Question -1) Mixed Costing Configuration :

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.

Configuration:

Step 1 – Define Quantity Structure (Configuration)

Menu path on SPRO - Controlling → Product Cost Controlling → Product Cost Planning →
Selected Functions in Material Costing → Mixed Costing-Define Quantity Structure Types

Double click on define quantity structure types for mixed costing

Select new entries button

Quantity structure-mix1

Time dependency-1

Name: mixed costing for pkl

Save
Step 2 - Define Costing Versions (Configuration)

Assign the quantity structure type to the costing version.

Menu path on SPRO - Controlling → Product Cost Controlling → Product Cost Planning →
Selected Functions in Material Costing → Define Costing Versions

Costing version: 1

Costing type:01

Valuation variant 001

Qty structure-mix1

Save

Step3:Assign costing version –okkn

Check for costing variant by selecting assignment tab

Question -2 : Master Data :

Step4:Creation of finished goods material master

105449

Step5:creation of bom-2boms

Step6:creation of 2 rate routing-CA21

Step7:change material master for production version-mm02

Step 8 - Maintain Procurement Alternatives for the material (Master data)

Logistics<Production<Product cost planning<Material costing<Master data for mixed cost
estimate<Edit procurement alternatives

Maintain the procurement alternatives for the selected material using the transaction code
CK91N. These would later be used to maintain the mixing ratios.

Step 9 – Maintain the mixing ratio for the selected material (Master data)

Maintain the mixing ratio for the material using the transaction code CK94.
Standard Cost Run:

Step 10 – Execute the costing run

Execute the costing run using either CK11N or CK40N. Now the costing run would calculate
the standard cost based on mix ratio.
 Steps (In Short):

- 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

Question 2)Material Master – Costing Fields:

For Finished Material :

 Costing -1 : With Quantity Structure, Material Origin, Variance Key, Costing Lot Size,
Overhead Group (used to charge same rate of overhead)
 Costing-2 : Price Control

For Raw Materials and Packing Material :

 Costing -1 : Do Not Cost Indicator, With Quantity Structure, Origin Group (Used for
determination of overhead rates for particular material groups), Costing Lot Size
 Costing-2 : Price Control

Question NO – 5: FICO Reconciliation:

Reconciliation Ledger Display the summarized balances of cost element. We can also see the
information object class wise and object type & also Organisational Unit wise i.e., Company Code,
Business Area, and Functional Area

This Reconciliation Ledger is also used to Reconcile Financial Accounting with Cost Accounting incase
of Cross Co.Code Cost – Accounting

The Reconciliation Ledger Can be updated in two ways :

A) Online Updation (System Automatically Creates Reconciliation Ledger)

B) Periodical Updation
PERIODICAL UPDATION : For Periodical Updation we need to deactivate the Reconciliation Ledger
at the month beginning and activate the Reconciliation Ledger (to make posting) at the month ending
to follow up postings and deactivate the Reconciliation Ledger.

For Creating a Document to the Reconciliation Ledger we need to maintain Number Intervals

ACTIVATE OR DE ACTIVATE RECONCILIATION LEDGER :

SPRO – REF IMG –CONTROLLING – COST ELEMENT ACCOUNTING – RECONCILIAITON LEDGER –

ACTIVATE/DEACTIVATE RECONCILIATION LEDGER

SELECT DEACTIVATE RECONCILIATION LEDGER KALB

Controlling Area XXXX

Select Execute

Save

Select back button

SELECT ACTIVATE RECONCILIATION LEDGER KALA

Controlling Area XXXX

Reconciliation Posting

Document Type SA

Select Execute

Back to menu Item

SPECIFY DOCUMENT NUMBER RANGE FOR RECONCILIATION POSTING

OK13

Controlling Area XXXX

Select Change Interval

Select Insert Interval

No From Number To Number

01 1 999999

Enter Save Back to menu Item

DEFINE ADJUSTMENT ACCOUNTS FOR RECONCILIATION POSTINGS :

Select Create Adjustment Account

GL Account No : 499999

Select Create Button

Account Group 0004 Expenses

 P&L Statement Account

Description

Short Text Co Reconciliation Accounts

Long Text Co Reconciliation Accounts

Control Data :

Only Balancece in Local Currency

Line Item Display

Sort Key 001

Creat/Bank/Interest

Field Status Group G001

SAVE

NOTE : Create Co Code clearing accounts in both company codes (Incase of Cross Co Code)

DEFINE ACCOUNTS FOR AUTOMATIC POSTINGS

Select Change Account Determination

Accounts are determined based on

Debit/Credit /
Save

Account Assignment

Debit Credit

499999 499999

Save Back to menu Item

Question -7 Cutover Activities:

he Go Live strategy comprises of the following:-

1) Cut off procedure

2) Pre-Go live checks.

