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AC040 Cost Management and Controlling

AC040 Cost Management and Controlling. Enterprise Controlling. Overview of CO Components. MC. Enterprise Controlling. Profit center accounting. CO. CO. CONTROLLING Overhead and process costs. CONTROLLING Profitability analysis. Cost/Revenue elements Cost centers

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AC040 Cost Management and Controlling

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  1. AC040 Cost Management and Controlling Enterprise Controlling

  2. Overview of CO Components MC Enterprise Controlling Profit center accounting CO CO CONTROLLING Overhead and process costs CONTROLLING Profitability analysis • Cost/Revenue elements • Cost centers • Internal orders and projects • Sales analysis of products and services • Contribution margin • Profitability analysis by organizational units Cost allocation by sources

  3. Cost Center Master Data in Profitability and Sales Accounting Overhead Cost Controlling Profit Center Accounting Process InternalOrders Product cost Controlling Cost object Profit Center Profitability Analysis Profitability segment

  4. Basic Concepts of CO-PA Characteristics Values Sales region North Product Prod1 Product group Electronics customer Cust1 Cust. grp Wholesale trade LandGermany Sales rep. Miller REGION S N W CUST. GRP. Electr. Food Bicy. PRODUCT GRP Revenues Sales, discountsand returns COGS Value fields Revenues 800 Sales, discountsand returns 100 COGS 650 Profitability segment

  5. Types of Profitability Analysis in Operating concern M001 Costing-Based Cost/Revenue Elements 800000 Revenue 1,000,000 808000 Sales deductions 100,000 -------------- Net Revenue 900,000 893000 Cost of Sales 690,000231000 Price Variances 10,000 651000 R & D Costs 10,000 671000 Marketing Costs 50,000 655000 Admin. Costs 40,000 -------------- Operating Profit 100,000 Account-Based Value Fields Revenues 1,000,000 Sales Deductions 100,000 -------------- Net Revenue 900,000 Material Costs 400,000 Production Costs 190,000 Production Variances 10,000 -------------- Contribution Margin 1 300,000 Material Overhead 50,000 Production Overhead 50,000 -------------- Contribution Margin 2 200,000 R & D 10,000 Marketing Costs 50,000 Admin. Costs 40,000 -------------- Contribution Margin 3 100,000

  6. Operating concern M001 Characteristics Values ALTKN Prev.acct no. BISMT Old mat. number KDGRP Customer group KONDA Price group KONDM Mat.pricing grp KTGRM Acct asgnmt grp LAND1 Country MTART Material type PLTYP Price list type PRODH Prod.hierarchy STAWN Comm./imp. code WW001 Group of countries WW003 Sales group WW004 Sales office WW005 Customer group WW006 Customer area WW007 Region WW008 Raguired term of del WW009 Key of valid conditi WW010 Incoterms 1 WW011 Incoterms 2 WW012 Net value WW013 Material tax WW015 Batch number WW016 Statist.mater.number WW017 Land Value fields

  7. Operating concern M001 Value fields ABSMG Sales quantity ERLOS Revenue STDPR Standard price VVDIF VVFI1 FI VVKG1 Net value kg VVP08 Total payable VVP09 Paid advance payment VVP10 Guarant.flat ratePON VVP11 Other costs PON VVP12 Market-flat ratePON VVP13 Freight PON VVP14 Insurance-freightPON VVP15 Insurance-credit PON VVP16 FCO VVP17 Sum PON VVP26 Commision PON VVP27 Claim compensation % VVP28 Cost overrun % VVP29 Cost overrun -amount VVP30 Price-Internal setl% VVP31 Price-Internal settl VVP32 Output VAT VVP33 Price-cost overrun% VVP34 Price-Cost overrunAm

  8. Operating concern M001 Value fields VVP39 MTP VVP40 Rebate perc./val. VVP41 Rebate perc./qty. VVP42 Rebate val./qty. VVP43 Gross / price list VVP44 Manual gross price VVP45 Net price VVP46 Net price manual VVP47 Basic discount VVP48 Additional discount VVP49 Additional discount2 VVP50 Discount excl. (man) VVP51 Discounts add. (man) VVP52 Discount val (man) VVP53 Surcharge manual VVP54 Surcharge manual % VVP55 DA discount VVP56 Manual gross price VVP58Cash discount VVP59Comm. Accr. perc/val VVP60Comm. Accr. val/qty

  9. Profit Center Validity Period Company Code Assignment Profit Center Address Data Communication Data Basic Data

  10. Profit Center – division in Mitas Product type Profit centers Profit Center Organizational Profit centers

  11. Profit Centers in Mitas Profit Centers Industry Profit Centers Agro 3115 3 – BU Industry 1 – Plant 15 – Product/Goods group Plant 3 – off take products 6110 6 – BU Agro 1 – Plant 10 – Product/Goods group

