be stored. In theory it is also possible to recalculate values that were determined outside of the valuation in CO-PA. On CO-PA. On the other hand this means that, quantity and value fields used, according to the value field assignment for the SD interface, to transfer sales orders and billing documents remain unchanged.

(C) SAP AG

AC530

7-7

Profitabilit y Reports in CO CO-P -PA A

Act Ac t ual Cos Co s t o f Sales i n Prof Pro f i t abi ab i lit li t y Margin Analysis  Contribution Margin  Actu Ac tu al c os t s bro b ro ken dow do w n in i n to co st co mpo mp o nent nen t s  Target/Actual Variances Qu an t i t y s o l d :

1,000 PC $100,000

Revenue:

Target

Actu Ac tual al

Var . %

A b s . v ar .

Material Material cost s Production costs Variable Variable labor co sts Process costs Material OH

50,000 4,000 4,000 10,000 5,000

45,000 5,000 4,500 7,000 5,500

Contribution margin I

27,000

33,000

Fixed labor costs Fixed Fixed production costs

10,000 7,000

10,000 7,000

0 0

0% 0%

Contribution margin II

10,000

16,000

6,000

60 %

5,000 -1,000 - 500 3,000 - 500

10 % - 25 % - 13 % 30% - 10 %

6,000

22 %

© SAP AG 2003

accounting is to display the costs for the quantity sold, divided up into useful  The goal of cost of sales accounting is sections.  The planned costs of goods sold for sold for a material is determined in product cost planning. You planning. You can access

the cost of goods sold from Product Cost Planning in Profitability Analysis within the valuation.  In Customizing, you can determine which cost estimates from product cost planning are used for the

valuation of actual or plan data in profitability analysis. To do this you have to define a costing key. key. The costing key characterizes a specific set of access parameters, which are used to control access to the costing data from product cost planning during the valuation.

(C) SAP AG

AC530

7-8

Maintain future futu re price

Manual Manual maint m aintena enance nce Selec Selection tion according according to... to... - Plant lant - Mater Material ial type - Material Material numbers ...

Manual individual maintenance

Rules

$

...

r o Future date

Costing osting run run Material Material li st Materi al

Plant

ACT-BCD00 ACT-LCD00 ACT-DCD00 ACT-DCD00 ...

6000 6000 6000 6100

Future Future valua valuation tion price Level

1 1 2 3

S price

750.00 25.00 1177.50 1250.00

Per.unit pr p rice

745.00 26.50 1429.50 1177.50

% var.

-0.67 6.00 21.40 -5.80

from 1. 1.1. 1... ..

© SAP AG 1999

 Through the function Marking, the new future valuation prices are prices are updated in all currencies or

valuations in the material ledger data. (V) as the valid valuation prices for future periods, you can either  To mark the calculated moving prices (V) as run or individual materials. mark an entire costing run or  Through individual maintenance, you select the materials whose future valuation prices you want to maintain (for example, all raw materials). If you want to maintain or control the future valuation prices manually, set the indicator Manual indicator Manual individual maintenance maintenance.. Otherwise, the future valuation prices calculated by the system are used. In addition, enter the date for which the future valuation price should be valid. Under Rules, you can specify the criteria for determination of the future valuation price for each currency or valuation:  The currency and/or valuation from which the translation should take place  The existing price from which the translation should take place  The date and exchange rate type with which translation should take place (only with different currencies)  The factor by which the result should be multiplied (for example, with a factor of 0.5 the price will be reduced by half) individual maintenance, check the new future prices and the  If you have set the indicator Manual individual respective date and change anything if necessary. After choosing Save, you receive information on the price change.

(C) SAP AG

AC530

7-9

Releasing Re leasing Pric es Future valuation valuation p rice

Manual Release Selection Selection accor ding to ... ... - Plant lant - Mater Material ial type - material material numbers ...

fro m 1.1... 1.1...

backgroud groud processing  back  Tolerances can be set

Dynamic price r elease - activate for each valuation area area

Current Standard Pric Price e first goods movement/material

© SAP AG 2001

 During the release, the system updates the valid future prices in the respective currencies or valuations as

prices. If necessary, the relevant stock quantity the current standard prices. If quantity is revaluated. The prerequisite is that planned prices exist in the system that are valid for the time period. If such valid planned prices are not available, the former valuation price is still used. The following additional prerequisites exist for materials with material price determination 3. The s tatus of the material ledger data for the current period must be Period opened or Price change effected. This means that no goods movement, invoice or order settlement have been posted after the period-end closing program. program. In addition, the closing entries for material price determination have not yet been made.  In addition to this, in Customizing, you can specify for each valuation area that a planned price is

released as the valuation price with the first goods movement in a new period if the validity date of the planned price is attained. This This dynamic price release is useful if it is, from an organizational point of view, difficult for you to release the planned prices between the period closing program and the first goods movement. In this case, use the dynamic price price release so that the materials that were moved moved in this period of time are valuated valuated with the new price. Nevertheless, you must release release the planned prices before the end of the period for materials materials not moved in this period period of time. A dynamic price release takes place with order settlements, settlements, the entry of an invoice and every goods movement of of a material. You should, therefore implement both the dynamic the dynamic price release and the conventional price release methods.

(C) SAP AG

AC530

7-10

Customizing: Mate aterial rial Ledger/Actua Ledger/Actuall Costing

Material Ledger Material Price Determination

Ac t ivate iv ate Materi Mat erial al L edg er for each valuation area

(new materials)

Material Ledger Type

Transactionbased Single/multilevel

Ass ig ns cu rr encies enc ies and v alu ati on s Standard: Standard: Transfer Transfer FI/C FI/CO O (000 (0000) 0)

for each valuation area

Maintain ML Number Ranges Ac t ivate iv ate Dyn amic ami c Price Pri ce Chang Ch anges es (optional for each valuation area)

Ac t ivate iv ate Act A ct ual Costi Cos ti ng

No

Optional activity typ e update

for each valuation area

Ac ti vati ng Cost Cos t Component Structures

Yes, quantities only Yes, w/ act. prices

Al ter nati nat i ve Updat Up date e Str uctu uc turr e (optional for each valuation area)

Production Startup... © SAP AG 2003

 The first step is to activate the material ledger. If you activate the material ledger for a given plant, you

should also activate it for all other plants in the company code. This assures proper reconciliation of accounts between financial accounting and materials management.  You use material price determination to control whether material prices are determined on a

transaction basis or a single-level/multilevel basis. You can define a default value or a mandatory value with which the materials to be created are valuated. Make sure that all materials have transaction-based price determination after production production startup. You can change change the material price determination determination and the price control of the relevant relevant material or materials in the material master master and in the material ledger data.  The next step is to create material ledger types and assign a maximum of three currency types to

each of these material ledger types. The standard system contains material ledger type 0000, which uses the currency types from Financial Accounting.  Check whether the ML number ranges meet your requirements. Check whether the document type ML

supplied in the standard system for material ledger documents is maintained. Check whether the number ranges of the accounting documents are maintained. In the standard system, the number range starting with 47 is intended for accounting documents for material ledger documents. A group for material ledger documents exists for each relevant transaction type in the standard system. Each group is assigned a number range of 100,000,000 numbers. It is generally not necessary to add new groups.