What is meant by cut off date?

SAP system is configured as per the requirement of the client. The system is ready for the
client to use. The client now needs to migrate from the Old system (Legacy system) to the
new SAP system.

The migration from the old system to the new system is known as cut off date.

The old system is switched off and the new SAP system is switched on.

The data will be migrated from the old system to SAP. The data will henceforth be entered
in the new SAP system.

To have a smooth switch over from the Legacy system to the new SAP systems are devised
the cut off procedure.

What is meant by Pre Go live check?

It is ensuring that SAP Production system is ready to go live smoothly.

Let proceed then.

Scenario
A Ltd. is a company implementing SAP system.

The company follows a January - December period for preparing financial accounts.

Therefore the go live data decided for A Ltd is 2nd January 2096.

The Trial balance will be uploaded with date as on 31st December 2095.

The Trial balance will consist only of balance sheet items since all the expense items are
already transferred to the retained earnings account in the old system.

The activities are divided as follows:-

1) Pre Go live activities

A Ltd will upload the GL codes, cost elements in the production system on 1st December
2095.

A Ltd will complete upload of all the material masters with all the views in the production
system by 2nd December 2095.

All Bill of Material, Routings will be uploaded in the production system by 4th December
2095.

The material masters for raw and packing material will be uploaded with the moving
average prices on 4th December 2095.

The cost center Plan will be uploaded, allocation cycles and activity price calculation will
be done by 6th December 2095.

Product cost calculation will be conducted from 7th Dec 2095 to 20th December 2095 to
get the correct cost calculation from system.

All other masters will be uploaded into the production system from 5th December 2095 and
completed by 18th December 2095.

2) Cut off activities

The company closes it sales on 26th December 2095.

The company stops all its stock movement on 26th December 2095 up to 1st January 2096.

All open purchase orders will be uploaded on 28th December 2095.

The provision for stock received and invoice not received will be accounted in a separate
GL code (different than the GR/IR).

The stocks will be finalized by 29th December 2095.

The company closes it old (legacy) system on 30th December 2095.

The stocks will be uploaded on 31st December 2095 and 1st Jan 2096.

The standard cost estimate will be marked and released on 2nd January 2096.

The system is available for data entry and operation to the users from 2nd January 2096.

Accounts Receivable open items will be uploaded from 1st January 2096 to 3rd January
2096.

Thus Accounts Receivable is available from 4th January 2096 to account for customer
incoming payment.

Accounts Payable open items will be uploaded from 3rd January 2096 to 4th January 2096.

Accounts Payable is available for payment from 5th January 2096.

Fixed assets are uploaded on 5th January 2096.

The Remaining GL Balances are uploaded on 7th January 2096.

Thus entire data take over activities are to be completed by 7th January 2096.

We will divide the activities as follows:-

A) Pre-Go Live activities

B) Pre-Go Live checks

C) Upload transaction data into the system

A) Pre-Go Live activities

1. Master data Load into Production system

Ensure all the master data is loaded into the production system.

We will broadly cover the master data which needs to be loaded and the module responsible.

Material Master (SAP Material Management)

Basic responsibility MM: All the respective views of the material masters the other modules
responsible . Ensure that all the required views are uploaded.

GL codes - FI

Customer Master - FI (accounting view) and SD (sales view)

Vendor Master - FI (accounting view) and MM (purchasing view)

Cost elements - CO

Secondary cost elements - CO

Profit centers - CO

Cost center - CO

Activity type - CO

Bill of Material - PP

Work Center/ Resource - PP

Routing / Master Recipe - PP

Purchasing Info Record - MM

Service Master - MM

Bank Master - FI

Quality Info Record - QM

Quality Inspection plan

2. Upload Cost center plan

Cost center plan must be updated through transaction code KP06 or using excel upload.

3. Execute the allocation cycles within cost center accounting

The plan allocation cycles (distribution, assessment) must be executed within the cost center
accounting module. This will allocate the costs from the service cost center to the receiver
cost center.

4. Update planned activity

After executing of the plan allocation cycles, the production cost centers are now ready with
the planned costs.

You can now calculate the activity prices through the system or manually update the planned
prices by calculating it outside.

The planned activity must be updated through transaction code KP26.

5. Calculate Activity prices

Calculate the activity prices using transaction code KSPI.

6. Execute product costing run

The product costing run will be executed for all semi-finished and finished materials in the
system using transaction code CK40N. This should be run after all the BOM and Master
recipe are uploaded.

The product cost finalization takes a long time and should begin well in advance before the
go live date. Normally the product costing run has to be executed again and again (3-4
times) since data needs to be corrected and costs have to be compared with the existing
legacy cost.

The possible errors in the product costing run are:-

1) Moving average prices or planned prices are not correctly maintained in the material
masters.

