SAP Product Costing – Finance Functional

The system must allow the creation and maintenance of:

• Cost Component Structure (CCS)

• Costing Variants for Standard, Planned, and Actual cost estimates

• Overhead Groups and Costing Sheets

• Activity Types with planned rates (labor, machine, setup)

Each material must have:

• A costing lot size

• Valid BOM and routing (or recipe/master recipe for process industries)

• Assigned costing view in material master

The system must calculate standard costs annually (or monthly if required) using CK40N for:

• Raw materials (purchased)

• Semi-finished goods

• Finished goods

The cost estimate must:

• Break down the cost into defined components (materials, labor, machine, overhead, subcontracting)

• Pick valid BOM and routing data

• Use activity rates from Cost Center Accounting (CCA)

The system must allow mass release of standard costs with automated FI revaluation postings (OBYC – PRD).

The system must apply overheads based on:

• Costing sheet (percentage-based or fixed rates)

• Material origin indicator

• Production plant

Overheads must be broken down by:

• Material overhead

• Production overhead

• Administrative and sales overhead (optional)

The system must capture actual price differences (PPV, exchange rate, freight, etc.).

Material Ledger must calculate:

• Actual periodic unit price (PUP)

• Leveling and revaluation of ending inventory

The system must generate FI/CO postings for variances and closing entries.

The system must calculate:

• Work In Process (WIP) for orders not yet delivered

• Variances for orders delivered (mix, qty, price, scrap, overhead variances)

The system must settle:

• WIP to balance sheet accounts

• Variances to P&L accounts

Settlement rules must be automatically derived based on material type and order type.

Posting of goods issue must update cost of goods manufactured using standard cost.

Production order confirmations must:

• Post activity costs based on planned or actual activity rates

• Capture scrap quantities and rework

Goods receipt from production must:

• Credit production orders

• Debit inventory at standard cost

In case of Material Ledger activation, system must revalue inventory and COGS at period-end closing.

The system must provide:

• Cost Component Reports (CK13N, CK11N)

• Standard Cost Roll-up comparison

• Production variances by plant, cost center, work center

• WIP report by order

• Actual vs Standard cost comparison

Reports must be accessible in SAP ECC/S4

HANA, SAP Fiori, or BW (as defined).

Release of standard cost estimates must be restricted to authorized finance users.

Changes to BOM, routing, activity rates, costing sheets must be logged.

System must prevent cost estimate release if prerequisite master data is missing or inconsistent.

All FI postings related to product costing must flow to defined G/L accounts as per the chart of accounts.