WIP Configuration Document

Table of Contents
Preface of the Document: .....................................................................................................................1 Scope of WIP in SAP:..........................................................................................................................2 How the WIP be Derived: ..............................................................................................................2 Definition of Resu t Ana !sis "e!s:...................................................................................................# Define $ost % ements for WIP $a cu ation..........................................................................................& Define Resu t Ana !sis 'ersion............................................................................................................( Define 'a uation )ethod *Actua $osts+............................................................................................1, Define -ine ID.s:.................................................................................................................................1/ Define Assi0nment:.............................................................................................................................1& Define 1pdate:....................................................................................................................................1( Define Postin0 Ru es for Sett in0 Wor2 In Process:...........................................................................22 Define 3umber Ran0es:......................................................................................................................2# Simp ified )aintenance of 'a uation )ethod:...................................................................................2, Define 'ariance "e!:.........................................................................................................................24 Define Defau t 'ariance "e!s for P ants............................................................................................#5 $hec2 'ariance 'ariants:....................................................................................................................#1 Define 'a uation 'ariant for WIP 6 Scrap *7ar0et $osts+................................................................#, Define 7ar0et $ost 'ersions:..............................................................................................................#8 Define 3umber Ran0es for 'ariance Documents:..............................................................................,2 9u Sett ement....................................................................................................................................,& Periodic Sett ement..............................................................................................................................,4 Sett ement Parameters........................................................................................................................./5 $reation of Sett ement Profi e:............................................................................................................/1 Defau t 'a ues:............................................................................................................................../# Indicators:......................................................................................................................................./# 'a id Receivers:............................................................................................................................../, :ther Parameters:.........................................................................................................................../, $reate Sett ement $ost % ements........................................................................................................// $reate A ocation Structure ................................................................................................................/& $reate Source Structure:......................................................................................................................82

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

WIP Configuration Document

Preface of the Document:

7he Document wi 0ive the detai ed information about the concept of Wor2 in Process and the re;uired confi0uration settin0s to be done in the s!stem. Concept of WIP: Wor2 that has not been comp eted but has a read! incurred a capita investment from the compan!. 7his is usua ! recorded as an asset on the ba ance sheet. Wor2 in pro0ress indicates an! 0ood that is not considered to be a fina product< but must sti be accounted for because funds have been invested toward its production.

Scope of WIP in SAP:

9or the )anufacturin0 firms *Product based+ coverin0 a the t!pes of production processes< name ! discrete< repetitive 6 process industr! se0ments< SAP has provided the separate too or sub= modu e to encounter the activities which wi be ta2en p ace in the business process and provides the detai ed out ine 6 resu ts of the manufacturin0 activities. 7he functiona sub=modu e in contro in0 part of SAP< which is termed as Product Cost Controlling (CO-PC) coverin0 a the vertica industr! 6 production processes. 7his P$ modu e wi he p the mana0ement to understand the most re;uired contro in0 aspects i2e production costs *direct 6 indirect costs+ overheads incurrin0 durin0 the production< what are a the p anned cost 6 actua cost for a product< b! re0u ar periodic basis what is the wor2 in pro0ress< variances between p anned 6 actua costs for manufacturin0 *;uantit! 6 price+ and fina ! how the fina costs wi the sett ed to which cost ob>ects.

How the WIP be Derived:

7he s!stem ca cu ates work in process *WIP+ to determine the costs incurred for materia s that have not !et been de ivered to stoc2. 7his ca cu ates the va ue of the unfinished 0oods. 7he ca cu ation procedure wi differ based on the various production processes. -i2e< In Product Cost by Period the wor2 in process for product cost collectors is ca cu ated at target costs on the basis of the ;uantities confirmed at the operations *at the reportin0 points in Raja Sekhar Talluri SAP FICO Consultant 2

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WIP Configuration Document

repetitive manufacturin0+. In Product Cost by Order the wor2 in process is ca cu ated for the manufacturing orders. 7he wor2 in process for manufacturin0 orders is norma ! ca cu ated at actua costs. Wor2 in process at actua costs is ca cu ated as the difference between the debits for materia withdrawa s< interna activit! a ocations< e?terna activities< and overhead costs *that is< the actual costs assi0ned to the ob>ect+ and the actual credits from 0oods receipts for de iver! to stoc2.

7he wor2 in process can be transferred to 9inancia Accountin0 and Profit $enter Accountin0 b! period. Sett ement to 9inancia Accountin0 ensures that the wor2 in process is inc uded in the ba ance sheet and the profit and oss statement. 7he ca cu ated wor2 in process is updated to the order *product cost co ector or manufacturin0 order+ under the resu ts ana !sis cost e ements. We can view and ana !@e the wor2 in process in the Product Cost Controlling Information System where SAP provides standard reports for the detai ed ana !sis.

Configuration Steps for WIP:

7he fo owin0 are the re;uired steps under the confi0uration of WIP. 7o confi0ure the WIP in the SAP s!stem< as we a 2now the interre ations between mu tip e modu es under SAP< more important ! the modu es i2e 9inance< $ontro in0< )ateria < Sa es 6 Distribution 6 Production P annin0 as the master data 6 the settin0s wi cover a the modu es which are mentioned above. With re0ardin0 to the settin0s is concern as the process< I am mentionin0 one b! one which wi cover a the modu es< for better understandin0. To define the control parameters for WIP calculation< we shou d carr! out the fo owin0 steps:

Definition of Result Analysis Keys:

Resu ts ana !sis 2e!s contains contro parameters for WIP ca cu ation. 7he order *product cost co ector or manufacturin0 order+ is on ! inc uded in WIP ca cu ation< if it has a resu ts ana !sis 2e!. A 2e! specif!in0 that the ob>ect is to be se ected durin0 resu ts ana !sis or when wor2 in process is ca cu ated. A number of va uation contro parameters are in2ed to this 2e!. The results-analysis key is a technical term used to control how the objects are valuated during results analysis 7he assi0nment of a resu ts=ana !sis 2e! to an ob>ect determines amon0st other thin0s

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SAP FICO Consultant

WIP Configuration Document

whether resu ts ana !sis is revenue=based< ;uantit!=based or manua on which basis *p anned or actua data+ resu ts ana !sis is carried out how profits are rea i@ed whether the inventor!< reserves and cost of sa es are to be sp it I)A Path Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost Period or :rder B Period %nd $ osin0 B Wor2 in Process B Define Resu t Ana !sis "e!s. :"A1

7ransaction $ode

Se ect the %?ecution *$ oc2+ Cutton < to proceed for the further settin0.

