Archit BBP CO V1 04-06-2012

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DOCUMENT NUMBER:BBP_CO_V1.0
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TITLE: Controlling(CO)
ADDENDUM/AMENDMENT #: New Document
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Project: ARCHIT
ARCH Pharmalabs Limited
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CONTROLLING
BBP_CO_V1.0
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APPROVAL
ACTIVITY
NAME
TITLE
SIGNATURE
/DATE
PREPARED BY :
Mr. JB BABU
Zensar
Consultant
REVIEWED BY :
Ms. Himanshi Parekh
REVIEWED BY :
CTM - Lead
Project
Mr. Govind Joshi
Manager Arch
Mr. Sreenivasan A.
Zensar
APPROVED BY :
Mr.Bhushan Punekar
CO - BPO
AUTHORISED
Mr. Paresh Jain
VP-
BY :
IA
&
IT
Controls
(
Project
Leader)
Arch
2010 Zensar Technologies Limited
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Document Control
Document ID
ZTL/2010/PRJ-252/CO/03
Compliance Status
Mandatory
Security Classification
Company Restricted
Issue Date
3rd December, 2010
Document Status
Draft,
Prepared by
J B Babu
Quality Review
J N Rao
Authorized by
Srinivasan A
Distribution
Bhushan P Arch Pharmalabs Limited
Document History
V1.0
Revised,
Final
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DOCUMENT CONTROL:
S NO
Revision
Creation Date
Last Modified
Remarks
1
2
3
4
5
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Table of Contents
1
INTRODUCTION.............................................................................................................................. 11
Financial Accounting Key Components..................................................................................12

2.1 Financial Accounting............................................................................................. 12
2.2 CO Module Overview............................................................................................13
Enterprise Structure.................................................................................................................. 16
3.1 Client.................................................................................................................... 16
3.2 Operating Concern............................................................................................... 17
3.3 Controlling Area.................................................................................................... 17
3.4 Company Code..................................................................................................... 18
3.5 Sales Organization................................................................................................ 19
3.6 Distribution Channel............................................................................................. 19
3.7 Divisions............................................................................................................... 20
3.8 Purchasing Organization.......................................................................................21
3.9 Plant..................................................................................................................... 22
3.10
Credit Control Area...........................................................................................25
3.11
Financial Management Area.............................................................................25
3.12
Planning Plant and Maintenance Plant..............................................................26
3.13
Chart of Account...............................................................................................28
CO Global settings.................................................................................................................... 30
4.1 Real Time Integration CO with FI..........................................................................30
4.2 Controlling Area Versions.....................................................................................32
Controlling Master Data............................................................................................................ 33

5.1.1
5.1.2
5.1.3
5.1.4
5.1.5
5.1.6
5.1.7
5.1.8
BBP_CO_MD5.1.1
BBP_CO_MD5.1.2
BBP_CO_MD5.1.3
BBP_CO_MD5.1.4
BBP_CO_MD5.1.5
BBP_CO_MD5.1.6
BBP_CO_MD5.1.7
BBP_CO_MD5.1.8
Cost Elements...................................................................34
Cost Element Groups.........................................................38
Cost Center.......................................................................39
Cost Centre Groups...........................................................41
Activity Types....................................................................41
Activity type groups..........................................................42
Statistical key Figures........................................................42
Internal Order....................................................................43
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5.1.9 BBP_CO_MD5.1.9 Profit Centers....................................................................44

5.1.10
BBP_CO_MD5.1.10 Material Master............................................................44
5.1.10.1
Raw / Packing and Lab Chemicals........................................................................... 47
5.1.10.2
Semi-finished and Finished Goods...........................................................................48
5.1.10.3
Allied Products..................................................................................................... 48
5.1.10.4
Stores and Spares / Operating Supplies...................................................................49
5.1.10.5
Capital Inventory................................................................................................ 49
5.1.10.6
Material Types, Valuation Type, Valuation Class.........................................................50
5.1.11
5.1.12
6
Controlling Master Data Business Process Steps and Transactions..........54

Controlling Master data Integration:.......................................................56
Business Processes Controlling.......................................................................................... 58

