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Actual Costing with The SAP Material Ledger

by: Vanda Reis

On-line Price: $82.95 (includes GST)

Hardcover package 511

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Retail Price: $109.95

Publisher: SAP Press,31.08.11

Category: SAP Level:

ISBN: 1592293786
ISBN13: 9781592293780

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. Learn how to configure the SAP Material Ledger to perform periodic actual costing, actual costing revaluations, and more
. Discover how the SAP Material Ledger calculates actual costs, and what it means for your business
. Master advanced SAP Material Ledger and actual costing functions

If you are a controller, consultant, or cost accounting professional, then this is your comprehensive guide to using the SAP Material Ledger for actual costing! Here, you'll find the answers to how, why, and where to perform actual costing with the SAP Material Ledger to optimize your business practices. After a brief overview of how to configure the SAP Material Ledger, the book delves into more in-depth usages of actual costing and Material Ledger functionalities, such as using alternative valuation runs and actual costing cross-company code.

Actual Costing Processes
Learn about the different types of inventory valuation and how they can influence your business.

Configuration
Master SAP Material Ledger basic configuration. You will be able to carry inventory valuation in multiple currencies, and configure your system to work with more advanced tasks.

Create Your Own Scenarios
Follow along and recreate scenarios in your system, such as manufacturing variances, supply chain transfers, period-end closing processes, and more.

Advanced Topics
Discover how to display intercompany actual costs in the actual cost component split, as well as integrate the Material Ledger with CO-PA.

Latest Releases
Up to date for SAP ERP 6.0 enhancement package 5, so you can prepare your business for future changes and transitions.
Highlights

. Product cost planning
. Actual costing runs
. Total cost absorption
. Purchase price variance
. Manufacturing and overhead variances
. Material price determination
. Single- and multilevel price determination
. COGS revaluation at actual cost
. WIP revaluation at actual cost
. Multiple valuations/transfer prices
. IFRS

The Author

Vanda Reis is a Product Costing and Material Ledger expert who has worked as a consultant and advisor for several of the largest companies worldwide. She has more than 12 years experience with product costing processes including actual costing (material ledger). Vanda has worked for several major SAP accounts as a consultant and advisor for material ledger subject matter. She has written material ledger articles for the Financial Experts magazine, and is a regular contributor to the SAP community.
Table of Contents


  ... Acknowledgments ... 15


  1 ... Introduction ... 17


  1.1 ... Structure of this Book ... 18


  1.1.1 ... Part I: Basic Information on the Material Ledger and Product Costing ... 18


