Product Costing & Material Master Data

ImageThe material master record contains all information needed for managing a material. This data is structured by views. The views correspond to the individual areas within the company in which the material is used.

Product Costing are relevant to the views of the Material Master defined in SAP:

  • assignment of material to a plant
  • Costing view
  • Accounting view

For the Costing View for Raw Materials , in the material master, the Quantity Structure should not be selected and Variance Key indicator.  For Semi Finished and Finished Products, there are also things to consider in the Material Master:

  • Base unit of measure, unit of measure in which stocks are recorded
  • “With Quantity Structure” indicator ,determines whether the material is generally costed using product costing or not.
  • “Material Origin” indicator,determines whether the material number is updated in the cost element itemization
  • Alternative BOM , determines which BOM alternative is used as basis for product costing with quantity structure
  • Group counter,determines which routing within the routing group is used in product costing
  • Special Procurement Type for costing, Used to indicate that the material is “sub-contracted;” if left blank, the special procurement type in the MRP view will apply.
  • ImageCosting Lot Size , indicates the quantity used as basis for costing; used to manipulate the SAP limitation on decimal places (maximum of 2).
  • Variance Key, indicates the control parameters for calculating variances.
  • Profit Center, indicates to which profit center the inventory valuation or material usage cost  be posted.
  • Co-Product Indicator, indicates if the material can also be used as a co-product in a joint production BOM.
  • Joint Production, contains the dialog box that allows the indication of the source-structure that determines how the order costs are distributed to co-products

For Accounting View of the Material Master, the following data should be also taken into consideration :

  • Material price based on the price control
  • Valuation class to determine what cost element/inventory account be assigned to material cost/inventory
  • the Currency and Price unit of the cost estimate


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