Sap co stepbystep config & user manual part 2

CO Integrated Training Program
Book- 2 / 2
(Version 16-1)
Trainer & Author:
© Srinivasa Kasireddy
+91-9959765211
Skype : srinivas3d
Date printed : 5 April 2022
File Name : SAP CO_stepbystep config & user manual Part 2

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Table of Contents:
1. CO-PA Valuation-2................................................................................................................................................15
Valuation using Mat. Cost Estimates..........................................................................................................15
1. Settings...................................................................................................................................................................15
1. Define and Assign Valuation Strategy:.............................................................................................15
2. Define Access to Standard Cost Estimates...................................................................................16
3. Assign Costing Keys to Products........................................................................................................16
4. Assign Value Fields....................................................................................................................................16
2. Enduser...................................................................................................................................................................17
1. Maintain condiiton record ........................................................................................................................17
2. Creating Sales order..................................................................................................................................17
3. Production Receipts...................................................................................................................................17
4. Delivery of goods to customer..............................................................................................................18
5. Billing document...........................................................................................................................................18
6. Display Billing document..........................................................................................................................18
7. Simulate Biling Document Transfer ...................................................................................................19
8. Post Billing Documents Subsequently..............................................................................................19
9. Display CO line tems.................................................................................................................................20
2. CO-PA Valuation3 (for Incoming orders)................................................................................................21
1. Settings:..................................................................................................................................................................21
3. Activate Transfer of Incoming Sales Orders.................................................................................22
2. Enduser:..................................................................................................................................................................22
1. Creating Sales order..................................................................................................................................22
2. Display CO-PA line items........................................................................................................................22
3. Simulation of Document Transfer from Incoming Sales Orders.........................................22
4. Post Sales Orders Subsequently........................................................................................................23
3. Multiple Valuation Approaches/Transfer Prices....................................................................................24
4. Actual Costing/Material Ledger......................................................................................................................27
1. Settings...................................................................................................................................................................29

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1. Activate Valuation Areas for Material Ledger ...............................................................................29
2. Assign Currency Types to MaterialLedger Type.........................................................................29
3. Assign Material Ledger Types to Valuation Area .......................................................................30
4. Maintain Currency and Valuation Profile.........................................................................................30
5. Assign Currency and Valuation Profile to Controlling Area...................................................31
6. Maintain Currency and Valuation Profile.........................................................................................31
7. Create Versions for Valuation Methods...........................................................................................33
8. General Version definition........................................................Error! Bookmark not defined.
9. Multiple Valuation Approaches: Check/Execute Activation...................................................33
10. Maintain Number Ranges for Material Ledger Documents ..............................................33
11. Configure Dynamic Price Changes...............................................................................................34
12. Define Material Update Structure...................................................................................................35
13. Assign Material Update Structure to a Valuation Area........................................................35
14. Activate Actual Costing........................................................................................................................35
Control of Credit of Cost Centers: Closing entries of the periodic costing run.....................36
Control of Credit of Cost Centers: Alternative valuation run...........................................................36
15. Activate Actual Cost Component Split .........................................................................................36
16. Check Customizing Settings for the ML......................................................................................36
17. Set Valuation Areas as Productive................................................................................................37
18. Creating GL accounts...........................................................................................................................38
19. Automatic Account Assignment.......................................................................................................39
20. Check Customizing Settings for the ML......................................................................................42
1. MM Enduser.........................................................................................................................................................42
1. Display material Master LAPFG1.....................................................................................................42
2. Change Material Price Determination for FG and SFG(for existing materials)...........44
3. Change Material Price Determination for RM (for existing materials) .............................44
1. Purchase Order Creation:.......................................................................................................................45
2. Goods Receipt for Purchase Order....................................................................................................45
3. Invoice Verification......................................................................................................................................46
4. Displaying material ledger Document...............................................................................................48
5. Change Material master LAPSFG1 ...................................................................................................48
1. PP settings............................................................................................................................................................48

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1. Define order type .........................................................................................................................................48
2. Define order type-dependent parameters.......................................................................................49
3. Define Control key.......................................................................................................................................50
4. Define Valuation of Goods Received................................................................................................51
5. Define Scheduling Parameters for Production Orders...................Error! Bookmark not
defined.
6. Define Confirmation Parameters.........................................................................................................51
7. Define Checking Control..........................................................................................................................52
2. Enduser...................................................................................................................................................................53
1. Make sure standard cost estimates released...............................................................................53
2. Create BOM LAPFG1................................................................................................................................53
3. Create BOM LAPSFG1 ............................................................................................................................54
4. Create BOM LAPSFG2 ............................................................................................................................54
5. Displaying BOM Level by Level ...........................................................................................................54
6. Creating Production order .......................................................................................................................54
7. Display Production Order ........................................................................................................................56
8. Create Purchase order for Exteranl activity PCKG....................................................................57
9. Inv verification................................................................................................................................................58
10. Production Order Confirmation for LAPSFG1..........................................................................58
Problem : Stor. Location is blank and not in edit mode..............................................................60
RM issue to Production order for LAPSFG1...........................................................................................60
11. Display goods movements for production order.....................................................................61
12. Display activity consumption in CC ...............................................................................................61
13. Material price analysis LAPRM1 and LAPSFG1....................................................................63
14. Reprocessing(incase of errors in Production Order Confimation)................................64
Error : Plant data of the material Xxxx is locked by the user xx..................................................64
Error : Enter Stor. Location ..............................................................................................................................64
Error : Check table TFBEFU_CR entry 10 does not exist...............................................................65
15. Display costs..............................................................................................................................................65
16. Display Settlement rule........................................................................................................................65
Production Receipts for Production Order LAPSFG1........................................................................65
17. Production Order Confirmation for LAPSFG2..........................................................................66

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Problem : Stor. Location is blank and not in edit mode..............................................................67
RM issue to Production order for LAPSFG2...........................................................................................68
18. Display goods movements for production order LAPSFG2..............................................69
19. Material price analysis LAPRM2 andLAPSFG2 .....................................................................69
21. Display costs..............................................................................................................................................71
22. Display Cost Center Actual Line items........................................................................................71
23. Cost Centers :Actual/Plan/Variance..............................................................................................71
Production Receipts for Production Order LAPSFG2........................................................................72
25. Production Order Confirmation for Assembling/ LAPFG1.................................................73
26. Production Order Confirmation final/ LAPFG1 ........................................................................73
27. Display goods movements for production order.....................................................................74
29. Cost Centers :Actual/Plan/Variance..............................................................................................75
30. Display costs..............................................................................................................................................76
32. Material price analysis LAPFG1......................................................................................................76
2 FI/CO Enduser.....................................................................................................................................................77
1. Display CostCenter reports....................................................................................................................77
2. Posting expenses to CC...........................................................................................................................77
3. Activity Splitting.............................................................................................................................................77
4. Calculating Actual Activity price...........................................................................................................77
5. Display activity prices ................................................................................................................................77
6. Revaluation of Production order at Actual prices .......................................................................78
7. Display Cost center report......................................................................................................................78

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8. Set status ‘Technically complete’ to prod order...........................................................................78
9. Settlement of Production order LAPFG1 .......................................................................................79
10. Internal error in FORM/FUNCTION get_prkexx(saplckmo) in position 10 with RC
81
11. Prod Order settlement LAPSFG1...................................................................................................81
12. Prod Order settlement LAPSFG2...................................................................................................82
13. Material Price Analysis before Costing Run .............................................................................83
14. Create Condition record ......................................................................................................................83
15. Sales order.................................................................................................................................................83
16. Delivery.........................................................................................................................................................83
17. Display material price analysis.........................................................................................................84
18. Billing .............................................................................................................................................................84
19. Display COPA line items.....................................................................................................................84
20. Display Material Master .......................................................................................................................84
21. Close Material period (Period end activity)................................................................................85
22. Edit Costing Run......................................................................................................................................85
Material Price Analysis after Single-Level Pr.Determination..........................................................87
Material Price Analysis after Multi-Level Pr.Determination.............................................................89
Manual Change of Actual Cost Component Split ..............................................................................90
23. Displaying Cost Components for Price........................................................................................95
24. Display Actual Cost Component Split.........................................................................................95
25. Releasing Planned Prices ..................................................................................................................95
26. Displaying ML document.....................................................................................................................95
5. CO-PA Valuation-4(Periodic Valuation)......................................................................................................96
1. Settings...................................................................................................................................................................96
2. Define Access to Actual Costing/Material Ledger ......................................................................96
4. Assign Value Fields....................................................................................................................................97
2. Enduser...................................................................................................................................................................98
1. Periodic Valuation........................................................................................................................................98
2. Display COPA line items.......................................................................................................................100

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6. CO-PA Summarization Levels.......................................................................................................................101
1. Settings................................................................................................................................................................101
1. Define Summarization Levels :..........................................................................................................101
2. Dispalying Key table and Totals table............................................................................................103
3. Build Summarization Levels :.............................................................................................................104
4. Displaying Key table and Totals table............................................................................................104
7. CO-PA Reports.....................................................................................................................................................105
1. Define Forms for Profitability Reports............................................................................................105
2. Create Profitability Report....................................................................................................................107
8. Cost Object Controlling...................................................................................................................................108
Result Analysis :..................................................................................................................................................108
Work-in-process(WIP):....................................................................................................................................108
Reserve for Unrealized costs: :...................................................................................................................109
Variance:.................................................................................................................................................................109
WIP /Variance calculation for Product costing by order and Product costing by period
......................................................................................................................................................................................109
Control Cost :........................................................................................................................................................109
Target Costs :.......................................................................................................................................................109
Input Variances :..............................................................................................................................................110
Output Variances :.............................................................................................................................................110
Costing sequence :............................................................................................................................................110
a. Preliminary Cost Estimate :.................................................................................................................110
b. Simultaneous costing :...........................................................................................................................110
c. Final Costing :.............................................................................................................................................110
9. Product Cost by Order.....................................................................................................................................112
1. FI settings...........................................................................................................................................................112
1. Creation of GL account WIP..............................................................................................................112
2. Creation of GL account WIP offset................................................................................................113
3. Creation of GL account Price Differences..................................................................................113
2. CO Settings........................................................................................................................................................113
1. Check Valuation Variants for Manufacturing orders(PP) :..................................................113
2. Check Costing Variants for Manufacturing orders(PP) :......................................................115

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3. Define goods received valuation for order delivery(already done).................................115
4. Creating secondary cost elements..................................................................................................116
5. Creating secondary cost elements(Settlment)..........................................................................116
6. Define Result Analysis Key.................................................................................................................116
7. Define Result Analysis Versions.......................................................................................................117
8. Define Valuation Method(Actual Costs)........................................................................................117
9. Define Line IDs...........................................................................................................................................118
10. Define Assignment..............................................................................................................................118
11. Define Update........................................................................................................................................121
12. Define Posting rules for settling Work in process ............................................................121
13. Define Result Analysis Versions..................................................................................................122
14. Define Variance Keys ........................................................................................................................122
15. Define Default Variance Keys for Plants .................................................................................123
16. General Version Maintenance in CO-Area.............................................................................123
17. Define Valuation Variant for WIP and Scrap (Target Costs).........................................124
18. Define Target Cost Versions..........................................................................................................124
19. Create Allocation Structure.............................................................................................................126
20. Create Cost Element Group...........................................................................................................128
21. Adding Value fields in Operating Concern(CO-PA setting)...........................................129
22. Create PA Transfer Structure(CO-PA setting).....................................................................130
23. Create Settlment Profile ...................................................................................................................133
24. Create No. Range intervals for Bus Transactions KZPI..................................................134
25. Creating GL account Prod-Variance..........................................................................................134
26. Automatic Account Assignment....................................................................................................135
27. Activate Actual Costing(Change Activty update setting).................................................135
3. PP Settings.........................................................................................................................................................136
1. Define Order Type :.................................................................................................................................136
2. Define order type-dependent parameters....................................................................................137
Define Cost-Accounting-Relevant Default Values for Order Types and Plants ................137
3. Define Scheduling Parameters for Production Orders..........................................................138
4. Define Confirmation Parameters......................................................................................................138
5. Define Checking Control.......................................................................................................................139

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4. PP Enduser.........................................................................................................................................................140
1. Creating Origin Groups..........................................................................................................................140
2. Assign Origin groups and Material Origin indicator in Material master ......................141
3. Maintain planned scrap in BOM LAPSFG1 ................................................................................141
4. Maintain planned scrap in BOM LAPSFG1 ................................................................................141
5. Check the period close..........................................................................................................................142
5. CO Enduser........................................................................................................................................................142
6. Create cost estimates.............................................................................................................................142
6. MM Enduser......................................................................................................................................................142
1. Assign Variance Key in the material master.............................................................................142
2. Purchase Order Creation:....................................................................................................................142
3. Goods Receipt for Purchase Order.................................................................................................143
4. Invoice Verification...................................................................................................................................143
5. Purchase Order Creation(Different vendor)................................................................................144
7. PP Enduser.........................................................................................................................................................146
1. Creating Production order ....................................................................................................................146
2. Display Production Order .....................................................................................................................148
3. Production Order Confirmation for LAPSFG1 ...........................................................................148
Problem : Stor. Location is blank and not in edit mode...........................................................149
4. Display goods movements for production order.......................................................................149
5. Display activity consumption in CC.................................................................................................150
6. Material price analysis LAPRM1 and LAPSFG1......................................................................151
7. Reprocessing(incase of errors in Production Order Confimation)..................................152
Error : Plant data of the material Xxxx is locked by the user xx...............................................152
Error : Enter Stor. Location ...........................................................................................................................152
Error : Check table TFBEFU_CR entry 10 does not exist............................................................153
8. Display costs...............................................................................................................................................153
9. Display Settlement rule..........................................................................................................................153
10. Production Order Confirmation for LAPSFG2.......................................................................153
11. Display goods movements for production order LAPSFG2...........................................154

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12. Material price analysis LAPRM2 andLAPSFG2 ..................................................................155
13. Reprocessing(incase of errors in Production Order Confimation).............................156
14. Display costs...........................................................................................................................................156
15. Cost Centers :Actual/Plan/Variance...........................................................................................157
16. Display Settlement rule.....................................................................................................................157
17. Production Order Confirmation for Assembling/ LAPFG1..............................................158
18. Production Order Confirmation final/ LAPFG1 .....................................................................158
19. Display goods movements for production order..................................................................159
22. Display costs...........................................................................................................................................161
24. Material price analysis LAPFG1...................................................................................................161
25. Create Production order ...................................................................................................................161
28. Display activity consumption in CC ............................................................................................165
29. Material price analysis LAPRM1 and LAPSFG1.................................................................165
31. Display costs...........................................................................................................................................167

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34. Display goods movements for production order LAPSFG2...........................................169
35. Material price analysis LAPRM2 andLAPSFG2 ..................................................................170
37. Display costs...........................................................................................................................................171
40. Production Order Confirmation for Assembling/ LAPFG1..............................................173
41. Production Order Confirmation final/ LAPFG1 .....................................................................173
45. Display costs...........................................................................................................................................176
47. Material price analysis LAPFG1...................................................................................................176
48. Reports for Product Cost by Order ..........................................................................................176
8. FI Enduser...........................................................................................................................................................177
1. Posting expenses to CC........................................................................................................................177
9. CO Enduser........................................................................................................................................................177
1. Activity Splitting(Month End Activity)..............................................................................................177
2. Calculating Actual Activity price (Month End Activity) ...........................................................177
3. Display activity prices .............................................................................................................................177
4. Prod Order Cost Analysis.....................................................................................................................178
5. Revaluation at Actual prices(Month end activty)......................................................................178
6. Cost center report.....................................................................................................................................179
7. Overhead Calculation for Production Order(Month End Activity)....................................179

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8. WIP Calculation(Month End Activity) .............................................................................................180
9. Line items for WIP/Result Analysis................................................................................................181
10. Set status ‘Technically complete’ to prod order ...................................................................181
11. Variance Calculation ..........................................................................................................................182
12. Production Order Settlement(Month End Activity)..............................................................184
14. Line items for Variances..................................................................................................................185
15. Prod Order Cost Analysis................................................................................................................185
16. MM Period Closing..............................................................................................................................185
17. Edit Costing Run...................................................................................................................................185
10. MM Enduser (Next month)...................................................................................................................185
6. Purchase Order Creation:....................................................................................................................185
11. PP End user(Next period)......................................................................................................................188
3. Production Order Confirmation for Assembling/ LAPFG1 ..................................................190
4. Production Order Confirmation final/ LAPFG1..........................................................................191
12. FI Enduser (Next period)........................................................................................................................191
1. Posting expenses to CC........................................................................................................................191
13. CO Enduser...................................................................................................................................................191
1. Activity Splitting(Month End Activity)..............................................................................................192
2. Calculating Actual Activity price (Month End Activity) ...........................................................192
3. Display activity prices .............................................................................................................................192
4. Revaluation at Actual prices ...............................................................................................................192
5. Cost center report.....................................................................................................................................193
6. Overhead Calculation for Production Order(Month End Activity)....................................193
7. Set Production Order Status to TECO..........................................................................................194
8. WIP Calculation(Reversing WIP)(Next month).........................................................................194
9. Variance Calculation for Production Order(Month End Activity)(next month) ..........195
10. Production Order Settlement(Next month) .............................................................................197

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12. Line items for Variances..................................................................................................................198
13. Line items for WIP/Result Analysis ...........................................................................................198
14. Prod Order Cost Analysis................................................................................................................198
15. Display CO-PA line items ................................................................................................................198
16. MM Period Closing..............................................................................................................................198
17. Edit Costing Run...................................................................................................................................198

Introduction
This book is vol-2 of 2 volumes
This book was initially a set of tutorials taught by me during class room training. After gradual
development over the years, now it has become a complete configuration guide/ end-user manual for
SAP CO module. Obviously this book is more a practical guide than a reference book even though
some info stuff has been inserted at some places.
Having taught the SAP FICO course to hundreds of beginners and experienced at various institutions,
I know the kind of problems and questions you will have when learning this module.This book is full of
detailed step-by-step procedures with necessary screen shots and sample configurations.
Having worked as a SAP Consultant at various organizations, I know the kind of requirements that
may arise at clients. To this end, most of the business processes and underlying concepts have been
explained thoroughly through out the book.
By understanding the how and whys, you will start gaining basic knowledge which reaches to
advanced level with in no time.
As you go through the material, if you have problems or questions please do mail me. If you find an
error in this book, or suspect there may be an error, kindly notify .
I hope you will find using this book as enjoyable.
Conventions Used in This Book
‘’ indicates a next thing in navigation or next action
‘----- button’ means to hit the button . For example ‘ Position button’ means ‘to hit Positon button’.
‘:’ is followed by the value/text to be entered
Multiple inputs/input values in a single screen are shown in the form of table.
How to use the book
Just read line by line and follow the instructions. Refering to screen shots makes your job
easy . Please refer to Info boxes for additional info.

