sap costing variant assignment

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Sap info record costing variants.

SAP Purchasing Info Record Usage in Costing Variants

By tanya duncan.

Table of Contents

Costing variant configuration, valuation variant configuration, assign purchasing conditions to delivery costs, create origin groups, map origin groups to cost components, check purchase info records and purchasing conditions.

I recently used some interesting configuration in the valuation variant to value externally and intercompany purchased materials.  My client has unique challenges because they are vertically integrated.

  They produce almost every raw material that goes in to their finished goods including packaging and the machinery to produce finished goods. The amount of intercompany purchases is massive and we needed a sustainable way to value purchased items and reference the purchasing conditions for intercompany markups and other charges like freight and shipping labor.

This configuration is a multi-step process, but it’s fairly simple when you have all the pieces configured correctly.

1. Costing Variant Configuration

First, in configuration Transaction OKKN shown in Figure 1, you configure the costing variant .

I created a custom costing variant for the standard cost estimate instead of using the standard PP01. The costing variant is the main configuration for how materials are costed in SAP. The yellow buttons represent costing variant components .

Figure 1  Configure Costing Variant

2. Valuation Variant Configuration

The valuation variant contains parameters for cost estimate valuation. In a valuation variant, you specify the strategy sequence for how costs are selected. For produced materials, the component’s standard price , moving average price , purchase info record price, or planned prices may be selected. You can also choose a particular plan/actual version and average the plan activity rates for the year or take the current activity rates. You navigate to the valuation variant with Transaction OKK4 as shown in Figure 2.

Figure 2  Configure Valuation Variant

The solution to this requirement was to:

• Assign strategy 1 as L Price from Purchasing Info Record
• Sub-strategy A Quotation Price via Condition Table
• Assign purchasing conditions to cost components

This strategy applies to costing component materials on a Bill of Material (BOM) for a finished good, as well costing any materials that do not have a BOM. This means that to value a material, SAP will first look for a Purchasing Info Record (PIR) for the item or its BOM components. SAP will take the price in the PIR and add any purchasing conditions that have been mapped to the valuation variant. If a PIR is not found, SAP will go on to strategy 2 which is 7 Valuation Price According to Price Control in Material Master. If a material is price control S, SAP will choose the standard price. If price control V, SAP will choose the moving average price. 

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3. Assign Purchasing Conditions to Delivery Costs

When you click on the yellow Delivery Costs button in OKK4 valuation variant configuration shown at the bottom of Figure 2, you see a table that allows you to assign purchasing conditions to a valuation variant as shown in Figure 3. You can navigate there with Transaction OKYO. I worked with a purchasing team member to determine which purchasing conditions were relevant for costing and mapped those in the table. 

Figure 3 Asign Purchasing Conditions

4. Create Origin Groups

I also created several Origin Groups with Transaction OPKS as shown in Figure 4 to further separate costs in a cost estimate. For example, we needed to split out the intercompany markup condition ZMKP in a cost estimate. I used Origin Group MRKP to separate this condition from other conditions. 

Figure 4 Create Origin Groups

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5. Map Origin Groups to Cost Components

I  mapped the origin groups to cost components in the Cost Component Structure  with T ransaction OKTZ as shown in Figure 5.

Figure 5 Map Origin Groups to Cost Components

6. Check purchase info records and purchasing conditions are created

Finally, I worked with my purchasing team members to ensure PIRs and purchasing conditions were created for all externally and intercompany purchased items. 

You display PIRs with Transaction ME13 as shown in Figure 6.

Figure 6 Display Purchasing Info Record Selection

The price for costing is picked up from the Net Price field if a PIR exists for the material being costed in that plant.

Figure 7  Display Purchasing Info Record

You display purchasing conditions with Transaction MEK3 as shown in Figure 8:

Figure 8  Display Purchasing Conditions

You can maintain conditions using a few different combinations based on what is configured in the access sequence. Here is an example I created as a demonstration as shown in Figure 9:

  Figure 9  Display Purchasing Conditions

Here is the final result when a cost estimate of a finished good contains purchased items:

In Transaction CK11N create cost estimate with quantity structure, you can see the components of the finished good on the left. I clicked on one of the purchased components and clicked on the Valuation tab to show that the material’s cost is coming from the Purchasing Info Record as shown in Figure 10. 