Here as per the re;uirement we can define our own RA 2e! despite of SAP standard de ivered 2e!s. We can 0ive up to 8 characters and description for the same. Here we create results anal sis ke s. %ach order for which !ou want to create work in process *WIP+ must receive a resu ts ana !sis 2e!. 7he presence of a resu ts ana !sis 2e! in the order means that the order is inc uded in WIP calculation durin0 period=end c osin0. 7he resu ts ana !sis 2e! can be specified as a defau t va ue for each order t!pe and p ant. It is then added to the order master record when an order of a particu ar order t!pe is created. Prepared By: Raja Sekhar Talluri SAP FICO Consultant

WIP Configuration Document

7he assi0nment of RA 2e! can be done at 7wo eve s< name !

:rder 7!pe 6 P ant combination. *9rom Production )odu e+

-et us see those settin0s now:

I)A Path 7ransaction $ode

Reference I)A Auide == Production B Shop 9 oor $ontro B )aster Data B :rder B Define :rder 7!pe Dependent Parameters :P-4

Se ect the re ated p ant 6 order t!pe and choose Detai s Cutton in the top *Shot "e! B 92+ 7hen Ao 7o $ontro in0 7AC.

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SAP FICO Consultant

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WIP Configuration Document

Here we assi0n the defau t va ues for Resu t Ana !sis "e!. :rder 7!pe 6 P ant combination. *9rom $ontro in0 )odu e+

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B )anufacturin0 :rders == Define $ost Accountin0 Re evant Defau t 'a ues for :rder 7!pes 6 P ants :"D#

7ransaction $ode

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SAP FICO Consultant

WIP Configuration Document

Se ect the re ated p ant 6 order t!pe and choose Detai s Cutton in the top *Shot "e! B 92+ Here we have assi0ned the RA "e! a on0 with Defau t Ru e for sett ement to the combination of P ant 6 :rder 7!pe.

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SAP FICO Consultant

WIP Configuration Document

Define Cost Elements for WIP Calculation
Here in the functiona transaction< we have to create the cost e ements which are 0oin0 to be used for capturin0 the WIP va ues from different production processes 6 cost ob>ects *:rders+ Here we can chec2 the cost e ements under which the wor2 in process and *if app icab e+ the reserves are updated on the order * product cost collector or * manufacturing order.+ 7hese secondar! cost e ements have cost e ement t!pe #1 *resu ts ana !sis for ordersEpro>ects+. In the step %efine &pdate< assi0n these resu ts ana !sis cost e ements to the individua ine IDs. 7he va ue of the ine ID is updated on the order under the appropriate resu ts ana !sis cost e ement. 7o transfer the wor2 in process or reserves for unrea i@ed costs to 9inancia Accountin0< we have to define the postin0 ru es. Do not define an! cost e ements in the $ontro in0 component for the AE- accounts in these postin0 ru es< because the order is not credited when the wor2 in process is sett ed.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define $ost % ements for WIP $a cu ation. "A58

7ransaction $ode

-i2e this we need to create the few cost e ements with the cate0or! #1< name !..

Primar! costs Secondar! $osts Revenues Sett ement

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WIP Configuration Document

Define Result Analysis !ersion

A results anal sis data * work in process in the Product $ost b! Period component< and wor2 in process or reserves for unrea i@ed costs in the Product $ost b! :rder component+ ca cu ated in results anal sis is updated on the order with reference to the results anal sis (ersion. 7his enab es !ou to ca cu ate wor2 in process on the basis of mu tip e resu ts ana !sis versions simu taneous !. 7his means that !ou can use different resu ts ana !sis versions to do the fo owin0: Define different methods of WIP ca cu ation: We can create resu ts ana !sis versions a on0 with operationa va uation that are based an Finterna F resu ts ana !sis version created for interna purposes< rather than on mu tip e va uation. 7his means< we can use different resu ts ana !sis versions to:

Different amounts of wor2 in process to be capita i@ed

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SAP FICO Consultant

WIP Configuration Document

Different methods of WIP ca cu ation

If we are operatin0 in different countries< can define different resu ts ana !sis versions to ta2e into account the different e0a re;uirements in each countr!.

$a cu ate wor2 in process at actua costs in up to three (aluation (iews in the Product Cost by Order component If we use transfer prices< then we can ca cu ate the resu ts ana !sis data in the fo owin0 va uation views:

-e0a view Aroup view Profit center view

In the Product Cost by Period component< the wor2 in process at tar0et costs is a wa!s ca cu ated in the operationa va uation view.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define Resu t Ana !sis 'ersion. :"A(

7ransaction $ode

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SAP FICO Consultant

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WIP Configuration Document

Se ect the 3ew %ntries Cutton or choose an e?istin0 entr! and then se ect the $op! as button.

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WIP Configuration Document

+ields , Importance He under this Resu t Ana !sis 'ersion< I have been se ected the contro indicators for ca cu ation of WIP or Resu t Ana !sis for the options:

:rders in Sa es :rder Re ated Production :rders in %n0ineer to :rder Production )anufacturin0 :rders wEo sett ement to materia .

Status $ontro : 7his the main contro point in ca cu ation of WIP for an order with reference to the status dependenc!. 7he main contro throu0h this fie d he ps us to determine periodic results anal sis data durin0 the ca cu ation of work in process *WIP+ or in results anal sis< and to be ab e to cance this data at the proper time< the s!stem needs information on the re evant business transactions for the period that affect cost accountin0. 1nder this option< SAP provides some defau t t!pes for status contro as fo ows. Status $ontro B A *7hen the s!stem wi determine+ +or -ales Orders: the status De ivered *D-'+ and 9ina Ci ed *93C-+ are determined d!namica ! from document f ow. Prepared By: Raja Sekhar Talluri SAP FICO Consultant 12

WIP Configuration Document

+or Production Orders: the periods in which the statuses De ivered *D-'+ and 7%$: *7echnica ! $omp eted+ were set are read from the master record of the production order. If we eave this fie d as b an2< then the s!stem wi automatica ! determined as option .A. on !.