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1. CO-PA Valuation-2
(In this chapter we are going to configure Valuation using Mat. Cost estimates)
Valuation using Mat. Cost Estimates
Valuation using Mat. Cost Estimates is used to determine COGM /COGS with material cost
estimate rather than with the standard price in the material master. The material cost
estimate can be either planned cost estimate from Product Cost Planning or Actual cost
calculated in Actual costing/ML .
With Out valuation 
COGS/COGM is determined from Material master standard price
Cost component split is not possible
With Valuation
COGS/COGM is determined from Planned cost estimate
Cost component split is possible
COGS/COGM is determined from Actual cost estimate
Cost component split is possible
(In this chapter we are going to configure Valuation using Planned. Cost estimates from
Product Cost Planning)
1. Settings
1. Define and Assign Valuation Strategy:
SPROControllingProfitability AnalysisMaster Data Valuation Valuation
StrategiesDefine and Assign Valuation Strategy
Operating concern : LAP1
Enter
Select Val.strat ‘001’ Online Valuation Actual
Double click on Details folder
New Entries
sequence Appl Costg sheet Mat.cstg Qty.field
2  VVIQT
Double click on Assignment of Valuation strategy folder

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New Entries
PV Rec. Plan ver Val .strat Name
01 F 001
Save
2. Define Access to Standard Cost Estimates
Same path upto Valuation
Set Up Valuation Using Material Cost EstimateDefine Access to Standard Cost
Estimates
Select Cstg key ‘I10’
Copy as button
Costing key : LAP LAP mat cost
Costing Variant LAP1 Standard Cost Est. LAP
Enter
Save
3. Assign Costing Keys to Products
Same path
Assign Costing Keys to Products
New Entries
PV RecT. Plan ver Material Valid to C key1
01 F LAPFG1 LAP
Save
4. Assign Value Fields
Same path
Assign Value Fields
Cost component structure : L1
Enter
New Entries
PV CCo F/V Fld name1 Fld name2 Fld name3
01 010 2 VV150

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01 050 3 VV400
01 070 3 KWSGEK
01 080 3 VV250
Save
2. Enduser
1. Maintain condiiton record
TCode : VK11
Condition type : PR00
Key Combination button
Material with release status
Enter
Sales Organization : LANS
Distribution Channel : LD
Material Amount Valid From Valid to
LAPFG1 63000 1.04.2011 31.03.2012
Save
2. Creating Sales order
Tcode: VA01
Create a Sales order for Material LAPFG1
Qty : 30
3. Production Receipts
Tcode :MB1C
Up to Logistics same pathMaterails ManagementInventory ManagementGoods
Movement Goods ReceiptsOthers
Document date : Todays date
Movement type : 521 (receipt w/o production order into unrestricted use stock)
Plant : LAP1
Storage location : LAP1
…
…

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Enter
Material Qty.
LAPFG1 100
Enter
Text : GR from production
Post
Enter to ignore the warning message
Post
Note down the material document no. 100000360
Other Goods Receipt menuDisplay
Material document : 100000360
Mat. Doc year : 2012
Enter
Accounting Documents button
Double click on Accounting Document
Dr Inventory FG . 49,16.275.00
Cr To Inc/Dec. in stock 49,16,275.00- (=100*49,162.27)
4. Deliveryof goods to customer
Tcode : VL01N
Post goods issue for the above sales order
Picked Qty : 30
5. Billing document
Tcode : VF01
Post a billing document for above Delivery document
6. Display Billing document
Tcode : VF03
Billing document : XXXXXXx
Accounting button
Double click on Profitab. Analysis
Value fields Tab
Value fields Material input , Material Overhead Production costs should be filled with
some value .

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If the above valuefields not calculated , we can do error analysis by Simulating Billing
Document Transfer as shown in the next step , rectify the error and then resend the biling
document to CO-PAusing ‘Post Billing Documents Subsequently’ TCode : KE4S
7. Simulate Biling Document Transfer
SPROControllingProfitability AnalysisToolsAnalysis Simulate Billing Document
Transfer
TCode :KE4ST
Billing Document : XXXXXXXXX
Company Code : LAP
Execute
Select Message type
Valuation button
Result of valuatn tab
‘After Valuation’ column shows the values calculated by valuation function.
8. Post Billing Documents Subsequently
SPROControllingProfitability AnalysisToolsProduction StartupSubsequent
Posting of SD DocumentsPost Billing Documents Subsequently
Tcode : KE4S
Billing Document : XXXXXXXXX
 Test Run
 Create log
Reversal of line items
Execute
Select a Message type
Valuation button

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‘After Valuation’ column shows the values calculated by valuation function.
Back button twice
Test Run
Execute
9. Display CO line tems
TCode : KE24

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2. CO-PA Valuation3 (for Incoming orders)
In this chapter we are going to configure valuation function for incoming sales orders .
We can transfer sales orders from SD to CO-PAto analyse expected revenues and
anticipated profits. Incoming salesorders can be valuated using cost estimates and costing
sheets
1. Settings:
Enter
Select Val.strat ‘004’ Online Valuation Actual Rec.Type A
New Entries
1 KE LAP1 VV700
2 √ VV700
New Entries
01 A 004 Online Valuation Rec. Type A
Save
Upto Valuation same path
Set Up Valuation Using Material Cost EstimateAssign Costing Keys to Products
New Entries
01 A LAPFG1 LAP
Save

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3. Activate Transfer of Incoming Sales Orders
Flow of Actual ValuesIntial StepsTransfer of Incoming Sales Orders Activate Transfer
of Incoming Sales Orders
TCode : KEKF
Position button
CO Area LAP
Enter
COAr Name FromFY OP.concern Inc.SO
LAP 2016 LAP1 1
Save
2. Enduser:
1. Creating Sales order
Tcode: VA01
Create a Sales order for Material LAPFG1
Qty : 10
2. Display CO-PA line items
TCode : KE24
Currency type : 10
Sales order : XXXXXX
Execute
Double click on the line item
Value fields tab
If Profitabilty analysis document is not displayed or value fields are not populated , we can
trace the error by transaction ‘Simulation of Document Transfer from Incoming Sales Orders’
as shown in the next step .
After rectifying the error we can generate CO-PA document by transaction ‘Post Sales
Orders Subsequently’ .
3. Simulation of Document Transfer fromIncoming Sales Orders
SPROControllingProfitability AnalysisToolsAnalysis Simulation of Document
Transfer from Incoming Sales Orders
TCode : KE4TS

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Sales document : XXXXXXX
Execute
Select a message type
Valuation button
Result Valuation tab
4. Post Sales Orders Subsequently
SPROControllingProfitability AnalysisToolsProduction StartupSubsequent
Posting of SD Documents Post Sales Orders Subsequently.
Sales document : XXXXXXXXX
 Test Run
 Log
Check for Existing records
Execute
Select the message
Valution button
Result of Valuation tab
Make a note of ‘After Valuation’ column
Back button
Test Run
Execute

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3. Multiple Valuation Approaches/Transfer Prices
There is always one valuation type which is default. Maximum number of valuations possible
is 3 in is SAP . Legal valuation is the default valuation type . Group valuation and Profit
center valuation are the additional valuation types used optionally
If we want to use multiple valuations , material Ledger is mandatory to be implemented
Valuation type
Legal Valuation
Group Valuation
Profit Centre Valuation
Legal Valuation : Legal Valuation is used for legal reporting . Even the internal sales are
recorded at external sales prices. Used at individual company code level .
Group Valuation : Legal Valuation is used for strategic reporting at group level . The
internal sales are recorded as transfers between company code at COGM prices. Internal
revenue and profit are eliminated.
Profit Center Valuation: Profit centre is a an independent org unit which can be treated as
independent reporting centre for profit/loss . Apart from legal prices and group prices a
special type of prices called transfer prices can also be used to valuate goods movement
between profit centres
If we want to use transfer prices in Profit Center Valuation , material Ledger is mandatory
to be implemented.
Corporate group
Comp Code A Manufactures & Sells cars External Sales
Comp Code B Manufactures & Sells Engines
External Sales
Internal supply

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Legal view :
Comp code B sales (Legal view):
Sale type COGM Sales quantity Price Revenue
External 21,00,000 300 9,000 27,00,000
Internal 7,00,000 100 9,000 900,000
Comp code A sales (Legal view):
External 70,00,000 100 90,000 90,00,000
Total revenue
(Legal view) :
90,00,000+27,00,000+900,000 = 12,600,000
Total COGM
(Legal view) :
70,00,000 + 21,00,000+7,00,000 = 98,00,000
Contribution margin (Legal) 28,00,000
Group View:
Comp code B sales (Group view):
External 21,00,000 300 9,000 27,00,000
Internal 7,00,000 100 7,000 700,000
Comp code B sales (Group view):
External 68,00,000 100 90,000 90,00,000
Total revenue
(Group view) :
90,00,000+27,00,000 = 11,700,000
Total COGM
(Group view) :
68,00,000 + 21,00,000 = 89,00,000
Contribution margin (Group view) 21,00,000

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.
Note: In currency and valuation profile we define a maximum of 3 combinations of valuation
view and currency type. The valuation view and its associated currency type are combinedly
called a valuation approach.
Eg : Profit centre view /Group currency can be one valuation approach.
Only a maximum of 2 currency types can be used even if we use 3 valuation approaches.
i.e. 2 valuation views of the three must use the same currency.
A currency and valuation profile can have three valuation approaches like the below.
Valuation view Currency type
0(legal) 10 (comp code currency
1(Group) 30 (Group currency)
2(Profit centre) 30 (Group currency)

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4. Actual Costing/Material Ledger
The component Actual costing/ Material Ledger has two subcomponents Actual Costing and
Material ledger.
Actual costing : Actual costing calculates an actual price (periodic unit price) for each
material, The actual price includes all actual costs for a particular period . The actual costing
uses actual costs to valuate inventories of raw materials, semifinished products, and finished
products.
Material ledger : Material ledger is used to manage inventories in multiple currencies and
/or perform multiple valuations. The material ledger enables the system to manage inventory
values in three currencies/valuations. If the material ledger is not active, you only maintain
the valuation prices in company code currency with legal valuation.
Material ledger and multiple valuations
It is mandatory to implement ML if we want to use multiple valuations. But ML can be
implemented with out using multiple valuations.
Material ledger with and w/o multiple valuations
ML with multiple valuations ML w/o multiple valuations
If multiple valuations are used ML valuates
the materials in upto 3 valuation views with
2 currencies
Eg1:
Legal valuation/Comp code currency
Group valuation/Group currency
Profit center valuation/Group currency
Eg2:
Group valuation/Group currency
Profit center valuation/ Comp code
currency
Eg3:
Group valuation/ Comp code currency
Profit center valuation/ Comp code
currency
If multiple valuations are not used ML just
store the material prices/stock values in upto 3
currencies
Eg1:
Comp code currency
Group currency
Hard currency
Eg2:
Comp code currency
Group currency
Index based currency
Used for parallel valuations. Material
price/stock is valuated separately and
stored in the specified currency.
Used if we want to store/display material
price/stock/transactions in multiple currencies.
Ie .It is a mere translation of price/ stock into
different currencies at historical exchange rate

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Image : Accounting 1 view of Material master

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1. Settings
(Make sure qty update and price update is active before activating the material legder for
plant)
1. Activate Valuation Areas for Material Ledger
SPROControlling Product Cost Controlling Actual Costing/Material Ledger Activate
Valuation Areas for Material Ledger
Double click on Check Material Ledger settings
Plant : LAP1
Display accounts 
Execute
Next page button/Scroll down(To display various settings that are related with ML)
Back button
Double click on Activate Material Ledger
Position button
Valuation area: LAP1
Company code : LAP
Enter
Valuation
Area
Company
Code
ML Act Price
Deter.
Price Det. is Binding in Val
Area
LAP1 LAP  3 .
LAP2 LAP  3 .
LAP3 LAP  3 .
Save
Enter to ignore the message
( Msg : After activating material ledger, live data must be converted)
Continue
2. Assign Currency Types to MaterialLedgerType
TCode :OMX2
Same path
Assign Currency Types to Material Ledger Type
New Entries

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ML Type CT from FI CO CrcyTyp Manual Description
LAP1 . .  ML type for LAP
Save
Continue
Select LAP1
Double click on ‘Define individual Characteristics’ folder
New Entries
Crcy type Short Description
31 Group currency, group valuation
Save
3. Assign Material Ledger Types to Valuation Area
SPROControlling Product Cost Controlling Actual Costing/Material Ledger Assign
Material Ledger Types to Valuation Area
Tcode : OMX3
Position button
Valuation area: LAP1
Enter
Valuation area Mat ledger type
LAP1 LAP1
LAP2 LAP1
LAP3 LAP1
Save
Continue
We must assign all valuation areas (plants) in the company code to the same Material ledger
type.
4. Maintain Currencyand Valuation Profile
SPROControllingGeneral ControllingMultipleValuation Approaches/Transfer
PricesBasic SettingsMaintain Currency and Valuation Profile
Tcode: 8KEM
New entries

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C+V prof Text
LAP1 LAP Group Valuation Profile
Save
Continue
Select ‘LAP1’
Make note of currency type ‘10’ valuation view ‘ Legal Valuation’
5. Assign Currency and Valuation Profile to Controlling Area
TCode :8KEQ
Upto Basic Settings same path
Assign Currency and Valuation Profile to Controlling Area
Position button
CO Area : LAP
Enter
Co Area C Crcy CC C+V Prof
LAP 2 INR 10 LAP1
Save
Continue
6. Maintain Currencyand Valuation Profile
PricesBasic SettingsMaintain Currency and Valuation Profile
Tcode: 8KEM
Select ‘LAP1’
New Entries
No C Text Valuation View
20 30 Group currency Group Valuation
Save
Caution :

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Scenario1 : Multiple Valuation Approaches/Transfer Prices is activated for the CoArea
The order of currency types in Currency / Valuation Profile must match with Currency
Types of Material Ledger Type as shown in the following image .
Scenario2 : Multiple Valuation Approaches/Transfer Prices is not activated for the CoArea
Do not use Crcy types like 12 ,31 (which are only to be used for valuation) in the Material
Ledger Type . Instead Crcy types like 30 ,40 ,50 can be used as shown in the following
image

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7. Create Versions for Valuation Methods
Note : Alternatively Versions can be maintained using the following path
SPROControllingGeneral ControllingOrganizationMaintain versions
Same path
 Create Versions for Valuation Methods
New Entries
Version Plan/Actual version Plan Actual WIP/RA Variance Exclusive use
909 Group valuation .    0
999 Proft center valuation .    0
Save
Continue
8. Multiple Valuation Approaches: Check/Execute Activation
TCode :8KEP
PricesActivationMultiple Valuation Approaches: Check/Execute Activation
Controlling Area : LAP
Check activation
Execute
Enter to ignore warning messages
(Check currency related settings )
Back button (if no errors)
Activate in controlling area
Execute
Enter ( to ignore the warning messages)
Activate button
9. Maintain Number Ranges for Material Ledger Documents
TCode :OMX4
SPROControlling Product Cost Controlling Actual Costing/Material Ledger
Maintain Number Ranges for Material Ledger Documents
Double click on Number Ranges for Material Ledger Documents
…
…
…
…

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Maintain Groups button
 ML update
Interval menuMaintain
(Maintain number interval here , if there is no interval)
Back button
 ML closing
Interval menuMaintain
(Maintain number interval here , if there is no interval)
(Repeat the procedure for all groups)
Save
Double click on Maintain Financial Accoutning Document Types
Double click on document type ‘ML’
(Note down the number range ie 47)
Double click on Accounting Document Number Ranges
(Create Number interval for number range 47)
10. Configure Dynamic Price Changes
Same path
Configure Dynamic Price Changes
Position button
Valuation Area : LAP1
Enter
ValArea Company code Price Release
LAP1 LAP blank
LAP2 LAP blank
LAP3 LAP blank
Save
Continue
Price
release
Manual price update TCode : CKME
Dyanmic price update : Price is updated automatically when the first material
transaction happens in a period

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11. Define Material Update Structure
Same path upto Actual Costing/Material Ledger
Material Update Define Material Update Structure
Select Material Update Structure ‘0001’
Double click on Material Update Categories
(Make note of different categories)
12. Assign Material Update Structure to a Valuation Area
Up to MaterialUpdate same path
Assign Material Update Structure to a Valuation Area
(By default 0001 is assigned to valuation areas LAP1, LAP2 and LAP3)
13. Activate Actual Costing
Update of activity consumption ::
'0' = Update is not active
'1' = Update is active but not relevant to price
determination.
Revaluation of Production order at Actual
prices(CostObj controlling) is required
'2' = Update is active and relevant to price
determination
Plan actual variances of cost center are
debited to the material when calculating
actual prices of activities. Revaluation of
Production order at Actual
prices(CostObj controlling) is not
required
Up to Actual Costing/Material Ledger same path
Actual Costing Activate Actual Costing
 Double click on ‘Verify Settings for Actual Costing’
Plant : LAP1
Execute
Double click on ‘Activate Actual Costing’
Postion button
Plant : LAP1
Enter

