This in-depth guide helps you analyze your company's performance by showing you how to use production variance analysis in SAP Controlling (CO). The author helps you identify the breakdown points in your company's performance and provides exclusive insights to better understand how these processes can be improved. Readers quickly learn how to make production processes more efficient, thereby directly and positively impacting your organization's bottom line. With this comprehensive guidebook, you'll be able to maximize the full potential of your SAP installation by making crucial process improvements.

About the Author(s)

John Jordan has been an SAP consultant, specializing in the SAP Financials and Controlling area for several years and owns his own company.

He is the author of the successful Essentials guide Production Variance Analysis for SAP Controlling. and has also written several articles for the SCM Expert and Financials Expert newsletters and has presented at the WIS conferences.

Table of Contents

Introduction ... 3

1. Initial Planning ... 5
... 1.1 Sales and Operations Planning ... 5
... 1.2 Long-Term Planning ... 6
... 1.3 Cost Center Planning ... 10
... 1.4 Summary ... 13

2. Cost Estimates ... 15
... 2.1 Master Data ... 15
... 2.2 Overhead Costs ... 20
... 2.3 Cost Components ... 22
... 2.4 Costing Variant ... 24
... 2.5 Standard Cost Estimate ... 25
... 2.6 Preliminary Cost Estimate ... 31
... 2.7 Summary ... 34

3. Actual Costs ... 35
... 3.1 Primary Costs ... 35
... 3.2 Secondary Costs ... 35
... 3.3 Credits ... 36
... 3.4 Post Actual Costs ... 37
... 3.5 Report Actual Costs ... 38
... 3.6 Summary ... 39

4. Period-End Processing ... 41
... 4.1 Types of Variance Calculation ... 41
... 4.2 Variance Configuration ... 42
... 4.3 Variance Categories ... 46
... 4.4 Period-End ... 48
... 4.5 Cost Center Variances ... 59
... 4.6 Purchase Price Variance ... 66
... 4.7 Actual Costing/Material Ledger ... 70
... 4.8 Summary ... 71

5. Scrap Variance Analysis ... 73
... 5.1 Scrap Basics ... 73
... 5.2 Assembly Scrap ... 74
... 5.3 Component Scrap ... 79
... 5.4 Operation Scrap ... 85
... 5.5 Summary ... 92

6. Reporting ... 93
... 6.1 Summarized Analysis Reports ... 94
... 6.2 Detailed Reports ... 101
... 6.3 Line Item Reports ... 102
... 6.4 Summary ... 103
... 6.5 Guide Summary ... 103
... 6.6 Looking Ahead ... 104

Bibliography ... 105
Glossary ... 107
Index ... 113