  Figure 10  Disaplay Material Cost Estimate

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Cost Component

A cost component identifies costs of similar types, such as material, labor, and overhead costs, by grouping together cost elements in the cost component structure.

Costing Variant  

The costing variant contains information on how a cost estimate calculates the standard price. For example, it determines if the purchasing info record price is used for purchased materials, or an estimated price manually entered in the Planned price 1 field of the Costing 2 view.

Moving Average Price

The moving average price in the Costing 2 view determines the inventory valuation price if price control is set at moving average. It is updated during goods receipt.

Origin Group

An origin group separately identifies materials assigned to the same cost element, allowing them to be assigned to separate cost components. The origin group can also determine the calculation base for overhead in costing sheets.

Purchasing Info Record

A purchasing info record stores all of the information relevant to the procurement of a material from a vendor. It contains the Purchase Price field, which the standard cost estimate searches for when determining the purchase price.

Standard Cost Estimate  

This is a material cost estimate used to calculate the standard price of a material. The cost estimate must be executed with a costing variant that updates the material master, and the cost estimate must be released. A standard cost estimate can be released only once per period and is typically created for each product at the beginning of a fiscal year or new season.

Standard Price  

The standard price in the Costing 2 view determines the inventory valuation price if price control is set at standard (S). The standard price is updated when a standard cost estimate is released. You normally value manufactured goods at the standard price.

Subcontracting

You supply component parts to an external vendor who manufactures the complete assembly. The vendor has previously supplied a quotation, which is entered in a purchasing info record with a category of subcontracting.

Tracing Factor

Tracing factors determine the cost portions received by each receiver from senders during periodic allocations, such as assessments and distributions.

Universal Journal

The efficiency and speed of the SAP HANA in-memory database allowed the introduction of the Universal Journal single line-item tables ACDOCA (actual) and ACDOCP (plan). The Universal Journal allows all postings from the previous financial and controlling components to be combined in single items. The many benefits include the development of real-time accounting. In this book, we discuss both period-end and event-based processing.

Valuation Class

The valuation class in the Costing 2 view determines which general ledger accounts are updated as a result of inventory movement or settlement.

Valuation Date

The valuation date determines which material and activity prices are selected when you create a cost estimate. Purchasing info records can contain different vendor-quoted prices for different dates. Different plan activity rates can be entered per fiscal period.

Valuation Grouping Code

The valuation grouping code allows you to assign the same general ledger account assignments across several plants with Transaction OMWD to minimize your work. The grouping code can represent one or a group of plants.

Valuation Type

You use valuation types in the split valuation process, which enables the same material in a plant to have different valuations based on criteria such as batch. You assign valuation types to each valuation category, which specify the individual characteristics that exist for that valuation category. For example, you can valuate stocks of a material produced in-house separately from stocks of the same material purchased externally from vendors. You then select procurement type as the valuation category and internal and external as the valuation types.

Valuation Variant

The valuation variant is a costing variant component that allows different search strategies for materials, activity types, subcontracting, and external processing. For example, the search strategy for purchased and raw materials typically searches first for a price from the purchasing info record.

Valuation Variant for Scrap and WIP

This valuation variant allows a choice of cost estimates to valuate scrap and WIP in a WIP at target scenario. If the structure of a routing is changed after a costing run, WIP can still be valued with the valuation variant for scrap and WIP resulting in a more accurate WIP valuation.

Valuation View

In the context of multiple valuation and transfer prices, you can define the following views: – Legal valuation view – Group valuation view – Profit center valuation view

Work Center

Operations are carried out at work centers representing; for example, machines, production lines, or employees. Work center master data contains a mandatory cost center field. A work center can only be linked to one cost center, while a cost center can be linked to many work centers.