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Plant Name1 Act. costing ActAct CreditCCt
LAP1 
LAP2 
LAP3 
Save
Continue
ActAct : This setting determines how activity consumption is updated in actual qty structure
in Cost Object Controlling &Actual costing
0 update not active
1 update active but not
relevant to price
determination
'Revaluation at actual prices' during period closing for Cost Object
Controlling is to be performed
2 update active and
relevant to price
determination
Variances between the activity
type prices posted during the
period and the actual price
calculated at the end of the
period are adjusted
subsequently
'Revaluation at actual prices'
during period closing for Cost
Object Controlling is not required
Control of Credit of Cost
Centers:Closing entries of the
periodic costing run
Control of Credit of Cost
Centers:Alternative valuation
run
Note : This setting should only be changed at month end but not during the month. If Cost
Obj Controlling is implemented use ‘1’ other wise use ’2’ .
14. Activate Actual Cost Component Split
Same path
Valuation Area Company Code ActCstCmpSpltActive
LAP1 LAP 
LAP2 LAP 
LAP3 LAP 
Save
Continue
15. Check Customizing Settings for the ML

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SAP Easy AccessAccountingControllingProduct Cost Controlling Actual
Costing/Material LedgerEnvironment Check Customizing Settings
TCode :CKM9
Plant : LAP1
Display Accounts .
Execute
Scroll down to Currency
(Make sure the currency settings are correct before going to next step ie Set Valuation Areas
as Productive)
Repeat the process for all valuation areas
16. Set Valuation Areas as Productive
Costing/Material LedgerEnvironment Production Startup Set Valuation Areas as
Productive
Tcode : CKMSTART
Caution :
After setting up the valuation area as productive, no changes are possible in the currencies
, currency types or material ledger types. Before that make sure that currency settings are
currect in Financial Accounting and ML .
Note :
Any materials created before setting valuation area to productive will have Price
determinatin 2 in their material master. We can change the Price determination to 3 using
TCode CKMM as shown in enduser part

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Plant : LAP1
Back groung job processing
 Test run
Execute
Test run
Execute
Repeat the process for plants LAP2 and LAP3.
Error: Cost component structure for period 006 / 2016 in plant LAP1 not found
Solution : Create planned cost estimate for the said period
17. Creating GL accounts
Transaction Modifier GL account
Val
class

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Purchasing,
Stock
Movement,
Production
PRD
Cost
(Price)differences
-
Price Diff-
Purchasing
400407
PRF Prod-Variance 400505
PRA Price-Diff GI
PRU
Price-Diff
Transfer
MAC Prod-Variance 400515
ML Closing
(Single Level)
PRY
Cost
(Price)differences
(material . ledger )
- Price Diff-SLvl LAP3 400302
-
Price Diff-
PurchasingML
LAP1 400303
PRF Prod-Variance
PRA Price-Diff GI
PRU
Price-Diff
Transfer
PSL
Write off SLvl
Price Dif
LAP3 400601
PNL
Offsetting-
Price dif from L
Lvl
LAP2 400504
ML Closing
(Multilevel)
PRV
Material . ledger
fr.low.levels price
diff.
-
Price Diff from
Lower level
blank 400609
PRF Prod-Variance
PRA Price-Diff GI
PRU
Price-Diff
Transfer
GBB
AUI Activty price
variance
LAP2 400510/costlemnt
LAP3 400510
ML Closing
(Release
Future Price)
UMB
Gain/Loss from
revaluation
-
Gain/Loss
from
revaluation
400502
ML Closing
(W/O
Revaluation)
LKW
Accruals and
defer.acct(material
ledger)
-
ML Provision
All the above GL accounts are to be created as P/L accounts except ML Provision a/c which
is to be created as BS account.
18. Automatic Account Assignment

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Tcode : OBYC
Double click on Transaction ‘PRV’ ie Material ledger fr low. Levels price dif
Chart of accounts : LACA
Enter
Save
Account
400609
Save
Continue
Info :
PRA – For goods issue and other movement types 201,261
PRF – For GR against production order and order settlement
PRV- For movement type 301 (plant to plant)
PRY – Price Difference account ( Material Ledger )
PRV – Material Ledger Adjustment Account –
COC ( or LKW )-Revaluation of Consumption ( Material Ledger ) -
Back button
Double click on Transaction ‘PRY’ ie Cost (price) differences (Mater.ledger)
Enter
General modification 
Valaution modif. 
Valuation class 
Save
Valuation modif General modification Valuation class Account
X - LAP1 400303
X - LAP3 400302
X PNL LAP2 400504
X PSL LAP3 400601

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PRA
PRF
PRU
Save
Continue
Double click on Transaction ‘PRD’ ie Cost (price) differences
Enter
Valuation class 
Save
X blank LAP1 400407
x PRF LAP3 400505
X PRF LAP2 400505
Save
Continue
Double click on Transaction ‘GBB’ ie Cost (price) differences
Enter
Valuation class 
Save
X AUI LAP2 400510
X AUI LAP3 400510

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Save
Continue
Back button
Double click on Transaction ‘LKW’ ie Accruals and defer. Acct (material ledger)
Enter
Save
Account
Save
Continue
19. Check Customizing Settings for the ML
Costing/Material LedgerEnvironment Check Customizing Settings
TCode :CKM9
Plant : LAP1
Display Accounts 
Execute
Scroll down to ‘Accounts for Valuation Area’
(Check the account assignment)
Repeat the process for all valuation areas
(Make sure actual cost component split is on)
1. MM Enduser
1. Display material Master LAPFG1
Tcode : MM03
Material : LAPFG1
Select View(s) button
Select Accounting 1
Org. Levels button
Plant : LAP1
Enter

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(Standard price should be displayed in multiple currencies, ML act shoud be active)
Error : Material ledger currencies were changed
Reason : If any currency settings are changed after activating the ML the above error can
arise
It is not possible to deactivate material ledger if any material movement data exists in the
valuation area ie plant.
(Check material master of SFGs and RMs . Make sure ML is active for all)
Problem : ML not activated for a material
Solution : Check whether qty update and value update is active in material type

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2. Change Material Price Determination for FG and SFG(for
existing materials)
Info : Price determination can not be changed in material master directly . It can be changed
in the following way.
SAP Easy AccessAccounting Controlling Product Cost Controlling Actual
Costing/Material Ledger Environment Change Material Price Determination
Tcode : CKMM
Plant : LAP1,LAP2
Valuation Class : LAP3 (FG),LAP2(SFG)
Program Definitions
Old Price Determination : 2
New Price Determination : 3
New Price Control : S
Processing Options
 Test run
Back groung processing
 Save log
Execute
Back button
Test run
Execute
Error : consumption account cannot be determined GBB VBR LAP3
Asign 400590 to GBB VBR LAP3 comination in OBYC
Error : Cost element 400590 is not assigned to a cost component in CostCompStruct 01
3. Change Material Price Determination for RM (for existing
materials)
Tcode : CKMM
Plant : LAP1,LAP2
Valuation Class : LAP1
Program Definitions
Old Price Determination : 2
New Price Determination : 3
New Price Control : S
Processing Options
 Test run
Back groung processing

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 Save log
Execute
Back button
Test run
Execute
4. Purchase Order Creation:
Tcode : ME21N
Vendor : LAPRMVNDR
Enter
Org.Data tab
Purch. Org : LAPO
Purch. Group : LPG
Company Code : LAP
Item Material PO
Quantity
Deliv.
Date
Net
Price
Currency Plnt Stor.
Location
10 LAPRM1 23000 15.08.201 279 INR LAP1 LAP1
20 LAPRM2 30000 15.08.201 369 INR LAP2 LAP2
Enter
Messages button to see any errors
Back button
Check button
Save
Note down the purchase order No. 4500017XX
5. Goods Receipt for Purchase Order
Tcode :MIGO
Up to Material Management same path
Inventory ManagementGoods MovementGoods ReceivedFor Purchase OrderPO
Number Known
Purchase order : 45000171XX Plant : Blank
Enter
Select line ‘1’
Where tab
Storage Location : LAP1
Text : GR

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Quantity tab
Qty in Delivery Note : 23000 KG
√ Item OK
Where tab
Text : GR
Quantity tab
√ Item OK
Check button (‘Document is 0K ‘ msg should come)
Post
6. Invoice Verification
Tcode : MIRO
Invoice date : Todays date
√ Calculate tax
Tax code : V1 4%Input tax
Text : Inv Verifcation
PO Reference Tab
Purchase order/Scheduling agreement 4500017XX Goods/service items
Enter
Select item 1&2
Item Amount Quantity
1 6417000 23000 √
2 11070000 30000 √
Copy the amount in Balance field (red signal)
Paste to Amount field (without –‘ve sign)
Enter
(Red signal should turn into green/yellow signal)
Payment tab
Baseline date : Todays date
Payment term : 0001
Simulate button

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Post button
Invoice Document menu Display
Follow-On Documents button
(Two accounting documents should be displayed one for invoice and one for price difference
posting. And a ML document should be displayed as well)
Double click on Material ledger document( to display it )
Select LAPRM1
Material price analysis button( )
Period/Year : current
View : Price Determination Structure
Info : Alternatively ML document can be displayed as shown in the next step

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7. Displaying material ledger Document
SAP Easy AccessAccounting Controlling Product Cost Controlling Actual
Costing/Material LedgerInformation systemMore Reports Material Ledger Document
TCode:CKMB
Document Number : 100000XX
Document Year : 201x
Enter
8. Change Material master LAPSFG1
TCode : MM02
Material : LAPSFG1
Enter
Select ‘ ‘MRP4’view
Enter
Plant : LAP1
Stor. Loc. : LAP1
Enter
MRP4 tab
Selection method : blank
Individual/coll : 2 collective requirements only
Save
1. PP settings
1. Define order type
TCode :OPJH
SPROProductionShop Floor ControlMaster DataOrder Define order type

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Select ‘PP01’
Copy As .. button
Order Type LAP1 Standard Production Order (LAP)
Settlement Profile : FA_ABP
Enter
Save
2. Define order type-dependent parameters
Same path
Define order type-dependent parameters.
TCode : OPL8
Position button
Plant : 1000
Order Type : PP01
Enter
Select plant ‘1000’ with Order Type ‘PP01’
Copy as button
Replace plant ‘1000’ with ‘LAP1’
Replace Order Type ‘PP01’ with LAP1
Enter
Planning tab
Operation
Reduction Strategy : Blank
Assignment
Substitute MRP Ctrller : MRP
Substitute Scheduler : MRS
Purchase requisitions
Reservation/Purch.Req. : 3
Cost Accounting tab
Change settings as shown in the following image

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Save
Enter twice to ignore the warning message
Continue
Back button
Select plant ‘LAP1’ with Order Type ‘LAP1’
Copy as button
Replace plant ‘LAP1’ with ‘LAP2’
Enter
Save
3. Define Control key
TCode :OPJ8
Upto Master Data same path
Routing DataDefine Control Key
Double click on ‘PP01’
Aut.goods receipt
 Cost
Back button
Double click on ‘PP02’
 Cost
 Aut.goods receipt

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Save
4. Define Valuation of Goods Received
Upto Shop Floor Control Same path
Integration Define Valuation of Goods Received
Tcode :OPK9
New Entries
Val.Area Company Name Val.Var Name
LAP1 007
LAP2 007
LAP3 007
Save
5. Define Confirmation Parameters
Tcode :OPK4
Upto Operations Same path
Confirmation Define Confirmation Parameters
Position button
Plant : 1000
Order Type : PP01
Enter

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Copy as button
Replace type ‘PP01’ with ‘LAP1’
Enter
Generally Valid Settings tab
Overview button( )
New Entries
Type Control Process
control
AutoGR Backflush Actual Costs
10 LAP1 Immediately
Online
Immediately
Online
Immediately
Online
Save
Continue
Back button
Process Control : LAP1
Back
Copy as button
Enter
Save
Continue
6. Define Checking Control
TCode :OPJK
Availabiltiy Check Define Checking Control
Position button
Plant : 1000
Order Type : PP01
Enter
Select plant ‘1000’ with Type ‘PP01’ .(Two records Business Function 1&2)
Copy as button

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Replace order type with ‘LAP1’
Enter
Enter
Save
Continue
Select plant ‘LAP1’ with Type ‘LAP1’ .(Two records Business Function 1&2)
Copy as button
Enter
Enter
Save
Continue
2. Enduser
1. Make sure standard cost estimates released
Caution : It is to be make sure that cost estimates has been released for the period . Before
posting any material transactions in the period either release planned cost estimates(If it is
first time) , or actual cost estimates (if not first time) .
The above precaution is to be taken if ‘COPA-Valuation using Mat. Estimates’ functionality
is implemented . If the above functionality is configured and material cost estimates are not
available error ‘No standard cost estimate could be found for material xxxx’ arises
during the release of billing document (VF02) and data is not transferred to COPA.
Error : Price changes for material xxxxx is not possible . Message no. C+811
When Actual costing/ML is active w/o dyanamic price release function, after any material
movements like production receipt or delivery is posted , it is not possible to release the
cost estimates. When you use actual costing / ML, a price must be released before any
goods movement in the period.
TCode : CK13N
(Check ‘Costing Date To’ in Date tab )
2. Create BOM LAPFG1
TCode : CS01
Material : LAPFG1

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Plant : LAP1
BOM Usage : 1 Production
’Copy From’ button( )
Material : LAPFG1
Plant : LAP1
BOM Usage : 6 Costing
Enter
Select the two items
Copy button( )
Save
3. Create BOM LAPSFG1
4. Create BOM LAPSFG2
5. Displaying BOM Level byLevel
SAP Easy Access LogisticsProductionMaster Data Bills of MaterialReporting
BOM ExplosionMaterial BOMBOM Level by Level
Tcode : CS11
Material : LAPFG1
Plant : LAP1
BOM Application : PP01
Execute
Item data button
6. Creating Production order
Info :
Collective order : Collective order is a set of production orders for a FG and all its SFGs .

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When we create a production order for a FG for a specific a quantity , production orders are
generated automatically for all the SFGs involved for the required quanties(based on the
BOM). Production order for a FG is called leading order and suesequent orders generated
for SFGs are called depenendent orders.
Collective
orders
With Automatic
Goods
Movements
Goods movements takes
place from lower level to
higher level of the production
automatically.
For Eg : When SFG are
delivered to stock, goods issue
is posted automatically to
production order of the FG .
Varainces can be
calculated and settled
to CO-PA
Without Automatic
Goods
Movements
No automatic goods
movements happens
Variances can not be
calculated and
therefore settlement
to CO-PA not possible
In our scenario we are using Collective orders With Automatic Goods Movements
SAP Easy AccessLogisticsProductionShop Floor ControlOrderCreateWith
Material
TCode :CO01
Material : LAPFG1
Production Plant : LAP1
Planning Plant : LAP1
Order Type : LAP1
Enter
Total Qty : 300 EA
Dates
Finish (End) : blank
Start : 1 st day of the month
Scheduling
Type : Forwards
Float Bef. Prdn : 1 Workdays
Float After Prdn : 1 Workdays
Release Period : 1 Workdays
Enter
In case of error ,complete error detals can be displayed in error log
Goto menuLogsOverview

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Collective orders Overview button ( )
Select the order (to be dispalyed)
 Order Header button( )
Back buton
Release Order button( )
Save
(Note down the order number 600036XX)
Error 1: Work scheduling data of material is not maintained
Solution: Maintain ‘work scheduling’ view of the material master for FG and SFGs
Tocde : MM50
Plant : LAP1
Material : LAPFG1
Execute
Select ‘A’
Maintain Materials button
Save
Warning Message : No capacity category maintained in work center for scheduling
Solution : to Ignore
7. Display Production Order
Tcode : CO02
Order : XXXXXXXX
Collective order
Enter
Make a note of production order numbers of LAPSFG1 and LAPSFG2

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8. Create Purchase order for Exteranl activity PCKG
Tcode : CO02
Order : XXXXXXXX
Collective order
Enter
Select Main order
Operation overview button( )
Double click Opeation ‘0020’
Ext. Processing tab
Make a note of Purchase Requisition No
TCode : ME58
Purchasing Organization :LAPO
Execute
Select the item
Process Assignment button()
Order Type : NB
Purchase Order Date :
Purchase Order :
Purchasing Group : LPG
Purch. Organization : LAPO
Enter
Select the requisition
Adopt button ( )
Or drag the requisition No. onto cart symbol ( )
Item Overview
Net Price Currency
12 INR
Item Detail
Account Assignment tab
G/L Account : 400501
Cost Center : 1002
Delivery tab
Goods Receipt
…
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Save
9. Inv verification
TCode : MIRO
Calculate tax
PO Reference Tab
Purchase order/Scheduling agreement xxxxxxxxxx Goods/service items
Enter
Select √ Booking OK for item 1
Enter
Enter
(Red signal should turn into green signal)
Payment tab
Payment term : 0001
Simulate button
Post button
Dr LAP RMvendor 3600.00
Cr Packing Charges 3600.00
Error : Account determination for entry LACA WRX X not possible M8147
Solution : Create WRX for a blank valuation class in OBYC
10. Production Order Confirmation for LAPSFG1
SAP Easy Access Logistics Production Shop Floor Control Confirmation Enter
For OperationTime Ticket
Tcode : CO11N
Order No: 600036XX (Enter the order that is created LAPSFG1 )
Enter
Operation 0010
Confirm.type : Final confirmation  Clear open reservations

