Transfer Control Can Produce Unexpected Results in Costing Runs

  • by John Jordan, ERP Corp
  • July 15, 2004
Transfer control is standard R/3 functionality that allows the transfer of existing component cost estimates to new product cost estimates. The author explains the costing run process and how transfer control selects cost estimates. He also discusses the importance of the "Always recalculate material" check box and provides an example of how it impacts transfer control.

A six-month or yearly cost rollup is a job that is usually understood and carried out successfully at most companies. However, costing a new product during the year is also necessary, and this task can cause problems. One of the difficulties is the decision of whether to update the standard price of components.

If a new product contains all new components, a new standard price is needed for all components. However, what if some of the components already exist and are shared with other existing products? Changing the existing standard price for these components can lead to a planned variance on production orders for existing products.

R/3 provides standard functionality called transfer control, which allows transfer of existing component cost estimates to new product cost estimates. You can enter transfer control in the initial screen when a costing run is created with transaction code CK40N, as shown in Figure 1.

Figure 1
Costing run with transfer contro

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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