  1.1.2 ... Part II: Material Ledger Transaction Data ... 19


  1.1.3 ... Part III: Material Ledger Advanced Topics ... 19


  1.1.4 ... Appendices ... 20


  1.2 ... Looking Ahead ... 20


  PART I ... Introduction to the Material Ledger ... 21


  2 ... Introduction to the Material Ledger ... 23


  2.1 ... Price Control and Inventory Valuation ... 24


  2.1.1 ... Price Control as Standard Price ... 25


  2.1.2 ... Price Control as Moving Average Price (MAP) ... 28


  2.1.3 ... Moving Average Price versus Standard Price ... 36


  2.2 ... Material Ledger Concepts/Usage ... 39


  2.2.1 ... Multiple Currencies ... 40


  2.2.2 ... Multiple Valuations ... 42


  2.2.3 ... Actual Costing Calculation ... 43


  2.3 ... Material Price Determination Control ... 44


  2.4 ... Material Price Analysis, Categories, and Process Categories ... 46


  2.4.1 ... Process Categories ... 49


  2.5 ... Procurement/Consumption Alternatives and the Controlling Level ... 50


  2.5.1 ... Procurement and Consumption Alternatives ... 50


  2.5.2 ... Controlling Level ... 52


  2.6 ... Summary ... 53


  3 ... Product Cost Planning ... 55


  3.1 ... Business Case ... 56


  3.2 ... Master Data ... 57


  3.2.1 ... Cost Center ... 57


  3.2.2 ... Activity Types ... 59


  3.2.3 ... Materials and Bill of Materials ... 62


  3.2.4 ... Routings ... 64


  3.2.5 ... Work Center ... 65


  3.3 ... Activity Types and Planning Prices ... 66


  3.4 ... Selected Configuration for Product Cost Planning ... 69


  3.4.1 ... Cost Component Split ... 69


  3.4.2 ... Activate Cost Component Split in Controlling Area Currency ... 71


  3.5 ... Standard Costing ... 72


  3.6 ... Summary ... 84


  4 ... Material Ledger Basic Configuration and Startup ... 85


  4.1 ... Multiple Currencies Configuration ... 86


  4.1.1 ... Activate Valuation Areas for the Material Ledger ... 86


  4.1.2 ... Assign Currency Types to Material Ledger Type ... 88


  4.1.3 ... Assign Material Ledger Types to Valuation Area ... 93


  4.2 ... Actual Costing Configuration ... 94


  4.2.1 ... Activate Actual Cost ... 94


  4.2.2 ... Activate Actual Cost Component Split ... 97


  4.3 ... Material Ledger Startup ... 98


  4.3.1 ... Before You Run the Startup Program ... 99


  4.3.2 ... Running the Material Ledger Startup Program ... 100


  4.4 ... Reconciliation of the Material Ledger Currencies ... 102


  4.5 ... Price Determination Control ... 104


  4.6 ... Material Master Data with Material Ledger ... 106


  4.7 ... Summary ... 107


  5 ... Other Material Ledger Related Configurations ... 109


  5.1 ... Account Determination: Basic Configuration ... 109


  5.1.1 ... Price Differences (PRD) ... 112


  5.1.2 ... Exchange Rate Differences for Open Items (KDM) ... 114


  5.1.3 ... Expenditure/Income from Transfer Posting (AUM) ... 115


  5.1.4 ... Revenue/Expense from Revaluation (UMB) ... 115


  5.1.5 ... Price Differences for Material Ledger (PRY) ... 117


  5.1.6 ... Price Differences from Lower Levels (PRV) ... 118


  5.1.7 ... Exchange Rate Differences from Lower Level (KDV) ... 119


  5.1.8 ... Stock Posting (BSX) ... 120


  5.1.9 ... Accruals and Deferrals Accounts in the Material Ledger (LKW) ... 121


  5.1.10 ... Cost Center Crediting from Activities (GBB-AUI) ... 122


  5.1.11 ... Revaluation of Other Consumption (COC) ... 123


  5.2 ... Account Determination: WIP Revaluation ... 124


  5.2.1 ... WIP from Price Differences-Material (WPM) ... 124


  5.2.2 ... WIP from Price Differences-Int. Acty (WPA) ... 125


  5.2.3 ... Price Diff. from WIP Written Off from Materials (PRM) ... 126


  5.2.4 ... Price Differences from WIP Written Off from Activity Types (PRA) ... 126


