COGS split into fixed and variable in Public Cloud

[AchintyaB]

As per business requirement we need to split activity cost as fixed and variable in margin analysis, but in configuration there is no option to select fixed and variable. Is this option available in SAP public cloud?

[vallabhasatish90]

Hi Achintya,

To get the product cost split by fixed and variable cost:

1. Need to define in cost component structure - whether a cost component is variable only of fixed and variable nature.

2. If the cost component is of fixed and variable nature, for example like labor cost - please maintain the fixed and variable cost in activity price maintenance.

3. All costs that are relevant for material inputs like - raw materials, packaging costs should be set as variable in the cost components.

4. Any overhead calculation cost components will be designed as fixed costs in cost components.

With you can see the product cost break down by fixed and variable in standard cost reports.

Regards

[AchintyaB]

Hi, We have a Labour activity and in cost component structure it is defined as fixed and variable. In product costing reports we are able to see fixed and variable cost separately but the issue is when we sell the material to customer we want to see the fixed and variable breakup in Market segment report (cost of goods sold split) . When we configure cost of goods sold split, is there an option to post fixed value and variable value to different GL accounts?

[vallabhasatish90]

Hi Achintya, to see Fixed and Variable in market segment is not available today. You need to have a custom report for this. In coming releases, there could be Review Booklet for Market Segments which will show different data points in same report. But for now system show full cost. But when you are looking at market segment, why fixed and variable is required. We need to see gross margin against full COGS. Fixed and variable cost makes sense when you compare costs among different materials and which materials are having more fixed cost portion, to take control actions. But for market segment report it is not much relevance.