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Quantities
To be Confirmed Unit
Yield 2100 EA
Scrap
Activities
To be Confirmed Unit R
Machine 21200 H 
Goods Movements button
Enter to ignore the warning msg
(Enter the quantity of RM that is consumed as shown in the table/image )
Material Quantity Units Plant Stor.Loc Movement type

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LAPRM1 22500 KG LAP1 LAP1 261
Warning :
Make sure Stor location is not blank for all goods movements
Problem : Stor. Location is blank and not in edit mode
Solution : Select the line for which Stor loation is blank
Dependent items button( )
Enter storage location
Back button
Save
Error : No price could be determined for internal activity ASMB 0000001002
Solution : Maintain values for activity type and cost center in KP06 and KP26 and perform
price calculation using KSPI.
Save
(Msg : Confirmation saved (Goods movements:1 , failed: 0)
(Instead of entering RM consumption in inconfirmation We can optionally issue RM using
tcode MB1A or MIGO as shown inthe following box)
RM issue to Production order for LAPSFG1
Tcode : MB1A
Document Date : 02.03.201 Posting Date : 02.03.201
’To Order... ‘ button
Order SLoc
600036XX LAP1
Enter

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Material Quantity UnE
LAPRM1 KG
Post
11. Display goods movements for production order
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Double click on LAPFG1
Goto menuDocumented Goods Movements
( 3 goods movments should be recorded . One is RM-goods issue , the second one is GR
for SFG from production and the third one is SGF-goods issue for next higher production
level . Mvmt Type indicates wether it is goods issue or goods receipt. )
Message : There is no data for the selection Message no. COIS024
Solution : Select check boxes under documentation of goods movement (Implementation
tab ) while maintaining order type dependent parameters TCode : OPL8
Goods movement for production orders entered already before the above correction can be
displayed using Order Information System TCode :COOIS
12. Display activity consumption in CC
Tcode : S_ALR_87013611
(Cost Centers : Actual/Plan/Varaince)
Fiscal Year : 201
From Period : 12
To Period : 12
Plan Version : 0
Cost Center Group :
Or value(s) 1001
Execute
(Make sure activity allocation is recorded under Act.costs column and quantity is recorded
under Act. acty column)
…
…

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Note : Make sure activity allocation is recorded under Act.costs column and quantity is
recorded under Act. acty column . If no activity type quantity is recorded check the following
settings
1. Control key (select √ Cost )
2. Satandard Formula (Select √ Used for calculation )
3. Check confirmation parameters
If unable to rectify , them we can manually enter activity allocation to production order using
TCode KB21N
Scrn var. : Order Input Type : List Entry
Send.CCtr SAtyTyp Rec.Order Rec.oper. Total Quantity UM
1001 MCH xxxxxxxxx Blank 21200 H
Post

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13. Material price analysis LAPRM1 and LAPSFG1
TCode : CKM3
Material : LAPRM1
Plant : LAP1
Period/Year : Current
TCode : CKM3
Material : LAPSFG1
Plant : LAP1

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14. Reprocessing(incase of errors in Production Order
Confimation)
Info : Incase of errors in posting of goods movements , goods movements with errors can
bepost post processed .
Reprocessing whole confirmation :- Tcode : CO16N
Reprocessing only Actual costs :- Tocde :COFC
Reprocessing only Goods Movements :- Tocde :COGI
Alternatively we can cancel confirmation using Tcode : CO13 and create again
Logistics  Production  Production Control  Confirmation  Reprocessing  Actual
Costs Reprocessing only Goods Movements
TCode : COGI
Plant : LAP1
Individual Records
Execute
Double click on a material
Look at ‘Error text’ column for possible errors
Error : Plant data of the material Xxxx is locked by the user xx
Solution : Delete the lock using Tcode SM12 .Then save transation in COGI
Error : Enter Stor. Location
Solution : Select the line with the said errorDependent items button( )Enter storage
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locationBack button Save
Error : Check table TFBEFU_CR entry 10 does not exist.
Solution :Maintain the setting ‘Define Goods Received Valuation for Order Delivery’ using
tcode OPK9. Bak to COGISave
(Make necessary corrections)
Back button
(Status should be green)
Save
(Msg : x goods movements have been successfully executed)
15. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Double click on LAPSFG1
Goto menuCostsAnalysis
(it should show items RM Issue , FG receipt and activity type quantity)
16. Display Settlement rule
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Header menuSettlement rule
(Material should be the settlement reciever)
Production Receipts for Production Order LAPSFG1
(Note :This step is not required for GR of SFG for production order if we use collective
order . So this step is to be skipped)
Tcode :MB31
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Movement Goods ReceiptsFor Order
Document date : Todays date Posting Date : Todays date
Movement type : 101 (GR for order into warehouse)
Order No: 600036XX
Plant : LAP1
Enter
Quantity : ? EA
Post
Tcode : CO11N
Enter
Operation 0010
Quantities
Yield 1500 EA
Scrap
Activities
Processing 7500 H 

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(According to BOM 22500 is the planned quantity ,we are deliberately issuing more quantity
ie 22600 to generate variance )
Select the item LAPSFG2
Dependent items button ( )
Material Quantity Units Plant Stor.Loc Debit/Credit Movement type
LAPSFG2 1500 EA LAP1 LAP1 S 101
LAPSFG2 1500 EA LAP1 LAP1 H 261

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Back button
Save
Save
(Msg : Confirmation saved (Goods movements1: , failed:0 )
(3 goods movements are generated
1 for RM consumption
1 for receipt of semi finished goods from production
1 for SFG consumption )
RM issue to Production order for LAPSFG2
Tcode : MB1A
Document Date : 02.03.201 Posting Date : 02.03.201
’To Order... ‘ button
Order SLoc
600036XX LAP2
Enter
LAPRM2 KG
Post

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18. Display goods movements for production order LAPSFG2
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
( All together 6 goods movments should be displayed .
2 for RM-goods issue ,
2 for GR of SFG from production and
2 more for SGF-goods issue for next higher production level .
Mvmt Type indicates wether it is goods issue or goods receipt. )
Goods movement for production orders entered already before the above correction can
be displayed using Order Information System TCode :COOIS
19. Material price analysis LAPRM2 andLAPSFG2
TCode : CKM3
Material : LAPRM2
Plant : LAP2
TCode : CKM3
Material : LAPSFG2
Plant : LAP1 (enter consumption plant)
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Confimation)
TCode : COGI
Plant : LAP1 ,LAP2
Storage Location : blank
Individual Records
Execute
Double click on the item
(Make corrections if any as shown in the box)
Solution : Delte the lock using Tcode SM12 .Then save transation in COGI
Solution : Select the line with the said errorDependent items buttonEnter storage
tcode OPK9. Back to COGISave
Back button
Save
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21. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
22. Display Cost Center Actual Line items
Tcode : KSB1
(Unhide the columns Object type , Total quantity, CO object name ,Business Transaction.
Activity Type)
23. Cost Centers :Actual/Plan/Variance
TCode : S_ALR_87013611
Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
Cost Center Group : Blank
Or value(s) : 2001
Execute
(Actvity Allocation and Actvity quantity should be displayed)
settings
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TCode KB21N
2001 PRCS xxxxxxxxx Blank 7500 H
Post
Production Receipts for Production Order LAPSFG2
(Note :This step is not required for GR of SFG for production order if we use collective
order . So this step is to be skipped)
Tcode :MB31
Order No: 600036XX
Plant : LAP2
Enter
Quantity : ? EA
Post
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
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25. Production Order Confirmation for Assembling/ LAPFG1
Tcode : CO11N
Order No: 600036XX (Enter the order that is created LAPFG1 )
Enter
Operation : 0010
Confirm.type : Partial confirmation Clear open reservations
Quantities
Yield blank EA
Scrap
Activities
Assembling 300 UN 
Save
26. Production Order Confirmation final/ LAPFG1
Tcode : CO11N
Enter
Operation : 0020
Quantities
Yield 300 EA
Scrap
Activities
Packing 300 UN 

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LAPFG1 300 EA LAP1 LAP1 S 101
Save
Problem : Goods receipt not proposed by the system
Solution: Activate Auto Goods Receipt in control key
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
2 for GR of SFG from production
2 for SGF-goods issue for next higher production level and
1 for for GR of FG from production
Confimation)
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TCode : COGI
Plant : LAP1
Storage Location : Blank
Individual Records
Execute
(If no errors , the message ‘No record was found for selection’ should be displayed
Ie only items are displayed if any errors)
Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
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Or value(s) : 1002
Execute
settings
TCode KB21N
1002 ASMB xxxxxxxxx Blank 300 UN
Post
30. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
(External activity PCKG is displayed under goods issue because it si recorded under primary
cost element )
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
32. Material price analysis LAPFG1
TCode : CKM3
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Material : LAPFG1
Plant : LAP1
2 FI/CO Enduser
1. Display CostCenter reports
Tcode : KSB1
2. Posting expenses to CC
3. Activity Splitting
(Not required)
4. Calculating Actual Activity price
Tcode : KSII
SAP Easy AccessAccountingControllingCost Center AccountingPeriod-End Closing
Single FunctionsPrice Calculation
Cost center group : PROD
Period : 5
Fiscal Year : 2014
 Background Processing
 Test Run
 Details Lists
Execute
Save
Info : Instead of calculating actual activity price , we can enter actual activity price manually
using the following menu path /Tcode
SAP Easy AccessAccountingControllingCost Center Accounting Actual
postingsActual PriceEnter
Tcode : KBK6
5. Display activity prices
TCode :KSBT

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6. Revaluation of Production order at Actual prices
During the period, activity consumption by production order is valuated with planned price.
After calculating the actual activity price at month end we can revaluate the activity
consumption with the new price. The differene between old valuation and the new one is
credited to the cost center and debited to production order.
SAP Easy AccessLogosticsProductionShop Floor ControlPeriod-End Closing
Revaluation at Actual pricesIndividual Processing
TCode:MFN1
Order : xxxx
Period :
Fiscal Year 201x
 Test Run
 Details Lists
Execute
Back button
Test Run
 Details Lists
Execute
7. Display Cost center report
TCode :KSB1
(Difference of xxx should have been allocated )
8. Set status ‘Technically complete’ to prod order
TCode:CO02
Order : xxxxxxxxx
Enter
Functions menuRestrict ProcessingComplete Technically

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Save
9. Settlement of Production order LAPFG1
Error : Internal error in FORM/FUNCTION add_local_curtp(saplmlccs_order_settlement) in
position 1 with RC for KALNR
TCode : SE38
Program : MLCCS_KO88_TREATMENT
Execute
(Execute the program to display existing exception handling settings
Execute the program to delete existing exception handling settings,if any
Execute the program to maintain new exception handling settings)
Display Settings
Company Code : LAP
Fiscal Year : 201X
Posting period : X
Execute
Delete Settings
Company Code : LAP
Fiscal Year : 201X
Posting period : X
Execute
Maintain Settings
Company Code : LAP
Fiscal Year : 201X
Posting period : X
Split Balance by S Price
Execute
SAP Easy AccessLogosticsProductionShop Floor ControlPeriod-End Closing
Settlement Individual Processing
TCode:KO88
Order : xxxxxxxxxxxxxxx
Parameters
Settlement period : x
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Fiscal Year : 201x
Processing type : Automatic
 Test Run
 Check trans. Data
Execute
Details list button( )
Variance is going to be settled to material. Previously production receipt (500902.50)is
valuated with planned price as shown in the following image
Back button
Test Run
Execute
Accounting documents button
Double click on Accounting document
Back
Double click on Material ledger
Material Price Analysis button( )

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Select Production under Receipts
Display Actual BOM button ( )
Right click on activity type ASMB
Display Activity Prices
(Activty price is planned price . when price dtermination is done activity pricew wil be actual
price)
10. Internal error in FORM/FUNCTION get_prkexx(saplckmo) in
position 10 with RC
Incase of the above error we have to delete standard price using Tcode : CKR1
11. Prod Order settlement LAPSFG1
TCode:KO88
Order : xxxxxxxxxxxxxxx LAPSFG1
Parameters
Fiscal Year : 201x
 Test Run
Execute

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Back button
Test Run
Execute
Back
12. Prod Order settlement LAPSFG2
TCode:KO88
Order : xxxxxxxxxxxxxxx LAPSFG2
Parameters
Fiscal Year : 201x
 Test Run
Execute
Back button
Test Run
Execute
Back

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13. Material Price Analysis before Costing Run
Accounting ControllingProduct Cost ControllingActual Costing/Material Ledger
Material LedgerMaterial Price Analysis
TCode : CKM3
Material : LAPFG1
Plant : LAP1 LAP Hyd paln
Period/Year : 5 2014
Curr./Valuation: Company code currency
Enter
In Material Price Analysis(CKM3) we can display the following details:
Actual cost component split,
Multi level structure for material and its various input and activity cost ,
Costing cockpit,
Closing documents,
Status of material for the period,
Inventory position.
14. Create Condition record
TCode : VK11
Condition type : PR00
LAPFG1: 63000
15. Sales order
TCode : VA01
Qty : 100
(Make sure condition types price(PR00), cost(VPRS) and discount (K007) have values)
16. Delivery
TCode :VL01N

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17. Display material price analysis
TCode :CKM3
(Delivery is valuated with standard price )
18. Billing
TCode :VF01
Error : ‘No standard cost estimate could be found for material xxxx’ during release to
accounting in VF02
Caution : It is to be make sure that cost estimates has been released for the period . Before
posting any material transactions in the period either release planned cost estimates(If it is
first time) , or actual cost estimates (if not first time) .
The above precaution is to be taken if ‘COPA-Valuation using Mat. Estimates’ functionality
is implemented . If the above functionality is configured and material cost estimates are not
available error ‘No standard cost estimate could be found for material xxxx’ arises
during the release of billing document and data is not transferred to COPA.
Solution : Temporarily you can overcome this by deleting Costing key assignment to
product under for point of valuation ‘01’ in COPAvaluation setting ‘ Assign Costing Keys
to Products’ .
Error : Price changes for material xxxxx is not possible . Message no. C+811
Once Actual costing/ML is active w/o dyanamic price release function, after any material
movements like production receipt or delivery is posted , it is not possible to release the
cost estimates
19. Display COPA line items
TCode :KE24
(Make sure Revenue , COGS, Discounts and Cost Component split are tranfered to COPA)
20. Display Material Master
Accounting1 & Costing2 view
Make a note of in Per. unit price , Future price ,Future price from.

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21. Close Material period (Period end activity)
Note : Before going with this step make sure all the material postings are done.
Tcode : MMPV
22. Edit Costing Run
Edit Costing Run
Tcode : CKMLCP
Postprocessing individual materials
We can perform all of the
following process steps in this
transaction at plant(s) level
We can perform certain activities for individual materials
with errors in Costing Run
Create Costing run
Performing Selection
Determining the Costing
Sequence
Allow Material Price
Determination
AccountingControllingProduct Cost Controlling Actual
Costing/Material LedgerPeriodic Material
Valuation Organizational MeasuresAllow
Material Price Determination
Tcode : CKMF
Performing Single-Level
Material Price Determination
AccountingControllingProduct Cost Controlling Actual
Costing/Material LedgerPeriodic Material Valuation 
Determin Material Prices(Single-Level)
Tcode : CKMH
Performing Multilevel Material
Price Determination
Allowing Closing Entries AccountingControllingProduct Cost ControllingActual
Costing/Material LedgerPeriodic Material
Valuation Organizational MeasuresAllow
Closing Entries
Tcode : CKMG
Performing Closing Entries AccountingControllingProduct Cost Controlling Actual
Costing/Material LedgerPeriodic Material Valuation 
Post Closing
Tcode : CKMI
Marking Future Prices AccountingControllingProduct Cost Controlling Actual
Costing/Material LedgerMaterial Ledger Set
PricesMaintain Future Prices
TCode :CKMPRPN

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Actual Costing Edit Costing Run
Tcode : CKMLCP
Create Costing Run button
Costing run : LAP1 LAP Costing run
Period : (Enter recently closed period) 201x
Enter
General Data
Plant Assignment tab
Select ‘LAP1’ and LAP2 under Available Plants
Assign selected plants( ) button
Save
 Process button(if it s not expanded)
Change Parameter button( )In the ‘Selection’ Flowstep
 Save Log
 Save
Back Button
Execute button ( )in the Selection Flowstep
Problem :Material not getting selected for actual costing run
The reason can be that for any material if the price determination has been changed by
using Tcode CKMM and after that if no transaction is posted for that material . Then that
material will not be selected for actual costing run .
Back button
Change Parameter button In the ‘Determine Sequence’ Flowstep
 Save log
 Save
Back Button
Yes button
Execute button in the ‘Determine Sequence’ Flowstep
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Padlock button( ) for ‘Single-Level Pr.Determination’ Flowstep
(It should be open )
Change Parameter button In the ‘Single-Level Pr.Determination’ Flowstep
Treating Materials Already Processed
Process Again (Optional)
Parameters
Warning For Changes Larger Than : 10%
Error When Change Larger Than ; 20%
Check Against the Standard Price of the Current Period
Procesing Options
 Save log
 Save
Back Button
Execute button in the ‘Single-Level Pr.Determination’ Flowstep
Back button
Material Price Analysis after Single-Level Pr.Determination
TCode : CKM3
Material : LAPFG1
Enter
(Single level price results are shown under Non allocated)
Show/Hide Valuated Quantity Structure button
Select Production( ) under Receipts
Display Actual BOM button( )
Double click on Activity Type ( to display activity type price )
( Actiual price and planned price should be same before multilevel price determination )
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Value flow Monitor:
Any material relevant errors which arise during Single level / Multi level price determinations
can be analyzed in detail by using Value flow Monitor at the following menu path/Tcode.
Information SystemObject List Value flow Monitor
Tcode : CKMVFM
Company Code : LAP
Material : Blank
Plant LAP1
Period : 5
Year : 2014
All
Write Extract
Name : LAP1
Execute
Runtime Errors : MESSAGE_TYPE_X , Message class C+ , Number 000
(During single level price distribution)
Reason : The materials which were created in a later period than the settlement . They do
not have any ML data for the settlement period. Actual cost component split should only be
activated at the beginning of the month.
Solution : Perform single level price determination for individual materials using TCode
CKMH to find the material that is creating errors. Activate the actual cost component split in
a proper way .
Lock button for ‘Multi-Level Pr.Determination’ Flowstep
Change Parameter button In the ‘Multi-Level Pr.Determination’ Flowstep
Plant LAP1 ,LAP2
Process Again (Optional)
 Save log
 Save
Back Button
Yes button
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Execute button in the ‘Multi -Level Pr.Determination’ Flowstep
Back button
Material Price Analysis after Multi-Level Pr.Determination
Material LedgerMaterial Price Analysis
TCode : CKM3
Material : LAPFG1
Enter
Show/Hide Valuated Quantity Structure button
Select Production( ) under Receipts
Display Actual BOM button( )
Double click on Activity Type ( to display activity type price )
(Actual price is different than planned price )
Problem: Activity type quantity is valuated with planned price instead of actual price
Solution :
Make sure actual activity price has been calculated
‘Activity update relevant to price determination’ is selected in Actual Costing Update
Make sure Revaluation of Production Order (TCode :MFN1/CON2) is done
Check related settings in Version maintenance(TCode :OKEQ) . Select ‘Own business
transaction’ in the field Revaluation