  5.2.5 ... Recap ... 127


  5.3 ... Exchange Rate Differences ... 127


  5.4 ... Summary ... 129


  PART II ... Material Ledger Basic Functions ... 131


  6 ... Purchasing Processes and Variances ... 133


  6.1 ... External Procurement and Purchase Price Variances ... 134


  6.1.1 ... Creating a Purchase Order ... 135


  6.1.2 ... Receiving Goods from a Purchase Order ... 137


  6.1.3 ... Receiving the Invoice for a Purchase Order ... 146


  6.2 ... External Procurement and Exchange Rate Variances ... 148


  6.2.1 ... Exchange Rates in the Moment of the PO ... 148


  6.2.2 ... Creating a Purchase Order for a Foreign Vendor ... 149


  6.2.3 ... Receiving Goods from a Foreign Vendor ... 151


  6.2.4 ... Exchange Rates for Invoice Receipt ... 153


  6.2.5 ... Invoice Receipt in Foreign Currency ... 153


  6.3 ... Changing the Controlling Level ... 157


  6.3.1 ... Changing the Controlling Level for an Individual Material ... 157


  6.3.2 ... Change the Controlling Level: Mass Processing ... 160


  6.4 ... Summary ... 161


  7 ... Manufacturing and Overhead Variances ... 163


  7.1 ... Manufacturing Order and Preliminary Costing ... 164


  7.1.1 ... Creating Production Orders ... 164


  7.2 ... Simultaneous Costing ... 170


  7.2.1 ... Production Order Confirmation (BC30020) ... 170


  7.2.2 ... Goods Issue to the Production Order (BC30020) ... 172


  7.2.3 ... Goods Receipt from Production Order (BC30020) ... 174


  7.2.4 ... Production Order Actual Costs (BC30020) ... 176


  7.2.5 ... Production Order Confirmation (BC90010) ... 178


  7.2.6 ... Goods Issue to the Production Order (BC90010) ... 179


  7.2.7 ... Goods Receipt from Production Order (BC90010) ... 181


  7.2.8 ... Production Order Actual Costs (BC90010) ... 183


  7.3 ... Plant-to-Plant Material Transfers ... 184


  7.4 ... Period-End Processing ... 187


  7.4.1 ... Entering Actual Activity Type Prices ... 187


  7.4.2 ... WIP Calculation (Determination of the Work in Process) ... 189


  7.4.3 ... Variance Calculation ... 191


  7.4.4 ... Settlement ... 193


  7.5 ... Summary ... 197


  8 ... Periodic Actual Costing ... 199


  8.1 ... Creating a Costing Cockpit Run ... 200


  8.2 ... Material Selection ... 203


  8.3 ... Determine Sequence ... 205


  8.4 ... Single-Level Price Determination ... 207


  8.4.1 ... Allowing Material Price Determination ... 208


  8.4.2 ... Single-Level Price Determination Parameters ... 210


  8.4.3 ... Single-Level Price Determination Execution ... 214


  8.4.4 ... Single-Level Variances Absorption ... 214


  8.4.5 ... Periodic Unit Price (After Single-Level Price Determination) ... 219


  8.5 ... Multilevel Price Determination ... 221


  8.5.1 ... MultiLevel Price Determination Parameters ... 222


  8.5.2 ... Multilevel Price Determination Execution ... 229


  8.5.3 ... Multilevel Variances Absorption ... 231


  8.5.4 ... Periodic Unit Price after Multilevel Price Determination ... 239


  8.6 ... Post Closing ... 241


  8.6.1 ... Allowing Closing Entries ... 242


  8.6.2 ... Post-Closing Parameters ... 243


  8.6.3 ... Post-Closing Execution ... 245


  8.6.4 ... Accounting Documents after Post Closing ... 246


  8.6.5 ... Material Master after Post Closing ... 254


  8.7 ... Mark Material Prices ... 255


  8.7.1 ... Mark Material Prices Parameters ... 256


  8.7.2 ... Release Material Prices ... 257


  8.8 ... Summary ... 259


  9 ... Actual Costing Revaluations ... 261


  9.1 ... Revaluation of Consumption ... 262


  9.1.1 ... Revaluation of Consumption Configuration ... 262


  9.1.2 ... Sales Process and Material Ledger Postings ... 264


  9.1.3 ... Period Closing ... 268


  9.1.4 ... Review ... 273


  9.2 ... Revaluation of Work in Process ... 274


  9.2.1 ... WIP Revaluation Configuration ... 275


  9.2.2 ... Work in Process Scenario ... 275


  9.2.3 ... WIP Calculation and Revaluation at Actual (Closing Period 02) ... 279


  9.2.4 ... Reverse Work in Process ... 291


  9.2.5 ... WIP Reversion with Actual Costs (Closing Period 03) ... 291


  9.2.6 ... WIP Revaluation Reports ... 298


  9.3 ... Summary ... 304


  10 ... Material Ledger Actual Costs and Value Flow Reports ... 305


  10.1 ... Actual Cost Component Split ... 306


  10.2 ... Valuated Actual Quantity Structure ... 308


  10.3 ... Actual Bill of Material ... 312


  10.4 ... Value Flow Monitor ... 314


  10.4.1 ... Value Flow Monitor Selection ... 316


  10.4.2 ... Value Flow Monitor Views ... 319


  10.5 ... Activity Types Value Flow Display ... 325


  10.6 ... Summary ... 327


  PART III ... Material Ledger Advanced Topics ... 329


  11 ... Material Ledger: More Functionalities ... 331


  11.1 ... Transferring Actual Costs to CO-PA ... 332


  11.1.1 ... Configuring CO-PA ... 332


  11.1.2 ... Periodic Valuation in CO-PA ... 338


  11.2 ... Debiting or Crediting Materials ... 342


  11.3 ... Changing Actual Cost Component Split Values ... 348


  11.4 ... Distribution of Usage Variances (DUV) ... 351


  11.4.1 ... DUV Configuration ... 352


  11.4.2 ... DUV Process ... 359


  11.4.3 ... DUV for Activity Allocation ... 368


  11.4.4 ... DUV Report ... 371


  11.5 ... Alternative Valuation Run (AVR) ... 372


  11.5.1 ... Creating an AVR for Cumulative Periods ... 373


  11.5.2 ... AVR Results and Analysis ... 379


  11.5.3 ... AVR Comparison Report ... 382


  11.5.4 ... Transferring the AVR Results to CO-PA ... 383


  11.6 ... Summary ... 388


  12 ... Transfer Prices and Multiple Valuation Approaches ... 389


  12.1 ... Transfer Price Concepts ... 390


  12.2 ... Multiple Valuation Approach Implementation Scenarios ... 391


  12.2.1 ... New Implementation ... 391


  12.2.2 ... Implementing Transfer Pricing in a Live System ... 391


  12.3 ... Multiple Valuations Configuration ... 393


  12.3.1 ... Creating a Currency and Valuation Profile ... 393


  12.3.2 ... Assigning Currency and Valuation Profile to a Controlling Area ... 396


