co pc workshops ac ml

8/2/2019 Co Pc Workshops Ac Ml

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U2K2 ProjectCO-PC WORKSHOPS

ACTUAL COSTING / MATERIAL LEDGER


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Goals and Objectives

Enable parallel valuation by keeping different currencies

and/or valuations (transfer prices)

UNITY: Single Valuation & Single currency

Combine the benefits of

Standard Price Control for preliminary valuation and Moving Average Price Control for balance sheet

Enable accurate periodic valuation

Settle price variances to period end inventories

Roll up price variances throughout the production process


3/42

Price control & Price determination

Price control

S: Standard price controlV: Moving average price control

Price determination

2: Transaction based

3: Single level/Multi level

UNITY

Pr. Control Pr. Det.

RM S 3

PM S 3

Semi-finished goods S 3

Finished goods S 3

Trading goods S 3

Spare parts V 2

Reject matl. S 2


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Multi-Level Actual Costing (Overview)

Introduction of theIntroduction of the

New ConceptNew Concept

Introduction of theIntroduction of the

New ConceptNew Concept

Preliminary Valuation and

Recording of Differences

Price determination:

Calculation of

Periodic Unit Price

Period End Closing:

Revaluation of materials

with Periodic Unit Price




Calculation of

Periodic Unit Price

Period End Closing:



Three Steps in Actual Costing

Three Steps in Actual Costing


5/42

Actual Costing: Single Levels

Production

Production

Production

Production

LevelLevel

LevelLevel

LevelLevel

LevelLevel

LevelLevel

LevelLevelExternal Procurement

External Procurement



LevelLevel

LevelLevel


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Actual Costing: Multi-Level

Production

Production

Production

Production

LevelLevel

LevelLevel

LevelLevel

LevelLevel

LevelLevel

LevelLevel

Multi-Multi-

LevelLevel

Multi-Multi-

LevelLevel





LevelLevel

LevelLevel


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Multi-Level Actual Costing

External ProcurementExternal Procurement External ProcurementExternal Procurement

ProductionProduction


Material Valuation withMaterial Valuation withMulti-Level Actual CostingMulti-Level Actual Costing

Revaluation at Period EndRevaluation at Period Endwith Actual Pricewith Actual Price

Preliminary ValuationPreliminary Valuation

During the PeriodDuring the Period


8/42


Introduction of the

New Concept

Introduction of the

New Concept

Preliminary Valuation andPreliminary Valuation and

Recording of DifferencesRecording of Differences


Calculation of

Periodic Unit Price

Period End Closing:



Preliminary Valuation andPreliminary Valuation and

Recording of DifferencesRecording of Differences


Calculation of

Periodic Unit Price

Period End Closing:



Three Steps in Actual CostingThree Steps in Actual Costing


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Material Price Analysis: Content

Receipts

Cumulative inventory 1000 250 25.00

Ending inventory 1000 250 25.00

Other receipts/consum

Consumption

PreliminaryPreliminary

valuationvaluation


valuationvaluationQuantityQuantityQuantityQuantity

Beginning inventory 1000 250 25.00

PricePrice

differencedifferencePricePrice

Differences between StandardPrice and actual price

Real time valuation

with Standard Price Average actual priceof category (line)


10/42

Material Price Analysis: Recorded Data

Receipts 1000 250 30 28.00

Cumulative inventory 2000 500 30 26.50

Ending inventory 700 175 25.00

Other receipts/consum 0 0 0

Consumption 1300 325 25.00


valuationvaluation




PricePrice


Beginning Inventory

+all Goods Receipts

Special Goods Receipts

and Consumptions


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Material Price Analysis: Interactive Information

Standard CostStandard Cost

EstimateEstimate

Standard CostStandard Cost

EstimateEstimateMaterial MasterMaterial MasterMaterial MasterMaterial Master

Material LedgerMaterial Ledger

Document OverviewDocument Overview

Material LedgerMaterial Ledger

Document OverviewDocument Overview

Document itemsDocument itemsDocument itemsDocument itemsSourceSource

documentdocument

SourceSource

documentdocumentDocumentDocument

headerheader

DocumentDocument

headerheaderAccountingAccounting

documentsdocuments

AccountingAccounting

documentsdocumentsFIFIPPPP MMMM

MMMM CO-CO-

PCPPCP

COCOCO-CO-

PAPACOCO

Receipts 100 10.000 1.000 110

Cumulative inventory 170 17.000 3.400 120

Ending inventory 140 14.000 100

Other receipts/consumption 50 5.000 2.400 148

Consumption 30 3.000 100

Beginning inventory 20 2.000 100

Prel. val.Category Quantity Price diff. Price


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Material Price Analysis: Actual BOM