6.1 Business Process Scenario....................................................................................58
6.2 System Considerations......................................................................................... 59
6.3 Solution in detail................................................................................................... 60
6.3.1 BBP_CO_BP6.3.1 Cost Element Accounting...................................................60
6.3.2 BPP_CO_BP6.3.2 - Cost Centre Accounting....................................................66
6.3.2.1
Cost Center Planning............................................................................................. 66
6.3.2.2
Activity Type Planning............................................................................................ 67
6.3.2.3
Activity Dependent Overhead Planning.....................................................................69
6.3.2.4
Activity Independent Overhead Planning...................................................................70
6.3.2.5
Statistical Key Figure planning................................................................................ 71
6.3.2.6
Periodic Allocation of Overheads:............................................................................ 71
6.3.2.7
Planning Profile.................................................................................................... 74
6.3.2.8
Cost Splitting........................................................................................................ 74
6.3.2.9
Activity Prices for a Cost Center.............................................................................. 74
6.3.2.10
Cost Center Planning -Transaction / Activity Chart:.....................................................75
6.3.2.11
Cost Center Planning Integration:..........................................................................77
6.3.2.12
Actual Posting in Cost Center Accounting.................................................................77
6.3.2.13
Period End Closing Activities in Cost Center Accounting..............................................79
6.3.2.14
Periodic Reposting................................................................................................ 79
6.3.2.15
Actual overheads Accruals...................................................................................... 80
6.3.2.15.1
Actual Allocation Assessment Cycle.................................................................80
6.3.2.15.2
Actual Allocation Distribution Cycle...................................................................80
6.3.2.15.3
Variance Calculation......................................................................................... 81
6.3.2.15.4
Actual Activity Price Calculation..........................................................................82
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6.3.2.16
CCA Period End Closing -Transaction / Activity Chart:...............................................83
6.3.2.17
CCA Period End Closing - Integration:...................................................................... 85
6.3.3
BPP_CO_BP6.3.3 Internal Order Accounting...................................................87
6.3.3.1
Internal Order Planning.......................................................................................... 88
6.3.3.2
Budget Management for Internal Orders...................................................................88
6.3.3.3
Availability Control for Internal Orders.......................................................................90
6.3.3.4
Actual Posting to Internal Order............................................................................... 90
6.3.3.5
Period End Closing - Internal Order Settlement..........................................................91
6.3.3.6
Period End Closing - Carry forward to next year.........................................................91
6.3.3.7
Internal order - Transaction / Activity Chart:...............................................................92
6.3.3.8
Internal order - Integration:..................................................................................... 92
6.3.4
BPP_CO_BP6.3.4 Product Cost Controlling.....................................................93
6.3.4.1
Product Cost Planning........................................................................................... 93
6.3.4.2
Origin Groups....................................................................................................... 94
6.3.4.3
Overhead Cost Sheet............................................................................................ 95
6.3.4.4
Costing Variant..................................................................................................... 96
6.3.4.4.1
Valuation Variant............................................................................................... 98
6.3.4.4.2
Date Control.................................................................................................. 99
6.3.4.4.3
Valuation Strategy for Material Component:.........................................................100
6.3.4.5
Cost Component Structure................................................................................... 101
6.3.4.6
Standard Cost Estimate....................................................................................... 103
6.3.4.7
Base Planning Object Costing............................................................................... 104
6.3.4.8
Additive Cost...................................................................................................... 105
6.3.4.9
Costing BOM...................................................................................................... 106
6.3.4.10
Product Cost Planning - Transaction / Activity Chart:.................................................107
6.3.4.11
Product Cost Planning - Integration:....................................................................... 110
6.3.4.12
Product Cost Object Controlling............................................................................. 110
6.3.4.13
Result Analysis Version:....................................................................................... 110
6.3.4.14
Valuation Methods:.............................................................................................. 112
6.3.4.14.1
Posting of calculated WIP:............................................................................... 112
6.3.4.15
Variance Variants:............................................................................................... 113
6.3.4.16
Settlement:........................................................................................................ 114
6.3.4.17
Production Process:............................................................................................ 115
6.3.4.17.1
Creation of Process order:............................................................................... 115
6.3.4.17.2
Process Order release.................................................................................... 115
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6.3.4.17.3
Creation of batch number:............................................................................... 116
6.3.4.17.4
Creation of Inspection lot:................................................................................ 116
6.3.4.17.5
Issue of materials to order:.............................................................................. 116
6.3.4.17.6
Confirmation of Process order:......................................................................... 116
6.3.4.17.7
Technical Completion of Order:........................................................................ 117
6.3.4.17.8
Revaluation of Process Orders......................................................................... 117
6.3.4.17.9
Order Settlement:.......................................................................................... 117
6.3.4.17.10
