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Target Vs Plan Cost Production Order

The document discusses different types of planned, actual, and target costs in cost object controlling. It defines total planned costs as the sum of planned cost debits and credits. Planned costs come from preliminary cost estimates and price valuations. Total actual costs equal the sum of actual debits and credits from material withdrawals, overhead allocations, and deliveries priced according to plan. Total target costs adjust planned costs to actual operating rates by factoring activity-dependent planned costs by actual quantities. Target costs are used to calculate variances by comparing them to control costs. The document also distinguishes MPS from MRP, noting MPS only plans firm A class materials to protect plans within a time fence.

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757 views2 pages

Target Vs Plan Cost Production Order

The document discusses different types of planned, actual, and target costs in cost object controlling. It defines total planned costs as the sum of planned cost debits and credits. Planned costs come from preliminary cost estimates and price valuations. Total actual costs equal the sum of actual debits and credits from material withdrawals, overhead allocations, and deliveries priced according to plan. Total target costs adjust planned costs to actual operating rates by factoring activity-dependent planned costs by actual quantities. Target costs are used to calculate variances by comparing them to control costs. The document also distinguishes MPS from MRP, noting MPS only plans firm A class materials to protect plans within a time fence.

Uploaded by

83pankaj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Hey Joe,

Total Plan Costs, Total value of the planned costs with which cost objects are debited and credited.

This value is calculated in the following formula:

Total planned costs = Planned cost debit + Planned cost credit

Use
In Cost Object Controlling, the planned debit of a manufacturing order is obtained from a preliminary cost estimate for
the order. In accordance with the costed quantity structure, the order is debited with planned costs for material
consumption, internal activity consumption, and overhead and process costs.

The planned credit of a manufacturing order comes from the delivery of the order to stock. The planned quantity of
the order is valuated with the planned price according to the price control.

The total value of the planned costs is the sum of the planned debits and planned credits.

Planned costs: The costs anticipated for a particular undertaking (such as an order).

On prod order level this cost will be picked by planned consumption from BOM for materials and planned activities
from routing.

Total Actual Costs
Total value of the actual costs.

This value is calculated with the following formula:
Total actual costs = Actual cost debit + Actual cost credit

Use
In Cost Object Controlling, the actual debit of a manufacturing order normally results from material withdrawals,
confirmations, overhead allocations, and so forth.

The actual credit of a manufacturing order results from the delivery of the order to stock. The actual quantity of the
order is valuated with the planned price according to the price control.

The total value of the actual costs is the sum of the actual debits and actual credits.

A cost consisting of the total debits made to a cost object.

This will consider actual consumption of materials and actual activity when you confirm order with co11n or co15

Total value of the target costs.

Calculated with the following formula:

Total target costs = Target cost debit + Target cost credit.

Use
Target costs are the planned costs adjusted to the actual operating rate.

The target debit on a manufacturing order is the sum of the activity-independent planned debit of the order and the
activity-dependent planned debit of the order multiplied by the actual quantity of the order.

The target credit of a manufacturing order results from the goods receipt postings to stock. The delivered actual
quantity is valuated with the planned price according to the price control.

The total value of the target costs is the sum of the target debit and the target credit.

The target costs are calculated during variance calculation and updated to the database.

The target costs cannot be shown until you have performed variance calculation for this target cost version. The
target credit for the calculation of the total variances and production variances cannot be calculated until an actual
quantity for an order exists after a goods receipt posting.

For the calculation of variances, the target costs are compared with the control costs.


.
MPS is same as MRP features wise but MPS will be done only for A class materials where you have firming type and
planning time fence to protect your plan from any automatic changes.

MRP : MD01 , MD02 , MDBT

MPS : MD40, MD41or MD42 .

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