13/42

Material Price Analysis: Production


14/42

Material Price Analysis: Consumption


15/42

Material Price Analysis: Subcontracting


16/42

Price Differences

Price Differences occur with

External procurement (order / invoice value)

In-house production (settlement of orders)

Initial entry of stock balances (external value posted)

Transfer postings (standard price in involved plants)

Subcontracting (subsequent charging)

Debit / credit of material


17/42

Exchange Rate Differences

Exchange Rate Differences occurExchange Rate Differences occurwithwith

Goods Receipts with reference to Purchase Orders

if the exchange rate at the time of Invoice Receiptif the exchange rate at the time of Invoice Receiptdiffers from the

exchange rate at the Time of Goods Receipts,Time of Goods Receipts,

or from the

assumed exchange rateassumed exchange rate

Prerequisite: You activate the treatment of exchange rate differences in Customizing!


18/42

Price difference versus exchange rate differences

Std price = 100

Goods receiptRate = 10/usd qty= 5 Purchase price = 11 usd

Price diff. = 5 x ((11*10)-100) = 50

Invoice receipt

Rate = 11/usd qty=5 Invoice price = 12 usdExchange rate diff. = ((11-10) * 11)*5) = 55

Price diff. = ((12-11)*11)*5) = 55

Inv. Price = 660 = Price diff1 + exc.rate diff. + Price diff2 + std. Pr.

= 50+55+55+500


19/42

Invoice price vs. payment

Invoice price = 660

3. Payment

Rate = 15/usd

Payment amount = 12*15*5 = 900

FX loss = 900 660 = 240

UNITY : FX gain or loss is not part of product cost it is posted

to P&L directly


20/42

Structured Value Chains: Process Types

1000

...

...

...

...

250

...

...

...

...

30

...

...

...

...

28.00

...

...

...

...


Other receipts/cons. 0 0 0


valuationvaluation



1000 250 25.00

PricePrice


Beginning inventory

Receipts

Production

Purchase order

Stock transfer

Subcontracting


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Controlling Levels of the Material

Process TypeProcess Type

Purchase orderPurchase order

SubcontractingSubcontracting

Stock transferStock transfer

Reposting/

material

Reposting/

material


Plant/materialPlant/material

Purchasing organization/ vendorPurchasing organization/ vendor


Purchasing organization/ vendorPurchasing organization/ vendor


Issuing plantIssuing plant


Issuing plant/ materialIssuing plant/ material


Production plant/ planning plantProduction plant/ planning plant

BOM / routingBOM / routing

Production versionProduction version

Procurement

alternatives

Characteristics of the Controlling LevelsCharacteristics of the Controlling Levels

...

...

...

...

...

Vendor A,

Vendor B, ...


22/42

Controlling Levels

UNITY

Default controlling level Plant/material is usedPurchasing organization / vendor can be used for subcontracting


23/42

Procurement Alternatives

1000

...

...

...

...

250

...

...

...

...

30

...

...

...

...

28.00

...

...

...

...



valuationvaluation



1000 250 25.00

PricePrice


Beginning inventory

Receipts

Production

Purchase order

Vendor A/ Porg1

Vendor B/ POrg1....IR..

....GR...


24/42

Cost Component Split of Materials Price

Price analysis for single MaterialsPrice analysis for single Materials

Cost Element Split of Periodic Unit Price

50,00050,000 50,00050,000Raw MaterialsRaw Materials14,00014,000 10,00010,000 4,0004,000LaborLabor11,00011,000 7,0007,000 4,0004,000MachineMachine10,00010,000 10,00010,000Logistic ProcessesLogistic Processes5,0005,000 5,0005,000Material OverheadsMaterial Overheads

90,00090,000 17,00017,000 73,00073,000TotalTotal

TotalTotal FixFix VariableVariable


25/42

Cost Component Split of Materials Price

C1cost component (Full scope MSO and UAPL)

Raw materials Pack Materials

Bought in

Inter company bought in

UAPL Markup

Premium

Subcontracting

Fixed supply costs (BP, SS, OS, SH, ID)


26/42

Cost Component Split of Materials PriceM1 / A1 Limited scope SU/MSO, full scope SU

MAIN AUXILIARY

Premium items Natural Chemicals

Total bought in (Total of Bought In + Intercompany Bought In from AUXILIARY) Speciality Chemicals

