Mixed Costing

Mixed costing

Use

You can use this function when you

• use different production processes to manufacture a product
• use different sources for procuring a material

The costing of either of these alternatives leads to differing manufacturing costs or purchase prices. Within a mixed costing you can calculate a mixed price.


A mixed cost estimate allows you to calculate a mixed price. You can update the mixed price as a standard price, and also use this mixed price to valuate materials controlled with S price.

If you display the itemization created with the cost estimate, you will see a special type of itemization. Each line in this itemization corresponds to exactly one procurement alternative that was created for the material costed. The individual procurement alternatives are identified under item category M (material). In addition to showing the procurement alternative, a flexible itemization can also show the equivalence numbers used to weight the procurement alternative in the mixed costing.

For more information on mixed costing please refer to following link:
Features of using Mixed Costing

(Steps to be followed)

-      A quantity structure type is configured in the customizing OMXA

-       This quantity structure type is associated to a costing version in the Customizing OKYD

-       The Procurement alternatives for the material have been defined CK91N

-       The mixing ratios for the procurement alternatives are defined based on the quantity structure type CK94

-       The material is costed with the above-defined costing version CK11N

-       Activate Variance Category OKVG

-       Create PA Transfer Structure KEI1

1. Define the quantity structure type (Tcode OMXA)   In change Mode;  create the qty structure type "Z001".     "Time Dependency" - This controls the time period in which the quantity structure will be used. It can be time indepenent, based on fiscal year, or based on each period. "Percent validation" - Tick this indicator if you want to ensure that the sum of the existing mixing ratios for a material and quantity structure type totals 100%.   2. Associate the quantity structure type to a costing version The path is right after that for the quantity structure type.   For the attached screenshot, the mixed costing will be called with the qty structure type Z001, when costing version = 1 will be used. The system will not do mixed costing for the other combinations of costing version & costing type & valuation variant. In this transaction, you can also define:  - Variant for transfer price determination   - Exchange rate type for currency translation  The configuration for the costing version can also be checked via costing variant configuration(tcode OKKN). It's a more convenient way as the configuration is based on the combination. In the Assignment tab, click the costing version button.   You'll see for the costing variant PPC1 (costing type 01, valuation variant 001), costing version 1 is assigned the qty structure type "Z001".  ALL ABOVE STEPS ARE ONE TIME CONFIGURATIONS.. FOLLOWING STEPS WILL BE FOLLOWED ON NEED BASIS (FOR MATERIALS, WE NEED TO RUN MIXED COSTING) 3. Define procurement alternatives The tcode is CK91N. Here we need to create the procurement alternatives per material/plant. I created two procurement alternatives for different versions. It's also possible to create alternatives for different valuation type/process cateogry/etc... On selection of process category BF (production) system will popup above message, that will confirm; whether you you wanna use versions  or you want to use BOM/Routing for creation of alternatives. You need to click confirm after giving relevant production version, lot size and changeable name (optional, used to name this alternative, it can be changed afterwards) For process category - Production you can choose to create procurement alternatives for in-house production either with production versions or by using the BOM and routing. - Purchase order You can then enter a vendor and the relevant purchasing org in the initial screen.  In the cost estimate for a procurement alternative with reference to a vendor, strategy "L" (price from purchasing info record) is always automatically set to highest priority strategy.  If you want to have a different logic, you may consider note 636967 and 319832. You can also create an unspecified procurement alternative. To do this, do not enter a vendor or a purchasing organization. The material is then valuated with the prices in the material master and not using the purchasing info record. - Subcontracting In this case the system will require you to enter the information on the BOM, vendor and purchasing org.  - Stock transfer You'll be required to enter the source plant 4. Define Mixing Ratios for the procurement alternatives (Transaction Code CK94) Here we can create the mixing ratios for the material per qty structure type. Since our Qty Structure type "Z001" is based on fiscal year, here we only need to enter the "fiscal year" information. If it's based on period, we need to create the mixing ratios for each period. Here all the proc alt created via CK91N will be displayed. And you can assign the mixing radio to them as you want. - MR indicator Set this indicator if you want to include a procurement alternative in mixed costing. It will ensure this procurement alt will be included in a mixed costing (even with a weighting of 0). - Mixing Ratio This is the most important figure in this transaction. You can enter equivalence numbers or percentages. But if "Percent validation" is ticked for the qty structure type,  the sum of the existing mixing ratios must totals 100%. 5. Cost the material with the above-defined costing version.  Create a cost estimate for material 10008/plant 1000 with costing variant PPC1 and costing version 1. The mixed costing is successfully carried out, as expected. Please note, the costing lot size of mixed costing is different with the normal costing. For more information please refer to note 402440, which provided very detailed explanation of the logic together with some examples.

Mixed Costing Variance Category must be activated before start of production run

First Activate category under Tcode OKVG

Create PA Transfer Structure to transfer variance to COPA (profitability Analysis) in KEI1

Assign Source “Mixed Price Variance “

Assign value field to transfer structure of Mixed Price Variance