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Note : If any errors arises , after rectifying them we have to run the whole costing run for all
material
Costing results : section can be used to analayse costing results in
different ways.
‘Calculate status data again’ button( ) to see the updated costing data
Manual Change of Actual Cost Component Split
Cost component split can be changed manually as shown here,
SAPEasy AcessAccounting ControllingProduct Cost ControllingActual
Costing/Material Ledger Material LedgerSet Prices Manual Change of Actual Cost
Component Split
Tcode : CKMCCC
Change Parameter button In the ‘Revaluation of Consumption’ Flowstep
 Save log
Execute button In the ‘Revaluation of Consumption’ Flowstep
Revaluation of Consumption : This flow step is used to revaluate the materials consumed
(Eg : goods delivered to customer) in the closed period with periodic unit price.
Problem : Process step ‘Revaluation of Consumption’ is not displayed in CKMLCP screen
Solution : Activate the Activate Business Function EA-FIN as shown below
TCode : SFW5
Continue button
Expand the folder ‘ENTERPRISE EXTENSIONS’
 Select ‘EA-FIN ‘ ie Financial Extension
 ‘Activate Changes’ button
Save

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CKM3 view after revaluation of consumption:

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Lock button for ‘Post Closing’ Flowstep
Change Parameter button In the ‘Post Closing’ Flowstep
Execute
 Revaluate material
 Revaluate Consumption
 Set CO Account Assignment
 Test run
 Save log
 Save
Back Button
Execute button in the ‘Post Closing’ Flowstep
Back button
 Test run
Save
Back button
Closing options:
Option 1:
Revaluate the stock in the previous
period.
When we do closing entries with this option
result will be the following
Option2
Do not revaluate the stock in the
previous period
1 The price control of the material in
the previous period is changed from
S to V automatically.
2 PUP is updated in the Accounting1
of material mater as moving average
price(V)
Standard price remains unchanged
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3 Price differences, Exchage rate
differences are posted to ending
inventory of the material stock
account
Price differences and exchange rate
differences are posted to Accrual
account(Material Ledger) account
4 This generates a FI entry
Dr/Cr Inventory A/c
Cr/Dr Price dif Single Level
Cr/Dr Price Dif from Lower level
This generates a FI entry
Accrual - ML a/c. Dr.
ML Revaluation A/c. Cr.
(To use this option account assignment
should be done for the transaction key
‘LKW’ using Tcode OBYC
TCOde : CKM3
Closing document button ( )
Accounting document button ( )
(Two accounting docs and a controlling doc is generated)
MM02 :
In the closed period price control is set to V . Stock is valuated with PUP
In the new period price control remains to be S. Stock is valuated with std price
Note : Marking &releasing is optional
Change Parameter button In the ‘Mark Material Prices’ Flowstep
Beginning of the following period
 Save log
 Save
Back Button
Execute button in the ‘Mark Material Prices’ Flowstep
Back button
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23. Displaying Cost Components for Price
SAPEasy AcaessAccounting ControllingProduct Cost ControllingActual
Costing/Material Ledger Information SystemDetailed ReportsCost Components for
Price
Tcode : MLCCSPD
24. Display Actual Cost Component Split
Same path
 Display Actual Cost Component Split
Tcode : CKMCCD
25. Releasing Planned Prices
(This step is not required if Dyanmic price Release is activated )
SAPEasy AcaessAccounting ControllingProduct Cost ControllingActual
Costing/Material Ledger Material LedgerSet PricesRelease Planned Prices
TCode: CKME
Material :
Plant : LAP1 , LAP2
 Test Run
Execute
Back button
Test Run
Execute
26. Displaying ML document
TCode :CKMB

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5. CO-PA Valuation-4(Periodic Valuation)
When data is transferred to COPA from SD component, COGS(value field VV140) is
updated from SD condtiton type VPRS. Initially VPRS takes its value from standard price. At
month end a new actual price is calculated using Actual costing/ML . New cost should reflect
the COPA
1. Settings
TCode :KE4U
Enter
Select Val.strat ‘002’ Periodic Valuation Actual
New Entries
1  VVIQT
New Entries
02 F 002 Periodic Valuation Actual
Save
2. Define Access to Actual Costing/Material Ledger
Same path upto Valuation
Set Up Valuation Using Material Cost EstimateDefine Access to Actual Costing/Material
Ledger
(Make a note of various settings for Costing key ‘ACT’ ie Actual Costing)
(Make sure the settings selected as shown in the image)

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Double click on ‘Val.Fld Allocatn for Periodic Moving Average Price’
New Entries
Op.concern Act.costs Name
LAP1 VV140 Cost of goods sold
Save
Same path
TCode : KE4H
Assign Costing Keys to Products
New Entries
02 F LAPFG1 ACT
Save
4. Assign Value Fields
Same path

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TCode :KE4R
Assign Value Fields
Cost component structure : L1
Enter
New Entries
PV CCo F/V Fld name1 Fld name2 Fld name3
02 010 2 VV150
02 050 3 VV400
02 070 3 KWSGEK
02 080 3 VV250
Save
2. Enduser
1. Periodic Valuation
SAP Easy AccessAccounting ControllingProfitablity AnalysisActual Postings 
Period-End Closing Periodic ValuationExecute
TCode : KE27
Enter
Actual Data
From Period : 5.201x to 5.201x
Record Type : F Billing data
Legal Valuation View
Options
√ All val.flds modifiable
√ Periodic Valuation
√ Test run
Selction Criteria button
Comapny Code : LAP
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All Charactersitics : *
Value Fields button
Delete Selection button( )
√ Cost of goods sold
√ Production costs
√ Material Overhead
√ Material Input
√ Other overhead
(deselect others)
Save button(to save the variant)
Variant : LAP1_testmode
Description : LAP1_testmode
Save
Execute
Display button ( )
Display button( )
(PUP value should be the value under ‘After valuation’ column )
Back button
Display button ( )
(A new item is generated for the variance for each billing item, Make sure valuefilds like
Material input, Prod cost etc are populated)
Backbutton 3 times
Test run
Selction Criteria button
Value Fields button
Execute

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2. Display COPA line items
TCode :KE24

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6. CO-PA Summarization Levels
Data in CO-PAis stored in the form of documents. For example every CO-PArelated
transaction in FI can create one line item in CO-PA. Every sales order item can create one
line item in CO-PA. This leads to high data volume and more time to run the reports.
Basically data is stored at two levels in CO-PA, one is line item level and other one is
profitability segment level . Segment level data takes less time to read than Line item data .
This is because segment level data is in summerised form.
Segment table ( CE4XXXX) stores the prof.segment definition .
Prof segment Product group Product
1 1 1
2 1 2
Segment level ( CE3XXXX) stores the value fields data for prof segment .
Prof Segment Quantity Revenue
1 20 200
2 30 150
Line item table (CE1XXXX) stores the data in the following way
Prof segment Product group Product Quantity Revenue
1 1 1 20 200
2 1 2 30 150
Data can be further summerised using summerisation levels. When we create a
summerization level two tables ( ie key table and totals table) are generated. In the above
example we can hide product and summarize the values at product group level.
Key table :
Key number Product group
A 1
Summerization table :
Key number Quantity Revenue
A 50 130
Key table is something like a segment table and summerization table is like a segment level
table
1. Settings
1. Define Summarization Levels :

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SPROControllingProfitability AnalysisToolsSummerization LevelsDefine
Summarization Levels
Enter
New Entries button
Summariz. Level : 1
Descrotion : LAP1 Summerization level
Back button
(Make a note of Status column . The initial status is ‘To be created’ )
Select level ‘1’
Choose level- detail button ( ) next to Characteristics
Field Name Chatcteristic Value Text
ARTNR
BUKRS
GJAHR
GSBER
KAUFN
KMVTNR
KNDNR
KOKRS
MATKL
PALEDGER
PERDE
PLIKZ
PRCTR
SPART
VERSI
Product
Company Code
Fiscal Year
Business Area
Sales Order
Sales employee
Customer
CO Area
Material Group
Currency type
Period
Plan/Act. Indic
Profit Center
Division
Version
*
LAP1
*
*
*
*
*
*
*

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VKORG
VRGAR
VTWEG
WERKS
Sales Org.
Record Type
Distr. Channel
Plant
*
Save
Continue
Yes button
Continue
(Make a note of Status column . The initial status should be ‘Active , without data’ )
Double click on summarization level ‘1’
Make a note of Key table (K81XXXX), Totals table (K81XXXX)
Choose level- detail button ( ) next to Indexes
Enter to ignore the msg
Info :
Summarized characteristics: Summarized characteristics are not available for analysis (in
reporting, etc.) The characteristics that are to be summarized should be blank.
Free characteristics: Enter the value "*" for free characteristics. These characteristics are
broken down by individual values.
Fixed characteristics: We enter a single characteristic value or ‘#’ . This is useful if you
only want to analyze one value of the characteristic (for example, only one company code)
or are interested in reading either only plan data or only actual data, or only data of a specific
record type).
Entering '#' means 'blank' is the fixed characteristic value. This means that only entries for
which the corresponding value is blank will be taken over into the summarization level.
2. Dispalying Key table and Totals table
TCode : SE11

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Database table : K81XXXX
Diplay button
3. Build Summarization Levels :
Define Summarization Levels generates Key table and Totals table . The two tables are
blank and can not be used for data extraction until they are fiilled with data . Build
summarization fills the data . This can be done several times a day.
SAP Easy AccessAccountingControllingProfitability AnalysisToolsSummerization
LevelsRefresh
TCode : KEDU
Type of Profitability Analysis : 1
Summarization levels : 000001
Build new levels
Execute
4. Displaying Key table and Totals table
TCode : SE11
Database table : K81XXXX
Diplay button
Contents button
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7. CO-PA Reports
CO-PA reports
Segment level
Line item level
Line item list
Reports based on line items
1. Define Forms for Profitability Reports
Tcode : KE34
Path: SPROControllingProfitability Analysis Information System Report
Components  Define Forms Define Forms for Profitability Reports
 Double click on Create Form
Enter
Form : LAP1 LAP PA Form
Two axes(matrix)
Create button
Operating concern currency
Enter
Double click on ‘Row 1’
Value field with characteristics
Enter
Value field : Revenue
Confirm button
Enter
Value field : Cash discount
Confirm button
Enter
Value field : Cost of goods sold
Confirm button
Formula

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Enter
Y001 button
 ‘-‘ button (Minus button)
’(‘ button
Y002 button
’+’ button
Y003 button
 ‘)’ button
( Formula should look like Y001 - ( Y002 + Y003 ) )
Enter
Short : Net Profit
Medium : Net Profit
Long : Net Profit
Enter
Double click on ‘Column 1’
Characteristics
Enter
Select Plan/Act. Indicator
 Left arrow button
Name From
Plan/Act. Indicator 0
(From : ‘0’ ie Actual data)
Confirm button
Edit menu  Gen. data selection Gen. data selection
Select Record Type
Left arrow button
Name From To
Record Type B (Direct posting from FI) F (Billing data)
Select Period/year
Name Variable ON/OFF From
Period/year √
(Select Variable ON/OFF check box next to From column)
Local variable : V1
Enter

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Name Variable ON/OFF From Variable ON/OFF To
Period/year √ V1 √
(Select Variable ON/OFF check box next to To column)
Local variable : V2
Enter
Confirm button
Extras menuVariablesVariables definition
Name Description
V1 From Period/year
V2 To Period/year
Enter
Save
2. Create Profitability Report
Tcode :KE31
Same path up to Information system
 Create Profitability Report
Double click on Create Profitability Report
Report : LAP1 LAP PA report
Report with Form : LAP1
Create button
Select Customer , Plant, Product,Sales Org, Sales order
Output Type tab
Classic drill down
√ Available on selection screen
Save
Enter

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8. Cost Object Controlling
The Cost Object Controlling is a functionality that is used to collect costs for various cost
objects like Production Order ,Sales Order or Product Cost collectors.
There are 4 components under Cost Object Controlling
Component Cost object Level of costing
Product Cost by Order Production/Process Order Production/Process
Order
Product cost by Sales order Sales Document item Sales Document item
Prodcut Cost by Period Product Cost collectors or Cost
Object Hierarchies
Product/Product Group
etc
Costs for Intangible Goods
and Services
Internal Orders or General Cost
Collectors
General Cost Object
Uses of Cost Object controlling in various production scenarios:
Make-to-stock
production
Product cost by Orders
Product cost by Period
Sales order related
production
Sales order related
Mass production
Product cost by Orders
Product cost by Period
Complex Make-to-
order production
Product cost by Sales Orders in addition to
Product Cost by Order and/or Product Cost by
Period
Use of Cost Object Controling in various manufacturing environments:
Repetitive Maufacturing Product Cost by Period
Discrete Manufacturing Product Cost by Order
Product Cost by Period
Result Analysis :
At the end of the period if production order is not executed completely (Some or all costs
may incurred in the production order and no quantity of FG reaches the inventory or only
partial quantity of the planned quantity reaches the inventory). As period end closing process
we calculate result analysis by WIP calculation function.
Result analysis = (Total debits of Cost object) – (Total credits of Cost object)
Result analysis for production order = Total debits of Production Order -Total credits of
Production Order
Work-in-process(WIP):

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If the result analysis balance is positive ( ie Total debits of Production Order >Total credits of
Production Order) , it will be posted to WIP Inventory a/c. The entry will be reversed in the
period end process of next month using WIP Cancellation function.
Reserve for Unrealized costs: :
If the result analysis balance is negaitve( ieTotal debits of Production Order <Total credits of
Production Order) it will be posted to Reserve for Unrealized costs a/c.
When Production Order is partially executed, only part of planned quantity of finished goods
reaches the inventory . The remaining quantity is considered as work in process . At month
end if a Production Order is open, we calculate WIP and post to WIP inventory a/c which is a
BS account. WIP = (Total debits of Production Order) – (Total credits of Production Order)
Variance:
Variance is the difference between Target costs and Control costs
WIP /Variance calculation for Product costing by order and Product costing by period
Product costing by period Product costing by order
WIP is calculated at target cost WIP is calculated at actual cost
Variances are calculated by period WIP is not calculated instead variance is
calculated when the production order status
is DLV or TECO
WIP is calculated only when the production
order status is not DLV or TECO
Variance = (Actual costs – Target costs)- WIP
Product cost collector can have both WIP and
Variance at the same time
Production order never have both WIP and
Variance at the same time
Control Cost :
The Control Costs can be the actual cost or planned cost
Target Costs :
The Target Costs can be calculated using
Planned Cost/Prelimnary Cost Estimate
or
Alternative Material Cost Est(Can be specified with costing Variant/Version)
or
Current standard Cost
For eg : Target Cost = (Confirmed quantity )* (Planned cost)

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Target Cost Version determines the Control costs and Target costs. The following image is
the screen shot of Target Cost Version.
Input Variances :
Input variances can arise due to change in RM price, in quantity of internal activity
allocations , in amount of overhead allocation, and G/L account postings
Output Variances :
Output variances arises if the actual FG quantity delivered is not equal to the planned order
quantity or if the delivered quantity is valuated differently.
Costing sequence :
a. Preliminary Cost Estimate :
Planned cost for the cost object like production order. This is calculated based on the BOM
and routing data . Planned costs are used in determining the target costs. Target costs are in
turn used in calculating the variance.
b. Simultaneous costing :
The actual costs that incured for a cost object like production order can be collected on the
cost object . Actual costs can include RM issues, SFG issues, Internal Activity allocations .
Actual cost collection at cost object level is called simultaneous costing. We can view actual
costs at any time.
c. Final Costing :

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Final costing determines the actual costs incurred during the production process . Final
costing is done as part of Period end closing(eg :WIP calculation at period end ) or at the
confirmation of cost object (Eg :Variance calculation at production order is done).

