co pc workshops ac ml
TRANSCRIPT
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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
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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
Preliminary Valuation and
Recording of Differences
Price determination:
Calculation of
Periodic Unit Price
Period End Closing:
Revaluation of materials
with Periodic Unit Price
Three Steps in Actual Costing
Three Steps in Actual Costing
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Actual Costing: Single Levels
Production
Production
Production
Production
LevelLevel
LevelLevel
LevelLevel
LevelLevel
LevelLevel
LevelLevelExternal Procurement
External Procurement
External 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
External Procurement
External Procurement
External Procurement
External Procurement
LevelLevel
LevelLevel
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Multi-Level Actual Costing
External ProcurementExternal Procurement External ProcurementExternal Procurement
ProductionProduction
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
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Multi-Level Actual Costing (Overview)
Introduction of the
New Concept
Introduction of the
New Concept
Preliminary Valuation andPreliminary Valuation and
Recording of DifferencesRecording of Differences
Price determination:
Calculation of
Periodic Unit Price
Period End Closing:
Revaluation of materials
with Periodic Unit Price
Preliminary Valuation andPreliminary Valuation and
Recording of DifferencesRecording of Differences
Price determination:
Calculation of
Periodic Unit Price
Period End Closing:
Revaluation of materials
with Periodic Unit Price
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
PreliminaryPreliminary
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)
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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
PreliminaryPreliminary
valuationvaluation
PreliminaryPreliminary
valuationvaluationQuantityQuantityQuantityQuantity
Beginning inventory 1000 250 25.00
PricePrice
differencedifferencePricePrice
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
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Material Price Analysis: Production
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Material Price Analysis: Consumption
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Material Price Analysis: Subcontracting
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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
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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!
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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
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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
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Structured Value Chains: Process Types
1000
...
...
...
...
250
...
...
...
...
30
...
...
...
...
28.00
...
...
...
...
Cumulative inventory 2000 500 30 26.50
Other receipts/cons. 0 0 0
PreliminaryPreliminary
valuationvaluation
PreliminaryPreliminary
valuationvaluationQuantityQuantityQuantityQuantity
1000 250 25.00
PricePrice
differencedifferencePricePrice
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
ProductionProduction
Plant/materialPlant/material
Purchasing organization/ vendorPurchasing organization/ vendor
Plant/materialPlant/material
Purchasing organization/ vendorPurchasing organization/ vendor
Plant/materialPlant/material
Issuing plantIssuing plant
Plant/materialPlant/material
Issuing plant/ materialIssuing plant/ material
Plant/materialPlant/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, ...
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Controlling Levels
UNITY
Default controlling level Plant/material is usedPurchasing organization / vendor can be used for subcontracting
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Procurement Alternatives
1000
...
...
...
...
250
...
...
...
...
30
...
...
...
...
28.00
...
...
...
...
Cumulative inventory 2000 500 30 26.50
PreliminaryPreliminary
valuationvaluation
PreliminaryPreliminary
valuationvaluationQuantityQuantityQuantityQuantity
1000 250 25.00
PricePrice
differencedifferencePricePrice
Beginning inventory
Receipts
Production
Purchase order
Vendor A/ Porg1
Vendor B/ POrg1....IR..
....GR...
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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
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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)
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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)
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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
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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.
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Multi-Level Actual Costing (Overview)
Introduction of the
New Concept
Introduction of the
New Concept
Preliminary Valuation and
Recording of Differences
Price determination:Price determination:
Calculation ofCalculation of
Periodic Unit PricePeriodic Unit Price
Period End Closing:
Revaluation of materials
with Periodic Unit Price
Preliminary Valuation andRecording of Differences
Price determination:Price determination:
Calculation ofCalculation of
Periodic Unit PricePeriodic Unit Price
Period End Closing:
Revaluation of materials
with Periodic Unit Price
Three Steps in Actual CostingThree Steps in Actual Costing
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Cost Controlling: Period End Activities I
Cost Object
Controlling
Material LedgerCost Center
Accounting
Cost Center 1
Cost Center 2
2
External Procurement
1
3
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Cost Controlling: Period End Activities II
Cost Object
Controlling
Material LedgerCost Center
Accounting
Cost Center 1
Cost Center 2
External Procurement
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
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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
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Single-Level Price Determination
External ProcurementExternal Procurement External ProcurementExternal Procurement
ProductionProduction
ProductionProduction
Single-Level Price DeterminationSingle-Level Price Determination
Actual Material Price based onActual Material Price based on
Costs of ProcurementCosts of Procurement
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Multi-Level Price Determination
External ProcurementExternal Procurement External ProcurementExternal Procurement
ProductionProduction
ProductionProduction
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
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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
Cumulative inventory 2000 500 30 26.50
Ending inventory 700 175 26.5010.50
Other receipts/consum 0 0 0 26.50
Consumption 1300 325 19.50 26.50
PreliminaryPreliminary
valuationvaluation
PreliminaryPreliminary
valuationvaluation
QuantityQuantityQuantityQuantity
Beginning inventory 1000 250 25.00
PricePrice
DiDiffff..
PricePrice
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Multi-Level Actual Costing (Overview)
Introduction of the
New Concept
Introduction of the
New Concept
Preliminary Valuation and
Recording of Differences
Price determination:
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
Price determination:
Calculation of
Periodic Unit Price
Period End Closing:Period End Closing:
Revaluation of materialsRevaluation of materials
with Periodic Unit Pricewith Periodic Unit Price
Three Steps in Actual CostingThree Steps in Actual Costing
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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
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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 ( )
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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
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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
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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