Actual Costing

Scenario Overview
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Actual Revenue
Preparations
Costing Recognition

Scenario Scenario Description Open Legend

Explorer Actual costing is the complete and precise determination of product costs based on actual costs incurred for all objects along the value
chain. The calculation is based on actual cost of materials, services, and overheads incurred for the final product for a specific accounting
period.
Scenario/Processes These costs are calculated by evaluating business transactions that are recorded throughout a period of time. At the end, actual costs can
be used to (re)valuate inventories, internal service confirmations, and cost of goods sold. It is a part of period end closing activity. You can
also set the new standard cost with actual cost for future periods.
Business Value

Scenario Flow

Further Information
The following business roles are involved in this scenario:

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 Actual Costing
Scenario Overview
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Actual Revenue
Preparations
Costing Recognition

Scenario Scenario Description Legend Open

CloseLegend
Legend
Explorer Actual costing is the complete and precise determination of product costs based on actual costs incurred for all objects along the value
chain. The calculation is based on actual cost of materials, services, and overheads incurred for the final Process
productmainly
for a specific
driven byaccounting
the user
period.
Scenario/Processes These costs are calculated by evaluating business transactions that are recorded throughout a period of time. At mainly
Process the end, actual
driven costs
by the can
system
be used to (re)valuate inventories, internal service confirmations, and cost of goods sold. It is a part of period end closing activity. You can
also set the new standard cost with actual cost for future periods. Process running in an external system
Business Value
Manual process not supported by the
system
Scenario Flow
Process that communicates with third-
party software (mouse-over for details)
Further Information
The following business roles are involved in this scenario: Process with relevance to Financials

Related scenario

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<Role Name> with more information
<Role Name>
 Actual Costing
Process Details: Preparations
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Preparations X X

GR/IR Overhead WIP Overhead Actual Revenue

Clearing Distribution Clearing Absorption Costing Recognition

Scenario Process Description

Explorer The Preparations process is a set of period end closing activities. These steps are
necessary for the execution of the actual costing process.
Performed by
 GR/IR (Goods Receipt/ Invoice Receipt) clearing is a function that you execute in order Accountant
Scenario/Processes to clear the Purchase in Transit and Unbilled Payables accounts when both the goods
received and the associated invoices have been recorded in the system.
 Overhead distribution allocates overhead costs from support cost centers to primary In the Work Center(s)
Business Value Inventory Valuation
cost centers or projects based on distribution rules that you assigned to the support cost
Cost and Revenue
centers.
Scenario Flow  Work-in-process (WIP) clearing is a periodic task that is usually performed at regularly
scheduled times or during period closing to correct and clear the work in process
Further Information account.
 Overhead absorption is a periodic task that is used to apply the overhead to the direct
costs of the production lots once the overhead costs are distributed from support cost
centers to the primary cost centers.

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 Actual Costing
Process Details: Actual Costing
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Actual Costing X
Actual Cost
Allocation

Preparations
Actual Cost Revenue
Rollup Recognition
Update
Actual Cost
Inventory
Release
Costs

Scenario Process Description

Explorer You can use an Actual Cost Rollup that calculates the actual costs of materials, production
lots and other objects along the value chain. Actual cost rollup also calculates actual resource
Performed by
cost rates based on the total cost incurred by production cost centers within the calculated
Accountant
Scenario/Processes period. You can either revaluate the current period inventory using the Actual Cost Allocation,
or adjust your inventory cost with the actual cost for future periods using Actual Cost Release.

Business Value You can revaluate inventory, internal service confirmations and cost of goods sold using In the Work Center(s)
Actual Cost Allocation by posting the difference between the preliminary postings and the Inventory Valuation
actual costs calculated by actual cost rollup.
Scenario Flow
You can use Actual Cost Release to release the actual cost for materials. You can then
Further Information overwrite the inventory cost with the source type actual cost by using the Update Inventory
Costs function.

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 Actual Costing
Process Details: Revenue Recognition
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Revenue X
X Recognition

Actual Revenue
Preparations Recognition
Costing

Scenario Process Description

Explorer The actual cost allocation function posts a revaluation of COGS (Cost of Goods Sold) to the
same account as the COGS. If you are using accrual methods, this is a deferred cost
Performed by
account. You can execute the revenue recognition run after the actual cost allocation run to
Accountant
Scenario/Processes realize the revenue.

Business Value In the Work Center(s)

Cost and Revenue

Scenario Flow

Further Information

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 Actual Costing
Business Value

Preparation Actual Costing Revenue

Recognition
Actual Cost
Allocation

GR/IR Overhead Overhead Actual Cost Revenue

WIP Clearing Recognition
Clearing Distribution Absorption Rollup

Update
Actual Cost
Inventory
Release
Costs

Scenario Overview Key Benefits

Explorer Without Actual Costing, the determination  It is a powerful tool to closely monitor performance along the value chain and
of actual product cost and COGS can be provides a cost breakdown, helping manufacturing companies to analyze the source
very difficult. Late invoices of products of the cost for finished products. In this way, it can help you to increase profitability.
Scenario/Processes lead to a loss of precision, if it was
 The process helps you to analyze the value chain which can be of benefit in cost
already consumed or sold. In controlling.
manufacturing, the determination of
Business Value resource cost and the roll-up of deviations  Actual costing is based on existing entities and therefore requires very little
across multiple production levels create additional business configuration.
additional challenges.
Scenario Flow Actual Costing handles fluctuating  You can combine Business ByDesign’s Actual Costing with standard cost valuation
purchase prices and reduces the impact for inventories to enjoy the advantages of both methods, clear benchmarks for cost
Further Information controlling and the precision of actual cost. You can also use your actual costing
of late invoices by calculating period
results to review and adjust your planned resources cost rates.
average prices for raw materials and
trade goods. It can help to comply with
legal requirements where valuation based
on actuals is must .
© © 2012 SAP AG. All rights reserved.
 Actual Costing
Scenario Flow

Inventory
Valuation

Actual Cost
Allocation

Revenue
GR/IR Overhead WIP Overhead Actual Cost Recognition
Clearing Distribution Clearing Absorption Rollup

Update
Actual Cost
Inventory
Release
Costs

Scenario
Explorer Cost and
Revenue

Scenario/Processes

Business Value

Scenario Flow
Legend & Variants
Further Information
Process related Work center in which
Process Work to Financials process is performed
mainly
driven by Center
the user
Business
document flow
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 Actual Costing
Further Information

Scenario Do you want to try it out? Do you need more information? Do you want to discuss with others?
Explorer
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Business Value

WIKI
Scenario Flow VV In addition to the product
documentation, SAP provides
Further Information Wikis that describe additional
aspects of SAP Business
ByDesign.
To access the WIKI, click here.*

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