Order closing:.............................................................................................. 118
6.3.4.18
Product Cost Period End Activities...................................................................... 118
6.3.4.18.1
Revaluation of Process order........................................................................... 118
6.3.4.18.2
Work in Process for the Process Order..............................................................119
6.3.4.18.3
Settlement Profile.......................................................................................... 119
6.3.4.18.4
Allocation Structure:....................................................................................... 122
6.3.4.18.5
Process Order............................................................................................... 124
6.3.4.18.6
Maintenance Order Cost................................................................................. 125
6.3.4.18.7
Research and Development Cost..................................................................... 126
6.3.4.18.8
Cost in Project System.................................................................................... 126
6.3.4.18.9
Cost in Job work-in......................................................................................... 128
6.3.4.19
Settlements and Transfer:..................................................................................... 129
6.3.4.20
Product Cost Controlling- Transaction / Activity Chart:...............................................133
6.3.4.21
Product Cost Controlling - Integration:.................................................................... 135
6.3.5
BBP_CO_BP6.3.5 Inventory Valuation considerations and costing impacts. .136
6.3.5.1
Solvent Recovery should not absorb Overheads:.....................................................136
6.3.5.2
Slow Moving and Non-Moving Stocks Information....................................................136
6.3.5.3
Treatment of short receipt quantity......................................................................... 136
6.3.5.4
Stock Ageing Analysis.......................................................................................... 136
6.3.5.5
Inventory Classification:....................................................................................... 136
6.3.5.6
Loss In Transit during Inter location Transfers :........................................................137
6.3.5.7
Invoice Booking Should be only after Quality Approval :.............................................137
6.3.5.8
Transport Charges Treatment in STO:.................................................................... 137
6.3.5.9
Incidental Charges inventorisation on imports :.......................................................137
6.3.5.10
Treatment of Inventory Written Off :........................................................................ 137
6.3.5.11
Impact in Costing while destroying Stocks :.............................................................138
6.3.5.12
BOM Accuracy :................................................................................................. 138
6.3.5.13
Inventory Landed Cost Break UP :........................................................................ 138
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6.3.5.14
Inventory Controls............................................................................................... 138
6.3.5.15
Batch wise Recoveries Information With Quantities:..................................................139
6.3.5.16
FG/ Intermediataries Valuation:............................................................................. 139
6.3.5.17
Treatment of Materials Used in Cleaning Batches:....................................................139
6.3.5.18
Treatment of Failed batches:................................................................................. 140
6.3.5.19
Capacity Utilization / Idle capacity:......................................................................... 140
6.3.5.20
Re Process Batch Information :............................................................................. 140
6.3.5.21
Cost Component Structure information :.................................................................140
6.3.5.22
Variance Details :................................................................................................ 141
6.3.5.23
Cost Component Information of Intermediaries:........................................................141
6.3.5.24
Batch Type Harmonization in the production:...........................................................141
6.3.5.25
Validation for posting of recoveries with rates:..........................................................141
6.3.5.26
Average Inventory Holding Period:......................................................................... 141
6.3.5.27
Treatment of Second Crop Production:...................................................................142
6.3.5.28
Cost of By-Product to be reduced from Main product................................................142
6.3.5.29
Subcontract Recovered Stock valuation:.................................................................142
6.3.5.30
Inter location job work cycle within a company code..................................................142
6.3.5.31
Subcontract Material Usage and Inventory Control:..................................................143
6.3.5.32
Issue of processed material to cost centre:..............................................................143
6.3.5.33
Capture of R&D Expenses:................................................................................... 143
6.3.5.34
Period Closure:................................................................................................... 143
6.3.5.35
Effect and result of CSA:...................................................................................... 143
6.3.5.36
Expenses provision in finance to move to cost centers..............................................144
6.3.5.37
Payroll Expenses to post to cost centers:................................................................144
6.3.5.38
Sample should be form part of COGS :...................................................................144
6.3.5.39
Reprocessing Cost Information:............................................................................. 144
6.3.5.40
: Optimum Product Mix......................................................................................... 144
6.3.5.41
Log Sheet Maintenance for Utilities:....................................................................... 144
6.3.5.42
Log Sheet Maintenance for Utilities:....................................................................... 145
6.3.5.43
Yield against Utility Cost:...................................................................................... 145
6.3.5.44
Coal Purchases tracking by source........................................................................ 145
6.3.5.45
Unauthorized PTN/PTNI Valuation:........................................................................ 145
6.3.5.46
Unauthorized PTN/PTNI Valuation:
Standard report MRN9 is available to compare the
inventory with material master price and the commercial price....................................................145
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6.3.6
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BBP_CO_BP6.3.6 Profit Center Accounting..................................................146
6.3.6.1
Automatic derivation of profit center in actual transactions.........................................147
6.3.6.2
Actual Posting in Profit Centre Accounting...............................................................150
6.3.6.3
Profit Centre Account Analysis............................................................................... 150
6.3.7
BPP_CO_BP6.3.7 Profitability Analysis.........................................................150
6.4 Business Process Steps & Transactions...............................................................152