Work in Process

Work in process (WIP) represents production costs of incomplete assemblies. For balance sheet accounts to accurately reflect company assets at period end, WIP costs are moved temporarily to WIP balance sheet and profit and loss accounts. WIP is canceled during period-end processing following delivery of assemblies to inventory.

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About the author

Tanya Duncan

• SAP S/4HANA Finance
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Thanks for your contribution Tanya. We also implemented this configuration with a different requirement. Origin group affected to pricing condition help to map different Cost Component Element. Our problem is the following: this configuration is suitable for purchased product but cannot be implemented for subcontracted product as you cannot use strategie L. KR Théophane

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Create Costing Variant in SAP

Last Updated on August 10, 2022 by admin

Create Costing variant

The following SAP training tutorials guide you on how to create costing variants in SAP step by step. You can maintain the costing variant in SAP by using one of the following navigation methods.

• SAP Menu Path: – SPRO -> IMG -> Project system -> Costs -> Planned costs -> Manual cost planning in WBS -> Unit costing -> Create costing variant.
• SAP Transaction code: – OKKT

Step 1: – Enter transaction code “OKKT” in the SAP command field and press enter.

Step 2: – On the costing variant overview screen, click on “New entries” to create new cost variants.

Step 3: – On the new entries screen, update the following fields.

• Costing Variant: – Update the four digits alphanumeric unique ID that identifies the costing variant in SAP and update the descriptive text of the costing variants.
• Control: – Under the control tab, select appropriate options for your costing variants, here we selected (Unit cost est. for the project, planned valuation orders, and easy cost planning (PS)).

Step 4: – Select the “Misc” tab and select the appropriate option for the cost element for unit accounting.

Click on the save button and save the configured costing variant data.

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SAP Controlling: Assigning and Checking Cost Component Structures

In SAP Controlling, a company code determines which cost component structure the standard cost estimate uses, which ensures that the same cost component structure is used for all plants and costing variants in a company code.

If you use different cost component structures in different plants, the standard cost estimate in one plant cannot access the results of standard cost estimates in another plant. You cannot transfer costing data for materials transferred from one plant to another.

For other cost estimates, the cost component structure is determined through the combination of company code , plant, and costing variant.

To access assignment of organizational units, double-click Assignment: Organiz. Units shown in the first figure below. Once selected, you should see the second figure display.

In this screen, you can assign cost component structures to organizational units such as Company Code , Plant , and Costing Variant . Some entries in this example employ masking. In the Plant column, both rows have the entry ++++ , which is a shorthand method of assigning cost component structures to all plants. You can employ the same technique of masking in many other screens throughout the system.

Specific entries always take priority over masked entries. Here’s an example:

In the Costing Variant column shown above, the row with the specific IPC5 entry takes priority over rows with masked entries in the same column. When you create a cost estimate for any company code with costing variant IPC5, the system will use main cost component structure 07 and auxiliary cost component structure 02. All other cost estimates for these plants will use main cost component structure 01 and auxiliary cost component structure 02.

Now that we’ve discussed assigning organizational structures in general, let’s look first at assigning the cost component structure and then checking this assignment.

Assigning Organizational Units with Cost Component Structures in SAP

The main cost component split is the principal cost component split used by a standard cost estimate to update a standard price. The main cost component split can be for COGM or for a primary cost component split. You assign the main cost component structure in the above figure. You’ll need to widen the columns so you can see the entire text in the column headings as shown below.

You assign the main cost component structure in the first column and the auxiliary cost component structure in the last column. You don’t have to assign an auxiliary cost component structure, but you do need to assign a main cost component structure to each row you define in this screen.

You can use the auxiliary cost component structure in parallel to the main cost component structure to allow comparisons and analysis. You can use the auxiliary cost component structure to analyze costs in cost estimates and CO-PA. When viewing a cost estimate with an activated auxiliary cost component structure, you can switch between the main and auxiliary cost component structures.

