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COGS account not as cost element

Former Member
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Dear SAP experts,

I need some clear understanding about something.

I run MTO project.

My friend in team say that COGS account doesn't need to be created as cost element category 12.

But, if we not created COGS account as cost element, can we still transfer COGS amount from SD condition type?

Please advice.

Regards

Accepted Solutions (1)

Accepted Solutions (1)

ajaycwa1981
Active Contributor
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Hi Anu

1. COGS is not recommended as a Cost Element if you are in a MTS Scenario

2. COGS is required as a cost element if your sales order is a Cost Object

The dependancy is not on Costing based or account based COPA, rather it is on whether your sales order is a cost object or not

In MTS, COGS is not reqd as a cost element.. In this case, you can update COGS to COPA in 2 ways

a. VPRS cond type in SD pricing procedure

b. Cost Comp Split from prod costing to COPA.. (IMG Settings in KE4U, KE40, KE4J/KEPC and KE4R)

Regards

Ajay M

Former Member
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For Ajay,

My current condition is that Sales Order is a cost object (not statistical).

So, should I create COGS as cost element? what category?

In term of MTS,

From what you're saying is that COGS account is not required to be cost element because COGS amount still be tranfered to CO-PA through SD condition type (VPRS) even if we don't create it as cost element.

Please correct me if I wrong.

Regards

ajaycwa1981
Active Contributor
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Hi Anu

My current condition is that Sales Order is a cost object (not statistical).

So, should I create COGS as cost element? what category?

Cost Element should be Category 1

In term of MTS,

From what you're saying is that COGS account is not required to be cost element because COGS amount still be tranfered to CO-PA through SD condition type (VPRS) even if we don't create it as cost element.

Please correct me if I wrong.

Yes, you have understood it right

Regards

Ajay M

Former Member
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One more thing please....

please help me for this one.

I believe i already told you all my friends that I run MTO.

This new business requirement.

I run sales order costing for a material that have process like bellow :

1. raw is purchase from vendor.

2.raw is process into semi finish good in internal company using PP module ( process order).

3.semi finish good process into finish good through external processing (not subcontracting).

When I run sales order cost estimate, there is error in step 3.

System does mention a cost element (210101) is not cost category.

When i trace it, system is reading OBYC (GBB-VAY).Coz only in that OBYC, the cost element exist.

Does anyone know what is the connection between run sales order costing (with external processing in it) and obyc (GBB-VAY)?

Why does system need to read that OBYC?

Please help.

Regards

ajaycwa1981
Active Contributor
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Hi Anu

System reads GL from OBYC in order to give you the Itemization in cost estimate

The itemization consists of GLs and the Material nos... The GLs for the same are read from OBYC

Ideally, it is GBB-VBR (Consumption accounts)... In case of MTO, since your GR from external processing will be consumed against MTO prod order, it is GBB-VAY

If you have any question other than the intended subject, please open a new thread as per the rules of the forum..

It becomes easy for others to participate

Regards

Ajay M

Edited by: Ajay Maheshwari on Nov 10, 2010 1:57 PM

Former Member
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Tks ajay...

Answers (1)

Answers (1)

Former Member
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Hello Anulekha,

COGS account is not recommended when you have a costing based COPA because the cost cost components are captured from the standard / actual cost estimate at the time of billing (prerequisite is that you link the cost components to value fields) and therefore if you create a cost estimate then it would be capturing the data twice once at the time of PGI and another at the time of invoicing. However, if you are not having COPA then you can create a cost element and the COGS would be posted with Sales Order as a cost object.

Additionally you can also capture COGS from SD with VPRS but capturing the COGS with cost components is recommended.

Kind Regards // Shaubhik