Product Cost Planning is the primary tool for creating material cost estimates. It allows you to simulate the cost of a product based on its Bill of Materials (BOM) and routing, enabling precise analysis of cost changes due to component substitutions before production begins.

The correct first step is analysis. Running a detailed comparison report (like a cost center line item report or S_ALR_87013611) allows you to drill down into specific postings (e.g., internal orders, purchase orders, manual journal entries) that caused the variance, enabling targeted correction rather than blanket reposting or adjustment.

Settlement is the core process that allocates costs accumulated on a sender object (like an internal order) to one or more receiver objects (like a CO-PA segment, cost center, or asset). The settlement rule defines the receivers and their percentages. Executing settlement transfers the costs, after which the order can be set to technically complete.

In make-to-order (MTO) scenarios, products are uniquely tied to a sales order. Sales Order Stock Costing uses the actual costs collected on the production order (via Product Cost by Order) to value the finished goods, ensuring precise profitability analysis for each customer order, unlike standard costing which uses a pre-determined price.

Statistical Key Figures (SKFs) are non-monetary values (like machine hours, headcount, square footage) used as tracing factors for overhead allocation. To allocate electricity based on machine hours, you must first record machine hours as an SKF on the receiver cost centers, which can then be used in assessment or distribution cycles.

While all options describe functions of the Material Ledger, its primary purpose in legal valuation is to act as the subledger for inventory accounts. It captures all actual costs (purchase price variances, production variances, exchange rate differences) and uses them to calculate a periodic unit price, providing the accurate actual cost of materials for financial reporting.

Results Analysis (RA) is the method used to calculate WIP and variances. A results analysis key determines the rules for this calculation (e.g., which costs are relevant). Assigning this key to the production order type is a mandatory configuration step to enable WIP calculation in Product Cost by Period.

To investigate outdated overhead rates, you need to analyze the cost centers where overhead originates. The Cost Center: Actual/Plan/Variance report shows the planned costs (which are the basis for calculating overhead rates) versus the actual costs incurred. A significant variance here indicates the planned data used for rate calculation is no longer accurate.

From a costing view: A confirmation records the consumption of activities (labor, machine time), posting actual activity costs (debts) to the production order. A goods receipt for the finished product posts the credit to the order and the debit to inventory, valuing the stock based on the costs collected on the order up to that point.

Product Cost Planning is the primary tool for creating material cost estimates. It allows you to simulate the cost of a product based on its Bill of Materials (BOM) and routing, enabling precise analysis of cost changes due to component substitutions before production begins.0