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    CO Workshop - Material Ledger - 2

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    Rashid Hakeem
    This document provides an overview of a workshop on controlling actual costs and the material ledger in SAP. It discusses: 1. The basics of the material ledger, which allows tracking actual costs by component for each product. 2. The differences between companies using SAP with and without the material ledger. Those with it can trace actual costs and production efficiency by product. 3. Potential results of implementing the material ledger, both positive like accurate profitability reporting, and negative like increased data volumes and closing times. 4. The costing flows within the material ledger for product cost estimates, process orders, and final impacts like variance adjustments.

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    CO Workshop - Material Ledger - 2

    Uploaded by

    Rashid Hakeem
    137 views10 pages
    This document provides an overview of a workshop on controlling actual costs and the material ledger in SAP. It discusses: 1. The basics of the material ledger, which allows tracking actual costs by component for each product. 2. The differences between companies using SAP with and without the material ledger. Those with it can trace actual costs and production efficiency by product. 3. Potential results of implementing the material ledger, both positive like accurate profitability reporting, and negative like increased data volumes and closing times. 4. The costing flows within the material ledger for product cost estimates, process orders, and final impacts like variance adjustments.

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    SAP CO Workshop on Material Ledger

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    This document provides an overview of a workshop on controlling actual costs and the material ledger in SAP. It discusses: 1. The basics of the material ledger, which allows tracking actual costs by component for each product. 2. The differences between companies using SAP with and without the material ledger. Those with it can trace actual costs and production efficiency by product. 3. Potential results of implementing the material ledger, both positive like accurate profitability reporting, and negative like increased data volumes and closing times. 4. The costing flows within the material ledger for product cost estimates, process orders, and final impacts like variance adjustments.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    137 views10 pages

    CO Workshop - Material Ledger - 2

    Uploaded by

    Rashid Hakeem
    This document provides an overview of a workshop on controlling actual costs and the material ledger in SAP. It discusses: 1. The basics of the material ledger, which allows tracking actual costs by component for each product. 2. The differences between companies using SAP with and without the material ledger. Those with it can trace actual costs and production efficiency by product. 3. Potential results of implementing the material ledger, both positive like accurate profitability reporting, and negative like increased data volumes and closing times. 4. The costing flows within the material ledger for product cost estimates, process orders, and final impacts like variance adjustments.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 10

    SAP CO Workshop

    Controlling
    Material Ledger
    OVERVIEW OF THE WORKSHOP – Day 2

    Controlling – Actual Costing / Material Ledger


    1. Material Ledger – Basics
    2. Companies with / without Material Ledger
    3. Results from Implementing Material Ledger
    4. Costing Flow
    4.1 Material Ledger – Flow – Product Cost Estimate
    4.2 Material Ledger – Flow – Process Order
    4.3 Material Ledger – Flow – Final ML Impact
    1. Material Ledger - Basics

     Actual Cost by Cost Component by Product


     Actual Cost of Material by Product
     Actual Cost of Labor by Product
     Actual Cost of Depreciation by Product
     Actual Cost of Sales
     Actual Cost Component

     During the accounting period all material movements are valued at a


    moving average for Raw Material / Packaging and Standard Costing
    for Semi Finished and Finished Goods and recorded by material in the
    material ledger

     Price Differences (Variances) for each material movement are


    recorded

     At the end of the period an actual cost (periodic unit price) is calculated
    for each material though out multiple levels of product produced

     Revaluation of Inventory (Semi Finished / Finished Goods)


     Revaluation of COGS
     Distribution of Usage variance is allocated to product
    2. Companies with / without SAP Material Ledger

    •SAP - Without Material Ledger •SAP - With Material Ledger


     No Traceability of Actual Material Cost by  Traceability of Actual Material Cost by
    Product Product
     Purchase Price Variance  Purchase Price Variance
     BOM Usage Variance  BOM Usage Variance
     Production Usage Variance  Production Usage Variance
     COGS at Actual Price  COGS at Actual Price
     No Traceability of production efficiency by  Traceability of production efficiency by
    product product
     No Report Standard & Actual value of  Report Standard & Actual value of
    Inventory by Product Inventory by Product
     Inaccurate Product Level Profitability /  Accurate Product Level Profitability / Gross
    Gross Margin Reporting Margin Reporting
    3. Results from Implementing Material Ledger

    •Results Positive from Implementing •Results Negative from Implementing


    Material Ledger Material Ledger

     Impact of Actual Cost on Monthly Profit  Massive volume of data


    and Loss
     Increased time to close by at least 1
     Actual Cost to support the Standard day may be more
    Cost Scenario of the company
     Distribution of usage variances
     See Actual Cost of Inventory without extremely time consuming
    impacting the previous inventory cost
     Difficult to Validate the accuracy of the
     Ability to see actual product line posting at a high level
    profitability
     Difficult for casual / non users to
    comprehend
    4. Material Ledger – Costing Flow
    4.1 Material Ledger – Flow – Product Cost Estimate
    (Will be performed once a year)
    4.2 Material Ledger – Flow – Process Order
    (Actual Costing)
    4.3 Material Ledger – Flow – Final ML Impact
    (Variances and its adjustment)
    End of Session

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