(C) SAP AG

AC530

7-11

Production Startup

Producti rodu onn Startup Startup roducction tio In the Material Material Ledger menu (Uti (Utilit lit ies) Creates Creates Material Material Ledger master record rec ords s Calculates Calculates Material Material Ledger stoc k values from FI stoc k values (2nd (2nd and 3rd c urrency) Sets Sets ML indic ators in all material material master records Sets Sets the th e material material pric e determination determination indic ator in material material master master recor ds for 2nd cu rrency (can be changed in 3rd) Fixes the curr encies used Sets Sets the produc tive indicator

© SAP AG 2001

startup, you should have completed completed and checked all preparation work. work. From an  Before production startup, organizational point of view, make sure that no material postings are necessary during conversion in the relevant plants during conversion. Between activation and production startup, the relevant plants are locked. Please read note 108374 about resetting data for production startup of the material ledger. The production startup function prepares data for the material ledger.  The production  After production startup of the material ledger, you cannot change the currencies, currency types and material ledger types. Ensure that the material type type attributes are correct in Customizing Customizing for Logistics General. Conversion is only possible for materials that have a material type that allows the update of values. In Customizing, ensure that all all valuation areas in which which you want to use the material material ledger are flagged as active for the material ledger. Additional valuation areas can be set subsequently as active and productive. From an organizational point point of view, ensure that the accounting accounting view for the relevant material has been created in the material master record.  If you worked with the material ledger in your production system prior to Release 4.0A, read note 0081463 in the OSS system.

(C) SAP AG

AC530

7-12

The Idea Idea Behin Behind d the Alternative Alt ernative Valuation Run

basis of actual data by means means of  Simulatio n on t he basis 



Cumulation: Material Material prices based on time wind ows spanni ng more tha th an one on e period Al t ernati ern ati ve valu v aluati ation on:: Cost accounti ng based on alternative value records records for in ternal ternal pu rposes

In addition, up to 999 alternative valuation valuation runs can be created for each periodic actual costing run. ru n.

© SAP AG 2003

 The

alternative valuation run alternative ru n (AVR) is a tool for alternative costing based on the periodic actual quantity structures. An AVR makes a copy of the actual data of selected periods. Each AVR performs calculations on its own data copy. The main periodic calculation steps, single and multilevel price determination, are also available to the AVR. Unlike periodic actual costing, which only pertains to the special analysis of periodic data, the AVR can be used to analyze several several related periods. Their quantity and value structure is summarized while the data is copied and thus lead to different results after single or multilevel price determination.

(C) SAP AG

AC530

7-13

 Unlike

periodic actual costing, which only carries operational standard prices, the AVR offers alternative valuation rules for determining material prices.

 If

in periodic costing the same periodic average price is used for valuating consumption and ending inventory during single-level valuation, the AVR permits alternative allocation rules to allocate the differences to consumption and ending inventory.

 Finally,

in the AVR the plants taking part in multilevel price determination can be combined in an alternative way to structure the periodic actual costing, thus allowing users to get a full view of value chains that are broken down in periodic costing, and a broken-down view of value chains that are end-to-end in periodic costing.

 Up

to 999 alternative valuation runs can be created for each period. Each of these runs works on its own data copy and administrates the results in its own data area.



(C) SAP AG

AC530

7-14

Uses  Cumulation 

Smoothing of seasonal or accidental periodic fluctuations



Minimizing the influ ence of work in pr ogress, the period assignment problem, beginning and ending inventories



Credits Credits to cost c enters even even durin g months when orders did not supply goods to stock

 Al t ernati ern ati ve valu v aluati ation on 

Suppor t of alternative alternative accoun ting poli cies und er IAS, IAS, US US GAAP, GAAP, HGB, etc.



Perf Perf ormin g calculations wi th simul ated prices as an an alternative to periodic actual costing

© SAP AG 2003

 The results of an AVR provide information of a different nature than that of periodic costing. The

calculation of the AVR depends on the costing parameters set and is therefore indirectly subject to the users' intention, who are likely to pursue their own costing purposes by setting parameters. Possible uses of the cumulation function of the AVR include calculating year-based actual prices, minimizing the problem of period assignment, assignment, smoothing seasonal seasonal fluctuations, including including the (optional) crediting crediting of cost centers on the basis of activity consumption of the adjusted value added. Another possible use is the analysis of the production volume for a whole fiscal year, and comparing such volumes for different fiscal years.  The alternative valuation function of the AVR permits the use of parallel accounting standards with

alternative material prices and activity prices, for example under HGB, IAS, or US GAAP. Price components for which legislation prohibits capitalization capitalization can be included in the calculation, and the effects of changed wage costs on the value added of finished goods can be simulated. Depending on the quantity structure, beginning inventories inventories can also be deleted and the cost flow to production costs can be restricted for a certain period.  This function of being able to include any other material prices as an alternative to standard prices for

valuation permits users to simulate the effect on the value added of changed raw material prices.

(C) SAP AG

AC530

7-15

Cumulation across time windows of any length

1

2

3

4

5

6

7

8

9 10 11 12

Period

Yea earr t o date d ate

Quarters

... © SAP AG 2003

 Time windows of any length can be cumulated. The same time windows can be cumulated in several

alternative valuation runs. In each AVR, the periods to be cumulated are defined from new and independently of other other costing runs. Time windows windows can straddle the fiscal year end. end. If material prices or activity prices change in the course of a cumulation period, these price changes are taken into account when the data is summarized. If there are price changes, the preliminary valuation within the AVR is standardized to the price of the first cumulation period, unless the user specifies different standard prices to be used.

