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Actual Costing with the SAP Material Ledger

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Product Details

ISBN:
978-1-59229-378-0
Author:
Vanda Reis
Type:
Hardcover, 511 pages
Year:
2011

Product Description and Table of Contents

• 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



Additional Resource(s)


Download: Errata update Aug 27 2012

Product Reviews


Showing reviews 1-4 of 28 | Next

  1. One of the best books available in SAP press

    Posted by Anil P on Mar 25th, 2014

    lot of concepts covered in the book and it is giving googd expalnation each and evry screen and field.

    overall it is very good book t undertand the conepts


  2. best guie to actual costing

    Posted by ozer baygin on Nov 28th, 2013

    a very good book for actual costing process. It also provide multiple actual valuation process. it's a very good investment.


  3. Very good book to understand SAP Material Ledger

    Posted by Shabir on Oct 19th, 2013

    Excellent book to understand the concepts related to SAP Material Ledger.


  4. Posted by Anonymous on Oct 2nd, 2013

    A very good guide for any consultant regarding this complicated subject.


Showing reviews 1-4 of 28 | Next

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