You assign an auxiliary cost component structure to an organizational unit in the last column in the figure above. Follow these additional steps needed to activate the auxiliary cost component structure:

1. Create an auxiliary cost component structure.

2. Create a transfer structure mapping the auxiliary cost components to the main cost components as shown below:

3. Assign the auxiliary cost component structure to the plan version per fiscal year in the Price calculation tab shown below.

4. Assign the auxiliary cost component structure to organizational units. See below.

5. Automatically calculate the plan activity price.

You don’t have to enter an auxiliary cost component structure. In most cases, the COGM cost component structure alone provides sufficient cost component reporting. The auxiliary cost component structure is available if you need additional reporting on primary costs, especially in some European implementations.

Next, we’ll look at a quick way to check assignment to organizational units.

Checking the Assignment to Organizational Units

You can check the assignment of cost component structures to organizational units by inspecting the costing variant. Take costing variant PPC1 as an example. Display costing variant PPC1 with Transaction OKKN or double-click the costing variant in the Costing Data tab of a cost estimate.

Select the Assignments tab and click the Cost Component Structure button to display the screen shown below.

The main cost component structure assigned to company codes 0001 and 0005 is 01, and the auxiliary cost component structure assigned is 02.

You can also assign a cost component structure to a plant. To add “Plant” as a column in the previous figure, click the down-pointing arrow to the right of the grid icon and select Change Layout to display this screen:

Double-click Plant to move it across to Displayed Columns and press (Enter) to display the screen shown below.

TIP : Click the Save icon before pressing (Enter) to save this layout.

You can now see the Plant column in the cost component structure assignments for the costing variant.

Notice the SBO Explorer (circle) icon available with Enhancement Package (EHP) 5. This icon allows you direct access to SAP BusinessObjects Explorer.

This blog post summarized the process for assigning organizational units to cost component structures in SAP Controlling. After assigning these units, you learned how to check them. You also read a discussion of both the main cost component structure and the auxiliary cost component structure.

Editor’s note: This post has been adapted from a section of the book Product Cost Controlling with SAP by John Jordan.

Recommendation

Looking for a comprehensive guide to product costing in SAP (SAP CO-PC)? With this best-seller, you’ll begin with a breakdown of how to manage master data and configure settings in SAP CO. Next, you’ll learn the nitty-gritty details of integrated planning, from creating cost estimates to handling planned costs, actual costs, and final settlements. Contains coverage of SAP HANA, current trends in product cost controlling, and other new functionalities!

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2746779 - Different Costing Variants in different Apps

You can check Costing Variants with App Check Costing Variant. You can see another set of Costing Variants in the SSCUI ID 102431 (Order Type settings).

Environment

SAP S/4HANA Cloud Public Edition

Reproducing the Issue

•  Check Costing Variants with App Check Costing Variant.
•  Check Costing Variants in the SSCUI setting 102431.
•  Compare the settings.

The Costing Variants you checked in App "Check Costing Variants" are the Costing Variants used for Standard Costing (App: Edit Costing Runs). The Costing Variants in the order type setting are different ones. They are used for determining the planned costs and actual costs of the Order.

You can check and modify the Costing Variants for orders via editting the corresponding Valuation Variants using SSCUI 102608.

Below are the pairings: Cositng Variant - Valuation Variant PSRM - 0RM PYG1 - 0Y6 PYG2 - 0Y7 PYC1 - 0Y1 PYC2 - 0Y2 PYR1 - YR6 PYR2 - YR7

It's explained in "Cause" part.

Standard Cost Estimate, Planned Costs, OKKN, OPL1, Valuation Variant, CK11N, CK40N, Costing Run. , KBA , CO-PC-PCP-2CL , Product Cost Planning (Public Cloud) , How To

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Costing Variant in SAP - Everything you need to know

Costing variant definitions and related items, definitions by module, related tcodes.

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SAP Help, Wiki, Q&A and other resources for Costing Variant

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We define Costing Variant for standard cost estimation. We are in Process Order scenario. Likewise, should we have to use a Costing Variant for actual product estimation ? We want to have actual cost from the Product costing to the COPA from the cost component structure.