CO-Multilevel Unit Costing

Multilevel Unit Costing – Can SAP support Target CostingStefan MuellerSAP AG

© Copyright 2000

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A M E R I C A S ’ S A P U S E R S ’ G R O U P ©Copyright 2000

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Roadmap

• Overview• Cost Estimates - Essentials• Multilevel Unit Costing• Conclusion

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Commited Cost

developmentconstruction prototype production

100 %

product idea

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Phasestools

detail of quantity structure

developmentconstruction

multilevel unitcosting

BOM

BOMrouting

material costing

BOMrouting

ABC

target costsset prototype production

base planningobject? phases

product idea

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Top-Down & Bottom-Up

Product CostPlanning through

all phases

Life cycle period 1 period 2 ...

Sales price : 125,- 120,-

Profit margin: 25 % 25%

Target costs: 100,- 96,-

100,-

60,- 20,-

20,- 15,- 15,-

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Roadmap

• Overview• Cost Estimates - Essentials• Multilevel Unit Costing• Conclusion

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Itemization

Qty Unit Value

Pump P-100

Fly Wheel

Sheet Metal

Labor Sheet Metal

% Surcharge

Activities

-

1 Ea 215 $

20 Min 30 $

5 $

1 Ea 10 $

0,6 m2 20 $

1 Ea 150 $

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Costed BOM

1 Ea 215 $

Qty Unit Value

Pump P-100

Fly Wheel

Sheet Metal

Labor Sheet Metal

% Surcharge

Proc. Prod. Plan

20 Min 30 $

5 $

1 Ea 10 $

0,6 m2 20 $

1 Ea 150 $

Labor Cutting

Labor Others

% Surcharge

Proc. Prod. Plan

Slug 100-310

-

10 Min 20 $

5 Min 30 $

10 $

1 Ea 10 $

1 Ea 80 $

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Cost Component SplitMaterial Labor Surcharge Process

100 80 15 20

30

5

10

20

80 50 10 10

20

30

10

10

80

Pump P-100

Fly Wheel

Sheet Metal

Labor Sheet Metal

% Surcharge

Proc. Prod. Plan

20 Min 30 $

5 $

1 Ea 10 $

0,6 m2 20 $

1 Ea 150 $

1 Ea 215 $

Qty Unit Value

Labor Cutting

Labor Others

% Surcharge

Proc. Prod. Plan

Slug 100-310

10 Min 20 $

5 Min 30 $

10 $

1 Ea 10 $

1 Ea 80 $

-

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Methods, Objects, ResultsCosting Method Material Base Planning Object

Unit Costing

Multilevel Unit Costing

Material Costing with Qty Structure

Costing Run

Cost Component Split Itemization

XX

Costed BOM

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Item Categories – EditableItem Category...Item Category... ...enter... ...enter... ... System derives...... System derives...

V (Variable Item) ValueQty, Price,Description, Cost Element*

T (Text) Description

E (Internal Activity) Price, Unit of Measure, Text,Cost Element, Value

Cost Center, Act Type,Qty

P (Proces manual) Price, Unit of Measure, Text,Cost Element, Value

Business Process,Qty

B (Base planning object) Price, Unit of Measure, Text,Cost Element, ValueBase Planning Object, Qty

M (Material) Price, Unit of Measure, Text,Cost Element, ValueMaterial, Plant, Qty

N (Service) Price, Unit of Measure, Text,Cost Element, Value

Service, Plant,Qty

F (External Activity) Price, Unit of Measure, Text,, Value

Inforecord, Purchase Org,Plant, Cost Element, Qty

L (Subcontracting) Price, Unit of Measure, Text,Cost Element, Value

Inforecord, Purchase Org, Qty

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Item Categories - SpecialItem Category...Item Category... …… is defined by... is defined by... ……and derives ...and derives ...

G (Surcharge) Text, Cost Element, ValueCosting Sheet

I (purchased part costing) Price, Unit of Measure, Text,Cost Element, ValueInforecord**

X (Process Cost) Process, Qty, Unit of Measure, TextCost Element, ValueTemplate*

Item Category...Item Category... ……is defined by... is defined by... ... and derives ...... and derives ...

