Surcharges by enterprise unit

Surcharges are used in the calculation of standard costs and inventory valuation. Surcharges are additional costs linked to the operational costs of an item or the overhead or maintenance costs. You can define three types of surcharges: item surcharges, warehouse surcharges by item, and warehouse surcharges.

Item surcharges by enterprise unit

You can define item surcharges by item or item group. For an operation across multiple countries, you can define item surcharges by enterprise unit. For example, freight costs are different based on the enterprise unit from where the materials are sourced. In this scenario, you can define freight costs for a manufactured item as a surcharge, by enterprise unit. Item surcharges enable you to perform costing for an item by enterprise unit.

An item surcharge is added to the valuation price of the item when receiving or issuing the item for a production order or a purchase order. For more information on how the item surcharges are added for operational activities of an item, see Booking triggered by.

You can define item surcharges by enterprise unit only if:
  • The Standard Cost by Enterprise Unit is Active in the Implemented Software Components (tccom0100s000) session.
  • The Item Surcharges by Enterprise Unit check box is selected in the Standard Cost Calculation Parameters (ticpr0100m000) session.
Note: If the item surcharges by enterprise unit functionality is enabled, you cannot create or modify item surcharges in the Item Surcharges (ticpr1110m000) session.

For example, a company operates across various parts of the world. In each country, warehouses and production facilities are grouped into sites. These sites are linked to enterprise units (EU). Item surcharges by enterprise unit

In Country 1:
  • Site 1 is linked to EU-1
  • Site 2 is linked to EU-2
  • Sites 3A and Site 3B are linked to EU-3
In Country 2:
  • Site 4 is linked to EU-4A, EU-4B, EU-4C, and EU-4D
  • Site 5 is linked to EU-5
  • Site 6 is linked to EU-6

An item surcharge of 5% is specified for EU-1 and 7% is specified for EU-2. You can define an empty surcharge in the Item Surcharges (ticpr1110m100) session. You can also define empty surcharges, wherein you can specify a surcharge line without defining an EU for the line. There is an empty surcharge of 3%. Since there is no surcharge defined for the EU-3, EU-4A, EU-4B, EU-4C, EU-4D, EU-5, and EU-6, the empty surcharge is used for them. These item surcharges are used to calculate the standard cost of the item.

Warehouse surcharges

Warehouse surcharges are costs incurred during warehouse operations such as the receipt of an item. You can define general warehouse surcharges along with warehouse surcharges by item and item group. You can define general warehouse surcharges that are always applicable in the Warehouse Surcharges (ticpr1110m300) session. Warehouse surcharges can be defined as a fixed amount or a percentage of costs. You can also define warehouse surcharges by item or item group in the Warehouse Surcharges by Item (ticpr1110m200) session.

Defining Item Surcharges by levels

You can define item surcharges by enterprise unit in the Item Surcharges (ticpr1110m100) session. The item surcharges can be defined as a fixed amount or a percentage of costs.

You can define an item surcharge by enterprise unit, item, or item group at four levels, which is used as the search sequence during the calculation of standard costs. The levels at which you can define item surcharges are:
  1. Enterprise Unit – Item
  2. Enterprise Unit – Item Group
  3. Item
  4. Item Group
Note: You can select the level of the item surcharge from the Views menu in the Item Surcharges (ticpr1110m100) session.
You can also define warehouse surcharges by item or item group at two levels, which is used as the search sequence during the calculation of standard costs. The levels at which you can define warehouse surcharges by item in the Warehouse Surcharges (ticpr1110m300) session are:
  1. Item
  2. Item Group

Actual surcharges

Although item and warehouse surcharges can be defined on multiple levels, you can view the applicable surcharges using these options from the References menu in the Item - Costing (ticpr0107m000) session:
  • Item Surcharges
  • Warehouse Surcharges by Item
  • Warehouse Surcharges

These options enable you to view the item or warehouse surcharges at the level on which they are defined for the item. The defined surcharges become actual when the standard costs of items are calculated and actualized.