6.4.1....................................................................................................................... 153
Cost Element Accounting........................................................................................ 153
6.4.2....................................................................................................................... 153
Cost Centre Accounting.......................................................................................... 153
6.4.3....................................................................................................................... 153
Internal Order Accounting.......................................................................................153
6.4.4....................................................................................................................... 153
Product Cost Controlling......................................................................................... 153
6.4.5....................................................................................................................... 153
Inventory Valuation................................................................................................. 153
6.4.6....................................................................................................................... 154
Profitability Analysis............................................................................................... 154
7
Functional Requirement......................................................................................................... 154
Reporting Requirement.......................................................................................................... 194
Integrations Points.................................................................................................................. 212

9.1 CO FI Integration.............................................................................................. 214
9.2 CO Material Management................................................................................215
9.3 CO Sales and Distribution................................................................................215
9.4 CO Production Process.....................................................................................215
9.5 CO Plant Maintenance......................................................................................216
10
Authorization........................................................................................................................... 216
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1 Introduction
The purpose of this document is to compile the requirements gathered during business
process design workshops. And also Arch has submitted the User Requirement document
documents based on the business process requirements of the company. With this, how the
company intends to run its business within the SAP System.
This document describes the design of the proposed solution and implications for the
business process. This document is to communicate the new business solution and
expected changes to the business process. The information needs to include:
Enterprise organizational structures
The proposed integrated business processes
Associated function definitions
Business requirements in term of reports/script and functionality
Authorizations
With the information conveyed by this document, the business should be able to approve the
proposed
solution.
The
Process
Definition
Document
becomes
the
master
deliverable/document, which serves as a basis for the entire project.
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2 Financial Accounting Key Components

2.1 Financial Accounting
The Financial Accounting Module is a complete accounting system capable of recording all
business transactions. The system has the following features:
Powerful tools for real-time evaluation and reporting of current accounting data.
Comprehensive tools (balance lists, journals, balance audit trails and other standard
reports) for documenting accounts.
The main components of FI Module include:
FI Module
Description
Components
General
Ledger The general ledger contains a record of all relevant accounting
Accounting
transactions from a business point of view in the G/L accounts.

The central task of G/L accounting is to provide a comprehensive
picture for external accounting and accounts.
Accounts
Receivable The Accounts Receivable application component records and
Accounting
administers accounting data of all customers. It is also an integral

part of sales management.
Accounts
Payable The Accounts Payable application component records and
Accounting
administers accounting data for all vendors. It is also an integral

part of procurement management
Asset Accounting
Asset accounting component makes it possible to manage and

update values for all fixed assets and to monitor the accounting
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procedures affecting fixed assets. The Asset Accounting

component is used for managing and supervising fixed assets
with the SAP System.
Bank Accounting
This component is used to manage transactions that are entered

into with the various banks
2.2 CO Module Overview

Controlling provides the information for management decision-making. It facilitates
coordination, monitoring and optimization of all processes in an organization. This involves
recording both the consumption of production factors and the services provided by an
organization.
As well as documenting actual events, the main task of Controlling is planning. It determine
variances by comparing actual data with plan data. These variance calculations enable you
to control business flows.
Income statements are used to control the cost efficiency of individual areas of an
organization, as well as the entire organization.
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The various components of CO include:

CO Module
Description
Components
Cost and Revenue Cost and Revenue Element Accounting provides you with an
Element Accounting
overview of the costs and revenues that occur in an organization.
It provides the structure for the assignment of CO data through
the classification of transaction line items according to the nature
of the cost or revenue posting to an object in CO. Most of the
values are moved automatically from Financial Accounting to
Cost Center Accounting
Controlling.
This component is used to track the occurrence of costs in the
organization. As costs are incurred, they are assigned or posted
to the appropriate Cost Center. The posting and assignment of
costs to Cost Centers not only makes Managerial Accounting
possible but is a vital step in using other CO components. The
standard hierarchy of the CO Area includes all Cost Centers and
Internal Orders
provides the ability to analyze costs at different positions.

It is a very flexible tool that can be used for a wide variety of
purposes to collect costs and also Revenues, it provides
capabilities for planning and monitoring and allocation of costs.
While Overhead Orders are used to monitor overhead costs for
particular purposes, Investment Orders are used to collect costs
Product
Controlling
incurred in the creation of a Fixed Asset

Cost It is concerned with all aspects of planning the cost of producing
products as well as analyzing and tracking the actual costs in the
production process. It has the following sub-components
a. Product cost planning refers to the creation of cost estimates
for the production of goods.
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CO Module
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Description
Components
b. Cost Object Controlling where the actual costs incurred in

the production of a good is collected using Process Orders. It
also provides the tools for calculating the Work in Process and
the variances at the period end closing.
Profitability
(CO-PA)
Analysis Profitability Analysis analyzes the profit or loss of an organization

by individual market segments. The system allocates the
corresponding costs to the revenues for each market segment.
Profitability Analysis provides a basis for decision-making, for
example,
for
price
determination,
customer
selection,
conditioning, and for choosing the distribution channel.

Profit
Center It lets you analyze internal profit and losses so that evaluating
Accounting (EC-PCA)
different areas or units within an organization is possible. Profit
Structure can be structured according to the region, function or
product classifications.
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3 Enterprise Structure
Within the Financial Accounting Module, specific high-level organizational structures are
defined. These Enterprise Structures provide a direction for how the solution operates and
how business functions, data and reporting are defined.
The Enterprise Structure in SAP Financial Accounting and integrated Modules consists of
the following
3.1 Client
The client is the highest level in the SAP System hierarchy. Specifications or data entered at
this level are valid for all company codes and for all other organizational structures. Each
Client contains a separate and unique set of master data, and data tables.
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Server
Development
Development
Sandbox
Quality
Production
Solution
Client
100
200
310
500
700
Manager
252
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Purpose
Configuration and Development environment
Pre-test, to conduct the initial testing by Consultant
Training / Testing / Practice to all users
Testing - Unit and Integration testing
Production - To record all business transactions
Project Implementation, Optimizer, EWA, Service Desk
3.2 Operating Concern