Subcontracting Other Chemicals

Labor Alkali

Depreciation Oils

Utilities Perfume / Fragrances

Repair & Maintenance Builder

Other Production Service Flavours

Production Indirect Petchem Surfactants

Decoration and Tubes Food Soft commodities

Contact Flexibles (incl. plastic tubes) Specialty Foods Ingredients

Plastic containers & closures Other Food ingredients

Tea packaging Fruits & vegetables

Outer Packaging Meat & Fish

Folding Cartons Tea

IC wooden sticks Other Raw Materials

Metal cans and Glass Other Total(Total of other components from MAIN)

Tubs , lids and Assemblies Bought-in

Other Packaging Intercompany

RM Total (Total of RM from AUXILIARY)


27/42

Fixed Supply costs

Fixed supply costs are allocated to product costs according to below criterias:

Product costs

BP Buying & Planning

SS SS Cost HR, Fin & IT

OS Other Supply Support

Ending inventory in pallets

SH Warehouse Stor&Handling

Number of pallet shipped/distributed

ID Transport Inbound


28/42

Fixed Supply costs

CCS FSC allocation

Limited scope SU/MSO M1,A1 Financial posting

Full scope SU M1,A1 Financial posting

Full scope MSO C1 Adition to unit price

Full scope UAPL C1 Adition to unit price

Fixed supply costs that are posted to CCA will be allocated to products by a

developped program. The results will be posted as a financial document or

will be posted to each material by MR22 transaction according to above table.


29/42


Introduction of the

New Concept

Introduction of the

New Concept



Price determination:Price determination:

Calculation ofCalculation of

Periodic Unit PricePeriodic Unit Price

Period End Closing:



Preliminary Valuation andRecording of Differences

Price determination:Price determination:

Calculation ofCalculation of

Periodic Unit PricePeriodic Unit Price

Period End Closing:





30/42

Cost Controlling: Period End Activities I

Cost Object

Controlling

Material LedgerCost Center

Accounting

Cost Center 1

Cost Center 2

2


1

3


31/42

Cost Controlling: Period End Activities II

Cost Object

Controlling

Material LedgerCost Center

Accounting

Cost Center 1

Cost Center 2


3

1

2


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Costing Run: Process Steps (1)

Actual Costing Run: Process StepsActual Costing Run: Process Steps

Selection: Selects all Materials in Plants with Price Determination 3

Determine sequence: Determines, in which Sequence Materials are costed, andassigns all Materials to a Costing Level

Single-Level Calculates Actual Prices based on Single-levelPrice Determination: Price Differences

Multi-Level Calculates Multi-Level Actual Prices, including roll-up of PriceDetermination: Price Differences and revaluation Amounts from

Cost Centers & Business Processes (optional)

Post closing: Closes Period (Material Ledger), Revaluates Inventory withPeriodic Unit Price (optional)

Mark material prices: Marks Periodic Unit Price for usage as Standard Price in aFuture Period


33/42

Costing Run: Revaluation of Activities and

Business Processes

ProductionProduction MaterialMaterial

Cost Center

Activities

Cost Center

Activities

Business

Processes

Business

Processes

Actual ./. PlanActual ./. PlanActual ./. PlanActual ./. Plan

Actual ./. PlanActual ./. PlanActual ./. PlanActual ./. Plan

PlanPlanPlanPlan StandardPriceStandardPriceStandardPriceStandardPrice

SettlementSettlementSettlementSettlement

Direct settlement to materials:Direct settlement to materials:

ActualActualactivity pricesactivity prices

Actual costs ofActual costs ofbusiness processesbusiness processes


34/42

Single-Level Price Determination




Single-Level Price DeterminationSingle-Level Price Determination

Actual Material Price based onActual Material Price based on

Costs of ProcurementCosts of Procurement


35/42

Multi-Level Price Determination




Multi-Level Price DeterminationMulti-Level Price Determination

Roll-up of price differencesRoll-up of price differences

from raw materials tofrom raw materials to

finished materialsfinished materials


36/42

Assignment of Price Differences

- Status: Determined Multi-Level

- Price control: S-Price

- Standard price: 25.00 MXN/100 PC

- Stock value: 175 MXN

- Periodic Unit Price: 26.50 MXN/100 PC

Receipts 1000 250 30 28.00


Ending inventory 700 175 26.5010.50

Other receipts/consum 0 0 0 26.50

Consumption 1300 325 19.50 26.50


valuationvaluation


valuationvaluation

QuantityQuantityQuantityQuantity


PricePrice

DiDiffff..

