ECONOMICS

Detailed explanation-1: -Determining the unit cost of production is a simple matter of addition and division, using this formula: Cost per Unit = (Fixed Costs + Variable Costs) / Number of Units. Add the costs together and divide this amount by the number of units you produce: Add up the fixed costs for a specific period of time.

Detailed explanation-2: -Let’s say Bom, Routing & Costing sheet is created. Then in order to estimate the cost of finished product, we need to execute cost estimate run. The estimate run picks up the list of materials consumed from BOM, picks up the list of activities from Routing and calculates overhead cost using Costing sheet.

Detailed explanation-3: -Cost Estimate in SAP Product Costing Noteworthy, it is an End User Activity. Next, Use Tcode – CK11N. (This Transaction Code CK11N user manual in SAP Application helps to create the Material Cost Estimate in SAP, and also prompts SAPLCKDI to run in the background which is a standard SAP Program.

Detailed explanation-4: -In CO02 (From Menu Bar you can select Cost—> Analysis)you can check the cost of Production Order. The actual cost is the Cost of the material after the Production Confirmation.