(C) SAP AG

AC530

7-16

Cumulation of periods in AVR

January

February

March

JAN

Quant it y

V value

Diff

BI

100

200

10

Re

150

300

140

CUM

250

500

150

Co

50

100

30

EI

200

400

120

FEB

Quant it y

V value

Diff

CUM

Quant it y

V value

Diff

BI

200

400

120

BI

100

200

10

Re

100

200

0

Re

650

1300

190

CUM

300

600

120

CUM

750

1500

200

Co

200

400

80

Co

450

900

150

EI

100

200

40

EI

300

600

50

MARC H

Quant it y

V value

Diff

BI

100

200

40

Re Receipts

Re

400

800

50

CUM MI + Re or Co + EI

CUM

500

1000

90

Co

Co

200

400

36

EI

EI

300

600

54

Diff(CUM) := Diff( BI(Jan)) + Diff(Re(Jan-March Diff(Re(Jan-March )) 200 : = 10

+ ( 140 + 0 + 50 50))

BI

Beginning inventory

Consumption Ending inventory

© SAP AG 2003

 Several periods are summarized during data copy, and in the AVR the summarization is performed

during the cumulation step. Unless the user has defined specific rules, the summarization is performed as follows:  The given beginning inventory of the first cumulation period is used as the beginning inventory (BI) inventory (BI) of

the cumulation period .  The receipts (Re) of the cumulation period are the total of periodic receipts of all cumulation periods.

inventory of the cumulation period is the total of cumulative beginning inventory and  The cumulative inventory of cumulative receipts.  The quantity and preliminary value of consumption of the cumulation period is the total consumption of

all periods. The differences allocated to the consumption of consumption consumption equal zero at the time the data is summarized. They are calculated later, during single-level price determination in line with the proportion between cumulative cumulative and consumed quantity. quantity.  The ending inventory (EI) of a cumulation period is the ending inventory quantity of the last period of

the cumulation period. The differences are set to zero during data summarization. They are calculated later, during single-level price determination, in line with the proportion between cumulative and ending inventory quantity. (C) SAP AG

AC530

7-17

 The cumulative ending inventory differences do not normally equal the ending inventory differences of

the last cumulation period. The reasons for this are complex. The above simple example explains the difference as resulting from the simple fact that the proportion of consumed and ending inventory quantity changes periodically and does not correspond to the cumulative proportion of 450 over 300 for every period.  During data summarization, only the single-level differences, i.e. single-level price and exchange rate

differences, are summarized. The multilevel differences are, however, set to zero and calculated later by multilevel price determination.

(C) SAP AG

AC530

7-18

Cumulation ? Pe Periodic riodic ave average rage Product A

Product B

900

Product A 100

90K G

Perio Pe rio d 1

10

10K G

1000

Product B 90

10K G

90K G 100

Period Pe riod 2

Cumulation Cu mulation (per. (per. 1 & 2) 2) Product A

Product B Ave rage (p er. 1 & 2) Product A

550

Product B

550 910

100 K G

100 K G

100 K G

190

100 K G

1100

1100 © SAP AG 2003

 The differences on the cumulative inventories are not simply the sum of differences incurred in all

periods, but are determined from new on the basis of the cumulative cumulative quantity structure. In the above above example, the same material is used in the production of two different products. In line with the cumulative consumption proportions proportions of 1:1, the costs are allocated in equal proportions, and therefore more evenly than in the periodic calculation. There product A (possible unfairly) carries most of the costs incurred, because in the same period in which the highest usage costs were incurred, the goods receipt of product A, which was decisive for the quantity, also occurred.

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AC530

7-19

Alte Al terr nat i ve valu v aluat atio ion n in i n AVR:  Materia Materiall valuation is controlled thr ough t he settings of the costing run: 

Alt Al t ernati ern ati ve Pri Pr i ces: ces :

 Planned pr ices ic es (CO (CO Versio Version n > 0)  Periodic actual prices  Cumulate Cumul ated d actual prices: 

Different valuation between consumption and ending in ventory vento ry via vi a BADI BADI_EN BADI_ENDIN DING_ G_INV INV

 Transfer of planned pric es from material master or other externally externally specified specified pri ces for f inal inventory valuation valuation

 Transfer Transfer of alternative lternative cost component split s fo r ending inventory valuation valuation 

Call-up of BADI CKMLAVR_SIM to manipulate quantity and value structure (valuation and simulation)

© SAP AG 2003

 Alternative valuations can be modeled using several settings. When creating an AVR, alternative prices

can be set for valuating the activity consumption. All plan prices known in cost center accounting are available in addition to the periodic actual prices. But a plan price that is to be used in the AVR must be available in all valuation views used for calculation in the material ledger and have been specified via the material ledger type set. In addition the activities consumed can be valuated with cumulative actual prices.  BADI BADI_ENDING_INV can be used to valuate the ending inventories with freely definable prices

as an alternative to the average price. Unless they are covered by the externally specified ending inventory valuation, the cumulative differences are allocated to consumption and charged further during price determination.  After data summarization, which is performed during the cumulation step, the cumulative data structure

can be modified by calling up BADI CKMLAVR_SIM. In this way, depending on the material type or other criteria, alternative prices can be set for revaluating the cumulative inventories and for further charging. In addition, the quantity structure can be reduced with this BADI, for example to remove irrelevant beginning inventories, receipts or consumption from the calculation. 

(C) SAP AG

AC530

7-20

Special Functions: Special Function s: Unit Summary

You are now able to: Set up an integrated i ntegrated connecti on to CO-P CO-PA A and  Set analyze analyze the prof itabili ty reports.  Descri Descri be the update of futu f uture re pri ces.  Prepare Prepare and execute execute produ ctio n startup fo r the material ledg er. er.  Implement extended Customizing options, such as acti acti vit y type updates and and individu ind ividu al material material update structures.

© SAP AG 2003

(C) SAP AG

AC530

7-21

Special Functions: Exercises Unit: Special Functions Topic Results Analysis At the conclusion of these exercises, you will be able to: •

Analyze the results of multilevel actual costing

•

Customize CO-PA so that you are able to use the results of actual costing effectively.

•

Mark the calculated actual prices as future valuation prices

You have been asked to analyze the results of multilevel actual costing in detail. In addition, you will mark the calculated ca lculated actual prices for the input materials as valuation prices for the subsequent period.

As the cost component split is only known after the multilevel price determination, these values have to be subsequently entered into CO-PA. This occurs during periodic revaluation, which will be executed for you by the course leader.

1

Multilevel Actual Costing: Integrated Analysis using Profitability Analysis (CO-PA) 1-1

Contribution Margin Accounting in CO-PA 1-1-1

•

Currency type 10

•

Current period 1-1-2

First call up the CO-PA report IDES 530 using the following parameters:

The report shows you the contribution margin accounting for your demo CD with target and actual values. Fill out the following table. Target

Actual

Quantity Revenues: Variable costs Fixed costs Total costs

(C) SAP AG

AC530

7-22

2

Origin of the Target Values in Contribution Margin Accounting 2-1

How were the target values for contribution margin accounting determined? ________________________________________________________ ____________________________ ____________________________ ________________________________________________________ ____________________________ ____________________________

2-2

From the CO-PA report, call up the standard cost estimate for your demo CD. Go to the costs the costs tab tab and set the base quantity for the displayed costs to the total cost of sales quantity (see previous task). Now display the cost component and fill in the following table: Base quantity:

As above (total cost of sales quantity)

Total variable costs: Total fixed costs: Total: Compare the values in the standard cost estimate with those from CO-PA. Go back to the CO-PA report.

