SAP Product Costing by Sale Order with Variant Configuration

SAP’s Controlling (CO) module, specifically its Product Costing component, facilitates the comprehensive costing of products, taking into account various facets of production. In the context of Make To Order (MTO) scenarios combined with variant configurations, Product Costing allows businesses to ascertain the cost of customized products. Let’s delve into the configuration and process flow:

Basic Configuration Settings for Product Costing:

1. Organizational Structure (FI & CO): Define controlling areas, plants, company codes, and other relevant structures to enable financial and controlling functionalities.

2. Financial Accounting Settings:

   • GL Accounts Creation: Define various general ledger accounts for inventory, cost of goods sold, etc.

   • OBYC-FI-MM Integration: This is the automatic posting settings between FI and MM modules.

   • Business Partner Creation: In S/4HANA, both vendors and customers are managed as business partners (BP).

3. Cost Component Structure (OKTZ): Define how various costs (e.g., material, labor) are grouped and shown in a cost estimate.

4. Costing Variants (PPC1, PPP1, PPP2): These variants determine how the cost estimate is calculated. This includes valuation variants, date control, and transfer control.

5. Variance Calculation & Settlement Configuration: Define variance keys and categories. The settlement configuration defines how these variances are allocated to different CO objects.

6. Splitting Structure Mapping: Maps cost elements to activity types. This facilitates the activity-based costing method.

7. Activity Rate Calculation (KP06, KP26, KSS4, KSPI): Plan and calculate rates for each activity type.

8. Material Ledger Configuration: If you’re using actual costing, the material ledger keeps track of price differences.

Product Costing by Sales Order with Variant Configuration:

1. Costing Variant (PPC4): Specific to sales order costing; determines the rules of how a sales order item is costed.

2. Requirement Class & Strategy: Ensure alignment of MRP and sales order behavior for the Make To Order scenarios.

3. Material Type KMAT: Configuration materials are categorized under KMAT material type.

4. Characteristics & Classes (CT04, CL01): Characteristics represent features (e.g., color, size) of configurable products. They’re grouped under classes.

5. Configurable Material Creation: Once characteristics and classes are in place, the KMAT material is created, indicating possible configurations.

6. “Super BOM” Creation (CS01): This Bill of Materials (BOM) takes into account all possible components for the configurations.

7. Work Centers & “Super Routing”: Create work centers and then a comprehensive routing for the KMAT material that includes all possible operations.

8. Configurable Profile (CU41): Determines how the configuration of a KMAT material will be managed.

Process Flow:

1. Business Partner Creation: Create vendors and customers.

2. Sales Order Creation (VA01): The sales order is raised with selected variants which trigger costing.

3. Purchase & Transfer Posting: Raw materials are procured and then transferred to sales order stock.

4. Production Confirmation: The production process is confirmed for the sales order.

5. Goods Receipt: The final product, based on the sales order, is received into stock.

6. Delivery & Billing: The final product is delivered, and the customer is billed.

7. Variance Calculation & Settlement: Any production variances are calculated and then settled to relevant CO objects.

In summary, the integration of Product Costing with the Make To Order scenario, especially with variant configuration, allows businesses to effectively and accurately cost products tailored to individual customer requirements. Proper configuration ensures efficiency, accuracy, and seamless integration between the module

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