An operating concern represents an organizational unit of the company, which provides the
sales and marketing information in a uniform structure. It is the valuation level for Profitability
Analysis (CO-PA).
By setting off the costs against the revenues, an operating profit for the individual market
segments that are defined by a combination of classifying characteristics (such as product
group, customer group, country, or distribution channel) can be calculated. The market
segments are known as profitability segments in CO-PA.
Operating Concern
1000
Description
Arch Operating Concern
3.3 Controlling Area

Controlling Area is an Organizational Unit in Controlling Module which is used for Cost
Accounting. Data in the Controlling Area is simultaneously updated with the various postings
in the Financial Accounting / Material Management / Sales and Distribution / Production
Planning / Human Capital Management modules.
The Controlling Area for Arch is given below:
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Controlling Area
1000
SUPERSEDES: N/A
Description
Arch Controlling Area
Cross Company Code Controlling Area is going to be used to generate the internal reporting.
Arch and Avon are going to use common Chart of Account, Fiscal Year Variant and Currency.
Both the company codes (Arch and Avon) will be assigned to the Controlling Area (1000).
Controlling Area Usage
- Cross Company Cost Accounting
Fiscal Year
- V3 April March with 4 Special Periods
Chart of Accounts
- 1000 Arch Group COA
Currency
- INR Indian Rupees
Cost Center Hierarchy
- 1000STD Arch CC Std. Hierarchy
Profit Center Hierarchy
- 1000STD Arch PC Std. Hierarchy
The following CO components will be activated:
Order Management
Commitment Management
Profitability Analysis (Costing based)
Profit Center Accounting
Project based accounting
Sales Order based costing (Make to order)
3.4 Company Code

Company Code is the Organizational Unit of Financial Accounting for which a complete selfcontained set of accounts can be drawn up for purposes of external reporting. This includes
recording of all relevant transactions and generating all supporting documents required for
financial statements. At each Company Code level Balance Sheet and Profit and Loss
Account and all financial statements can be generated. Statements required for Legal
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Reporting can be generated / balanced at Company Code level. Company code is used for
various processes within Financial Accounting in order to balance entries, post transactions
and manage security.
The Company Code for ARCH is given below:
Company Code
1000
3000
3.5
Description
Arch Pharmalabs Limited
Avon Organics Limited
Country
India
Currency
INR
India
INR
Sales Organization
Sales Organization is an organizational element, which represents all activities of Sales and
Distribution module with in SAP such as Sales, Distribution of goods and services, Billing. It
is an organizational unit within logistics that structures the company according to its sales
requirements.
The Sales Organizations for ARCH are:
Company
Sales Org Code
Sales Organization Description
Code
1000
1000
3000
3000
1100
1500
3100
3500
Arch Domestic Sales Organization

Arch Export Sales Organization
Avon Domestic Sales Organization
Avon Export Sales Organization
3.6 Distribution Channel

Distribution channels are the means through which the sold materials reach the customer.
A distribution channel can be assigned to one or more sales organizations.
The Sales Distribution Channels are:
Distribution
Description
Channel
10
Direct
20
Depot / Warehouse
30
Inter-company Sale
2010 Zensar99Technologies
Limited
Stock
Transfer
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3.7 Divisions
A division can be defined as a Product group or business segment or line of business that
could be made up of a wide-ranging spectrum of products. This entity normally groups
together saleable materials and services for the purpose of responsibility and analysis.
The Sales Divisions for Arch are:
Division
10
20
31
32
40
51
90
91
92
Description
Intermediates
API
CRAMS Intermediates
CRAMS API
Agro Chemicals
Services
Others
Job work
Scrap Sales
3.8 Purchasing Organization