3

Origin of the Actual Values in Contribution Margin Accounting 3-1

From the CO-PA report, call up the "Cost Component for Price" Price " report. Enter the following settings: Period/year:


Currency/valuation:


Type of price:

Periodic unit price

Base quantity:

User entry: Sales quantity (see above)

Fill out the following table. Base quantity:

As above (total cost of sales quantity)

Total variable costs: Total fixed costs: Total: Compare the values in the standard cost estimate with those from CO-PA. 3-2

Customizing CO-PA for the Transfer of the Actual Cost Component Split Go to Customizing for Profitability Analysis (CO-PA). 3-2-1

(C) SAP AG

In the section "Define access to actual costing/material ledger": Which costing key does CO-PA access to copy the actual data from the material ledger? _____________________________________________________ _________________________ _______________________________ ___ AC530

7-23

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AC530

7-24

3-2-2

In the section "Costing Key → Material Types": Which costing key is used for the periodic revaluation IST? ___________________________________________________ _________________________ __________________________

3-2-3

In the section "Define Value Fields": Which value fields form the cost element "material component" that is controlled by the cost component structure that we are using? Operating Concern IDEA, Cost Component Structure ML Point of valuation:

Value field for material component

Actual data transfer - transaction based: Periodic revaluation - actual: 3-2-4

CO-PA report AC530 is defined using form AC530. Check and see how the line material component is is defined in the form: Value field for line material component : Value field for Material Componen Component t Data column): cell (in Actual Data

4

Detailed Analysis of Actual Values in Contribution Margin Accounting 4-1

Material Prices Contribution Margin Accounting shows you that the material price variances are responsible for the highest contribution to your negative result. In the following tasks, you will analyze the cause of these variances. 4-1-1

You are in the contribution margin report for your material (demo CD in plant 6000). Call up the material ledger display. Using the data, determine why the demo CD has such large price differences. Amount of price differences from receipts: Price differences from purchase orders:

MXN

Price differences from production:

MXN

Which vendor can already be seen to be the cause of the high price variances? _____________________________________________________ _________________________ _______________________________ ___ 4-1-2

Which of the two categories has single and multilevel price differences? Use the display variant Single- and multilevel differences . _____________________________________________________ _________________________ _______________________________ ___ Where do the single level price differences for this category come from?

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AC530

7-25

_____________________________________________________ _________________________ _______________________________ ___ Where do the multilevel price differences for this category come from? _____________________________________________________ _________________________ _______________________________ ___

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AC530

7-26

4-1-3

What is the portion of single- and multilevel price differences from production? Single-level price differences / production

MXN

Multilevel price differences / production

MXN

Using the multilevel material ledger document, check which of the input materials is of greatest significance for multilevel actual costing.

4-1-4

Multilevel price differences due to label:

MXN

Multilevel price differences due to blank CD:

MXN

In order to identify the source of the high price variances, call up the material ledger display for the material component with the highest price variances. Which vendor sold you the material at a high price? Vendor

Price

1096 / Fabricas Mixtli:

MXN

1097 / Puebla Digital:

MXN

1098 / Productos Argentinos:

MXN

1099 / Studio Chapultepec:

MXN

You have identified both vendors that are directly and indirectly responsible for the high price of your finished product, and can now take appropriate action. 4-2

Actual Values from Cost Center Accounting Contribution Margin Accounting shows you that the wages and salaries variances are the second largest contributor to your negative result. 4-2-1

Call up the report to analyze the plan/actual variances for your cost center. Make the following entries: Controlling area:

6000

Period/fiscal year:


Plan version:

0

Cost center (value):

CC530-##

Cost element:

No entry

Analyze the actual cost variances: Which cost element has particularly large variances between plan and actual? _____________________________________________________ _________________________ _______________________________ ___ 4-2-2

Under which cost element has the material ledger balanced the cost center in actual? _____________________________________________________ _________________________ _______________________________ ___

(C) SAP AG

AC530

7-27

(C) SAP AG

AC530

7-28

5

Maintain Prices 5-1

Scope of the exercise In this exercise, you will maintain the future price for both of your input materials. These prices can no longer be released in the current period. Why? ________________________________________________________ ____________________________ _____________________________ _ ________________________________________________________ ____________________________ _____________________________ _

5-2

Maintenance of the Future Valuation Price of Both of Your Input Materials Call up price maintenance maintenance from the material material ledger menu. Make the following entries: Materials

ACT-LCD-## and ACT-BCD-##

Plant

6000

Manual individual maintenance

X (yes)

Date of the future price

First day of the month after next

Rules icon. Make the following entries: Click on the Maintain Rules

Use

Periodic unit price

In currency/valuation:


Conversion date

Today's date

Exchange rate type

M

Additional factor

1.00000

What does the setting “Use: Periodic unit price” mean? ________________________________________________________ ____________________________ _____________________________ _ ________________________________________________________ ____________________________ _____________________________ _ ________________________________________________________ ____________________________ _____________________________ _ 5-3

Save your entry and check the result. Go into the material ledger display for one of the two materials look at the additional data. Has the future valuation price been maintained? Also check the material master after this entry ( Accounting Accounting 1).

6

Value Flow Monitor In the info system of the material ledger, call up the Value Flow Monitor report report for all materials in company code 6000 last period. Write down the distribution of price differences for each valuation class. Valuation class

Cumulative

RoC

Allocated

Ending Inv

3000

__________

______

_________

_____

7900

__________

______

_________

_____

(C) SAP AG

AC530

7-29

7920

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__________

______

AC530

_________

_____

7-30

Special functions: Solutions

(C) SAP AG

AC530

7-31

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AC530

7-32

Unit: Special Functions Topic Results Analysis

The following menu paths are used in the solutions:

1

ACT:

Accounting Controlling Product Cost Controlling Actual Costing/Material Ledger

IMG:

Tools

Customizing

Edit Project

SAP Reference IMG

Multilevel Actual Costing: Integrated Analysis using Profitability Analysis (CO-PA) 1-1

Contribution Margin Accounting in CO-PA 1-1-1

CO-PA Report IDES-530 Controlling Profitability Analysis Information System Execute Report (Operating Concern IDEA, Costing-based Profitability Analysis) Choose Report IDES-530

1-1-2

Currency type

10

From/to period

Current period

The report shows you the contribution margin accounting for your demo CD with target and actual values. Fill out the following table. Target

Actual

Quantity: Revenue: Variable costs: Fixed costs: Total costs: (Write down the costs here:) (C) SAP AG

AC530

7-33

2

Origin of the Target Values in Contribution Margin Accounting 2-1

The target values are determined through the valuation of the sales quantity at plan price.

2-2

Determining the Target Values report , call up the standard cost estimate for estimate for your demo CD, From the CO-PA report, and complete the following data: Material:

ACT-DCD-##

Plant:

6000

Costing variant:

PPC1

Costing version:

1

Valid from:

Today

In the upper right-hand section of the interface, select the "Costs" tab tab and enter the quantity used (600 pieces) in the "User entry" field. Base quantity: Total variable costs: Total fixed costs : Total: The values equal the target values in CO-PA. Go back to the CO-PA report.

