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Thursday, September 13, 2012

Product Costing fastfacts

Define calculation base
Define percentage overhead rates
Define costing sheets
Define overhead keys
Define cost component structure:
Define structure
Define cost component
Assign cost elements to cost components


Product costing is a tool for planning costs and establishing prices for materials. It is used to calculate the costs of goods manufactured and the costs of goods sold for each product unit. 

If costing is carried out on the basis of data in Production Planning (PP), then the cost estimate is a product cost estimate with a quantity structure (for example, BOM and routing). If costing is carried out on the basis of data that you enter manually, then the cost estimate is a product cost estimate without a quantity structure. 
Product costing belongs to both the Production Planning (PP) Module and the Controlling (CO) Module. 

Cost Object Controlling is used in the following areas:

§ Order Related Production.

§ Repetitive Manufacturing.

§ Process Manufacturing.

§ Sales Order Related Production.

§ Engineer to Order.

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