S (Summary Line) Summary LineFormula, Text

O (Formula) Formula ResultFormula, Text, Cost Element

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Costing Items – How to Edit

• Costing Items– Ressource, Description,

Qty, Price• Listscreen

– Rapid Editing– Mark, Copy, Delete, Filter

• Detailed Screen

Item-Cat Ressource Qty Value

Pump 1 Ea

E Labor Sheet Metal 20 Min 30 $

P Process Cost 1 Ea 5 $

M Sheet Metal 100-700 0,6 m2 5 $

X M Fly Wheel 100-300 1 Ea 5 $

Item Cat.: Material

MaterialPlant

100-300

1000

Qty Price fix / varDescription

Cost Elemnt Origin Group

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Screen Shot: Display Material Cost Estimate

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Roadmap

• Overview• Cost Estimates - Essentials• Multilevel Unit Costing• Conclusion

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Basic Scenarios

Blech

Rohling

Welle

Neue Pumpe

Scenario 1:New

Product

Top-DownEditing

Blech

Rohling A

Welle

Pumpe A

Blech

Rohling B

Welle

Pumpe B

Scenario 2:Similar Product

Copy Subordinate Costing Structure and make changes

Scenario 3:Product Changes

Blech

Rohling A

Welle

Pumpe A

Blech

Rohling B

Welle

Pumpe A

Copy full Costing Structure and make

Changes

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Aims of Multilevel Unit Costing

• Simulation Costing– What-if analysis– Changes to prices, quantities,

structures• Costing New Products

– Supplementing missing quantity structure data

– Creating new quantity structure data

• Costing Cockpit– Very easy to use– Graphical interface– Multilevel changes

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Screen Shot: Multilevel Unit Costing

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Multilevel Unit Costing - LayoutQuick-Info?Costing Structure on/off Worklist on/off List on/off

Ressource Qty Value

Costing Structure

Worklist/ Detailed List

Unit Costing / Header

Drag &

Drop

ContextMenu

(rechte Maustaste)

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Rapid Columnadjustment

ContextMenu

(rechte Maustaste)Create

ChangeDisplay

--------------------Substructure

...

Costing Structure

Costing Structure I

• Material Cost Estimate w/o Qty Structure– Create, Change, Display – Copy

• Base Planning Object– Create, Change, Display

• Material Cost Estimate with Qty Structure– Display– Copy

• Change Hierarchy Display

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Costing Structure IICopy

Costing Structure

Costing variant;Version

before

after

Insert

Orginal or

Copy?

before

after

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Costing Structure IIIStatus & Revaluation

Changed Error

ContextMenu

(rechte Maustaste)

--------------------Teilstruktur

...

• Changes Status

• Error Status– Error = red– Warning = yellow– Information = green

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Cut & Paste

X

Copy into buffer

Insert from buffer

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Filtering

X

Filter setzen

X ContextMenu

(rechte Maustaste)

--------------------Filteruse

...

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Worklists

X

Worklist

Material Cost Estimate

Base planning ObjectInternal Activity

Processes

My Worklists

Personal/ Common

Buckets

Change buckket to worklist

Brnach to master data

Search help

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Examples of Layouts

Header

Report

Basic layout Edit Layout

Reporting / Edit Reporting / Details

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Basic Layout

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BOM + List Screen

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Roadmap

• Overview• Cost Estimates - Essentials• Multilevel Unit Costing• Conclusion

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Can SAP support Target Costing?

• High flexiblity– Simulation and integration– Different tools during the life

cycle• No costing surprises:

– based on same costing rules– same costing structures– Uses existing master data

(where available)• Full comparison of cost estimates

during the life cycle• Valuation of targeted sales qty‘s

in CO-PA possible

yes

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What to do?

• No or just additional customizing in CO-PC-PCP– New costing variants and

valuation variants• Learn to use the tool

– 2 days to learn basic navigation

– Designed for the power user (cost estimator)

• Multilevel Unit Costing available within the R/3 4.6B standard delivery.

Notmuch

(hing)

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