3

Origin of the Actual Values in Contribution Margin Accounting 3-1

Price " report. From the CO-PA report, call up the "Cost Component for Price" Enter the following settings, if required: Period/year:


Currency/valuation:


Type of price:

Periodic unit price

Base quantity:

User entry: Sales quantity (see above)

Fill out the following table. (C) SAP AG

AC530

7-34

Base quantity: Total variable costs: Total fixed costs : Total: The values equal the target values in CO-PA.

(C) SAP AG

AC530

7-35

3-2

Customizing CO-PA for the Transfer of the Actual Cost Component Split The Customizing entries for the following questions are found under the following menu nodes: IMG: Controlling 3-2-1

Profitability Analysis

Master Data

Valuation

Define access to actual costing/material ledger: IMG: ... Set Up Valuation using Material Cost Estimate Access to Actual Costing/ Material Ledger

Define

For actual costing, CO-PA accesses the costing key ACT, whereby the data from the legal valuation is transferred. 3-2-2

Costing Key → Assign Material Types IMG: ... Set Up Valuation using Material Cost Estimate Key Assign Material Types

Costing

Point of Valuation 02: Costing key ACT is used for all activities and materials. 3-2-3

Assign Value Fields IMG: ... Set Up Valuation with Material Cost Estimate Value Fields

Assign

Operating Concern IDEA, Cost Component Structure ML Point of valuation:

Value field for material component

Actual data transfer

VV150 (Total from fixed and variable amounts)

Transaction based BZ 01 Periodic revaluation actual

VV151 (Total from fixed and variable amounts)

BZ 02 3-2-4

Form AC530 for CO-PA Report IMG: Controlling Profitability Analysis Information System Report Components Define Forms Define Forms for Profitability Reports Form, and the select Form IDES 530. Choose Display Form

Double Click on the material component field, field, a dialog box appears that shows the value field displayed in the line.

(C) SAP AG

AC530

7-36

Value field for line material component :

(C) SAP AG

AC530

Value field VV150 material component

7-37

In the same line, double click on the actual value field. In the first dialog box you see that this value field is different to the one defined for the line. Confirm. You now see which value field is read for this report field: Value field for material component cell (in Actual Data column):

4

Value field VV151 Material Component ACT

Detailed Analysis of Actual Values in Contribution Margin Accounting 4-1

Material Prices Contribution Margin Accounting shows you that the material price variances are responsible for the highest contribution to your negative result. In the following tasks, you will analyze the cause of these variances. 4-1-1

You are in the contribution margin report for your material (demo CD in plant 6000). Call up the material ledger display. Using the price determination structure, determine why the demo CD h as such large price differences. Amount of price differences from receipts: Price differences from purchase orders:

MXN

Price differences from production:

MXN

Which vendor can already be seen to be the cause of the high price variances? Vendor 1099 (Studios Chapultepec) delivered at a price of MXN _____ and caused a price variance of MXN _____. 4-1-2

Which of the two categories has single and multilevel price differences? Use the display variant Single- and multilevel differences . Category "Production" has single and multilevel price differences. Where do the single level price differences for this category come from? The single-level price differences for production come from order settlement. Where do the multilevel price differences for this category come from? The multilevel price differences come from the material component price variances during the manufacturing process.

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AC530

7-38

4-1-3

What is the portion of single- and multilevel price differences from production? Single-level price differences / production

MXN

Multilevel price differences / production

MXN

Using the multilevel material ledger document (receipts from lower levels), check which of the input materials is of the greatest significance for multilevel actual costing.

4-1-4

Multilevel price differences due to label:

MXN

Multilevel price differences due to blank CD:

MXN

In order to identify the source of the high price variances, call up the material ledger display for the material component with the highest price variances. Which vendor sold you the material at a high price? Vendor

Price

1097 / Puebla Digital

MXN 11

1098 / Productos Argentinos

MXN 14

You have identified that vendors Productos Argentinos and Studios Chapultepec are responsible for most of the price variances of your Demo CD. 4-2

Actual Values from Cost Center Accounting 4-2-1

Plan/Actual Variances for Cost Center Accounting Controlling Cost Center Accounting Information System Reports for Cost Center Accounting Plan/ Actual Comparisons Cost Centers: Actual/Plan Variances Make the following entries: Controlling area: Period/fiscal year:


Plan version:

0

Cost center (value): (C) SAP AG

6000

AC530

CC530-## 7-39

Cost element:

No entry

Cost element 43000: Wages has particularly high variances. This confirms the result that you got from the contribution margin structure: High wage and salary costs have had a negative effect on your results. 4-2-2

(C) SAP AG

The cost center is credited under cost element 895000: Plant activity.

AC530

7-40

5

Maintain Prices 5-1

No more price releases can take place in the current posting period. For materials with price control 3, a standard price can only be changed if the material ledger has not updated any data yet.

5-2

Maintenance of the Future Valuation Price of Both of Your Input Materials ACT/ML

Material Ledger

Set Prices

Materials

Maintain Future Prices ACT-LCD-## and ACT-BCD-## (Multiple selection, not the to/from fields)

Plant

6000

Validity date

Date entered manually: First day of the month after next

rules icon and choose the tab for company code . Click on the Maintain rules

Use

Periodic unit price

In currency/v aluation:


Conversion date

Today's date

Exchange rate type

M

Additional factor

1.00000

Enter the same parameters for all three currencies. The “Use periodic unit price” setting means that the future valuation price is determined from the periodic unit price in the respective currency. The columns for currency conversion ( Translation date and Exchange rate) are only of meaning if the price in one currency should be calculated into another currency. individual maintenanc maintenancee The results of price maintenance are seen in the Manual individual area. If necessary, you can overwrite these results.

Execute. 5-3

Results of Price Maintenance Go into the material ledger display for one of the two materials and look at the additional data. The future valuation price is updated with the price maintenance data.

(C) SAP AG

AC530

7-41

6

ACT/ML

Info System

Object List Value Flow Monitor

Company code

6000

Period

Previous

Execute materials

All

Valuation class

Cumulative

RoC

Allocated

Ending Inv

___________________

__________

______

_________

_____

___________________

__________

______

_________

_____

___________________

__________

______

_________

_____

(C) SAP AG

AC530

7-42

Summary

AC530 Act Ac t u al Cos Co s t i n g /Mater /Mat erii al L edg ed g er Fundamentals of Material Material Valuatio Valuation n Desig Desig n and Purpo se of the t he Material Material Ledger Recording Business Transactions Transactions Struct ured Value Value Chain Chains s Perio Perio d-End d-End Close in Actu al Costi Costi ng Extended Custom izing and CO-P CO-PA A Integration

© SAP AG 2001

(C) SAP AG

AC530

8-1

Course Objectives

You are now able to: 

Explain Explain th e possiblities and limits of tr aditional aditional stock valuation wit hout t he material ledger. ledger.



Understand the pur poses and and struc ture of the material ledger.