  12.3.3 ... Creating Versions for Valuations ... 397


  12.3.4 ... Creating Additional Valuations in Financial Accounting ... 398


  12.3.5 ... Defining Depreciation Areas ... 400


  12.3.6 ... Specifying the Use of Parallel Currencies ... 401


  12.3.7 ... Assigning Currency Types to Material Ledger ... 402


  12.4 ... Profit Center Implementation Configuration ... 403


  12.4.1 ... Profit Center Accounting (PCA) Transfer Pricing ... 403


  12.4.2 ... General Ledger Accounting Transfer Pricing ... 404


  12.5 ... Automatic Account Determination Configuration ... 405


  12.5.1 ... Determining Accounts for Internal Goods Movement ... 405


  12.5.2 ... Determining an Account for Production Variances ... 407


  12.5.3 ... Determining the Valuation Approach Clearing Account ... 408


  12.6 ... Defining the Transfer Prices Pricing Procedure ... 410


  12.6.1 ... Defining Condition Tables ... 410


  12.6.2 ... Defining Access Sequences ... 412


  12.6.3 ... Defining Condition Types ... 413


  12.6.4 ... Defining a Pricing Procedure for Transfer Pricing ... 415


  12.6.5 ... Defining Transfer Pricing Variants ... 417


  12.7 ... Optional Configuration ... 418


  12.7.1 ... Product Cost Type ... 418


  12.7.2 ... Product Costing Variant ... 420


  12.7.3 ... Planning Costing Versions ... 422


  12.7.4 ... Maintain Operating Concern to Carry Profit Center Valuation ... 423


  12.7.5 ... Assign the SD Conditions to the Value Fields ... 424


  12.7.6 ... Assigning Accounts for Internal Goods Movements ... 425


  12.7.7 ... Activating Profit Center Valuation in CO-PA ... 426


  12.8 ... Multiple Valuations Startup Procedure ... 427


  12.8.1 ... Activating Multiple Valuations ... 428


  12.8.2 ... Setting the Valuation Areas as Productive ... 429


  12.9 ... Multiple Valuations Process Examples ... 429


  12.9.1 ... Defining the Condition Records ... 429


  12.9.2 ... Standard Costing Estimate ... 431


  12.9.3 ... Material Master Prices ... 432


  12.10 ... Summary ... 433


  13 ... IFRS and Multiple Valuation of Cost of Goods Manufactured ... 435


  13.1 ... Introduction to IFRS ... 436


  13.2 ... Multiple Valuation of Inventory Concept ... 437


  13.3 ... Multiple Valuation of COGM Configuration ... 440


  13.3.1 ... Activation of the Business Function FIN--CO--COGM ... 440


  13.3.2 ... Define Accounting Principles ... 440


  13.3.3 ... Assign Accounting Principle to Ledger Groups ... 441


  13.3.4 ... Define Currency and Valuation Profile ... 442


  13.3.5 ... Assign Currency and Valuation Profile to Controlling Area and Activation ... 444


  13.3.6 ... Definition of Additional CO-Version in Controlling ... 444


  13.3.7 ... Activation of Activity Consumption in Quantity Structure and Credit of Cost Centers ... 446


  13.3.8 ... Transfer Depreciation from Asset Accounting ... 447


  13.3.9 ... Transfer Closing Entries from the Material Ledger to Controlling ... 448


  13.3.10 ... Define Alternative Accounts for Material Ledger Postings ... 450


  13.4 ... Periodic Process for Multiple Valuation of COGM ... 451


  13.4.1 ... Transfer of Depreciation to Controlling-Cost Center Accounting (CO-CCA) ... 452


  13.4.2 ... Price Calculation ... 454


  13.4.3 ... Calculation of Cost of Goods Manufactured and Closing Posting ... 457


  13.5 ... Summary ... 460


  14 ... Actual Costing Cross-Company Code ... 463


  14.1 ... Stock in Transit and Actual Costing Function Prerequisites ... 464


  14.1.1 ... Business Function LOG--MM--SIT ... 464


  14.1.2 ... Creating a New Cost Component for Delta Profit ... 466


  14.1.3 ... Group Valuation ... 467


  14.1.4 ... Electronic Data Interchange ... 469


  14.2 ... Stocks in Transit and Purchase Order (GRP) ... 470


  14.3 ... Intercompany Profits in the Actual Cost Component Split ... 472


  14.4 ... Cross-Company Code Stock Transfer Processes in Multilevel Actual Costing ... 473


  14.5 ... Summary ... 475


  ... Appendices ... 477


  A ... Examples in T Accounts ... 479


  A.1 ... Period 01 2011 ... 479


  A.2 ... Period 02 2011 ... 488


  B ... Material Ledger Data Archiving Objects ... 491


  C ... Bibliography ... 495


  D ... The Author ... 497


  ... Index ... 499