Create Costing Types

…whether this costing type permits a current costing (a costing with the same costing date) to be updated.

Example: You are restrictive about updating the Standard costing type, which represents the standard cost, since updating the standard cost more than once a day could cause problems: You would only see one record in 'Product Costing. Display' (PCS300), but there might be several accounting transactions based on different standard costs. At the same time, costs need to be as up-to-date as possible for costing types reserved for the current product cost and for simulations.

…whether simulation of material and operation data such as quantity and operation time is permitted for this costing type.

The practical consequence of not allowing simulation is that you cannot change such data for materials and operations when you select option 12=Materials/Operations, option 13=Materials or option 14=Operations for a costing based on this costing type in 'Product Costing. Display' (PCS300).

By not selecting this check box, you can block simulation of structure data from being performed for the costing type that represents the standard cost. The reason for doing so is that any errors in the calculation would have far-reaching consequences in the financial system. Selecting this check box enables you to perform, for example, a simulation of the same data for a costing type reserved for simulations.

…whether you can recalculate the cost of a product by selecting option 9=Recalculate for the product in 'Product Costing. Display' (PCS300).

This is intended to ensure that the recalculation is done only for the appropriate costing types.

…a costing type in which cost rates are searched, if there are no cost rates defined for the costing type being processed.

Example: For a costing type for simulations, cost rates are entered only for cost drivers that need to be simulated. In costing types for which no rates are entered, you can refer to another costing type, for example one reserved for current product costing. This eliminates the need for manual updates of all costing rates when performing simulations.

…whether to calculate order-initiated costs such as setup time based on the order quantity when they are included in higher levels in the costing model.

Order-initiated costs are retrieved from costing components that have the 'Ordering cost' check box selected in 'Costing Component. Open' (PCS010).

Example: A semi-finished product has an order quantity of one. The setup cost rate for cost driver 43 is USD 80.00. When two units of this product are included in higher structures, the calculation gives 2 x 80.00=160 if the check box is not selected. Otherwise the calculation gives 1 x 80.00=80.

You decide the value of this parameter depending on your company's manufacturing process.

Example: Manufacturing a finished product requires two units of a semi-finished product. If you manufacture two units of the semi-finished product at the same time, select the check box. Do not select the check box if you manufacture one unit of the semi-finished product on two different occasions.

…the exchange rate type to use in the costing calculation.

The exchange rate type is mainly used when simulating costs for products with different currencies in the costing. This can be the case when distributed items or purchased items are involved.