Explain how material price differences can can flo w into the sto ck value of pr oduct s for which t hese materials materials were used.



Explain actual costin g and the determination determination o f the periodic unit pri ce. ce.



Carry out the the postings postings for period-e period-end nd closing in the material material ledger, ledger, including t he revalua revaluation tion of s tocks with actual prices.



Understand the integration o f the material material ledger with ot her SAP SAP applica applications. tions.

© SAP AG 2001

(C) SAP AG

AC530

8-2

Recommended Follow-Up Courses

 AC650 Trans Tr ansff er Pri ces

© SAP AG 1999

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AC530

8-3

Recommended Re commended Follow-Up Follow-Up Activ ities

 Repeat Repeat the t he exercis es! Use the t he IDES IDES data or your own da data when when doing doing so.

Read the onlin e docu mentation!  Read  Read the IMG documentation!  Read Read th e release release notes! not es!

© SAP AG 1999

(C) SAP AG

AC530

8-4

Appe Ap pend nd ix

Contents:  Addi Ad di t ion io n al sli s lid d es fo f o r:

Valuation Examples Examples  Currency and Valuation  Details for determining the costing sequence for multil evel evel actual actual c osting.  Material Update Structure  All Al l o cati cat i on o f cons co nsum ump p tion ti on d iffer if ferenc ences es  Manual Manual Change Change of Act ual Cost Compo nent Split  Details on AVR © SAP AG 2003

(C) SAP AG

AC530

9-1

Example for one on e single currency US-Based US-Based Grou p Local currency

Act ual Cos ti ng

Compa ompany ny in Chica hicago go

Company in Detroit Price / Material

Price / Material

10: USD 100

10: USD 100

Requirements

Settin Settin gs in FI

Requirements


nUS

10:: US doll ars 10

nUS

10:: US doll ars 10

dol lars

doll ars

Material Ledger Settin Settin gs in CO

Material Ledger Settin Settin gs i n CO

1 data record

1 data record

10:: US doll ars 10

10:: US doll ars 10

© SAP AG 2001

 In this example, the group is based in the USA. The group consists of two companies. One company is

based in Detroit and the the other in Chigago.  The headquarters must report in US dollars to comply with legal requirements in the United States.  As both companies are situated in the USA you only require one currency. Both companies and the headquarters use the same valuation approach. This means that only one valuation appraoch is required.  In turn, this means that only one currency is required in the SAP Accounting and Controlling components This currency will use currency type 10: Local Currency, Legal Valuation  In the material ledger, actual costing can be used to calculate actual costs for materials and if necessary to revaluate for legal valuation. valuation.

(C) SAP AG

AC530

9-2

Example for Mult iple Valuation Valuation US-Based US-Based Group Grou p Local currency Group valuation Hard currency Company in Detroit

Act ual Cos ti ng

Compa ompany ny in Me Mexico xico City

Price / Material

Price / Material 10: 800 MXN 31: USD 90 40: USD 110

10: USD 100 31: USD 90

Requirements


Requirements

nUS

dol lars

10:: US doll ars 10

nMexican

nUS

dol lars

31:: US doll ars 31

nUS


pesos 10: Mexican pesos

doll ars

31:: US dollars 31 40:: US doll ars 40

Material Ledger Settin Settin gs in CO

Material Ledger Settin Settin gs i n CO

2 data records

3 data records

10:: US doll ars 10 31:: US doll ars 31

10: Mexic an 10: pesos 31:: US doll ars 31

© SAP AG 2001

 This slide shows a group of affiliated companies based in the United States. One company in the group

is in Detroit, while another is in Mexico City. As in the earlier example, the headquarters report in US Dollar to comply with legal requirements of the United States.  To comply with the legal requirements of the United States, the company in Detroit reports in US dollars. At the same time, the company reports to group headquarters which consolidates all its affiliated companies. This consolidation currency is called group currency. All internal profits are illiminated during consolidation. The resulting valuation approach is called group valuation.  The company in Mexico City must report in Mexican pesos to comply with legal requirements in Mexico. Like the Detroit company, the Mexican co mpany needs to prepare its financial statements both to meet legal requirements and also to report to group headquarters. When it reports to group headquarters, the company must use the group currency (USD). In addition, Mexican law requires to report in a hard currency, due to inflation issues.  In the SAP system, this means that both companies define their local currency as currency type 10 (Detroit: USD, Mexico: MXN). In addition to that, both companies define a Group currency at Group Valuation (Currency Type 31), USD. The Mexican company defines a hard currency (currency type 40) US Dollar).

(C) SAP AG

AC530

9-3

Costing Run: Costing Sequence

Directed l evel evel

...

...

Cycle level

Directed l evel evel Directed l evel evel

...

Cycle level

... Directed l evel evel

© SAP AG 2001

sequence, the system generates order in which which the costing run will be  When you determine the sequence, completed. This internal function is the first level of multilevel actual costing. The quantity structure is determined from actual data collected from movements and operations in logistics (materials management, production planning and so on).  The quantity structure is generated from actual data in order to fulfil the prerequisites of multilevel actual costing. In contrast to the plan quantity structure the actual quantity structure contains objects (materials, worklists, bills of materials,...) that were actually used during production. The quantity model, which contains materials, processes and structure tool uses the input data to create a process model, procurement and consumption consumption alternatives. This process process model is condensed to a predecessor/ predecessor/successor model, model, which only contains relations (that is quantity flows) between materials. In a final step, the model, which describes the sequence in which predecessor/successor model model is split up into a level model, materials have to be processed. The update of movements and operations for actual costing is controlled using the actual costing/material ledger controlling levels.  This results in a list of production levels (for example level 1 raw materials, level 2 semifinished goods and so on) with hierarchical information about the respective materials. You can go to the material list from the level overview, which allows you to display detailed information about the materials. From the material list you can then directly access the material ledger data.

(C) SAP AG

AC530

9-4

Mate aterial rial Update Update Structure Categories Qntty

Prelim. valuation

Price diff.

ExchRt diff.

Price

Process types

Beginning Beginning inventory inventory Receipts

Procurement alte alternatives rnatives

Production Purchas Purchase e order

Unspecified receipts receipts fo r process type

Vendor Vendor A/60 A/6000 00 Vendor Vendor B/ 600 6000 0 ....IR..

