6 Replies Latest reply: Feb 25, 2010 11:00 AM by Tran Huyen RSS

fixed & variable cost!

Tran Huyen
Currently Being Moderated

Hi,

 

Could anyone show me how fixed and variable cost are treated in SAP

In case commercial enterprise, (not implementing Product costing sub-module), how to take care fixed and variable cost ?

If it possible, could you show me the documents relevant my concern!

 

Thanks very much for any help!

  • Re: fixed & variable cost!
    Chandresh vyas
    Currently Being Moderated

    Hi,

     

    You need to implement Cost Center Accounting (CCA), Internal Order (IO) very smartly and need to create the Org structure in that manner to meet your requirement, but it is always advisable to implement Product Costing (PC).

     

    Thanks,

    Chandresh Vyas.

    • Re: fixed & variable cost!
      Tran Huyen
      Currently Being Moderated

      Yes, certainly

       

      We have implemented those modules, and defined Org. structure

      But I don't know anything about fixed and variable cost in SAP (without Product costing sub-module).

      Plz help!

       

      Thanks,

      HuyenTT

      • Re: fixed & variable cost!
        Ashok Raut
        Currently Being Moderated

        Hi,

        Fixed/Variable without product costing is having very limited option.

        Cost center accounting can be used for cost center based fixed/variable cost reporting.Fixed cost like depreciation,admin expense cab be captured at cost center/cost element level to report  and same thing can be done with ramaining variable cost.

         

        This is how cost center accounting will support to draw a statement of fixed and variable cost based on nature of expenses.

         

        Hope this helps you.

        regards,ashok

        • Re: fixed & variable cost!
          Tran Huyen
          Currently Being Moderated

          Thanks Ashok,

           

          Do you mean fixed cost will be posted to 1 cost center and variable cost will be posted to another one?

          But in cases of mixed-cost, how system captures what part is fixed and what is variable in total mixed-cost?

          On the other hand, Is there any benefit of dividing cost in to fixed and variable except drawing fixed-variable statement? (such as analyzing profit/loss of a business decision)

           

          Thanks,

          HuyenTT

          • Re: fixed & variable cost!
            Ashok Raut
            Currently Being Moderated

            Huyen,

             

            Cost posting to one or different cost center is totally business decision based on requirement. I am just talking about,using cost center and cost element for fixed and variable cost reporting.

             

            Lets take example of Production cost center XXXX1000:

             

            It have postings from depreciation/fixed admin expenses which are fixed in nature and on other side it has postings of variable cost.These postings are made under individual cost element.

             

            Here by grouping cost element it is possible to determine value of fixed and variable cost for cost center XXXX1000.

             

            Hope this is clear.regards,ashok

            • Re: fixed & variable cost!
              Tran Huyen
              Currently Being Moderated

              Thanks Ashok,

               

              Yes, I am clear what you mean now.

              But My concern is mixed-cost (semi-fixed or semi-variable), how the system dealt with this?

               

              For example:

              salary of sales man: Cost element 627000

              fixed salary: 500

              If he sells more than 20 product a month, he will receive 10 for each addition one.

               

              So 500 is fixed cost, and the bonus is variable.

               

              This CE 627000 is called mixed cost element.

               

              In many cases, the accountant can not know which part is fixed, which one is variable as my example.

              So at the end of period, she will use some ways to calculate

               

              And, another problem i care: except drawing statement , what more can SAP do about fixed & variable?

               

              Thanks very much Ashok!

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