$utoff Period: Period that divides the ife c!c e of an ob>ect for which WIP calculation or results anal sis is to be performed into open and c osed periods. 7his means that the resu ts ana !sis data from ear ier periods< for which postin0s ma! have been 0enerated in 9inancia Accountin0< is not chan0ed. $han0es to the p an data or actua data in ear ier periods are accounted for b! the resu ts ana !sis or WIP ca cu ation process in the first open period. Assi0nment of $ost % ement: Here we need to assi0n the cost e ement what we have created with the cate0or! of #1< name ! 7echnica RAEWIP cost e ement. 7he main purpose of this assi0nment is to capture different costs< when wor2 in process is ca cu ated< the fo owin0 data is updated under this cost e ement:

.aluated actual costs Calculated costs

9or the ca cu ation of wor2 in process< the va uated actua costs and the ca cu ated costs are on ! used for interna purposes and do not re;uire separate cost e ements. A that is needed is a technica resu ts ana !sis cost e ement.

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SAP FICO Consultant

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WIP Configuration Document

Define !aluation "ethod #Actual Costs$

Here we have to define a va uation method for the ca cu ation of work in process. 7his creates the in2 between the controlling area< the results anal sis ke < the results anal sis (ersion< and the s stem status. When we create new va uation methods< we have to specif! whether the wor2 in process shou d be va uated at target costs or actual costs/ Wor2 in Process at 7ar0et $osts In the Product Cost 0 Period component the wor2 in process is va uated at tar0et costs. 7he va uation is made on the basis of the ;uantities confirmed at the operations or reporting points. Wor2 in Process at Actua $osts In the Product Cost 0 Order component the wor2 in process is norma ! va uated at actua costs. 7he va ue of the wor2 in process is the difference between the debit and the credit of an order as on0 as the order has the status PR%- *partia ! re eased+ or R%- *re eased+.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define 'a uation )ethod *Actua $osts+ :"A#

7ransaction $ode

Here when we se ect the new entries< s!stem wi disp a! an window where we need to se ect the va uation method at either Actua $osts or 7ar0et $osts. Accordin0 to the re;uirement< we need to se ect the appropriate option. :nce we se ect the re;uired va uation method< s!stem wi disp a! an input window< in which we need to 0ive the information for contro in0 area< resu t ana !sis version 6 resu t ana !sis 2e!< basin0 on which s!stem wi 0enerate the dependent entries automatica !.

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SAP FICO Consultant

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WIP Configuration Document

Define %ine ID&s:

7he ine IDs are used to 0roup the wor2 in process and reserves for unrea i@ed costs accordin0 to the re;uirements of 9inancia Accountin0. 7he work in process or reser(es for unreali1ed costs are ca cu ated as a tota for each order and apportioned to the ine IDs. We have a option to define separate ! for each ine ID whether the wor2 in process for that ine ID must be capita i@ed. Whi e creatin0 the -ine ID.s we need to consider the fo owin0 points as a basis< to have a c ear idea on what are we need to maintain. 7hose are :

7o ca cu ate the wor2 in process usin0 actua costs< we need to create an additiona ine ID for the cost e ements under which the 0oods receipts are posted. 9or each ine ID< we have to create a cost e ement *t!pe #1+. In $ustomi@in0 for Product $ost P annin0< specif! in the step %efine cost components which va ues are re evant to inventor! va uation< ph!sica inventor! va uation< and ta?=based inventor! va uation. Cost components c assif! the costs ca cu ated in the cost estimate into 0roups. 7he ine IDs for WIP ca cu ation are norma ! structured accordin0 to the same o0ic as the cost Raja Sekhar Talluri SAP FICO Consultant 1"

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WIP Configuration Document

components in Product $ost P annin0. 9or e?amp e< a ine ID Fraw materia sF norma ! has the same cost e ement interva assi0ned to it that is assi0ned to the cost e ement Fraw materia sF.

It wou d a so be possib e to structure the ine IDs accordin0 to the va ue fie ds in Profitabi it! Ana !sis. In this case !ou wou d create ine IDs for the cost of 0oods manufactured *fi?ed and variab e+< sa es and distribution costs< administration costs< and so on.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define -ine Id.s 3I-

7ransaction $ode

1nder the settin0s for Resu t Ana !sisE WIP ca cu ations this -ine Id p ace an important ro e< where we assi0n the re evant cost e ement what ever we have created for the WIP ca cu ations or the source cost e ements< as we .

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SAP FICO Consultant

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WIP Configuration Document

Define Assi'nment:

1nder this functiona transaction< we have to assi0n the cost e ements to the respective -ine Ids. 7he main noted points for assi0nment is as fo ows:

$ost e ements under which an order is debited and credited With work in process at target costs< a cost e ements that are inc uded in the cost estimate on which the ca cu ation of tar0et costs for the va uation of wor2 in process is based *such as a cost e ements in the preliminar cost estimate for the product cost collector.

Work in Process at 2ctual Costs 7he ine IDs put the costs incurred for the order into specific 0roups for e?amp e:

Direct materia costs Production costs Indirect costs

7hese 0roups shou d be based on the structure of the cost of 0oods manufactured in the cost component structure. In the 1pdate< the categor indicates whether the cost e ements under which the different postin0s are made are debits or credits for WIP ca cu ation.

Assi0n a debits *such as for materia withdrawa s+ interna activities< e?terna activities and overhead< to ine IDs of cate0or! 3 *costs+. Assi0n a credits *such as for materia issues and order sett ement+ to ine IDs of cate0or! 2 *sett ed costs+.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define Assi0nment. :"A/ 6 :"AC Raja Sekhar Talluri SAP FICO Consultant 1$

7ransaction $ode Prepared By:

WIP Configuration Document

As mentioned in the previous step< we have to assi0n the cost e ements as per the sub=0roupin0s and nature of the each individua costs. 9or %?amp e< the cost e ements GGG,#52GGG are the cost e ements which wi capture the costs of Raw materia *Direct or Primar! costs+< so I have assi0ned those 0roup to the ine id PR$ *Primar! $osts+.

Here< under this Assi0nment settin0< we can a so have the fo owin0 options as we :

If we maintain different RA 2e!s< we can maintain the cost e ement assi0nment based on that. 7he assi0nment of the cost e ements can a so ma2e specific to :ri0in< cost centers< activit! t!pes 6 business processes. *where I have mas2ed for a +.

