Product Costing

Product Cost = Materials Cost(ROH + HALB Materials Cost)+Activity Cost (Operation Cost)+Overhead Cost.

1.Raw materials cost are generally entered as Planned price along with the valid from date in Costing 2 view, and price control indicator is "V". Origin group has to be given to all the Raw materials in costing 1 view.

2. For HALB Materials Price control indicator will be S for Inhouse manufactured & V for externally processed materials (Sub-Contracted Items) respectively. Also assign Overhead group for all Inhouse manufactured items.

3. No need to enter any value for the materials having S as the price indicator and for Sub-contracted items that's F30 also no need to enter any cost in the material master.

4. Activity cost is the cost incurred in performing individual operation. This cost is captured via the work center which we mention in each operation in the routing of that product. A Cost centre and an appropriate activity type is assigned in the work centre.

5. Proper Cost should be assigned for the combination of Activity type and Cost centre.

6. Overhead cost is the indirect cost that we capture according to the customer's requirement.

7. If certain items for certain products alone should not be considered for costing means, then we can achieve this using costing relevancy indicator in the BOM and for the activity(operation's mentioned in routing) which should not be considered for costing also can be mapped by removing the costing relevancy indicator in routing. Overhead group is assigned in Costing1 view.

8. Creating Cost center - KS01

9. Create Activity Type - KL01.

10. Assiging Rates for a cost center/activity type combination in T code KP26.

11. Cost estimate Related T codes are CK40N,CK11N,CK24.

12. UseCK40N always, so that you can do the costing ,mark the price and release the same. Generally Cost Rollup will be taken for Finished product so that the system automatically calculates for the Semi- Finished products standard cost.

13. IF you use CK11N,then only costing will be done, but for marking and release you have to use CK24.

14. For each Production order type in T code OPL8 Order Type Dependent Parameters - Under controlling tab - Costing variant Planned and actual has to be assigned. 

15. In REM scenario - Product Cost Collector has to be created using T code KKF6N for all Inhouse Manufactured assemblies.

Check these links [What's Order settlement?|https://www.sdn.sap.com/irj/scn/thread?messageID=6237793#6237793]

*Steps For Order Settlement*

 You should follow following steps for Order Settlement after confirmation :

1. After Final Confirmation of Order ( Status : CNF) make GR for order using Tcode : MIGO / MB31 so Production Order Status will be DLV.

2. Then complete the order technically by using Tcode : CO02----> Functions ( Menu)-----> Restrict Processing -------> Technically Complete. You can carry out TECO for multiple Orders in Tcode : COHV (Mass Processing).

3. Over head calculation- KGI2 or CO43 4. WIP calculation - KKAX or KKAO 5. Variance - KKS2 or KKS1 6. Settlement - KO88 or CO88.