Managing Costing Variants for Calculations in SAP FICO

Costing variants in SAP FICO define the method and rules used to calculate costs for different objects such as materials, products, and services. They play a key role in controlling and determining how costs are calculated and allocated in the system. This article provides a step-by-step guide to managing costing variants in SAP FICO, along with examples to help illustrate the process.

Step 1: Understand the Structure of a Costing Variant

A costing variant is a collection of settings that control the way costs are calculated. It determines factors like:

• Costing Method: Defines the method used for cost calculation (e.g., standard costing, moving average, etc.).
• Valuation Class: Specifies which valuation class (e.g., raw materials, finished goods) the costing variant applies to.
• Costing Sheet: Defines the overhead cost calculation and the allocation to cost objects.
• Price Determination: Determines how material prices are derived (e.g., standard price or actual price).

Step 2: Create a Costing Variant

The first step in managing costing variants is to create them in the system. This involves assigning specific costing rules to a variant for a particular costing version.

• Go to transaction OKKV to create a costing variant.
• Enter a unique Costing Variant ID (e.g., "0001" for standard costing variant) and provide a description.
• Click Save to create the costing variant.

Example: A costing variant "0001" is created and named "Standard Costing Variant" for costing version "0001" to apply standard costing methods to materials.

Step 3: Assign Costing Sheet to Costing Variant

Next, assign a costing sheet to the costing variant. The costing sheet defines how overheads are applied during the costing process.

• Navigate to transaction OKKV and select the costing variant.
• Under the Costing Sheet section, assign the appropriate costing sheet (e.g., "CS01").
• Click Save to confirm the assignment.

Example: Costing sheet "CS01" is assigned to costing variant "0001," ensuring that overhead costs are applied based on the defined overhead rates in the costing sheet.

Step 4: Define Price Determination Method in Costing Variant

The price determination method controls how material prices are determined in the costing process. For each costing variant, you can define whether materials should be valued at standard prices or actual prices.

• In the costing variant configuration, go to the Price Determination section.
• Select the method for price determination, such as Standard Price or Moving Average Price.
• Click Save to confirm the price determination method.

Example: For costing variant "0001," the price determination method is set to "Standard Price" for all materials, meaning materials will be costed based on their standard prices.

Step 5: Define Costing Methods in the Costing Variant

Costing variants allow you to define various costing methods, such as:

• Standard Costing: Used when materials are valued at a fixed price.
• Moving Average Costing: Used when material costs fluctuate and are calculated as an average of previous costs.

To define the costing method:

• Go to transaction OKKV and select the costing variant.
• Under the Costing Method section, choose the method you want to apply (e.g., "Standard Costing").
• Click Save to confirm the selected costing method.

Example: In costing variant "0001," the costing method is set to "Standard Costing," meaning all materials will be valued at their standard price.

Step 6: Assign Costing Variant to Costing Versions

After configuring the costing variant, it needs to be assigned to a costing version. The costing version is a set of rules that defines how costs are calculated for a specific period.

• Go to transaction OKKN to assign the costing variant to a costing version.
• Enter the costing version (e.g., "0001") and select the costing variant (e.g., "0001").
• Click Save to assign the costing variant.

Example: Costing variant "0001" is assigned to costing version "0001" to ensure that standard costing is applied when calculating costs for materials in that version.

Step 7: Test the Costing Variant Configuration

After configuring the costing variant, it's essential to test it to ensure the correct costing methods are applied. Testing helps validate that the overhead costs, price determination, and costing methods work as expected.

• Go to transaction CK11N to create a costing estimate.
• Enter a material or product and select the costing version and costing variant.
• Run the costing estimate and check if the cost calculation aligns with the defined settings in the costing variant.

Example: A costing estimate for material "MAT1001" is run using costing version "0001" and costing variant "0001." The system calculates the costs based on standard pricing and applies the overheads as per the costing sheet.

Step 8: Review and Adjust Costing Variant Settings

After running the test, review the costing results. If discrepancies or issues are found, adjustments may be needed in the costing variant configuration.

• Review the costing results and ensure that the correct price determination, overhead application, and costing method were used.
• If necessary, return to the costing variant configuration (transaction OKKV) to modify any settings.
• Save any changes and rerun the costing estimate if needed.

Example: If overhead costs were not applied correctly, review the costing sheet assigned to the costing variant and ensure the proper overhead rates are included.

Step 9: Maintain Costing Variants for Periodic Updates

Costing variants should be maintained periodically to ensure that any changes in cost structures, overhead rates, or pricing methods are captured. Regular updates help ensure that your costing calculations remain accurate and aligned with business requirements.

• Go to transaction OKKV to modify existing costing variants as needed.
• Update costing methods, price determination, or overhead rates based on changing business needs.
• Save changes and test the updated configuration.

Example: If the overhead rates change, update the costing sheet in the costing variant and test the changes by running a costing estimate again.

Conclusion

Managing costing variants in SAP FICO is essential for controlling cost calculations and ensuring accurate financial reporting. By following the steps outlined in this article, you can efficiently configure and maintain costing variants, assign them to costing versions, and test their application. Regular updates and maintenance of costing variants ensure that your cost calculations are always aligned with the latest business requirements and market conditions.