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WIP Configuration Document

Define ()date:
9or each line I%< specif! the resu ts ana !sis cost e ement under which the wor2 in process and *under some circumstances+ the reser(es for unreali1ed costs are updated< and assi0n each ine ID to a categor . 7he cate0or! indicates whether the cost e ements under which the different postin0s are made are debits or credits for WIP ca cu ation. Work in Process at 2ctual Costs 7he debits and credits of an order are 0rouped as fo ows:

Assi0n a debits< such as for materia withdrawa s< interna activities< e?terna activities< and overhead to ine IDs of cate0or! 3 *costs+. 7he s!stem creates wor2 in process for each debit postin0 that is updated under one of these cost e ements. 7hese va ues are updated under the resu ts ana !sis cost e ements *cost e ement cate0or! #1+ that !ou specif! under !efine update.

Assi0n a credits< such as for materia issues and order sett ement to ine IDs of cate0or! 2 *sett ed costs+. 9or each credit postin0 that is updated under one of these cost e ements< the s!stem reduces the wor2 in process.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define 1pdate. :"A,

7ransaction $ode

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WIP Configuration Document

Here the 1pdate has been done< with reference to the RA 2e! for SAS):S *Actua $osts+ 6 SAS)7$ *7ar0et $osts+. In this settin0< the contro points are:

RA version RA 2e! Raja Sekhar Talluri SAP FICO Consultant 2*

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WIP Configuration Document

-ine Id -ine Id $ate0or! *$ost Aroupin0+

9or these combination< we have to assi0n the secondar! cost e ements *#1 $ate0or!+ and Apportionment 3umber we can assi0n the H for what e?tent is re evant for capita i@ation. *Primar! $osts 155H and for secondar! costs 85H+

Define Postin' Rules for *ettlin' Wor+ In Process:

In this step specif! the A- accounts in 9inancia Accountin0 to which the WIP is sett ed. Assi0n a resu ts ana !sis cost e ement or a 0roup of resu ts ana !sis cost e ements to two AE- accounts. A postin0 document is 0enerated in 9inancia Accountin0 on the basis of the sett ement of wor2 in process.

Data is written to the Ca ance Sheet Data is written to the P6- Statement

If we have specified a profit center in the order * product cost co ector or manufacturin0 order+ the data is a so forwarded to Profit $enter Accountin0.

We can assi0n the resu ts ana !sis data to the AE- accounts at the fo owin0 eve s:

Resu ts ana !sis cate0ories 7he resu ts ana !sis cate0ories are created on the basis of the assi0nment of the costs to ine IDs:

WIPR = Wor2 in process with re;uirement to capita i@e costs WIP: = Wor2 in process with option to capita i@e costs WIPP = Wor2 in process with prohibition to capita i@e costs

3orma ! define a postin0 ru e that assi0ns the wor2 in process with re;uirement to capita i@e costs to the AE- accounts for unfinished products *ba ance sheet+ and stoc2 chan0es *PE-+.

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WIP Configuration Document

I)A Path Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define Postin0 Ru es for Sett e Wor2 In Process :"A4

7ransaction $ode

Here< we maintain the assi0nment of the A- accounts P 6 - account *$han0es in WIP+ 6 the ba ance sheet account *WIP+ with reference to the $ontro in0 area< compan! code< RA version 6 most important ! RA cate0or!. Here I have chosen WIPR *Wor2 In Process Re;uirement for $apita i@ation+ and R1$R *Reserves for 1nrea i@ed $osts +

Define ,umber Ran'es:

In the functiona transaction< we need to specif! the number ran0e interva for capturin0 the 9I documents< when the WIP has been sett ed to the respective A- accounts maintained in the Postin0 Ru es.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! PeriodE:rder B Period %nd $ osin0s == Wor2 In Process == Define 3umber Ran0e :"A8

7ransaction $ode

when we chose the e?ecute button< the s!stem wi ta2e to the initia screen< where we need to input the respective contro in0 area.

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WIP Configuration Document

With this the main settin0s are comp eted for the RAEWIP. Cut as a process is concern we need to chec2 one more functiona transaction< in which the other contro points wi be maintained for the va uation method of WIP ca cu ations.

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WIP Configuration Document

*im)lified "aintenance of !aluation "ethod:

In this step !ou specif! the method b! which results anal sis is carried out for the ob>ects * sales document item< pro4ect< and internal order+. 7he va uation method is defined b! the fo owin0 parameters:

Controlling area to which the ob>ect is assi0ned 5esults anal sis ke specified in the ob>ect 5esults anal sis (ersion specified in resu ts ana !sis Resu ts ana !sis method Status contro Profit basis 'a uation eve )inimum va ues *if app icab e+

A resu ts ana !sis method must be defined in the s!stem for each va uation method. 7he resu ts ana !sis method contro s which formu a is used to ca cu ate the results anal sis data.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! Sa es :rder B Period %nd $ osin0s B Resu t Ana !sis == Define 'a uation )ethods for Resu t Ana !sis :"A#

7ransaction $ode

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2!

WIP Configuration Document

:nce we se ect the specified va uation method< doub e c ic2 on the se ected entr!< s!stem wi 0ive the different status eve < what have been maintained for the ca cu ation of WIP.

3ow< to chec2 the dependent settin0s at each status eve < se ect the individua entr! and then choose Detai s button *Short "e! 92+. Here< there are few contro points on which we need to concentrate as per the t!pe of RA 2e!. 7hose are fo ows. 52 3e -2-7O- (2ctual Cost) -2-76C (6arget Cost) 52 6 pe + (2t 2ctual Costs) - (2t 6arget Costs) +inal 52 -8ould 0e 9lank -8ould 0e 9lank

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WIP Configuration Document

7he above screen< is for Status of R%-< i2e wise has to ma2e for the remainin0 statuses *D%-< PR%- 6 7%$:+

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WIP Configuration Document

Variance Calculation
Here we have to define the contro parameters for ca cu ation of variances and scrap on Production orders< process orders 6 sa es orders. 7o carr!out the settin0s for the variance ca cu ation< we have to fo ow the steps as mentioned be ow.