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9. ProductCost by Order
The Product Cost by Order application is used to analyze costs at the level of
Manufacturing orders.
Manufacturing orders
Production orders
(Discrete Manufacturing)
Process Orders
(Process Industries)
Production/Process orders themselves are the cost objects in Product cost by order. Actual
costs that incured are collected in production/process orders and are usually analyzed and
settled by lot. WIP is calculated as long as the production order status is REL ie ‘Released’.
Variances can only be calculated after the production ordr status is set to either DEL ie
‘Delivered’ or TECO ie ‘Technically complete’ . (Production order type should have
settlement type FULL).
With Product Cost by Order :
The actual costs of production orders and process orders can be calculated
The work-in-process(WIP) inventory can be calculated and/or updated
The finished goods inventory can be valuated and updated .
Variances can be calculated and analyzed and transferred to CO-PAfor further analysis
Actual costing data can be transfered to Actual Costing / Material Ledger
Production
environment
Sales order related
production
Complex make to order with valuated
sales order stocks
Prodcut cost by order along
with Product cost by sales
order
Mass production on the basis of sales
orders with valuated sales order
stock
Make to stock
production
The scenario we are going to configure is for Discrete manufacturing environment.
Production Order is going to be the cost object .
1. FI settings
1. Creation of GL account WIP
Tcode : FS00
Select GL account 200700 Inv RM

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Copy button
GL account : 200502
Enter
Change the Description to ‘Work in process’
Save
2. Creation of GL account WIP offset
Tcode : FS00
Select GL account 300204 Inc/Dec in Stock
Copy button
GL account : 300600
Enter
Change the Description to ‘WIP Offset’
Save
3. Creation of GL account Price Differences
400503
Costelements of category ‘22’ is used to settle order costs, project costs, or cost object
costs to objects outside of CO. These objects could be asset, materials , or general ledger
accounts . Accounting documents are generated when the costs are settled.
2. CO Settings
1. Check Valuation Variants for Manufacturing orders(PP) :
SPROControllingProduct Cost ControllingCost Object ContrliingProduct Cost by
OrderManufacturing Orders Check Valuation Variants for Manufacturing Orders(PP)
Tcode : OPN2 or OKK4
Select Valuation Variant ‘006’ ie Production order -planned
Copy As button
Replace Valuation variant ‘006’ with LA1
Description : Prod order -planned LAP

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Enter
Double click on Valaution variant ‘LA1’
Overhead tab
Costing sheet : LAP Costing Sheet
Save
Valuation Varinat/Plant button( )
New Entries
Valuation Variant : LA1
In plnt : LAP1
Enter
Back button
New Entries
in plnt : LAP2
Save
Back to valuation variant screen
Select Valuation Variant ‘007’ ie Production order - actual
Copy As button
Replace Valuation variant ‘007’ with LA2
Description : Prod order –Actual LAP
Enter
Double click on Valaution variant ‘LA2’
Overhead tab
Costing sheet : LAP Costing Sheet
Save
Valuation Varinat/Plant button( )
New Entries
In plnt : LAP1
Enter
Back button
New Entries
in plnt : LAP2
Save

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2. Check Costing Variants for Manufacturing orders(PP) :
Same path
 Check Costing Variants for Manufacturing orders(PP)
Tcode : OPL1
Select Costing Variant ‘PPP1’
Copy As button
Costing Variant : LAP2 Prod Order – Plan LAP
Control tab
Valaution variant : Prod order –planned LAP
Save
Back to Costing Variants Screen
Select Costing Variant ‘PPP2’
Copy As button
Costing Variant : LAP3 Prod Order –Actual LAP
Control tab
Valaution variant : Prod order –Actual LAP
Save
3. Define goods received valuation for order delivery(already
done)
SPROControllingProduct Cost ControllingCost Object ControllingProduct Cost by
Order Define Goods Received Valuation for Order Delivery
Tcode :OPK9
New Entries
Val. Area Company Name Val.Var. Name
LAP1 007
LAP2 007
Save
Continue

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4. Creating secondary cost elements
TCode : KA06
Enter
Cost Element : 9000000000
Valid From : 01.04.2014
Enter
Name : Result Analysis
Description : Result Analysis
CElem category : 31
Save
Create 10 more secondary cost elements (9000000001-9000000008)
Cost element category should be same for all
Description : WIP Description : Reserves
9000000001 9000000002
9000000003 9000000004
9000000005 9000000006
9000000007 9000000008
9000000009 9000000010
5. Creating secondary cost elements(Settlment)
TCode : KA06
Enter
Cost Element : 1000000098
Valid From : 01.04.2014
Enter
Name : Settlemnt cost element
Description : Settlemnt cost element
CElem category : 21 ie Internal settlement
Save
6. Define Result Analysis Key
OrderPeriod End ClosingWork in ProcessDefine Result Anlaysis Keys

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Tcode :OKG1
Make a note of RA Key ‘000002’ WIP Calculation at Actual Cost
7. Define Result Analysis Versions
Same path
TCode : OKG9
New Entries
Double Click on COAr ‘LAP’ and Vsn ‘0’
Transfer to Financial Accounting
Note :We should not select the indicator Transfer to Financial Accounting until we have
completed the step ‘ Define Posting rules settling Work in Process’ . Ie We should not
change the posting rules after setting the status active for setting ‘Transfer to Financial
Accounting’.
Technical RA Cost Element : 900000000
Save
Continue
New Entries
Double Click on COAr ‘LAP’ and Vsn ‘909’
Transfer to Financial Accounting
Note :We should not select the indicator Transfer to Financial Accounting until we have
completed the step ‘ Define Posting rules settling Woork in Process’ . We should not change
the posting rules later.
Technical RA Cost Element : 900000000
Save
Continue
8. Define Valuation Method(Actual Costs)
Same Path

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TCode : OKGC
New Entries
Actual costs button
CO Area : LAP
RA Version : 0
RA Key : 0000002
Enter
Save
Continue
9. Define Line IDs
Same path
New Entries
COArea Line ID Name
LAP EL Goods Recpt
LAP EK Direct Costs(RM)
LAP FK Production Costs
LAP GK RM OH
LAP GK1 Prod OH
LAP ABR Settled Costs
Save
Continue
10. Define Assignment
Same Path
TCode : OKG5

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Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘EL’
Copy as button
COArea Masked Cost Element
LAP 00003+++++
(Change target COArea & Masked Cost Element)
Enter
Save
Continue
Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘EK’
Copy as button
LAP 00004+++++
Enter
Save
Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘FK’
Copy as button
LAP 10000000002
Enter
Save
Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘GK’
Copy as button
LAP 1000000001
Enter

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Save
Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘GK’
Copy as button
COArea Masked Cost Element ReqToCap
LAP 1000000003 GK1
Enter
Save
Select the item with COArea ‘1000’ , RA Version ‘0’ and ReqToCap ‘ABR’
Copy as button
LAP 1000000098
Enter
Save

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11. Define Update
Same path
TCode : OKGA
New Entries
COAr Vsn RA Key LID Creation Usage ApptNo
Save
Continue
12. Define Posting rules for settling Work in process
Same path
TCode :OKG8
New Entries
CO Area Company Code RA Version RA category P&L Acct BalSheetacct
LAP LAP 0 WIPR 300600 200502
Save
LAP 0 FERT EL K WIP 9000000009
Reserves 9000000010
LAP 0 FERT EK K WIP 9000000001
LAP 0 FERT FK K WIP 9000000003
LAP 0 FERT ABR A WIP
Reserves
LAP 0 FERT GK K WIP 9000000005
LAP 0 FERT GK1 K WIP 9000000007

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Continue
Info :
GL account ‘200502’ is WIP account
GL account ‘300600’ is WIP offset a/c
13. Define Result Analysis Versions
We should not select the indicator Transfer to Financial Accounting until we have completed
the previous step ie Define Posting rules settling Woork in Process . We should not change
the posting rules later.
Same path
TCode : OKG9
Double Click on COAr ‘LAP’ and RA Version ‘0’
 Transfer to Financial Accounting
Save
Enter to ignore the wrng msg
14. Define Variance Keys
Sam path upto Period End Closing
Variance CalculationDefine Variance Keys
TCode : OKV1
Select Variance Key ‘0000001’ ie Production order
Copy as button
Variance Key Name
LAP1 LAP Variance key(Prod order)
 Scrap
Enter
Save

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Continue
15. Define Default Variance Keys for Plants
Same path
TCode :OKVW
Position button
Plant : LAP1
Enter
Plnt Variance Keys Name
LAP1 LAP1 LAP Varinace key (Prod order
LAP2 LAP1 LAP Varinace key (Prod order
Save
Continue
16. General Version Maintenance in CO-Area
SPROControllingGeneral ControllingOrganizationMaintain Versions
TCode : OKEQN
Select Version ‘1’ ie Plan version change 1
Double click on ‘Controlling Area Settings’ folder
Yes button to ‘Transfer version to COArea ?’
Save
Select Version ‘2’ ie Plan version 2
Double click on ‘Controlling Area Settings’ folder
Yes button to ‘Transfer version to COArea ?’
Save

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17. Define Valuation Variant for WIP and Scrap (Target Costs)
Same path
New Entries
Select Valuation Variant 001
copy As buton
Valuation Variant LA1 Plan cost/preliminary CE/ Current Std CE
Enter
Save
18. Define Target Cost Versions
Variance = Target cost - control cost
Target cost version Target cost Control cost
0 Total Variance Current std cost Est Actual cost
1 Production variance PlanCost/Prel Cost estimate Actuaul cost
2 Planning varince Current std cost Est Plan cost
OrderPeriod End ClosingVariance CalculationDefine Target Cost Version
TCode : OKV6
New Entries
CO Area : LAP TgtCostVsn : 0
Desctiption : Total Variance
Variance Variant : STD ie Standard
Valuation Variant for Scrap : LA1
Control Costs
Actual Costs
Target Costs
Current Std Cost Est
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Save
Continue
New Entres button
Desctiption : Production Variances
Valuation Variant for Scrap : blank
Control Costs
Actual Costs
Target Costs
Plan Costs/Preliminary Cost Estimate
Save
Continue
New Entres button
Desctiption : Planning Variances
Valuation Variant for Scrap : blank
Control Costs
Plan Costs
Target Costs
Current Std Cost Est
Save
Continue
…
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Info:
Plan cost = Plan Quantity * Plan Price
Actual cost = Actual Quantity * Actual Price
Target cost = Actual Quantity * Plan Price
Ie If Plan Quantity and Actual Quantity are equal Target cost and Plan cost are equal
19. Create Allocation Structure
OrderPeriod End ClosingSettlementCreate Allocation Structure
TCode :
New Entries
Alloc.str Text
L2 Prod Dif allocation
Save
Continue
Select ‘L2’
Double click on Assignments folder
New Entries
Assignment Text Overlapping Check
01 RM Cost
02 RM OH
03 Production cost
04 Prod OH
Save
Select Assignment ‘01’
Double click on Source folder

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Enter
From cost el To cost elem
400599 400950
Double click on Settlement cost element folder
New Entries
Receiver cat By cost element Settlement cost elem Name
G/L 
PSG 
Save
Double click on Assignmens folder
1000000001
New Entries
G/L 
PSG 
Save
1000000002

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New Entries
G/L 
PSG 
Save
1000000003
New Entries
G/L 
PSG 
Save
20. Create Cost Element Group
Tcode :KAH1
Cost element group : PROD_COST
Enter
Description:Prod cost
Insert Cost Element button

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PROD_COST
400599 RM Consumption
400950 SFG consumption
400501 Packing charges
1000000001 RM OH
1000000002 Activyt allocation
1000000003 Prod OH
Save
21. Adding Value fields in Operating Concern(CO-PAsetting)
TCode : KEA0
Operating Concern : LAP1
 Display <->Change button( )
Data structure
Change button
Value fields tab
 Select the following Value fields
VV290 ie Price variance
VV320 ie Lot-size Variance
VV330 ie Usage variance
VV340 ie Input Variances
VV350 ie Scrap
VV360 ie Remaining Variances
VV364 ie Mixed-price variance
Transfer fields button( )
Save
Activate button

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Back button
Yes button to genarte Operating Concern
22. Create PATransfer Structure(CO-PAsetting)
Same path
TCode: KEI1
New Entries
Structure Text
L2 PA settlement, prod var LAP.
Enter
Select structure ‘L2’
Double click on Assignment lines folder
New Entreis
Assignment Text Qty billed/delivered
01 Prod Qty 
10 Scrap .
20 Price Variance .
25 Mixed-price variance .
30 Quantity variances material .
35 Quantity variances production .
40 Resource usage variance .
50 Input variance .
60 Lot size variances .
65 Output price variance .
70 Remaining Input variance .
90 Remaining Variances .
 Select Assignment ‘1’ ie Prod Qty
Double click on Value fields folder
New Entries
Quantity/value Fixed/variable Value fld
Quantity field 3 VV700

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 Select Assignment ‘10’ ie Scrap
Cost Element
Group : PROD_COST
Variances on production orders
Variance category : SCRP ie Scrap
New Entries
Value field 3 VV350
 Select Assignment ‘20’ ie Price variance
Cost Element
Group : PROD_COST
Variance category : PRIV ie Input Price Variance
New Entries
Value field 3 VV290
 Select Assignment ‘25’ ie Mixed-price variance
Cost Element
Group : PROD_COST
Variance category : MXPV ie Mixed-Price Variance
New Entries
Value field 3 VV364
…
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 Select Assignment ‘40’ ie Resource usage variance
Cost Element
Group : PROD_COST
Variance category : RSUV ie Resource-Usage Variance
New Entries
Value field 3 VV330
 Select Assignment ‘50’ ie Input variance
Cost Element
Group : PROD_COST
Variance category : QTYV ie Input Quantity Variance
New Entries
Value field 3 VV340
 Select Assignment ‘60’ ie Lot size variances
Cost Element
Group : PROD_COST
Variance category : LSFV ie Lot Size Variance/Fixed-Cost Variance
New Entries
…
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Value field 3 VV320
 Select Assignment ‘70’ ie Remaining variance
Cost Element
Group : PROD_COST
Variance category : INPV Remaining Input Variance
New Entries
Value field 3 VV360
 Select Assignment ‘90’ ie Remaining variance
Cost Element
Group : PROD_COST
Variance category : REMV Remaining Variance
New Entries
Value field 3 VV360
Save
Continue
23. Create Settlment Profile
Same path
Select Settlement profile ‘PP01’
Copy button
Settlement profile : LAP3 Production Order
…
…
…
…

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To be settled in full
Allocation structure : L2
PA Transfer structure : L2
Default object type : MAT
 % -Settlement
Equalance numbers
Amount settlement
 Variances to Costing Based PA
Valid Receivers
Material : Settlements Required
Profit. Segment : Settlements Optional
(others : Settlement Not Allowed)
Document type : SA
Save
Continue
24. Create No. Range intervals for Bus Transactions KZPI
Tcode : KANK
CO Area : LAP
Maintain Groups Button
Select Business Transaction ‘KZPI’ ie Actual overhead (periodic) under Non ssigned
Element/Group button
Double click on No ranges for CO docs
Save
Continue
25. Creating GL account Prod-Variance
Tcode : FS00
Select GL account 400500 Salaries
Copy button
…
…

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GL account : 400505
Enter
Change the Description to ‘Prod-Variances’
Create/Bank/interest tab
Change Field status group to ‘G001’
Save
Edit Cost element button
Valid from : 1.4.2.2012
Enter
Cost Elem Category : 01
Save
26. Automatic Account Assignment
Tcode : OBYC
Double click on Transaction ‘PRD’ ie Cost (price) differences
Enter
Valuation modif. 
Valuation class 
Save
Valuation modif. General modification Valuation class Account
X PRF LAP3 400505
X PRF LAP2 400505
Save
Continue
27. Activate Actual Costing(Change Activty update setting)
Note : This setting should only be changed at the beginning of the month but not during the
month.
Update of activity consumption ::
'0' = Update is not active

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'1' = Update is active but not relevant to price
determination.
Revaluation of Production order at Actual
prices(CostObj controlling) is required
'2' = Update is active and relevant to price
determination
Plan actual variances of cost center are
debited to the material when calculating
actual prices of activities. Revaluation of
Production order at Actual
prices(CostObj controlling) is not
required
SPROControllingProduct Cost ControllingActual Costing/Material Ledger
Actual Costing Activate Actual Costing
 Double click on ‘Verify Settings for Actual Costing’
Plant : LAP1
Execute
Double click on ‘Activate Actual Costing’
Postion button
Plant : LAP1
Enter
Plant Name1 Act. costing ActAct CreditCCt
LAP1  1
LAP2  1
LAP3  1
Save
Enter to ignore the Warning Msg
Continue
3. PP Settings
1. Define Order Type :
SPROProductionShop Floor ControlMaster DataOrderDefine Order Types
TCode : OPJH
Select ‘PP01’
Copy As .. button
Order Type LAP2 Prod Order costing (LAP)

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Settlement Profile : LAP3 ie Production Order
Enter
Save
2. Define order type-dependent parameters
SPROProductionShop Floor ControlMaster DataOrderDefine order type-
dependent parameters.
TCode : OPL8
Position button
Plant : LAP1
Order Type : LAP1
Enter
Copy as button
Replace Order Type ‘LAP1’ with LAP2
Enter
Cost Accounting tab
Cost Accouning
Cstg variant planned : LAP2
Cstg variant actual : LAP3
Results Analysis Key : 000002
Planned Cost Calcul. : Determine Planned Costs when Saving
Distribution Rule
Default Rule : PP1 Production Mat.Full settlement
Distribution Rule ‘PP1’ is used to calculate cumulative variance (Product costing by Order).
Distribution Rule ‘PP2’ is used to calculate periodic variance (Product costing by Period) .
Save
Continue
(Repeat the process for plant LAP2 )
Save
Alteranative way :
Define Cost-Accounting-Relevant Default Values for Order Types and Plants