Purchasing organization is an organizational unit responsible for procuring materials or
services for one or more plants and for negotiating general conditions of purchase with
vendors. The purchasing organization assumes legal responsibility for all external purchase
transactions.
Arch will have the following Purchasing Organizations
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Purchase
Organization
1000
1071
1101
1102
1103
1104
1105
1106
1107
1171
1172
1173
1200
1201
1202
1203
1271
1272
1300
1301
1371
1372
1471
1071
3101
3200
3201
3401
Description
CPO (Central Purchase Office) Mumbai
Singapore Branch
Arch - Tarapur factory
Arch - Badlapur Unit
Arch - Taloja G 6 Unit
Arch - Taloja R & D Unit
Arch - Tarapur, Plot E-64 & E-82
Arch - Dombivali unit
Arch - Turbhe R & D Unit
Arch Tarapur WH Not in Use
Arch - Bhiwandi Warehouse
Arch Dombivli Warehouse
Arch Andhra Pradesh
Arch - Merven Unit
Arch - Siddipet Unit
Arch - Sibra Unit
Arch - Hyderabad W/H Not in use
Arch - Sibra W/H
Arch Haryana
Arch Vitalife Laboratories
Arch - Vitalife Godown 1
Arch - Vitalife Godown2
Arch - Vadodara Godown
Singapore Branch
Avon - Solapur unit
Avon - HO
Avon - Sadasivpet unit
Avon - Vadodara unit
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3.9
SUPERSEDES: N/A
Plant
Plant is an organizational unit within a company code. A Plant is an organizational unit that
divides the enterprise according to production, procurement, distribution and Stock storage
area etc. It is a place where materials are produced, or goods and services are provided.
The following are the plants in Arch:
Company
Code
Plant
Plant Description
Plant Location
Activity
1000
1000
1000
1000
1000
1000
1100
1101
1102
1103
1104
1105
Head Office
Arch Pharmalabs ltd - Tarapur factory
Arch Pharmalabs ltd - Badlapur Unit
Arch Pharmalabs ltd - Taloja G - 6 Unit
Arch Pharmalabs ltd - Taloja R & D Unit
Arch Pharmalabs Ltd- Tarapur, Plot- E-
Mumbai
Tarapur
Badlapur
Taloja
Taloja
Tarapur
ARCH HO
MFG
MFG
MFG
R&D
MFG
1000
1000
1106
1107
64 & E-82
Arch Pharmalabs ltd - Dombivali unit
Dombivali
Arch Pharmalabs ltd - Turbhe R & D Turbhe
MFG
MFG
1151
1161
Unit
Logical Port
N/A
Arch Pharmalabs Ltd- Tarapur, Plot- E- Tarapur
Bonding
MFG
1000
1162
81
Arch Pharmalabs Ltd- Tarapur, Plot- E- Tarapur
MFG
1000
1171
80/L
Arch Pharmalabs ltd Tarapur WH Tarapur
E Depot
1000
1000
1172
1173
Not in Use
Arch Pharmalabs ltd Bhiwandi
Bhiwandi
Arch Pharmalabs ltd Dombivli Bhiwandi
E Depot
E Depot
1200
1201
1202
1203
1271
Warehouse
Arch Pharmalabs ltd RO- Hyderabad
Arch Pharmalabs ltd Merven Unit
Arch Pharmalabs ltd Siddipet Unit
Arch Pharmalabs ltd Sibra Unit
Arch Pharmalabs ltd Hyderabad WH-
ARCH RO
MFG
MFG
MFG
E Depot
1000
1000
1000
1000
1000
1000
1000
Hyderabad
Hyderabad
Hyderabad
Hyderabad
Hyderabad
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Company
Code
Plant
Plant Description
Plant Location
1000
1000
Not in Use
1272 Arch Pharmalabs ltd Sibra WH
Hyderabad
1301 Vitalife Laboratories (A division of Arch Gurgaon
E Depot
MFG
1000
Pharmalabs Ltd)
1302 Vitalife Laboratories R&D (A divison of Gurgaon
R&D
1000
Arch Pharmalabs Ltd)

1371 Arch Pharmalabs ltd
E Depot
1000
1000
Godown1-Not in use
1372 Arch Pharmalabs ltd Vitalife Godown2 Gurgaon
1471 Arch Pharmalabs ltd Vadodara Vadodara
E Depot
NE Depot
1000
Godown
1252 Vitalife Laboratories-
LL Plant
Sri
Vitalife Gurgaon
Krishna Andhra
Activity
1000
Pharmaceuticals Ltd.
1253 Loan Licensing Plant 2
Pradesh
Andhra
LL Plant
1000
Pradesh
1571 Arch Pharmalabs ltd Vitalife Bhiwadi Gurgaon
E Depot
1000
3000
Godown Not in use

1071 Singapore Branch
Singapore
3171 Avon Organics Limited Bhiwandi WH- Bhiwandi
Depot
E Depot
3000
3000
3000
Not in Use
3101 Avon Organics Limited Solapur unit
Solapur
3200 Head Office
Hyderabad
3201 Avon Organics Limited Sadasivpet Hyderabad
MFG
AVON-HO
MFG
3000
3000
unit
3251 Logical Port
3401 Avon Organics Limited Vadodara unit
Bonding
MFG
N/A
Vadodara
3.10 Credit Control Area

Credit Control Area is an organizational unit that represents an area responsible for granting
and monitoring credit limit of Customers. Credit information can be made available per
customer within a credit control area.
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The following is the Credit Control Area for Arch:

Credit Control Area
1000
Description
Arch Credit Control Area
3000
Avon Credit Control Area
3.11 Financial Management Area