Define !ariance Key:

:rders * product cost co ectors or manufacturin0 orders+ and cost ob>ect nodes in cost ob>ect hierarchies can on ! be se ected for variance ca cu ation if a variance 2e! is entered in the order or cost ob>ect node. If the order master doesn.t have the variance 2e!< then the s!stem wont pic2 up the order for the variance ca cu ation. So< to 0et the variance for an order< this is mandator! fie d in the order master. We can ca cu ate variances either for the entire ife of the ob>ect *cumu ative+ or for a specific postin0 period *periodic+. In Product Cost 0 Order: we usua ! ca cu ate the variances cumu ative !. In cumu ative variance ca cu ation< the target costs are ca cu ated on the basis of the ;uantit! !ou have transferred to stoc2 for the order. 7he actua costs are for the entire ife of the order. 'ariance ca cu ation re;uires that the order have the status D-' *de ivered+ or 7%$: *technica ! comp eted+. In Product Cost 0 Period< we a wa!s has to ca cu ate the variances periodica !.

In variance ca cu ation b! period< the tar0et costs are ca cu ated on the basis of the ;uantit! that !ou de ivered to stoc2 in the period. 7he actua costs are on ! for the period in which !ou ca cu ate variances. 'ariance ca cu ation re;uires that a 0oods receipt was posted for the order in the period. If that is not the case< the s!stem on ! ca cu ates remainin0 variances. Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define 'ariance "e! :"'1

I)A Path

7ransaction $ode

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WIP Configuration Document

:nce enter in to the initia screen< choose the new entries options or we can a so cop! the standard variance 2e! and ma2e the appropriate chan0es as per re;uirement.

+ield %escription Control Indicator " Scrap# If this indicator is se ected< the va ue of the scrap is ca cu ated durin0 (ariance calculation and subtracted from the tota variances. 7he costs for the operations that were carried out before the scrap was confirmed are then shown in a separate co umn. Control Indicator- $rite %ine Items# If this indicator is se ected< a document is created when variances or tar0et costs are ca cu ated< showin0 the fo owin0 information:

Who ca cu ated the tar0et costs or variances When the tar0et costs or variances were ca cu ated Raja Sekhar Talluri SAP FICO Consultant 2'

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WIP Configuration Document

Which tar0et costs or variances have chan0ed

As for the s!stem performance is concern< there is no necessit! for se ected this particu ar indicators in the variance 2e!.

Define Default !ariance Keys for Plants

1nder this functiona transaction< we ma2e the assi0nment of variance 2e! to the p ant as a defau t va ue. Purpose# 'ariances are ca cu ated on the basis of the (ariance ke shown in the order master record. 7he functiona it! of this assi0nment wi wor2 as fo ows.

When we create a materia master record< the s!stem proposes a defau t variance 2e! for that materia master throu0h the p ant. %ven at the time of creatin0 production order< process order< or product cost collector for this materia < the s!stem proposes a defau t variance 2e! throu0h the entr! in the materia master record.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define Defau t 'ariance "e! for P ants. :"'W

7ransaction $ode

We have an other a ternative as we to carr!out the assi0nment of defau t variance 2e! to a the materia s maintained at the p ant eve < b! usin0 the standard pro0ram

SAPMKKS1.

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WIP Configuration Document

Chec+ !ariance !ariants:

C! usin0 this functiona settin0 we have to define the (ariance (ariants. 'ariance variants determine what are a the (ariance categories are to be ca cu ated. 7he fo owin0 variance cate0ories can be ca cu ated:

Scrap 'ariance Input Price 'ariance Resource B 1sa0e 'ariance Input Iuantit! 'ariance Remainin0 Input 'ariance )i?ed Price 'ariance :utput Price 'ariance 6 -ot Si@e 'ariance

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WIP Configuration Document

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define 'ariance 'ariant. :"'A

7ransaction $ode

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WIP Configuration Document

Define !aluation !ariant for WIP - *cra) #.ar'et Costs$ In this section we create a va uation variant for the va uation of wor2 in process and unp anned scrap *scrap variances+ at tar0et costs. We define how the s!stem ca cu ates the target costs for the va uation of wor2 in process and how it ca cu ates the tar0et costs for the va uation of scrap.
7he tar0et costs can be ca cu ated as fo ows:

At p anned costs = that is< on the basis of a preliminar cost estimate for the production order< process order< or product cost collector In an a ternative material cost estimate Jou a so specif! the costing (ariant and the costing (ersion.

:n the basis of the standard price ca cu ated in a current standard cost estimate

If !ou withdraw materia s from the non reserved stoc2 in ma2e=to=stoc2 production< these standard costs are ca cu ated on the basis of a standard cost estimate for the materia . If !ou are usin0 a (aluated sales order stock in sa es=order=re ated production< the s!stem uses the cost estimate on which the ca cu ation of the standard price is based. Jou specif! in the re;uirements c ass how the standard price for individua re;uirements materia s is ca cu ated with an va uated sa es order stoc2. If we want to carr! out the WIPEScrap ca cu ation or va uations a wa!s at the tar0et costs ca cu ated on the basis of a standard cost estimate< then need not create a va uation variant for wor2 in process and scrap.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define 'a uation 'ariant for WIP and Scrap *7ar0et $osts+ =3I-=

7ransaction $ode

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WIP Configuration Document

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WIP Configuration Document

Define .ar'et Cost !ersions: In t8is step we define 8ow t8e target costs to 0e calculated/
6arget cost (ersions are used in the fo owin0 wa!s:

In variance ca cu ation:

7o contro which variance *tota variance< production variances or p annin0 variance+ is ca cu ated

7o va uate unp anned scrap* scrap (ariance+ 1np anned scrap is va uated in the period=end c osin0 activities when the variances are ca cu ated. We can specif! in a (aluation (ariant for WIP and scrap which cost estimate !ou want to use to ca cu ate the tar0et costs for the va uation of unp anned scrap. 7hen assi0n the va uation variant to tar0et cost version 5 if !ou want to inc ude it in the va uation of scrap.

