Improve Your Analysis by Adding Cost Components to Cost Estimate Lists

  • by John Jordan, ERP Corp
  • January 15, 2007
Viewing a list of cost estimates with cost components as columns assists your cost component analysis. However, cost components are not available as columns in standard cost estimate list reports. Learn a little-known technique involving a small amount of configuration to make cost components available as columns in these standard reports.
Key Concept

Analysis of cost components such as material, labor, and overhead overtime or across a range of products can assist in profitability analysis. Cost components increasing over time may result in a focus to reduce material, labor, or overhead costs. Comparison of cost components across products can influence marketing decisions. A manufacturing company may decide to focus on products that require less labor and overhead, or a company may be interested in analyzing the results of efforts to reduce labor and overhead costs.

Cost components that are available as columns in cost estimate list reports can be useful when analyzing production or purchasing performance across a range of products. You can add cost components to standard cost estimate list reports and costed multi-level bill of material (BOM) reports by creating cost component groups and assigning them to a cost component.

Standard cost estimate lists do not have cost components available as columns. This makes cost component comparison across a range of products difficult. With standard list reports, you need to drill down to each cost estimate individually, which displays cost components on a separate screen. Some companies write custom reports to include cost components as columns in list reports. I’ll show you how to add cost components to cost component groups with standard configuration. You then can easily view cost component groups as columns in standard cost estimate list reports and in costed multi-level BOM reports.

John Jordan

John Jordan is a freelance consultant specializing in product costing and assisting companies gain transparency of production costs resulting in increased efficiency and profitability. John has authored bestselling SAP PRESS books Product Cost Controlling with SAP and Production Variance Analysis in SAP Controlling.

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