  12. Material Profit Center Assignments Profitabilitysegments Cost center, business process Sales order Profit center Cost object Asset Internal order Product order Profit centers

  13. Planning and Planning Integration: Overview • Introduction to Planning • Planning in Cost Center Accounting using different Controlling methods • Integrated Planning Cycle • Planning With ABC

  14. Copy Plan and Actual Data Plan data Actual data Plan 2004 Version 1 Actual 2004 Copy: Cost Centers Profitability Segments . . Plan data Plan 2005 Version 1 Revaluation

  15. Integrated Corporate Planning Strategic Procedure planned requirements Sales Planning Profit Planning LIS Sales Cost of goods manufactured / sold Template Bill of material Routing SOP LTP Material CostEstimate Activity input quantity Process Input quantity Cost center/ Activity type Activity price Process price

  16. Planning Integration - Update Sales Plan/CO-PA Logistics InformationSystem Profit Planning Sales Planning/ Fore- casts Costcomponents Sales quantity Sales quantity Material master Production - PP SOP, LTP Productcosting Cost of goods sold Activity requirements Cost Centers Plan-Integrated Orders

  17. CO- PA: Planning Sales Organization Time frame from … to ... Version Industry Product Quantity Revenue COGS Media Software Pharma 1000 5000 3000 3000 4000 1000 2000 3000 800

  18. Integrated Planning in Profit Center Accounting Profitability Analysis Profit Center Plan PC Sales 100,000 Discounts 5,000 Cost of sales 50,000Marketing costs 10,000 Administration costs 15,000 …. LIS t Internal Order Cost Center

  19. Transaction-Based Postings In CO: Contents • Postings in Overhead Cost Controlling • Postings in Cost Object Controlling • Postings in Profitability and Sales Accounting • Example Posting for Transfer Prices

  20. Transferring Sales Order Receipts to CO-PA CO-PA Quantity + Revenue + Bonus + (accrued) COS + EC-PCA Acct. CO-PA FI SD 1 Customer Order 1 Quantity flow t

  21. EC-PCA Delivery and Billing Quantity + CO-PA Revenue + Bonus + COS + (costing-based) Revenue COS X X Acct. CO-PA Rebate Inventory X FI X Customer X SD 1 2 3 Sales order Delivery Billing Quantity flow t

  22. Goods receipts Selling Goods and Services - with Sales Order Controlling Billing Document SD Acty Sales order ProfitabilityAnalysis CCtr Allocation CO-PA MM CO Object Item 20 Installation onsite Order Settlement External activities Invoice

  23. Period-End Postings in CO: Unit Contents • Overhead Cost Controlling • Cost Object Controlling • Actual Costing/Material Ledger • Profitability Analysis • Schedule Manager • Reconciliation Ledger

  24. Overview of the Data Flow in Profitability Analysis CO Cost and Revenue Element Accounting Profitability Segments CO-PA Profitability Analysis Product cost Controlling Overhead CostControlling Cost object • Cost Centers • Internal Orders Cost of goods estimation FI RevenuesDiscounts SD

  25. Assigning Overhead Costs: Overview CO- OM Administrative costs Assessment Cost Center Value Fields Field service hours Direct/indirect activity allocation CO- PA Marketingcampaign Order/project settlement Customer support Assessment Process Special deliveries Template Allocation

  26. CO- PA Assessment of Cost Center and Process Costs Cycle: Assessment Cost center administration 400000 20,000 430000 30,000 50,000 630000 - 50,000 Administration: + 50,000

  27. Order Settlement to ProfitabilityAnalysis Invoice + x% Costs Invoices Overheads Order CO- PA

  28. Overview of the Data Flow to Profit Center Accounting EC-PCA Profit Center Accounting CO Cost and Revenue Element Accounting Profitability Analysis Product cost Controlling Overhead Cost Controlling • Processes • Cost Centers • Internal Orders Cost object FI revenues Discounts SD

  29. Balance Sheet Items in EC-PCA Online EC-PCA Financial Accounting Assets Assets Work in Process Work in Process Inventory Values Inventory Values Down Payments Down Payments Receivables Payables

  30. Profit Center Motor cycles EC-PCA Distribution/ Assessment Va l ue F l ow Distribution and Assessment similar to Cost Center Accounting Profit Centers Sales Administration Profit Center Sports cars Period-End Closing: Distribution

  31. Distribution/ Assessment in Mitas Overhead Distribution/Assessmentto Product Profit Centers Va l ue F l ow Profit Center Tyre 1 • Profit/Loss Statement: • Revenues • Change of Inventory • Overhead • Organizational Profit Centers • Sales • Administration Profit Center Tyre 2 • Profit/Loss Statement: • Overhead EC-PCA Period-End Closing: Distribution/Assessment

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