%ven thou0h< we can create our own tar0et cost versions< SAP provides the standard versions name ! 5<1< 2 6 #. Kust chec2 out how these # versions are different from one 6 another in the functiona it!. 7ar0et cost version 5 * total (ariance+ 7he amount of the tota variance 0enerates a postin0 in 9inancia Accountin0 durin0 sett ement. 9or this version< se ect actual costs as the contro costs and standard cost estimate as the tar0et costs. 6arget cost (ersion * is t8e onl target cost (ersion t8at is rele(ant to settlement/ 68at is: onl t8e (ariances calculated wit8 target cost (ersion * can 0e settled to Profita0ilit 2nal sis/ Onl in target cost (ersion * can ou specif a (aluation (ariant for t8e (aluation of scrap and work in process/

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WIP Configuration Document

7ar0et cost version 1 * production (ariance+ 9or this version choose actual costs as the contro costs and planned costs as the tar0et costs.

7ar0et cost version 2* planning (ariance+ With tar0et cost version 2< the costs from the pre iminar! order cost estimate are interpreted as contro costs. 9or this version< se ect planned costs as the contro costs and current cost estimate as the tar0et costs. We cannot ca cu ate p annin0 variances for the product cost co ector.

7ar0et cost version # *production variance of the period+ 7o compare the p anned costs of the period ca cu ated on the basis of an a ternative material cost estimate *such as a modified standard cost estimate+ with the actua costs of the period on the basis of the !ie d de ivered to stoc2 in the period. 7he base ;uantit! for variance ca cu ation is the !ie d. 9or this version< choose the actua costs as the contro costs and the a ternative materia cost estimate as the tar0et costs. 7o determine the a ternative materia cost estimate< enter a costin0 variant and choose a costin0 version.

&ote# The target cost version specifies which data is to be compared The target cost version also specifies which variance variant is used and therefore which variance categories are calculated $e can also define different target cost version for each controlling area Pre-5e;uisites: Cefore definin0 the 7ar0et $ost 'ersions< we a so need to ma2e sure that the be ow settin0s are comp eted. 7hose are:

'ersion )aintenance:= Here we have to maintain the versions under Controlling 2rea -ettings. :n ! the versions created there can be defined in this step as a tar0et cost version. If !ou want to use the tar0et cost version for variance ca cu ation< !ou shou d perform the fo owin0 steps: 'ariance "e!s< Defau t 'ariance 2e! for p ants 6 'ariance 'ariant.

If we want to use the $ost :b>ect hierarch! as we < we shou d maintain the fo owin0 settin0s: Raja Sekhar Talluri SAP FICO Consultant 3"

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WIP Configuration Document

1. In $ost :b>ect $ate0ories for $ost :b>ect Hierarchies< have to chec2 the $ost :b>ect $ate0ories re0ardin0 the variance ca cu ation and distribution. 2. In $ost :b>ect Profi es for cost ob>ect hierarchies< has to chec2 the profi e re0ardin0 the variance 2e! *if re;uired+

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define 7ar0et $osts 'ersions :"'8

7ransaction $ode

7o chec2 the parameters maintained for each version< se ect the specific version then choose the detai s button or use the short 2e! 92.

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WIP Configuration Document

7hen 7ar0et $ost 'ersion 5

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WIP Configuration Document

7ar0et $ost 'ersion 1

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WIP Configuration Document

7ar0et $ost 'ersion 2

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WIP Configuration Document

Define ,umber Ran'es for !ariance Documents: When variances are ca cu ated< the fo owin0 business transactions are carried out: "A1S "PI' "S:P "S:S "'AR == == == == == $a cu ate Scrap Distribute Actua $osts for $ost :b>ects $a cu ate Primar! 7ar0et $osts $a cu ate Secondar! 7ar0et $osts $a cu ate 'ariances.

When these business transactions are carried out< $: documents are created containin0 the tar0et costs< variances< scrap and distributed actua costs. 3umbers are assi0ned for these documents.

So< we have to maintain number ran0es to imit va ue areas for the numbers assi0ned or to cate0ori@e documents accordin0 to certain criteria.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B 'ariance $a cu ation == Define 3umber Ran0es for 'ariance Documents. "A3"

7ransaction $ode

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WIP Configuration Document

7o see the assi0ned 0roups for the number ran0e ob>ect< choose the Disp a! Aroups button or use the short 2e! 9/.

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WIP Configuration Document

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WIP Configuration Document

&ote# 3o business transaction shou d be there under 3ot Assi0ned. 7hen come bac2 from that screen< to see the maintained number ran0e interva < and choose the Disp a! Interva Cutton.

7hese are a the steps re;uired for customi@in0 the Resu t Ana !sisE Wor2 In Process 6 'ariance $a cu ation under Period %nd Activities for Product $ost $ontro in0.
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WIP Configuration Document

Settlement Configuration
Here we define parameters for Sett ement. Sett ement is used to transfers the actua costs assi0ned to the order to one or more receivers *norma ! the materia bein0 manufactured+. 7he variances between the ori0ina inventor! va uation and the actua costs are transferred to 9inancia Accountin0< Profit $enter Accountin0 and Profitabi it! Ana !sis. When we sett e< the wor2 in process is transferred to 9inancia Accountin0 and Profit $enter Accountin0. Wor2 in process is a wa!s sett ed b! period. Sett ement wi be carried out at two different eve s< for various cost ob>ects.

9u Sett ement Periodic Sett ement

/ull *ettlement
9u sett ement is used for production orders and process orders in the Product $ost b! :rder component. <ac8 goods receipt results in a preliminar (aluation of t8e in(entor /

If the materia is havin0 Price $ontro .S. the de ivered ;uantit! is va uated with the standard price in the materia master record. If the materia is havin0 Price $ontro .'. the de ivered ;uantit! is va uated with a price se ected throu0h the 'a uation 'ariant for the va uation of 0oods received.

W8en t8e order is completed (status delivered): settlement performs t8e following functions:

Crin0s the order ba ance to @ero Passes the difference between the pre iminar! inventor! va uation and the actua costs to inventor!.

