Valuation Variant --- CO

Valuation Variant Definition: valuation variant Product Cost Controlling (CO-PC) Product Cost Planning Key that controls which prices the system selects to valuate the quantity structure of a material cost estimate or order, or to valuate the costing items of a unit cost estimate. The valuation variant controls how the materials and activities in the cost estimate are valuated. The valuation variant specifies the following parameters: o Which price in the material master (such as the standard price) or in the purchasing info record (such as the net order price) is used to cost a material in the BOM o Which planned or actual price is used to valuate the internal activities o Which version in Cost Center Accounting is used to valuate internal activities o Which costing sheet is used to calculate overhead o Whether and to what extent a BOM item or an operation in the routing is relevant to costing The different valuation strategies for materials, internal activities, external activities, and subcontracting are stored as strategy sequences. A global valuation variant is valid for all plants. A local valuation variant is valid only for a specific plant. You define valuation variants in Customizing for Product Cost Controlling. Cost Object Controlling In Cost Object Controlling there is a valuation variant that can be used for the valuation of work in process at target costs and for the valuation of scrap variances. In this valuation variant, you specify which cost estimate is used to calculate the target costs. Check valuation variants Here you create a valuation variant that contains the required parameters for the valuation of a cost estimate. You also specify which costing sheet is used to calculate overhead. Valuation Strategies o Material valuation Here you define the sequence in which the system searches for prices

to valuate the materials. You can access prices from the material master record and the purchasing data. When accessing prices from purchasing, you can select up to 3 sub-strategy sequences and specify the assignment of condition types to origin groups. Then, through the origin groups, you can assign these costs to cost components. You can also enter a costing sheet specifically for the calculation of the overhead costs for material components. For material cost estimates, you also specify whether additive costs can be added to the selected price. o Activity Types / Processes Here you define the sequence in which the system searches for prices in activity type planning or actual activity price calculation in Cost Center Accounting or Activity-Based Costing to valuate the utilized activity types and business processes. You also specify which plan/actual version is used. o External Processing Here you define the sequence in which the system searches for prices in the purchasing info record or in the operation in the routing to valuate the external activities. o Subcontracting Here you define the sequence in which the system searches for prices in the purchasing info record. In purchasing, the quota arrangements are used to create a mixed price for materials that are manufactured with external vendors with parts provided by the customer. You can specify whether the quota of the individual vendors that are entered in the source list for the material to be processed should be determined through the planned quota arrangement or the actual quota arrangement. You can also specify whether overhead should be calculated for these materials in material costing. Strategy Sequence You define the individual valuation methods for the valuation variant as strategy sequences. For the valuation of the material components you define a strategy sequence that reads the fields of the material master record in a particular sequence such as: 1. Planned price 1 2. Standard price 3. Moving price The first price that is not zero is used to valuate the material component. Overhead In the section Miscellaneous, you can link the valuation variant to a costing sheet. The costing sheet contains the parameters that control the calculation of overhead. Price Factors In the section Miscellaneous, you can link the valuation variant to price factors for inventory costing. Requirements If you don't want to use the costing sheet provided in the standard system, you must carry out the following steps in the section Overhead: o Define costing sheets

If you want to define different overhead rates for different groups of materials, you must carry out the following step: o Define overhead groups If you want to use price factors, you must carry out the following step: o Price factors for inventory costing To assign condition types to origin groups, you must process the following step: o Raw Material Cost Estimates Standard Settings The standard system provides a number of predefined price strategies. o For material valuation, you can choose up to five (5) strategies for each valuation variant. o For activity types/processes, external processing and subcontracting, you can choose up to three (3) activity prices for each valuation variant. You can modify these valuation variants to suit your requirements by changing the standard strategy sequences as necessary. Activities 1. Enter an alphanumerical key and a name for the new valuation variant. 2. Define a strategy sequence for the valuation of material components. a) To do so, select a price from the material master. b) You can also access prices from purchasing info records and condition types. To do so, enter the strategy L, press (if necessary) Enter, and enter up to three sub-strategies. If you take prices from condition types, you must assign these condition types to origin groups in Customizing. (See Raw Material Cost Estimate) c) You can also specify a costing sheet for allocation of overhead to raw materials if you want to use separate conditions for raw materials. d) For each material valuation strategy, you can specify whether additive costs are to be included in the valuation of the material component. 3. Define a valuation strategy for activity types and processes and assign a plan/actual version from cost center planning. 4. Define a valuation strategy for external processing. 5. Define a strategy sequence for subcontracting and choose a quota arrangement for subcontracting. 6. Specify whether overhead rates should be calculated for subcontracted materials. 7. Assign a costing sheet to the valuation variant. 8. Assign price factors to the valuation variant (if applicable). 9. Save your entries. 10. Assign the valuation variant to a costing variant.

Note If you want to use different valuation strategies or different overhead rates in plants that belong to the same company code, you can define plant-specific valuation variants by assigning a valuation variant to a plant. If you don't do this, the valuation variants apply to all your plants.