SAP Product Costing-Sub Contracting & External Process Mfg..
Complete "Sub Contracting & External Operation Manufacturing" with Product Costing of Live Examples
SAP Product Costing-Sub Contracting & External Process Mfg.. free download
Complete "Sub Contracting & External Operation Manufacturing" with Product Costing of Live Examples
Subcontracting and External Operation Process are crucial aspects of manufacturing in SAP. They represent ways in which a company can outsource part of their production to third parties. Here’s a detailed elaboration on the processes:
Subcontracting Process
1. Creation of Valuation Classes: Valuation classes help in determining the G/L account for postings.
RM: Raw Material
PACK: Packaging Material
FG: Finished Goods
2. Creation of G/L Accounts:
RM & PACK Consumption: This is where costs related to the consumption of raw materials and packaging are posted.
FG - COST of MFG from Vendor: Represents the cost incurred when manufacturing is done by the subcontractor.
Subcontracting Charges Account: Captures additional charges related to subcontracting that are not part of material or production costs.
3. OBYC Settings: Determines the automatic postings in Financial Accounting.
Configure for RM & PACK, FG, and subcontracting charges.
4. OKTZ (Overhead Cost Groups):
Assign overheads for RM and PACK. This determines how indirect costs are allocated.
5. Cost Center Creation:
Specifically for the subcontracting process. Cost centers capture costs for specific departments or activities.
6. Design Costing and Valuation Variant:
Tailored to the subcontracting process, determining how costs are calculated.
7. Purchase Order:
Create using item category 'L' (Subcontracting). Transfer the necessary components to the subcontractor via a transfer posting.
8. Goods Receipt:
When subcontracted goods are received using Movement Type 101.
External Operation Process Costing
1. G/L Accounts for External Operation:
Represents costs associated with external operations. Configure this in OKTZ.
2. Costing and Valuation Variant Design:
For external operation processes. This variant controls how costs are calculated for external operations.
3. Purchase Info Record and Routing:
Purchase Info Record contains details of the vendor and pricing for the external operation.
Routing, with an external processing control key, dictates the sequence of operations and designates one or more operations as external.
4. Production Order Creation:
When the production order is created for a material with an external operation, a purchase requisition is automatically generated for that operation.
5. Goods Receipt:
Goods or services related to the external operation are received against the purchase order and are posted to the production order.
6. Production Order - Cost Trend Option:
The cost trend in a production order shows various cost elements. It will display goods issue (cost of components), activity confirmation (production costs), and goods receipt (cost of the finished product).
7. Variance Calculation and Settlement:
At the end of the month or production cycle, variances between planned and actual costs for the production order are calculated. The variances are then settled to their respective cost objects (like a cost center or a finished goods inventory account).
Both these processes showcase the flexibility of the SAP system to handle complex manufacturing scenarios where not all operations are performed in-house. The setup ensures proper accounting and cost tracking for activities outsourced to third parties.