The Funds Management Area is the organizational unit within an organization, used
to represent a closed system for funds management, budgeting, and budget
execution. The Funds Management Area also contains attributes or settings that
impact master data and/or transactions within the FM Area. FM Area is linked to
Company Code and Controlling area, which will enable integration with all other
organizational units within an enterprise. Funds Management within an Enterprise is
controlled through Master Data called (a) Funds Centers and (b) Commitment Items.
Funds Center represents the organizational areas of responsibility for budgetary
monitoring and reporting. It is linked to Cost Center. Funds Center identifies where in
the organization revenue, expense, and budget are managed, reported, and
controlled. Budget is assigned to Funds Centers and postings can be controlled
against this budget based on the linking of other organizational objects. Funds
Center usually represents the lowest levels of the organization where management
responsibility exists.
Commitment Item represents budget classification. It is used to reflect the type of
revenue and expenditure being budgeted and also to detail balances in FM.
Commitment Items are linked to revenue and expense general ledger accounts, as
well as primary and secondary cost elements. Additionally, Commitment Items may
be created for specific budgetary and carry forward needs. Commitment Item
identifies the business transaction for which budget is consumed.
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Essentially commitment items will get mapped to General Ledger Account(s) or

group of GL Accounts based on nature of Expenditure. Commitment hierarchies are
maintained in the preparation of commitment items for the grouping of commitment
items of similar nature and reporting purpose.
The following FM area will be used:
Company Code
Financial
FM Area Description
Management Area
1000- Arch Pharmalabs Limited
3000- Avon Organics Limited
1000
Arch Group FM Area
Funds Management will be activated in Second Phase after Go-Live.
3.12 Planning Plant and Maintenance Plant
In Plant Maintenance, a distinction is made between the organizational units

"planning plant" and "maintenance plant".
Maintenance plant is the organization in which technical objects and main

work centers can be maintained
In a Planning plant, maintenance task lists are defined for the respective
maintenance plants, material planning is carried out on the basis of bills of
material in task lists and orders, maintenance plans are managed and
scheduled, maintenance notifications are created and maintenance orders
can be handled.
NOTE:
Planning Plant and Maintenance plants - both are same i.e. 1101, 1201,
3101
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Comp
Maintena
any
nce Plant
Plant Description
SUPERSEDES: N/A
Maintenan
Plant Description
ce
Code
Planning
Plant
Arch Pharmalabs ltd - Tarapur
1000
Arch
Pharmalabs
ltd
Tarapur factory
Arch Pharmalabs
ltd
1101 factory
Arch Pharmalabs ltd - Badlapur
1101
1000
1102 Unit
Arch Pharmalabs ltd - Taloja G -
1102
Badlapur Unit
Arch Pharmalabs ltd - Taloja
1000
1103 6 Unit
Arch Pharmalabs ltd - Taloja R &
1103
G - 6 Unit
Arch Pharmalabs ltd - Taloja
1000
1104 D Unit
Arch Pharmalabs Ltd- Tarapur,
1104
R & D Unit
Arch Pharmalabs ltd.
1000
1105 Plot- E-64 & E-82

Arch Pharmalabs ltd - Dombivali
1105
1106 unit
Arch Pharmalabs ltd - Turbhe R
1106
1000
1107 & D Unit

1107
1105
Turbhe R & D Unit

Arch Pharmalabs ltd
1000
1161 Plot- E-81

1105
Arch Pharmalabs ltd
1162 Plot- E-80

Arch Pharmalabs ltd - Merven
1201
Arch
1000
1000
1000
1000
1000
1201 Unit
Arch Pharmalabs ltd - Siddipet
Pharmalabs
ltd
Dombivali unit
Arch Pharmalabs
ltd
Pharmalabs
ltd
1202
Merven Unit
Arch Pharmalabs
ltd
1203
Siddipet Unit
Arch Pharmalabs ltd - Sibra
1301
Unit
Vitalife
1202 Unit
1203 Arch Pharmalabs ltd - Sibra Unit
Vitalife Laboratories (A divison
1000
Arch
1301 of Arch Pharmalabs Ltd)
Laboratories
(A
divison of Arch Pharmalabs

Ltd)
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1301
1000
3000
Laboratories
(A
Vitalife Laboratories R&D (A
divison of Arch Pharmalabs
1302 divison of Arch Pharmalabs Ltd)

Avon Organics Limited - Solapur
3101
Ltd)
Avon Organics Limited -
3201
Solapur unit
Avon Organics Limited -
3101 unit
Avon
3000
Vitalife
Organics
Limited
3201 Sadasivpet unit
Sadasivpet unit
3.13 Chart of Account

A chart of accounts provides a framework for the recording of values, in order to ensure an
orderly rendering of accounting data. The general ledger accounts they contain are used by
one or more company codes. Arch will be using the 8 digits as GL Account ID.
Arch will operate under the single chart of accounts that will be centrally maintained.
Chart of Accounts
1000
Description
Arch Chart of Accounts
The numbering logic for Arch GL account, the first digit represented as follows,:
1 - Liabilities
2 - Assets
3 - Revenues
4 & 5- Material Consumption & Manufacturing Expenses
Employee Benefits & Administrative Expenses
Selling Expenses & Interest and other charges
Depreciation, Deferred Expenses & Appropriations
Noted Items
9 - Secondary Cost Elements
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4 CO Global settings
Posting of Financial Transaction in SAP require the following global settings and the same
has been incorporated in the FI Blue Print
Non-Leading Ledger
Currency
Group Currency
Fiscal year variant
Posting Period variant
Document types
Document numbering
Document posting keys (debit/credit)
Posting period variant to determine the open and close periods
Field Status Group
Exchange Rates
Tax Procedure
For more details refer the FI Business Blue Print under the Chapter 4 Global Settings
4.1 Real Time Integration CO with FI