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WIP Configuration Document

7he Sett ement Ru e for this sett ement is 0enerated from the defau t ru e PP1 for the re evant p ant in the parameters that depend on the order t!pe. Dependin0 on the price contro < the s!stem debits either the Ca ance Sheet Account *price contro indicator .+ or a price difference account *price contro indicator -+ with the difference durin0 sett ement. 7he materia account determination determines the primar! cost e ement *such as for semi finished products or finished products+ under which the credit is updated on the order. In standard cost accountin0< this difference is ana !@ed in the (ariance calculation and a second postin0 is made for the variances in Profitabi it! Ana !sis. If the order doesn.t have the status !elivered at the end of the period< !ou can ca cu ate the work in process and ma2e postin0s for the wor2 in process in 9inancia Accountin0 when !ou sett e. 9rom period to period !ou ca cu ate the chan0e a0ainst the previous period usin0 WIP ca cu ation and sett e the amount of the chan0e to 9inancia Accountin0. 9or fu sett ement< !ou specif! the defau t ru e FPP1 Production orders *fu sett ement+F in the parameters that depend on the order t!pe for the re evant p ant.

Periodic *ettlement
Periodic sett ement is used for product cost collectors and cost o04ect 8ierarc8ies in the Product $ost b! Period component. It can be used for production orders and process orders in the Product $ost b! :rder component. A pre iminar! va uation of the inventor! ta2es p ace with ever! 0oods receipt. At the end of the period< the run schedu e header carries both variances and the cost of the wor2 in process. When !ou sett e at the end of the period< !ou can:

Aenerate postin0s for the chan0e in WIP in 9inancia Accountin0 and Profit $enter Accountin0 Pass the variances to Profitabi it! Ana !sis Pass the net actua costs *actua cost ess credit for inventor! va uation ess wor2 in process ess scrap+ to 9inancia Accountin0 and Profit $enter Accountin0

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WIP Configuration Document

9or the periodic sett ement of manufacturin0 orders< !ou specif! defau t ru e FPP2 Production orders *periodic sett ement+F in the parameters that depend on the order t!pe for the re evant p ant. 9or the periodic sett ement of product cost co ectors< !ou specif! defau t ru e -65 *with strate0! for tracin0 factor determination+. It is possib e to use fu sett ement and periodic sett ement for the sett ement receiver Fmateria F for materia s that are:

In the ma2e=to=stoc2 inventor! in ma2e=to=stoc2 production In the (aluated sales order stock with sa es=order=re ated production and va uated pro>ect stoc2

-ales-Order-5elated Production
If we are usin0 a va uated sa es order stoc2 in sa es=order=re ated production< the f ow of ;uantities and va ues is the same as in make-to-stock production/ If !ou are usin0 a non (aluated sales order stock in sa es=order=re ated production< 0oods movements are not va uated. Instead< the costs are sett ed to the sa es order and then to Profitabi it! Ana !sis. =o (ariances are calculated/ 7he sett ement ru e for the manufacturin0 order assi0ned to a sa es order item is 0enerated usin0 the defau t ru e PP1 *fu sett ement+ in the parameters that depend on the order t!pe. 7he settlement rule for the sa es order is generated automaticall if Profita0ilit 2nal sis is acti(e/ If Profitabi it! Ana !sis is not acti(e< !ou must manuall create a settlement rule to a AEaccount. We can specif! in the allocation structure whether the settlement to t8e sales order shou d be made under the original cost element or under a settlement cost element. If we are usin0 a non (aluated sales order stock< we can on ! use full settlement for the manufacturing orders assi0ned to a sales order item. At the end of the period< the costs are sett ed from the manufacturin0 orders and process orders assi0ned to the sa es document item to the sa es document item. 7he in(entor (alues are calculated on the sa es document item when we perform results anal sis/ 7hen sett e the in(entor (alues calculated in results anal sis to +inancial 2ccounting and Profit Center 2ccounting/ Prepared By: Raja Sekhar Talluri SAP FICO Consultant !#

WIP Configuration Document

*ettlement Parameters
Sett ement re;uires a sett ement ru e for the order. When the order is created< the s!stem 0enerates a sett ement ru e from the defau t ru e in the parameters that depend on the order t!pe:

9or manufacturin0 orders in lot-0ased cost controlling the defau t ru e is PP1 (full settlement)/ 9or manufacturin0 orders in periodic cost controlling the defau t ru e is PP2 (periodic settlement)/ 9or product cost co ectors the defau t ru e is S7R *with strateg for tracing factor determination+

7his sett ement ru e determines the sett ement receiver *such as a materia or sa es order+. 7he sett ement ru e is in2ed to the fo owin0 parameters:

Sett ement Profi e A ocation structure Source structure PA 7ransfer Structure

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WIP Configuration Document

Creation of *ettlement Profile:

In the sett ement ru e< we define a ran0e of control parameters for settlement/ Sett ement profi e is prere;uisite before we enter a sett ement ru e for a sender. If we want to sett e the costs eac8 time to >ust one cost center or one >?@ account< we need a sett ement profi e. As we cannot maintain the sett ement parameters durin0 sett ement to a receiver< we must save the sett ement profi e either in the order t!pe or in the mode order or reference order.
Activities 1. $reate a sett ement profi e. 2. Save the profi e in the order t!pe.

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B Sett ement B Define Sett ement Profi e :":&

7ransaction $ode

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WIP Configuration Document

-elect t8e =ew <ntries 9utton or choose the e?istin0 entr! and Press the Cop 2s button.

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WIP Configuration Document

2ctual Costs?Cost of -ales: Here we need to se ect the provision for sett ement< 0enera ! it wi be the Can 9e -ettled :ption.

%efault .alues:
1nder this section we ma2e the defau t settin0s at the sett ement profi e eve for the fo owin0 fie ds:

2llocation -tructure (2 tool t8at allocates t8e costs incurred on a sender 0 cost element or cost element group: w8ic8 can 0e used in settlements , assessments) -ource -tructure (-ource <lements , >@ accounts for classification of costs) P2 6ransfer -tructure (2ssignment of .alue +ields , Auantit +ields to 6ransfer costs , re(enues from +I or 77 to Profita0ilit 2nal sis) %efault O04ect 6 pe (We enter an O04ect 6 pe t8at ser(es as %efault (alue for 2ccount 2ssignment/ >enerall Cost Center)

Indicators:
Se ect the appropriate indicators as per re;uirements. In 0enera scenarios the first # indicators are used.