PricePrice


37/42


Introduction of the

New Concept

Introduction of the

New Concept




Calculation of

Periodic Unit Price

Period End Closing:Period End Closing:

Revaluation of materialsRevaluation of materials

with Periodic Unit Pricewith Periodic Unit Price

Preliminary Valuation andRecording of Differences


Calculation of

Periodic Unit Price

Period End Closing:Period End Closing:

Revaluation of materialsRevaluation of materials

with Periodic Unit Pricewith Periodic Unit Price



38/42

Costing Run: Process Steps (2)

Actual Costing Run: Process StepsActual Costing Run: Process Steps

Selection: Selects all Materials in Plants with Price Determination 3

Determine sequence: Determines, in which Sequence Materials are costed, andassigns all Materials to a Costing Level

Single-Level Calculates Actual Prices based on Single-levelPrice Determination: Price Differences

Multi-Level Calculates Multi-Level Actual Prices, including roll-up of PriceDetermination: Price Differences and revaluation Amounts from

Cost Centers & Business Processes (optional)

Post closing: Closes Period (Material Ledger), Revaluates Inventory with

Periodic Unit Price (optional)

Mark material prices: Marks Periodic Unit Price for usage as Standard Price in aFuture Period


39/42

Posting Example: before Closing Entries

Material consumptionMaterial consumptionVB 325

Material stockMaterial stock

325 VBBI 250

ZU 250

GR/IR allocationGR/IR allocation

RE 260 260 ZU

VendorVendor

280 RE

Price differencePrice differenceZU 10

RE 20

GRGR

IRIR

CNSCNS

GRGR

GRGRIRIR IRIR

IRIR

CNSCNS

CNSCNSGRGR

Stock value:

175 MXN

Stock value:

175 MXN

Standard price: 25 MXN / 100 units

Periodic unit price: 26.50 MXN / 100 units

Standard price: 25 MXN / 100 units

Periodic unit price: 26.50 MXN / 100 units

Beginning inventory (BI): 1000 PC / 250 MXN

Goods receipt/purchase order: 1000 PC / 260 MXN

Invoice receipt: for 1000 PC / 280 MXN

Consumption: 1300 PC / 325 MXN

Ending inventory: 700 PC

C ( )


40/42

Posting Example: Closing Entries (Revaluation)

Beginning inventory (BI): 1000 PC / 250 MXN

Goods receipt/purchase order: 1000 PC / 260 MXN

Invoice receipt: 1000 PC / 280 MXN

Consumption: 1300 PC / 325 MXN

Ending inventory: 700 PC

Material consumptionMaterial consumptionVB 325

Material stockMaterial stock

325250

250

GR/IR allocationGR/IR allocation

260 260

VendorVendor

280

Price differencePrice difference

10

20

Status: Closing entry performed

Price control: V (only old periods)

V price: 26.50 MXN / 100 units

Status: Closing entry performed

Price control: V (only old periods)

V price: 26.50 MXN / 100 units

ML accrual (LKW)ML accrual (LKW)

10.510.5

10.510.5CLCL

CLCL

CLCL 19.519.519.519.5CLCL


41/42

Revaluation: Change of Price Control

Period 1 Period 2

Price ControlDuring Period: Preliminary Valuation Price (S)

After Closing Entries: Periodic Unit Price (V)

For Period 1:Price Control: S

For Period 2:Price Control S

For Period 1:

Price Control V

For Period 0:

Price Control V


42/42

Costing Run: Analysis of the Variances

AC530 1088

Level 0 50Level 1 450

Level 2 550

Level 3 38....

Results overview Material list

Material Plant LevelSL ML CL S price Per. unit price % var.

1850 2560- 3580 1228,83

700 175 00

1250 560- 1580 1228.83

0 78- 150 1325,22

Single-leveldifference

Single-leveldifferenceQuantityQuantity

1000 175 26,5010,50

Multileveldifference Price

Beginning inventory

Receipts

Production

Version1

Version 2

....RE..

....WE...

850 560- 923 1123.45

ACT-BCD00 6000 1 750.00 745.00 -0.67

ACT-LCD00 6000 1 25.00 26.50 6.00

ACT-DCD00 6000 2 1177.50 1228.83 21.40

ACT-DCD00 6100 3 1250.00 1188.20 -5.80

...

Actual BOM

Prod. version 01: new machineOutput quantity ACT-DCD00: 850 PC

Input quantity ACT-LCD00: 888 PC

Input quantity ACT-BCD00: 850 PC

Inpt int. activity E 530CC00/530AT100 setup hours 12 H

Inpt int. activity E 530CC00/530AT200 masch.hour 24 H

Actual BOM

Prod. version 01: new machineOutput quantity ACT-DCD00: 850 PC

Input quantity ACT-LCD00: 888 PC

Input quantity ACT-BCD00: 850 PC

Inpt int. activity E 530CC00/530AT100 setup hours 12 H

Inpt int. activity E 530CC00/530AT200 masch.hour 24 H

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