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Position button
Plant : LAP1
Order Type : LAP1
Enter
Double click on Plant ‘LAP1
3. Define Scheduling Parameters for Production Orders
Upto Shop Floor Control Same path
Operations Scheduling Define Scheduling Parameters for Production Orders
Position button
Plant : 1000
Order Type : PP01
Enter
Select plant ‘1000’ with Order Type ‘PP01’ and PrSch ‘*’
Copy as button
Replace Order type ‘PP01’ with ‘LAP2’
Enter
Save
Continue
Select plant ‘LAP1’ with Order Type ‘LAP2’ and PrSch ‘*’
Copy as button
Enter
Save
Continue
4. Define Confirmation Parameters
Confirmation Define Confirmation Parameters
Position button
Plant : 1000
Order Type : PP01
Enter

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Copy as button
Replace type ‘PP01’ with ‘LAP2’
Enter
Overview button( )
New Entries
Type Control Process
control
AutoGR Backflush Actual Costs
10 LAP2 Immediately
Online
Immediately
Online
Immediately
Online
Save
Continue
Process Control : LAP2
Goods movemnts
√ All components
Back
Copy as button
Enter
Save
Continue
5. Define Checking Control
TCode :OPJK
Availabiltiy Check Define Checking Control
Position button
Plant : 1000
Order Type : PP01
Enter
Select plant ‘1000’ with Type ‘PP01’ .(Two records Business Function 1&2)
Copy as button

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Enter
Enter
Save
Continue
Select plant ‘LAP1’ with Type ‘LAP1’ .(Two records Business Function 1&2)
Copy as button
Enter
Enter
Save
Continue
4. PP Enduser
1. Creating Origin Groups
SPROControllingProduct Cost ControllingProduct Cost PlanningBasic Settings for
Material CostingDefine Origin Groups
TCode : OKZ1
Origin type From : 02
To : 02
Enter
New Entries
Name Origin group
Org grp 1 RM1 LAP1
Org grp 2 RM2 LAP2
Org grp 3 SFG1 LAP3

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Org grp 4 SFG2 LAP4
Save
2. Assign Origin groups and Material Origin indicator in
Material master
Origin groups are helpful in variance analysis according to material components. Input price
variance , Input qty variance and resource usage variance can only be displayed with the
help of origin groups.
TCode : MM02
LAPSFG1 (Plant LAP1) , LAPSFG2 (Plant LAP1) LAPRM1 (Plant LAP1) LAPRM2 (Plant
LAP2)
Costing1 view
Origin group : LAP1/2/3/4
√ Material origin
3. Maintain planned scrap in BOM LAPSFG1
TCode :CS02
Material LAPSFG1
Plant LAP1
BOM Usage 6 Costing
Enter
Double click on item 10
Operation scrap in % : 1 √ NetI D Component scrap(%) : 1
Back bitton twice
Save
4. Maintain planned scrap in BOM LAPSFG1
TCode :CS02
Material LAPSFG1
Plant LAP1
BOM Usage 1 Production
Enter
Double click on item 10

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Operation scrap in % : 1 √ NetI D Component scrap(%) : 1
Back bitton twice
Save
5. Check the period close
TCode : MMRV
5. CO Enduser
6. Create cost estimates
TCode :CK40N
6. MM Enduser
1. Assign Variance Key in the material master
TCode : MM02
LAPFG1 (Plant LAP1), LAPSFG1 (Plant LAP1) , LAPSFG2 (Plant LAP1)
Costing1 view
Variance Key : LAP1
Tcode : ME21N
Vendor : LAPRMVNDR
Enter
Org.Data tab
Purch. Org : LAPO
Purch. Group : LPG
Company Code : LAP
Item Material PO
Quantity
Deliv.
Date
Net
Price
Currency Plnt Stor.
Location
10 LAPRM1 26000 15.08.201 279 INR LAP1 LAP1
20 LAPRM2 60000 15.08.201 369 INR LAP2 LAP2
Enter
Back button
Check button
Save

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Tcode :MIGO
Number Known
Enter
Where tab
Text : GR
Quantity tab
√ Item OK
Where tab
Text : GR
Quantity tab
√ Item OK
Post
Tcode : MIRO
√ Calculate tax
PO Reference Tab
Enter
Select item 1&2

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1 7.254.900,00 26000 √
2 7.254.900,00 60000 √
Enter
Payment tab
Payment term : 0001
Simulate button
Post button
Select LAPRM1
5. Purchase Order Creation(Different vendor)
Tcode : ME21N
Vendor : LAPTRVNDR
Enter
Org.Data tab
Purch. Org : LAPO
Purch. Group : LPG
Company Code : LAP
Item Material PO
Quantity
Deliv.
Date
Net
Price
Currency Plnt Stor.
Location

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10 LAPRM1 20000 15.08.201 270 INR LAP1 LAP1
Enter
Back button
Check button
Save
Tcode :MIGO
Number Known
Enter
Where tab
Text : GR
Quantity tab
√ Item OK
Post
Tcode : MIRO
√ Calculate tax
PO Reference Tab
Enter
Select item 1&2

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1 5.400.000,00 20000 √
Enter
Enter
Payment tab
Payment term : 0001
Simulate button
Post button
7. PP Enduser
1. Creating Production order
Material
TCode :CO01
Material : LAPFG1

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Order Type : LAP2
Enter
Total Qty : 150 EA
Dates
Finish : Today
Start : Today
Scheduling
Type : Forward
Enter
Control tab
CstgVariantPlan : LAP1 CstgVariantActl : LAP2
Costing Sheet : LAP1 Overhead key :
RA Key : FERT Variance Key : LAP1
Cost order button( )
(Msg : Costs determined --> see cost display)
Info : We are calculating the preliminary cost estimate, which is used later in variance
analysis
Goto menuCostsAnalysis/Itemization/Cost comp. Structure
Back button
Order Header button
(Make sure a collective order is created for each of the SFGs)
Double click on the production order for LAPSFG1
Control tab
Cost order button

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Back button
Control tab
Save
Error : No price could be determined for internal activity ............
Solution : To check whether planned activity price has been calculated
2. Display Production Order
Tcode : CO02
Order : XXXXXXXX
Collective order
Enter
Make a note of production order numbers of LAPSFG1 and LAPFG2
Tcode : CO11N
Enter
Operation 0010
Quantities
Yield 1000 EA
Scrap 50
Activities
…
…

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Machine 10530 H 
Warning :
Back button
Save
Save
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
…
…

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Fiscal Year : 201
From Period : 12
To Period : 12
Plan Version : 0
Cost Center Group :
Or value(s) 1001
Execute

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settings

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TCode : CKM3
Material : LAPRM1
Plant : LAP1
TCode : CKM3
Material : LAPSFG1
Plant : LAP1
Confimation)
TCode : COGI
Plant : LAP1
Individual Records
Execute
…
…

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Back button
Save
8. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
(it should show items RM Issue , FG receipt and activity type quantity. Note the difference
between Target costs and actual costs)
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Tcode : CO11N
…
…
…
…

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Enter
Operation 0010
Quantities
Yield 750 EA
Scrap
Activities
ie 22600 to generate variance )
Save
Tcode : CO02/03

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Order : XXXXXXXX
Collective order
Enter
TCode : CKM3
Material : LAPRM2
Plant : LAP2
TCode : CKM3
Material : LAPSFG2
…
…

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Confimation)
TCode : COGI
Plant : LAP1 ,LAP2
Individual Records
Execute
Back button
Save
14. Display costs

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Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
(Compare Target and actual costs)
Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
Or value(s) : 2001
Execute
settings
Tcode : CO02/03
Order : XXXXXXXX
…
…

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Collective order
Enter
Tcode : CO11N
Enter
Operation : 0010
Quantities
Yield blank EA
Scrap
Activities
Save
Tcode : CO11N
Enter
Operation : 0020
Quantities
Yield 141 EA
Scrap 1
…
…

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Activities
Packing 142 UN 
Save
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Confimation)
…
…

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TCode : COGI
Plant : LAP1
Individual Records
Execute
Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
Or value(s) : 1002
Execute
…
…

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settings
22. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
cost element )
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
TCode : CKM3
Material : LAPFG1
Plant : LAP1
25. Create Production order
Material
TCode :CO01
Material : LAPFG1
…
…
…
…

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Order Type : LAP2
Enter
Total Qty : 450 EA
Dates
Finish : Today
Start : Today
Scheduling
Type : Forward
Enter
Control tab
Cost order button( )
Info : We are calculating the preliminary cost estimate, which is used later in variance
analysis
Goto menuCostsAnalysis/Itemization/Cost comp. Structure
Back button
Order Header button
(Make sure a collective order is created for each of the SFGs)

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Control tab
Back button
Control tab
Save
Tcode : CO11N
Enter

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Operation 0010
Quantities
Yield 1050 EA
Scrap
Activities
Machine 10530 H .
LAPSFG1 1050 EA LAP1 LAP1 101
Warning :
Back button
Save
Save

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Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Fiscal Year : 201
From Period : 12
To Period : 12
Plan Version : 0
Cost Center Group :
Or value(s) 1001
Execute
settings
TCode : CKM3
…
…

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Material : LAPRM1
Plant : LAP1
TCode : CKM3
Material : LAPSFG1
Plant : LAP1
Confimation)
TCode : COGI
Plant : LAP1
Individual Records
Execute
…
…

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Back button
Save
31. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
(it should show items RM Issue , FG receipt and activity type quantity)
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Tcode : CO11N
…
…
…
…

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Enter
Operation 0010
Quantities
Yield 750 EA
Scrap
Activities
Processing 3750 H .
ie 27000 to generate WIP )

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Back button
Save
Save
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
…
…

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TCode : CKM3
Material : LAPRM2
Plant : LAP2
TCode : CKM3
Material : LAPSFG2
Confimation)

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TCode : COGI
Plant : LAP1 ,LAP2
Individual Records
Execute
Back button
Save
37. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
…
…
…
…

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Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
Or value(s) : 2001
Execute
settings
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
…
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Tcode : CO11N
Enter
Operation : 0010
Quantities
Yield blank EA
Scrap
Activities
Save
Tcode : CO11N
Enter
Operation : 0020
Quantities
Yield 150 EA
Scrap
Activities
Packing 150 UN 

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Save
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
Confimation)
TCode : COGI
…
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Plant : LAP1
Individual Records
Execute
Fiscal Year : 201x
From Period : 12
To Period : 12
Plan Version : 0
Actual Valuation
Or value(s) : 1002
Execute
settings
…
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45. Display costs
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
cost element )
Tcode : CO02/03
Order : XXXXXXXX
Collective order
Enter
TCode : CKM3
Material : LAPFG1
Plant : LAP1
48. Reports for Product Cost by Order
SAP Easy AccessAccountingControllingProduct Cost ControllingCost Object
ControllingProduct cost by OrderInformation SystemReports for Product Cost by
OrderLine ItemsActual
TCode : KOB1
…
…
…
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Order : (enter 3 orders )
Execute
8. FI Enduser
9. CO Enduser
1. Activity Splitting(Month End Activity)
Tcode : KSS2
Single FunctionsSplitting
2. Calculating Actual Activity price (Month End Activity)
Tcode : KSII
Period : 5
Fiscal Year : 2014
 Test Run
 Details Lists
Execute
Save
TCode :KSBT
…
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4. Prod Order Cost Analysis
TCode :KOC4
Order : (6 prod orders)
Execute
5. Revaluation at Actual prices(Month end activty)
Note :Please skip this step is if Actual Coosting /ML is implemented and 2 update active
and relevant to price determination is selected in thesettings . In this case the
difference between the plan price and actual price is debited directly to material.
This step is to be performed after actual price calculation.
SAP Easy Access Logistics Production Shop Floor Control Period End Closing
Revaluation at Actual prices Collective Processing
TCode : CON2
Plant : LAP1
 With Production Orders
Period : 6
Fiscal Year : 201x
Background Processing
 Test Run
 Details Lists

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Execute
Next list level button( )
Select any item under Senders
Reports button( )
Double click on ‘Cost Centers: Actl/Target/Variance’
Test Run
 Details Lists
Execute
Repeat th process for plant LAP2
6. Cost center report
TCode :KSB1
(CC balances shuld be zero)
7. Overhead Calculation for Production Order(Month End
Activity)
SAP Easy Access Logistics Production Shop Floor Control Period End
ClosingOverhead CalculationCollective Processing
TCode : CO43
Plant : LAP1
Period : 6
Fiscal Year : 201x
 Test Run
 Details Lists
Dialog display
Execute
Select any item under Receivers

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Double click on ‘Orders: Actual/plan/variance’
(Actual OH should be blank)
Test Run
 Details Lists
Execute
(Actual OH should not be blank)
8. WIP Calculation(Month End Activity)
ClosingWork in processCollective ProcessingDetermine
Tcode : KKAO
Enter
Plant : Blank (=all plants)
Period : 6
Fiscal Year : 201x
Parameters
WIP to period : 5

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Fiscal Year : 201X
RA version : 0 ie Plan/Act - Version
Processing options
 Test Run
 Log Information Messages
Output options
 Output Object List
 Display Orders with Errors
Execute
Back button
Test Run
Execute
Select any WIP amount
WIP Report button ( )
Info : WIP is only calculated in this step. Posting to GL accounts happen in the next step. Ie
production order settlement
If final confirmation is entered for a production order , no WIP exist for that order
9. Line items for WIP/Result Analysis
Same Path
 WIP/Result Analysis
TCode :KOB8
10. Set status ‘Technically complete’ to prod order
TCode CO02
Functions menuRestrict processingComplete technically
Save
(Status should change to TECO)
…
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11. Variance Calculation
ClosingVariancesCollective Processing
TCode : KKS1
Enter
Parameters
Period : 6
Fiscal Year : 201x
All target cost vsns
Processing options
 Test Run
 Details
Execute
Select ‘Total Variance ‘ against Version
Select any production order
Cost Element button( )
Back button
…
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Test Run
Execute
Prod order qty : 50 items (planned qty)
GR from Prod : 49 (yield = actual qty)
(in Tgt cost version we specify target cost and control cost)
VArince type Trgt cost
version
Target cost Control cost
Planned
variance
1 Std cost *planned
qty
Prel cost*planned
qty
Make /buy
descion
Prod variance 2 Prel cost*planned
qty
Final cost*Planned
qty
‘Total’
variance
0 Std cost *palnned
qty
Final cost*Actual
qty
Settled to FI ,
COPA
If planned qty = actual qty
‘Total’ variance = Planned variance + Prod variance variance
Input variances Output variance
Input qty:
Dif qty of components/activity type
(Origin group must be maintained)
Output price
(Valution pice is changed after GR from
production)
Input price :
Eg: compone price dif, Activy price
dif
(Origin group must be maintained)
Output qty variance
(dif between prod qty and yeild)
Resource usage :
Eg : Unplanned use of RM/Activty
Lot size variance
Eg: Setup cost
Mixed price variance :
Dif in procurement alterative
Other input:

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Scrap variance = Planned scrap – actual scrap
12. Production Order Settlement(Month End Activity)
ClosingSettlementIndividual Processing
TCode : KO88
Order : 600036XX
Settlement period : 5
Fiscal Year : 2014
 Test Run
 Check trans.data
Execute
Details lists button ( )
Sender button
Back button
Receiver button
Test Run
Execute
Entry should be :
Cr 300600 WIP Offset
Dr 200502 Work In Process

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TCode : KOB1
Order : 600036XX
Execute
14. Line items for Variances
OrderLine items Variances
TCode :KOB3
TCode :KOC4
16. MM Period Closing
TCode :MMPV
10. MM Enduser (Next month)
Tcode : ME21N
Vendor : LAPRMVNDR
Enter
Org.Data tab
Purch. Org : LAPO
Purch. Group : LPG
Company Code : LAP
Item Material PO
Quantity
Deliv.
Date
Net
Price
Currency Plnt Stor.
Location
10 LAPRM1 23000 15.08.201 279 INR LAP1 LAP1
20 LAPRM2 30000 15.08.201 369 INR LAP2 LAP2
Enter
Back button
Check button

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Save
Tcode :MIGO
Number Known
Enter
Where tab
Text : GR
Quantity tab
√ Item OK
Where tab
Text : GR
Quantity tab
√ Item OK
Post
Tcode : MIRO
√ Calculate tax
PO Reference Tab
Enter

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Select item 1&2
1 6417000 23000 √
2 11070000 30000 √
Enter
Payment tab
Payment term : 0001
Simulate button
Post button
Select LAPRM1

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Info : Alternatively ML document can be displayed as shown in the next step
11. PP End user(Next period)
Tcode : CO11N
Enter
Operation 0010
Quantities
Yield ? EA
Scrap

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Activities
Machine ? H 
LAPSFG1 ? EA LAP1 LAP1 101
LAPRM1 ? KG LAP1 LAP1 261
Save
Tcode : CO11N
Enter
Operation 0010
Quantities
Yield ? EA
Scrap
Activities

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LAPRM2 ? KG LAP2 LAP2 261
ie 27000 to generate WIP )
LAPSFG2 ? EA LAP1 LAP1 S 101
LAPSFG2 ? EA LAP1 LAP1 H 261
Save
Tcode : CO11N
Enter
Operation : 0010
Quantities
Yield blank EA
Scrap
Activities

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Assembling ? UN 
Save
Tcode : CO11N
Enter
Operation : 0020
Quantities
Yield ? EA
Scrap
Activities
Packing ? UN 
LAPFG1 ? EA LAP1 LAP1 S 101
Save
12. FI Enduser (Next period)
13. CO Enduser

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Tcode : KSS2
Tcode : KSII
Period :
Fiscal Year : 201
 Test Run
 Details Lists
Execute
Save
TCode :KSBT
4. Revaluation at Actual prices
Revaluation at Actual prices Collective Processing
TCode : CON2
Plant : LAP1
Period : 6
Fiscal Year : 201x
 Test Run
…
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 Details Lists
Execute
Select any item under Senders
Double click on ‘Cost Centers: Actl/Target/Variance’
Test Run
 Details Lists
Execute
5. Cost center report
TCode :KSB1
(CC balances should be zero)
Activity)
ClosingOverhead CalculationCollective Processing
TCode : CO43
Plant : LAP1
Period : 6
Fiscal Year : 201x
 Test Run
 Details Lists
Dialog display