Other user-definable receipts

....GR... (Rem. (Rem.)) Purchase Purchase order Other Other receipts/consumpt ions P+: P+: Other Other procurement Inventory C+: C+: Other Other consumption

Namin Namin g rules

Consumption, labor

© SAP AG 2001

 The material update structure determines which transactions are entered in which category of the  







structure. material ledger display. SAP recommends the use of the standard update structure. Optionally, you can define your own material update structure. structure. The data for the goods movements is collected in different categories of categories of the material ledger according to the material update structure. Through your own naming rules, you can assign your controlling levels to levels to a process category in order to make further distinctions between specific transactions in the material ledger data than provided for in the standard system. category represents a receipt, choose the category Receipts. The category Receipts has If the process category represents an influence on the price . However, with process category B+ (procurement), B+ (procurement), you can also choose the distinguish between such receipts in receipts in the material category Other receipts/consumptions receipts/consumptions in order to distinguish between update structure. If the process category represents a represents a consumption, consumption, you can decide whether the consumption should have an influence on the price. The category Other receipts/consumptions receipts/consumptions has an influence on the price; the category Consumption doesn‘t. If you want to further distinguish between distinguish between process categories that group for the material ledger. This only applies to represent a consumption, enter a movement type group for consumptions that are single-level. A material update structure must contain at least the process categories B+ and V+.

(C) SAP AG

AC530

9-5

Defin De fine e Material Material Update Stru Structu cture re

Quantity Beginnin Beginnin g inventory Receipts Production Purchase order

Preliminary Valuation

Vendor B/ 6000 ....IR.. ....GR...

3

Assi As si gn Process category (e.g VK) to Own CO Level

Purchase Order: Other Receipts/Consumption Inventory Check Cost Center

2

Specific Movement Type Group?

Only: B+ Procurement V+ Consumption VA Assets VK Cost center VKA Customer order VNAW Consumption (plant not active) VP Project VUBM Material Material Transfer Posting i.e.: i.e.: single level level consumption consumption /B+

B+: B+: Other Other Procurement Procurement V+: Other Consumption

Price

Receipts Consumption

Create Own CO Level (Name): e.g e.g Check Cos t Center

Vendor A/ 6000 6000

Price diff.

4

Define Update Structur e & Assign Valuation Valuation Area

Receipts Receipts only in categories - Receipts Receipts - Other R/C R/C Consumption only in categories - Consumption Consumption - Other R/C R/C

© SAP AG 2001

 You can assign your own Controlling levels to a process category using your own name formation

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rules. This allows you to differentiate between specific activities in the material ledger data, further than you could in the standard system. First you have to create your own controlling level. Then you create your self-defined name. You may have also created your own movement type groups to allow you to differentiate your name. Choose new entry and enter the process category. Enter B+ for process categories for procurement (receipts). For consumption process categories enter a process category that begins with V. Enter the controlling level and your own movement type group, as required. Save. To view the list of assignments, go to Customizing and choose "Assign Self-defined Names for Receipts/Consumption". Receipts/Consumption". From here you can display the assignment of name formation rules to process categories. Recommendation: Use the standard naming structure. The structure. The definition of alternative structures enables you to manipulate the calculation of the periodic unit price, as you can differentiate between the way you include single-level consumption (for example cost center withdrawals).

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Manual Change Change of Actual Cost Component Split

© SAP AG 2003

splits for each procurement alternative. This  You can use this function to change actual cost component splits for may be necessary for the following reasons. for example:  Individual values in a split are incorrect.  No cost component split split information was available available for a transaction at the time time the actual entry was

made. This is now to be added retrospectively.  The same selection criteria are available as for material price analysis. In addition, once you have

selected the material, you can switch from main to auxiliary cost component split (and vice versa). This is also possible for nodes that cannot be changed. To simplify changing cost component split values, you can rescale the base quantity from the actual quantity to any quantity (user input). Double-click on a procurement alternative. The existing existing cost component split is displayed displayed on the right. Now you can edit the fields that have a white background color.  You should only make changes that do not change the column total. The difference form the existing

column total created by your changes is displayed on the Difference line.  In order to transfer changes to values in local currency (column V ariable 1) to other currencies, select

column Variable 2 (or Variable 3) and choose Translate from local currency . The new values are translated to the other currency and displayed in the column selected. To replace the cost component (C) SAP AG

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split values with values from a cost component split template, choose Transfer . Save your entries. The changed lines are highlighted in color.  If the total for all elements changes, a debit/credit document is posted (similar to transaction MR22,

Material debit/credit). In account determination, posting keys UMB and PRD must be maintained with modification MAN.

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Alll o c at Al atio ion n of Ac Actt iv ivii ty Qua Quant ntii ty Dif fe ferr en ences ces Retrograde confirmation: 5000 h

Order Order

Cost Cente Center r

1000 h

Alll o c at Al atii o n ru rull es Act Ac t u al q u anti ant i t y throug h entry entry of activity e.g. e.g. 6000 6000 h © SAP AG 2003

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If for example you have used indirectly determined activity quantities to allocate the costs of your activities (retrograde confirmations), variances from the quantities actually determined may arise. On the basis of the quantity measured, the system is enabled to determine a more accurate operating rate. rate. This gives you more detailed information on target costs and the cause of variances. Allocation of activity differences Enter the activity for the actual quantities. Produce an allocation of activity differences. You can display and edit a default allocation. Allocate activity differences Post the allocation of activity differences Option for correction You can edit the allocation before posting it. In this process you can adjust the quantities to be allocated and decide whether to debit the adjustment for this quantity to the associated order, material or finished product.

You can use this function to allocate activity differences from the recording of actual activity quantities to orders, or to product cost collectors or make a subsequent debit to the finished product. You should perform the allocation allo cation of activity differences at least once a month before periodend close.

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When you post activ ity di fferences, the relevant cost centers are debited or credited.

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Alll o c at Al atio ion n of Mater Materia iall Quan Qu anti titt y Diff Di ffer eren enc c es Beginning Inventor Inventor y: 1100 PC

Goods Issues: 10 100 00 PC PC

Order Order

Inventory 100 PC

A ut o ma Aut matt i c allocation

Physical inventory document Inventory: 0 PC © SAP AG 2003

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You can use this function to allocate consumption differences differences from a physical inventory to orders, or make a subsequent debit to the material or finished product. You should perform the allocation of consumption differences at least once a month before period-end close. In the material ledger you can use the material price analysis to check the inventory values and to monitor postings. The material price analysis tells you the movement types of the postings under Other receipts and consumption. You can obtain the movement types of the consumption line in the original document. The function is composed of Generate allocation Edit and post allocation Display allocation of consumption differences Enter the required selection criteria. You will get a list of inventory documents. Select one or more lines, and choose Allocate. The system provides a default quantity allocation. allo cation. You can choose whether to create a subsequent debit for the quantities and values to the following objects: Orders Material Finished product Product cost collector To edit this allocation, choose Details. The individual items are displayed. Now you can change the quantity, the allocation indicator and the recipient object for each item. When you

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have made your changes, choose Post in the Item overview. To display the result, choose Details.

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AVR: Det Detail ailed ed View of Coc k p it

Determining the first and last period of an alternative alternative costing r un

Transfer of ending ending inventory values from a previous run

© SAP AG 2003

While creating an AVR, the first and last period of the cumulation period are defined. The beginning

inventory of the AVR is set to equal the quantity and valuation of the beginning inventory of the first period of the cumulation period. If a different beginning beginning inventory valuation valuation is required, this can be accommodated by referring to a previous run. If that is the case, the valuation of the AVR beginning inventory is made in line with the ending inventory valuation of the previous run.