1**B .aluation (If we define t8e B %istri0ution 5ule for a -ettlement 5ule: t8en s stem c8ecks t8e 6otal Percentage eit8er w8en we sa(e t8e rule or w8en we use B c8eck function) B -ettlement (If we select t8is: in t8e settlement rule we can define t8e distri0ution rule on B 0asis settling t8e costs to multiple recei(ers) <;ui(alence =um0ers (If we set t8is indicator: we can define t8e distri0ution rules in settlement rule: according to w8ic8 costs are settled proportionall 0ased on t8e costs , num0er of recei(ers) -ettlement 0 2mount (If we set t8is indicator: we can define t8e distri0ution rule in t8e settlement rule: w8ic8 allows costs to 0e settled 0 amount)

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WIP Configuration Document

.ariances to Costing C 9ased P2 (If we set t8is indicator: (ariances are passed to CO-P2 component during t8e Order -ettlement)

.alid 5ecei(ers:
Here s!stem wi provide the mu tip e a ternatives for the se ection of sett ement receivers. A on0 with that< s!stem have the # options to choose for each a ternative< those are:

-ettlement =ot 2llowed (If we want to 0lock t8e settlement: weD(e to select t8is option) Can 9e -ettled (If we want to allow t8e settlement: weD(e to select t8is option) 7ust 9e -ettled (If we select t8is option: t8en t8e recei(er will 0e an re;uired entr in %istri0ution 5ule for a -ettlement 5ule)

Ot8er Parameters:
Here we wi ma2e the additiona settin0s specification for a sett ement profi e.

%ocument 6 pe (%ocument 6 pe for -ettlement 5uns rele(ant for 2ccounting , 9alance -8eet) 7aE =o/ of %istri0ution 5ules (WeD(e to specif t8e 7aEimum =o/of %istri0ution 5ules for a -ettlement 5ule/ We cannot settle recei(ers for w8ic8 t8ere are no %istri0ution 5ules) 5esidence 6ime (Fere weDll specif t8e residence time for settlement documents in Calender 7ont8s)

:nce carried out the re;uired chan0es 6 maintenance of sett ement profi e< choose the SA'% button to confirm the chan0es or settin0s.

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WIP Configuration Document

Create *ettlement Cost Elements In this Activit! we can define the separate cost e ements for different ob>ects with identica ro es.

Primar! $ost % ements for sett ement to receivers in %?terna Accountin0. (We can -ettle to recei(ers in eEternal accounting like 2sset 2ccounting: In(entor 7anagement wit8in 77 , >@ accounting) (Cost <lement Categor 22) Secondar! $ost % ements for Sett ement to receivers in Interna Accountin0 (Cost <lement Categor 21)

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B Sett ement B $reate Sett ement $ost % ements "A51 6 "A58

7ransaction $ode

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WIP Configuration Document

In the initia screen of the functiona transaction< provide the va ues in the fie ds

Cost <lement (=ame of t8e Cost <lement or =um0er of >@ 2ccount)

.alid +rom , 6o (6ime Period of Cost <lement .alidit )

5eference (We can take t8e reference of eEisting (alues) 7hen choose enter< to proceed to the ne?t screen.

In the above screen< we have to 0ive the va ues in the 3ame< Discription 6 $ost % ement $ate0or!. Rest of the 9ie ds 6 7abs are not important and we can s2ip those 6 se ect SA'% to confirm.

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WIP Configuration Document

Create Allocation *tructure

An 2llocation -tructure comprises one or severa sett ement assi0nments. An assi0nment shows which costs *ori0in: cost e ement 0roups from debit cost e ements+ are to be sett ed to which receiver t!pe *for e?amp e< cost center< order< and so on+. SAP provides 2 options 6 a ternatives in Sett ement Assi0nment.

Assi0n the debit cost e ement 0roups to a sett ement cost e ement. Sett e b! cost e ement = that is< the debit cost e ement is the sett ement cost e ement

I)A Path

Reference I)A Auide == $ontro in0 B Product $ost $ontro in0 B $ost :b>ect $ontro in0 B Product $ost b! :rder B Period %nd $ osin0s B Sett ement B $reate A ocation Structure :":8

7ransaction $ode

Se ect the A ocation Structure and se ect the Assi0nment Icon from the 3avi0ation 7ree.

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

"!

WIP Configuration Document

If we see this screen< we.ve maintained on ! two assi0nments name !:

)ateria s 6 Revenues

9or which< now we have to assi0n the -ource +ields technica ! 2now as $ost % ements.

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

""

WIP Configuration Document

As shown in the above screen< we have to assi0n the source cost e ements to capture a the posted va ues which are re ated to the )ateria s.

3e?t in the 3avi0ation 7ree< 2ssessment Cost <lement< here we need to assi0n the cost e ement if we use the same A ocation Structure for the Assessment. (Cost <lement Categor !2 C 2ssessment)

If re;uired< choose the 3ew %ntries Cutton and ma2e the necessar! assi0nments.
Prepared By: Raja Sekhar Talluri SAP FICO Consultant "#

WIP Configuration Document

3e?t Step< 2ssignment of -ettlement Cost <lements to the Source fie ds< se ect the option throu0h 3avi0ation 7ree< as shown Ce ow:

7hen< s!stem wi disp a! the ne?t screen< where we need to the a ocation of -ettlement 5ecei(ers , Cost <lements/

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

"$

WIP Configuration Document

If we see the above screen< we.ve se ected the fo owin0 receivers as a ternatives for Assi0nment to )ateria s.

Profit Se0ment $ost $enter

:rder 6

Sa es Document Item. A on0 with the Receiver $ate0ories< there are two more fie ds name !:
9 Cost <lement (If we select t8is indicator: s stem will take t8e original cost

element onl to transfer t8e costs from t8e sendor or source to respecti(e recei(er)
-ettlement Cost <lement/ (If we gi(e t8e settlement cost element 8ere eait8er

categor 21 or 22: t8e costs will 0e settled from source o04ect to t8e recei(er)

:nce a the settin0s have done the choose the SA'% Icon to confirm a the chan0es or settin0s.

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

"'

WIP Configuration Document

Create *ource *tructure: In this activit!< we define the source structure used when sett in0 6 costin0 >oint products. A source structure contains severa source assi0nments< each of which contains the individua cost e ements or cost e ement interva s to be sett ed usin0 the same distribution ru es. In the sett ement ru e for the sender !ou can define one distribution ru e< in which !ou specif! the distribution and receivers for the costs for each source assi0nment.

Prepared By:

Raja Sekhar Talluri

SAP FICO Consultant

")