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Execute
(Actual OH should be blank)
Test Run
 Details Lists
Execute
(Actual OH should not be blank)
7. Set Production Order Status to TECO
Tcode : CO02
Order : 600036XX
Enter
Functions menuRestrict processingTechnically Complete
Save
8. WIP Calculation(Reversing WIP)(Next month)
ClosingWork in processCollective ProcessingDetermine
Tcode : KKAO
Enter

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Period : 6
Fiscal Year : 201x
Parameters
WIP to period : 5
Fiscal Year : 201X
Processing options
 Test Run
Output options
 Output Object List
Execute
Back button
Test Run
Execute
Select any WIP amount
Info : WIP is only calculated in this step. Posting to GL accounts happen in the next step. Ie
production order settlement
If final confirmation is entered for a production order , no WIP exist for that order
9. Variance Calculation for Production Order(Month End
Activity)(next month)
Info : To calculate the variance for a production order, the status of production order must be

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set to TECO or DLV
ClosingVariancesCollective Processing
TCode : KKS1
Enter
Parameters
Period : 6
Fiscal Year : 201x
Processing options
 Test Run
 Details
Execute
Select ‘Total Variance ‘ against Version
Select any production order
Cost Element button( )
Back button
Test Run
Execute
…
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10. Production Order Settlement(Next month)
TCode : KO88
Order : 600036XX
Fiscal Year : 2014
 Test Run
Execute
Sender button
Back button
Receiver button
Test Run
Execute
Entry should be :
Cr 300204 Inc/Dec in Stock 2481.00-
Dr 400505 Prod-Variances 2481.00
Dr 300600 WIP Offset 35931.00
Cr 200502 Work In Process 35931.00-
Variance is posted to Prod Variance account
and
WIP is reversed
Back button
Double click on Profitab. Analysis (to display CO-PA document)

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Value fields tab
TCode : KOB1
Order : 600036XX
Execute
12. Line items for Variances
OrderLine items Variances
TCode :KOB3
13. Line items for WIP/Result Analysis
Same Path
 WIP/Result Analysis
TCode :KOB8
TCode :KOC4
15. Display CO-PA line items
TCode : KE24
Currency type : 10
Record type : C
Company code : LAP
Excute
Enter
16. MM Period Closing
TCode :MMPV
TCode :CKMLCP

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10. ProductCost by Sales Order
The Product Cost by Sales Order application is used to analyze costs at the level of
sales document items.
Sales Document items (items in inquires, quotations, or sales orders) are the cost objects
in Product cost by sales order.
With Product Cost by Sales Order :
We can calculate and analyze planned costs/revenues and actual costs/revenues by sales
document item
We can calculate the value of goods that have been delivered to customer
We can collect the sum of the actual costs incurred for the sales order item
Manufacturing organizations normally use Product Cost by Sales Order in combination with
Product Cost by Order or Product Cost by Period.
Complex make-to-order environment in sales order related production is where we use sales
order costing.
Sales
order
stock
Valuated
sales order
stock
Sales order items carry costs
and revenues only certain
situations
Eg: In complex make-to-order
environment to analyse costs
of salesorder, we set sales
order items carry costs and
revenues . We use Product
costing by sales order.
In Mass production on the
basis of sales order
environment we do not set
sales order items carry costs
and revenues .
We use Product costing by
order
All costs are
available at
each production
level.
Each goods
movement
reflects FI
immediately
Valuation
= M
Valuated sales
order stock to be
valuated
separately from
general stock.
Valuation
= A
Valuated sales
order stock to be
valuated together
with general
stock
Non
Valuated
sales order
stock
Sales order items carry costs
and revenues always
Valuation
= Blank
1. CO Settings

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1. Activate sales order costing in CO-Area
TCode : OKKP
Select COArea ‘LAP’
Double click on ‘Activate components/control indicators ‘ folder
 Sales Orders
Save
If this indicator is set :
Actual costs and revenues can be posted a sales order item ie A sales order can be used as
the CO object.
Settlement is possible from production orders ( networks and so on ) to the sales order item
Actual costs and revenues and the data from results analysis can be settled to results
analysis.
2. Check Valuation Variants for Product Costing:
Sales OrderPreliminary Costing and Order BOM Costing Costing Variants for Product
CostingCheck Valuation Variants for Product Costing
Tcode : OKY0
Double click on Valuation Variant ‘001’
Valuation Variant/Plant button( )
Position button
Valuation Variant : 001
Plant : LAP1
Enter
Double click on plant LAP1
Overhead tab
Costing Sheet : LAP Costing Sheet
Costing Sheet : LAP Costing Sheet
Save
Continue
3. Check Costing Variants for Product Costing :
Same path
 Check Costing Variants for Product Costing
Tcode : OKY9

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Select Costing Variant PPC4
Copy As button
Costing Variant : LAP4 Sales Order Cost Est LAP
Enter
Double click on costing variant LAP4
(Make a note of various settings)
4. Define Requirements Classes
SPROSales and DistributionBasic Functions Availability Check and Transfer of
Requirements Transfer of Requirements Define Requirements Classes
TCode :OVZG
Select ReqCl ‘ 040 ’ ie Mke-to-ord.w/o cons.
Copy As button
Reqmts class : LA1 Mke-to-ord LAP.
Requirments Assembly
Avail /Check  Assembly type: Blank
Req.transfer  Special Stock : E
Order Type : Blank
Configuration
Enter
Save
Continue
5. Create Allocation Structure
SPROControllingProduct Cost ControllingCost Object Controlling Product Cost by
Sales OrderPeriod End ClosingSettlementCreate Allocation Structure
TCode : OKO6
New Entries
Alloc.str Text
L5 Sales order Settlement
Save
Continue
Select ‘L5’

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Double click on Assignments folder
New Entries
Assignment Text Overlapping Check
01 Total Cost
02 Revenues
Save
Enter to ignore the msg
Enter
Cost Elem.Group
PROD_COST
New Entries
G/L 
Save
From cost el
300510
New Entries

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G/L 
Save
11. Create PATransfer Structure
Same path
TCode: KEI1
New Entries
Structure Text
L7 Sales Ord COPAsettlement,
Enter
Select structure ‘L7’
New Entreis
Assignment Text Qty billed/delivered
01 Sales Qty 
10 RM .
50 Prod Cost .
70 Prod OH .
80 Mat OH .
90 Revenue .
 Select Assignment ‘1’ ie Sales Qty
New Entries
Quantity field 3 VVIQT
 Select Assignment ‘10’ ie RM

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Cost Element
From : 400599
Cost/revenues
New Entries
Value field 2 VV150
 Select Assignment ‘50’ ie Prod cost
Cost Element
From : 1000000002
Cost/revenue
New Entries
Value field 3 VV400
 Select Assignment ‘70’ ie Prod OH
Cost Element
From : 1000000003
Cost/revenue
New Entries
Value field 3 KWSGEK
 Select Assignment ‘80’ ie Mat OH
Cost Element
From : 1000000001
…
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…
…
…
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Cost/ revenues
New Entries
Value field 3 VV250
 Select Assignment ‘90’ ie Revenue
Cost Element
From : 300510
Cost/ revenues
New Entries
Value field 3 VV010
Save
Continue
6. Create Settlement profile
Sales OrderPeriod-End ClosingSettlementCreate Settlement Profile
Select Settlement profile ‘SD1’ Sales Order MTO Production
Copy button
Settlement profile : LAP4 Sales Order MTO LAP
To be settled in full
Allocation structure : L5
PA Transfer structure : L7
Default object type :
 % -Settlement
…
…
…
…
…
…

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Equalance numbers
Amount settlement
 Variances to Costing Based PA
Valid Receivers
GL account : Settlements Required
Profit. Segment : Settlements Optional
(others : Settlement Not Allowed)
Document type : SA
Save
Continue
7. Check Requirements Classes
Sales Order Control of Sales-Order-Related Production/Product Cost by Sales Order
Check Requirements Classes
Double click on ReqCl ‘ LA1 ’ ie Mke-to-ord.w/o cons.
Costing
Costing : X Costing required
Costing ID : Blank (Sales doc item can be costed manually in the sales doc)
Costing Method : 1 ie Product costing
Costing Variant : LAP4
Costing Sheet : LAP1
Copy Costing Sheet 
Account assignment
Acct Assignment Cat. : E ie Customer indiv. reqt
Valuation : M ie saparate valuation with ref. to sales document/project
Without Val. Strategy .
Settlement profile : LAP4 ie Sales Order MTO Production
Strategy Sequence : Blank
Changeable : Blank
Results Analysis Key : KUND ie RA for Sales Orders (Product costing)

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Functional Area : Blank
Save
Continue
Sales
order
stock
Valuated Sales order
stock: RA is not
required
Valuation M : valuated sales order stock is valuated
separately from general stock. Sales order stock is
updated on quantity and value basis
Valuation A : valuated sales order stock is valuated
together with general stock. Sales order stock is
updated only on quantity basis.
Non valuated Sales
order stock : RA is
mandatory
Blank
8. Check Account Assignment Categories
Same path
Check Account Assignment Categories
TCode: OME9
Double click on Acct Assignment Cat ‘E’ ie Customer indiv. Reqt
Consumption posting : E Accounting via sales order
E = To flag the sales order item as cost and revenue-carrying
Special Stock E Orders on hand (=Sales order stock)
Fields
Mand.Ent Opt.Entry Display Hidden
Sales Order
Save
Continue
…
…

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9. Check Requirements Types
Same Path
Check Requirements Types
Tcode :OVZH
New Entries
RqTy Requirement type ReqCl Description
LA1 Indiv.cust.ord. w/o consumpt. LA1 Mke-to-ord. LAP.
Save
(can also be copied from RqTy ‘KE’ ie Indiv.cust.ord. w/o consumpt.)
10. Check Control of Requirements Type Determination
Same Path
Check control of Requirements Type Determination
Tcode :OVZ1
Postion button
Item category : TAK ie Make-to-order Prod.
MRP Type : Blank
Enter
ItCa Typ Rqty Q
TAK LA1 1
Save
Continue
11. Define Access to Standard Cost Estimates(COPA)
(Create costing key with Transfer sales order cost estimate)
12. Create No. Range intervals for Bus Transactions
KABG, KABM, KABF
Tcode : KANK
CO Area : LAP
Maintain Groups Button
√ No. Range for CO Document (LAP)
Double click on Business Transaction ‘ ’ ie ,
Double click on Business Transaction ‘ ’ ie
Double click on Business Transaction ‘ ’ ie
Element/Group button
Save

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Continue
.
1 Enduser(MTO with valuated sales order stock)
1. Create material
Basic data2
√ Materail is configurable
2. Create a Sales Order & Sales Order Cost Estimate
Tcode :VA01
Order type : TA
Sales Organization : LANS
Distribution Channel : LD
Division : LS
Enter
Sold-to party : LAPSDCUST
Req. Deliv. Date : Todays date
Delivery plant : LAP1
√ Complete dlv
Payment Terms : 0001
Item Material Order Quantity ItCa Plant
10 LAPFG 30 TAK LAP1
Enter
Procurement tab
( RqTy should be ‘RE’ )
Select item 10
GoTo menuItemConditions
CnTy Amount
PR00 450
MWST 0
Account Assignment tab
(Make a note of Results Analysis Keys ,Costing sheet , Overhead key)
Costing button( ) (to create Sales Order Cost Estimate)
Product costing button
Costing Data

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Costing Variant : PPC4
Transfer Control : PC03
Dates tab
Default Values button
Enter
Cost Comps button ( )
Save
√ Cost Comp Split
√ Itemization
Enter
Edit menuIncompletion log
Save
Note down the order no
3. Create Production Order for Sales order
SAP Easy AccessLogisticsProductionShop Floor ControlOrderCreateFor Sales
Order
TCode :CO08
Sales Order : 140XX 000010
Order Type : PP01
Enter
Total Qty : 30 EA
Dates
End : Today
Start : Today
Scheduling
Type : Current date
Control tab
Costing
CstgVariantPlan : PPP1 CstgVariantActl : PPP2
Costing Sheet : LAP1 Overhead key : LAP1

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Goto menuCostsCost comp. Structure
Back button
Release Order button
Save
1. RM issue to Production order
Tcode : MB1A
Movement Type : 261
Plant : LAP1
Enter
Order : 60003XX
LAPRM1 153 KG
Post
5. Production Order Confirmation
Tcode : CO11N
Order No: 600036XX
Enter
Operation 0010
Confirm.type : Partial Confirmation
Quantities
Yield : 20 EA
Activities
Machine : 200 H
Save
6. Display Cost Center report
Tcode : KSB1

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7. Production Receipts for Production Order
Tcode :MB31
Movement Goods ReceiptsOther
To Order button
Order SLoc S By-Prds
600036XX LAP1 E
Enter
Save
Info :
GR is valuated with actual quantity produced multiplied by sales order cost estimate.
Special Stock Indicator ‘E’ indicates that the stock is special stock meant for sales order.
TCode : KOB1
Order : 600036XX
Execute
Tcode : KSS2
Enter
…
…

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Cost center : 1001
Version : 0 Plan/Act - Version
Period : 5
Fiscal Year : 2014
 Test Run
 Details Lists
Execute
Cost Elements button
Tcode : KSII
Period : 5
Fiscal Year : 2014
 Test Run
 Details Lists
Execute
Save
(Actual Activyt price should be 11.00 (ie 7700.00/700.00)as shown in the image. )
Info : Instead of calculating actual activity price , we can enter actual activity price manually
using the following menu path /Tcode
SAP Easy AccessAccountingControllingCost Center Accounting Actual
postingsActual PriceEnter
Tcode : KBK6
Activity)
ClosingOverhead CalculationIndividual Processing
TCode : KGI2
Enter
…
…

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Order : 60003XX
Parameters
Period : 5
Fiscal Year : 201X
 Test Run
 Dialog dispaly
Execute
Enter to confirm the message
 Test run
Execute
Revaluation at Actual prices Individual Processing
TCode : MFN1
Order : 60003685
Period : 6
Fiscal Year : 2014
 Test Run
 Details Lists
Execute
Back button
Test Run
 Details Lists
Execute

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13. WIP Calculation(Month End Activity)
ClosingWork in processIndividual ProcessingDetermine
Tcode : KKAX
Enter
Order : 60003XX
Parameters
WIP to period : 5
Fiscal Year : 201X
Processing options
 Test Run
 Save log
Output options
Execute
Back button
Yes button
Test Run
Execute
14. Production Order Settlement(Month End Activity)
TCode : KO88
Order : 600036XX
…
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Fiscal Year : 2014
 Test Run
Execute
Sender button
Back button
Receiver button
Test Run
Execute
Entry should be :
Cr 300600 WIP Offset
Dr 200502 Work In Process
15. Production Order Confirmation(final )(Next month)
Tcode : CO11N
Order No: 600036XX
Enter
Operation 0010
Confirm.type : Final Confirmation
Quantities
Yield : 10 EA

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Activities
Machine : 100 H
Save
16. Display Cost Center report
Tcode : KSB1
17. Production Receipts for Production Order(Next month)
Tcode :MB31
Order No: 600036XX
Plant : LAP1
Enter
Quantity : 10 EA
Post
Revaluation at Actual prices Individual Processing
TCode : MFN1
Order : 600036XX
Period : 6
Fiscal Year : 2014
 Test Run
 Details Lists
Execute
Test Run

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 Details Lists
Execute
19. Set Production Order Status to TECO
Tcode : CO02
Order : 600036XX
Enter
Functions menuRestrict processing Complete Technically
Save
20. WIP Calculation(Reversing WIP)(Next month)
ClosingWork in processIndividual ProcessingDetermine
Tcode : KKAX
Enter
Order : 60003XX
Parameters
WIP to period : 5
Fiscal Year : 201X
RA version : 0
Processing options
 Test Run
 Save log
Output options
Execute
…
…

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Info : WIP should be zero
21. Variance Calculation for Production Order(Month End
Activity)(next month)
Info : To calculate the variance for a production order, the status of production order must be
set to TECO or DLV
ClosingVariancesIndividual Processing
TCode : KKS2
Enter
Order : 60003XX
Parameters
Period : 5
Fiscal Year : 2014
 Test Run
 Detail list
Execute
Cost Elements button
Back button
 Test run
Execute
22. Production Order Settlement(In next month)
…
…

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TCode : KO88
Order : 600036XX
Fiscal Year : 2014
 Test Run
Execute
Sender button
Back button
Receiver button
Test Run
Execute
Entry should be :
Cr 300204 Inc/Dec in Stock -
Dr 400505 Prod-Variances
Dr 300600 WIP Offset
Cr 200502 Work In Process -
Info :
Variance is posted to Prod Variance account
and
WIP is reversed
Back button
Double click on Profitab. Analysis (to display CO-PA document)
Value fields tab
23. Deliveryof FG to customer

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TCode : VL01N
24. Billing
TCode : VF01
Srinivasa Kasireddy is a senior SAP consultant with a Singapore based IT
consulting company. Have nearly 10 years of experience in FICO as well as
ABAP programming. Handled different kinds of projects like end- to- end
implementations Rollouts and Up gradations. Supported number of
multinational clients on existing projects.
Experienced in delivering ERP solutions for Airlines, Banking, Power
Generation and Manufacturing industries.
He is a professional trainer and visiting faculty in the area of SAP FI&CO and has trained
more than 100 batches.
For any training enquiries :
Please call 91-9959765211
Skype :srinivas3d

Sap co stepbystep config & user manual part 2

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