2) Incorrect quantities in the Bill of Materials, incorrect base unit quantity in the Bill of
Material.

3) Incorrect quantities (hours, KWH etc.) for activities in the Routing or Master recipe.

4) Incorrect alternate unit of Measure

The product costing is calculated and made ready. The actual Mark and release will happen
on after the stocks are uploaded into the system.

B) Pre-Go Live activities

1. Ensure all the customizing request are in the production system. Check that all the
customizing request are gone in the system and no major requests are pending. Request
relating to reports being developed can be transported as and when the reports are ready.

2. Ensure all the number ranges for all the modules have been maintained in the production
system.

3. Ensure that Operating concern has been generated.

4. Ensure that all the Customer Master data is loaded.

5. Ensure all material masters (all material types) have been loaded.

6. Ensure that all the Vendor Master data is loaded.

C) Upload transaction data into system

1. Upload Open purchase orders

Open purchase orders can well be uploaded into the system in advance before the cut off
date if no invoices are expected.

2. Stock upload

Stock upload happens in 2 steps:-

1) Finished goods: The standard prices are first uploaded through MR21 or through an
ABAP program which also uses MR21. The stock quantities are uploaded using movement
type 561 through an ABAP program which calls transaction MB1C.

2) Raw Material, packing Material, stores and spare parts: The quantities and values are
uploaded at the same time using an ABAP program which calls transaction MB1C.

The stock upload will generate the following entry in the system:-

Finished goods stock a/c Debit

Semi-Finished goods stock a/c Debit

Raw Material stock a/c Debit

Packing Material stock a/c Debit

Stores and spares a/c Debit

Data take over Credit

3. Mark and Release the cost estimate

After the stock is uploaded into the system, the standard cost estimate will be marked and
released into the material master using transaction code CK40N.

4. Upload Accounts Receivable and Accounts Payable open items

The Accounts Receivable and Accounts Payable open items are uploaded through LSMW
which calls transaction code F-02 GL Account posting. The profit center is captured in the
data take over account. Baseline date must be captured, which will determine aging based on
number of days mentioned in the payment terms.

The accounting entry for Accounts Receivable open item upload is:-

Customer a/c (not GL) Debit

Data takeover a/c Credit

The accounting entry for Accounts Payable open item upload is:-

Data takeover a/c Debit

Vendor a/c (not GL) Credit

5. Asset Master and value upload

Asset Master is a special case of upload where in you upload not only the master data but
also the values. The total cost and accumulated depreciation are also uploaded at the same
time.

This is done through transaction code AS91.

We will explain how it is done.

5.1 The upload of asset master and values through AS91

This upload of asset masters along with the values will not update the FI General Ledger.
The FI - GL entry balance update will be passed through another transaction.

5.2 Transfer Asset balance into profit center

Once the asset master along with the values is uploaded, the opening balance for the asset
needs to be transferred to profit center.

The asset balances opening balances are transferred into profit center accounting through
transaction code 1KEI.

5.3 Remove the GL codes for asset from 3KEH table

Remove the Asset reconciliation codes from the transaction code 3KEH. This is required
because a manual FI entry will be passed in the next step, which will duplicate posting into
PCA for the assets.

5.4 Update the FI entry for asset through transaction OASV.

We give an example of how a GL entry passed for Fixed asset upload:-

Let us take Plant and Machinery

Plant and Machinery a/c Dr 100,000

Accumulated depreciation a/c Cr 30,000

Data takeover a/c Cr 70,000

5.5 Reinstate the GL codes for asset in 3KEH

After passing the entry for asset upload update the asset reconciliation accounts in
transaction code 3KEH.

6. Upload General Ledger account balances

Finally we upload the remaining General Ledger account balances other than Fixed Assets,
Stock, Accounts Receivable and Accounts Payable. This is again uploaded through an
LSMW program which calls transaction code F-02 GL.

Posting.

Let us take an example for the accounting entry passed:-

Data takeover a/c Debit 550,000 (Balancing figure)

Cash a/c Debit 10,000

Bank a/c Debit 50,000

Advances Debit 90,000

Share capital a/c Credit 100,000

Short term Loan a/c Credit 200,000

Long term loan a/c Credit 400,000

The Data takeover will become zero on upload of this entry.

Question - 8

SAP FICO - Internal Order Settlement. An internal order is used as an interim collector of
costs and an assistance to the planning, monitoring and controlling processes needed. The
costs can be settle to one or more receivers like cost center, fixed asset, profitability
segment, etc, when the job has been completed.
Settlement through settlement cost element :

22 is settlement to outside of controlling i.e. CWIP, Asset

21 is used for settlement to cost center , Production order, Profitability Segment
Settlement through By cost element :

If we use settlement through by cost element then sender cost elements are update as
receiver cost elements in the receiver side also. Means debit and credit will be same cost
elements.