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Actual Price Calculation & Revaluation

Former Member
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What is logic for actual Price Calculation.Give the example with 3 activity types.

How the system revaluates the Production Order with actual activity price.On what logic system revaluates.

PLease give example.

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Answers (2)

Answers (2)

Former Member
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Hi,

When you start production you will have all master data such as BOM and routing (designed considering optimum situations)

BOM has a direct referance to material master from where we get material price

Routing has direct referance to Work center. In the work center we maintain different activites such as work center setup activity or production activity or labour activty (a work center is a place where production is taking place)These activities defined in work center has direct referance to activity types. for activity types we maintain standard prices (in t code KP26). Also in work center we maintain formulas which uses these activities and calcualtes proper values reffering entries in KP26. offcourse you require some configurations here

The routing contains production time, which is maintined for production of unit materials(called as base unit). these times maintained are very imprtant and calculated / maintained by experts (some times you have to take stop watch to production area and take all times required manually). These times maintined are the basis for caluclating production costs.Also these are basis for capacity planning as well in PP. Once the times are checked and freezed they act as standard times for that production process.

And everyone tries to reach that standard time.

The same concept is used in SAP. First of all we mainatin all standard values (assuming them to be standard as some EXPERT has done analysis and given the data for system)

By using these standard values we do the planning resulting in planned costs. Which offcourse we have to achieve. But the problem is practically it is impossible to achieve standard values all the time. So in system we try to capture actual times utilised for the production and actual materials consumed for the production. So by taking these actuals system will calcualte the actual price.

It is important for us to determine whether company is in profit/loss   for this we can consider actual costs. Also these actuals calculations will be reffered in future to get more realistic prices also.

The difference between actual and planned price will act as varince.

I hope you understand. Let me know if you have any doubts.

Regards,

Pavan

Former Member
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Hi Debsish,

Suppose you are having 3 activities Machine, labour , set up ,

You have the plan price for the activites In KP26 as Machine 100 , Labour 200, Set up 50  ( In rs per Hr)

Now at the time of production order confirmation you have confirmed Machine 2 hr, Labour 3 hr , Setup 1 Hr

Now cost is as bellow

Machine 2 x 100 = 200

Labour 3 x 200 = 600

set  1 x 50 = 50

Total cost = 850

Now at the month end you came know that Actula activty rate is Mac 110, lab 210, set up 60 .( You can maintian Activity rate manually in KBK6 or You can calculate by using KSII)

at the month end when run MFN System will Revaluate the cost withe actula activity rate available in KBK6

Now cost is as bellow At po

Machine 2 x 110 = 220

Lab = 3 x 210 = 630

setup = 1 x 60 = 60

Total actual cost = 910

To allow revaluation of production order you need to confifuration in versions under price calculation tab select "Own Business transaction or Original Business transaction "

Regards,

Ram

Former Member
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Forget about KBK6.If i do assesment of RS910 from administrative Cost Center to Production Cost Center.Then how system calculates Actual Price of activities in KSII on what logic.Please write with calculation.

Former Member
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Hi,

As per your requirment Now cost monitored in Production cost center is 910 ... Suppose you have confirmed production order with 10 Hrs .... The 10 hours will be captured in Production cost center..

While you are doing ksii Systme consider actual cost in the production cost center and actual activity hours in the production cost center .

Now actual activity rate per hour - 910/10 = Rs . 91

Regards,

Ram

Former Member
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U have shown the calculation for one activity.When there are 3 activities how system will calculate for each activities.

when Machine 2 hr, Labour 3 hr , Setup 1 Hr.

Former Member
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U have shown the calculation for one activity.When there are 3 activities how system will calculate for each activities.

when Machine 2 hr, Labour 3 hr , power 2kwh.

Former Member
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Please let me know your splitting str.

Regards,

RAM

Former Member
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I have not defined any splitting structure.How the calculation will  be?