Actual cost and planned costs in sap

 

Actual cost and planned costs in sap:

In production order cycle following costs are involved. Planned costs, Actual Costs and target costs. Planned costs are calculated when we create the production order and when we save the order. I want to know when Actual costs are calculated. During production order confirmation or during goods receipt. One more thing is what are target costs. How they are different from Planned costs and Actual Costs. At what stage these target costs are calculated.

otal Plan Cost = Std Cost the material required to Produce X Planned Qty of the required material

Target Cost = Std Cost the material planned to Produce X Std Qty of material required to produce, for Produced Actual Qty

Actual Cost = Std Cost the material planned to Produce X Actual Qty of material consumed, for Produced Actual Qty

For Example : Final Material - A,- Qty Planned to Produce - 2 nos

As per Standards, Below Qty of Materials required to Produce A , for 2 Nos

Mat B - 2Nos X INR 50 = INR 100

Mat C - 4Nos X INR 60 = INR 240

Activity Cost = 2 hrs X INR 10 = INR 20

Total Plan Cost = INR 360

Actual Qty Produced = 1 No

Actual Consumption is as follows .

Mat B - 1.5 Nos ( X INR 50 = INR 75 )

Mat C - 2 Nos ( X INR 60 = INR 120 )

Activity Cost = 2 hrs ( X INR 10 = INR 20 )

So, Actual Cost = INR 7512020 = INR 215

Whereas, Target cost for the Actual Qty ( of Product A - 1 Ns) is , as follows,

Mat B - 1 Nos ( X INR 50 = INR 50 )

Mat C - 1.5 Nos ( X INR 60 = INR 90 )

Activity Cost = 1 hrs ( X INR 10 = INR 10 )

Therefore, Target cost = INR 509010 = INR 150