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© SAP AG 2003

While creating an AVR, the first and last period of the cumulation period are defined. The beginning

inventory of the AVR is set to equal the quantity and valuation of the beginning inventory of the first period of the cumulation period. If a different beginning beginning inventory valuation valuation is required, this can be accommodated by referring to a previous run. If that is the case, the valuation of the AVR beginning inventory is made in line with the ending inventory valuation of the previous run.

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AVR: Det Detail ailed ed View of Coc k p it Revaluation Revaluation of inventories

Revaluation Revaluation of si nglelevel level cons umption Marking Marking of fut ure standard standard price

Specifying the prices included in costing for each each valuation view

© SAP AG 2003

Under the Settings tab, the prices can be set for valuating the activity consumption. If parallel value

records are maintained in the material ledger, a price has to be entered for each of the parallel value records. In the above example, the material ledger in the participating plants has two parallel value records, legal and profit center valuation. The valuation alternative controls the allocation of the cumulative differences to consumption and ending

inventory. If no entry is made here, cost allocation is made in the same way as for the single-level material price determination of the the periodic actual costing, costing, on the basis of consumption consumption and ending inventory inventory quantities. There is an option to revaluate the material inventories on the basis of the calculated prices of an AVR.

The revaluation is posted to the last period of the cumulation period. The posting is not made on the inventory accounts themselves, but on inventory delta accounts. Using the account modification constant or an accounting policy rule, the postings of different alternative valuation runs can be recorded on separate accounts. In addition the prices calculated by an AVR can be marked as future standard prices.

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© SAP AG 2003

Under the Settings tab, the prices can be set for valuating the activity consumption. If parallel value

records are maintained in the material ledger, a price has to be entered for each of the parallel value records. In the above example, the material ledger in the participating plants has two parallel value records, legal and profit center valuation. The valuation alternative controls the allocation of the cumulative differences to consumption and ending

inventory. If no entry is made here, cost allocation is made in the same way as for the single-level material price determination of the the periodic actual costing, costing, on the basis of consumption consumption and ending inventory inventory quantities. There is an option to revaluate the material inventories on the basis of the calculated prices of an AVR.

The revaluation is posted to the last period of the cumulation period. The posting is not made on the inventory accounts themselves, but on inventory delta accounts. Using the account modification constant or an accounting policy rule, the postings of different alternative valuation runs can be recorded on separate accounts. In addition the prices calculated by an AVR can be marked as future standard prices.

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AVR: Det Detail ailed ed View of Coc k p it Cumulat Cumulation ion of periods periods Call-up of BADI CMLAVR_SIM to modify data Determini Determini ng the cum ulative actual actual values

Determini Determini ng the diff erences between between the th e AVR and the th e actu actu al costing of the last last period

© SAP AG 2003

data, the periodic data is copied and summarized, providing the Using the process step Cumulate data, cumulation period covers more than one period. If BADI CKMLAVR_SIM is activated, it can be called up in process step Modification of value added .

This BADI can be used to set any number of material prices and to modify the quantity structure. If the BADI is not activated, this process step is hidden. If in line with its settings, the AVR uses cumulative actual prices to valuate activity consumption, they are

determined with process step Determine actual prices. prices. This process step remains hidden, unless valuation of activity consumption is made with cumulative actual prices. If the given AVR is a posting run, the postings that result can be simulated and analyzed in the process

step Determine step Determine delta postings. postings. closing is used to make the delta postings that previously existed as statistical step Post closing is The process step Post entries. During posting, material inventories and single-level consumption consumption can be revaluated and cost centers can be credited. In the same way as for periodic revaluation, postings for the subsequent period are reversed. SAP recommends revaluation of the periodic actual costing. From a preventive maintenance point of view, SAP only supports AVR revaluation for material inventories. If this recommendation is disregarded (C) SAP AG

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and cost centers are credited via an AVR, the following must be observed: Either credit only the periodic actual costing with periodic actual prices, or exactly one AVR with cumulative actual prices.

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© SAP AG 2003

data, the periodic data is copied and summarized, providing the Using the process step Cumulate data, cumulation period covers more than one period. If BADI CKMLAVR_SIM is activated, it can be called up in process step Modification of value added .

This BADI can be used to set any number of material prices and to modify the quantity structure. If the BADI is not activated, this process step is hidden. If in line with its settings, the AVR uses cumulative actual prices to valuate activity consumption, they are

determined with process step Determine actual prices. prices. This process step remains hidden, unless valuation of activity consumption is made with cumulative actual prices. If the given AVR is a posting run, the postings that result can be simulated and analyzed in the process

step Determine step Determine delta postings. postings. closing is used to make the delta postings that previously existed as statistical step Post closing is The process step Post entries. During posting, material inventories and single-level consumption consumption can be revaluated and cost centers can be credited. In the same way as for periodic revaluation, postings for the subsequent period are reversed. SAP recommends revaluation of the periodic actual costing. From a preventive maintenance point of view, SAP only supports AVR revaluation for material inventories. If this recommendation is disregarded (C) SAP AG

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and cost centers are credited via an AVR, the following must be observed: Either credit only the periodic actual costing with periodic actual prices, or exactly one AVR with cumulative actual prices.

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AVR: Resu Result lt s and an d Int Integ egrr at atio ion n

 Actu Ac tu al c os t c ompo om pone nent nt sp l it is c alc u lated lat ed  Inventory can be revaluated

An aly y si s v ia mate m aterr ial p ric ri c e analy an alys s is (CKM3) (CK M3)  Anal An aly y si s by b y d isp is p lay ing in g t he valua val uated ted quan qu anti titt y s t ru c tu r e  Anal  Transactio n CKMLAVRP CKMLAVRPER ERD D compares co mpares the cumu lative to

the periodic data  Result Result can be reconciled to Bus iness Infor Infor mation

Warehouse Result s can be b e analyzed analyzed in the t he Value Value Flow Monito r  Result Revaluation possib le in profitabili prof itability ty analysis analysis  Revaluation

© SAP AG 2003

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Follow-up Followup to profitability ana analysis lysis

Definition of a costing selection

Assi As si gn men t t o an AVR

© SAP AG 2003

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Definit Definit ion of a costing s electio electio n

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IMG: - Controlling Profitability Analysis Master Data Valuation Create valuation with material costing Define access to actual costing/material ledger

gn ing g a cos c os ti ng select sel ect i on t o alt al t ernati ern ati ve valu v aluati ati on runs ru ns  As si gnin  IMG:  - Controlling  Product Cost Controlling -- Actual Costing/Material Ledger – Actual Costing – Enter Cost Component Split in CO-PA (C) SAP AG

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Follow-up Followup to profitability ana analysis lysis

© SAP AG 2003

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AC530 - Actual Costing - Material Ledger

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