During allocations in Controlling, most of the postings will not affect Financial Accounting.
These postings do not update any G/L account transaction figures in General Ledger, they
are posted within Controlling. If, however, an allocation in Controlling leads to a change in
Profit Center or Segment, that is relevant for evaluations in Financial Accounting, a shift
occurs between the affected items in the profit and loss statement. For this reason, this
information has to be transferred to Financial Accounting. This reconciliation between
Controlling and Financial Accounting takes place by means of real-time integration.
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As a result of real-time integration, all Controlling documents that are relevant for General
Ledger Accounting are transferred from Controlling to General Ledger Accounting in real
time. This means that Financial Accounting is always reconciled with Controlling.
A document is created in Financial Accounting for each posting in Controlling. This means
that the detailed information contained in the CO documents is always available in reports in
New General Ledger Accounting.
Value flows within Controlling that are relevant for General Ledger Accounting such as
assessments, distributions, confirmations, and CO-internal settlements are transferred
immediately. The FI documents are posted with the business transaction COFI. They contain
the number of the CO document. This means that you can call up the CO document from the
FI document, and vice versa.
If a document could not be transferred because the posting period was blocked in Financial
Accounting or no account was found, for example, the document is included in a post
processing work-list.
The following variant will be created and assigned to the Company Code 1000 and 3000.
Z001 Arch CO-FI Real Time Integration Variant
The Variant activated with the scenarios of:
Document Type used to post the CO to FI
Z0 CO-FI Real Post
Real Time Integration Active
Account determination Active
The following integration scenarios will be checked:
Cross Company Code
Cross Profit Center
Cross Segment
Cross Fund
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The following Account Assignment will be made:

40190099
CO to FI Document Splitting
4.2 Controlling Area Versions

Versions enable to have independent sets of planning and actual data. In planning, versions
can be used to maintain alternative scenarios based on different assumptions. For example,
the different versions can represent different markets, price and wage increases, or sales
programs.
The plan and actual data for version 0 can be used in plan/actual comparisons and variance
analysis.
The following are Predefined Versions in SAP System:
Version
Version name
Plan/actual version
Plan Version: Change 1
Plan Version: Change 2
Actual Costs vs. Target Costs
100
PS: Progress Version
110
PS: Forecast Version
The Versions are used:
Overhead Orders
Profitability Analysis
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Profit Center Accounting
Project Systems
Product Cost Controlling
SUPERSEDES: N/A
5 Controlling Master Data

The Master data for Controlling, the following items are covered.
5.1.1
Ref No.
Description
Cost element
Cost Element Groups
Cost center
Cost Center Groups
Activity type
Activity type Groups
Statistical Key figures
Internal Order
Internal Order Group
10
Profit Center
11
Profit Center Groups
12
Material Master
BBP_CO_MD5.1.1 Cost Elements
The cost element tells the nature and origin of cost. Cost Element is used for entering all
costs within the entire cost accounting system.
Cost element is of two types
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Primary cost element: A primary cost element is an item in a chart of accounts, which is
used within controlling area to record the value-assigned to cost objects.
Secondary cost element: Secondary cost element exists only in Controlling. Second Cost
Element will be used to allocate costs within CO. Secondary cost element will not have any
link to GL in financial accounting.
Important Fields in Cost Elements
Name: The cost element name is used for online displays and evaluations. When create a
primary cost element, the SAP R/3 System uses the corresponding general ledger account
name as the default for the cost element name.
Cost Element category: Number identifying a Cost element category, used only in the
Controlling (CO) component.
Primary Cost Element Categories: The following cost element categories used for primary
cost elements:
Cost Element Category
01
11
12
22
90
Description
Primary costs/cost-reducing revenues
Revenues
Sales deduction
External settlement
Cost element for balance sheet accounts in Financial
Accounting (Asset Reconciliation account type to check the
budget check)
The Cost element category for the Secondary Cost Elements differ from primary cost
element. For secondary cost element below categories are used.
21
31
41
42
43
Description
Internal Settlement
Order/project results analysis (For Order Analysis)
Overhead Rates
Assessment (Allocation purpose)
Internal activity allocation (Activity Type purpose)
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50
SUPERSEDES: N/A
Project Sales Revenues
Primary Cost elements will be created with reference to General Ledger Accounts, for which
data need to be transferred to Controlling. The list of Primary cost elements will be finalized
based GL Account master data.
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The following secondary cost elements will be created in the system to make use of in COBusiness Process:
Cost
Element ID
Description
Element
Category
Descriptin Of Category
90021150
RA-PRIMARY-PS
21
Internal settlement
90021160
RA-SECONDARY-PS
21
Internal settlement
90021170
RA-REVENUE-PS
21
Internal settlement
90021210
MAINTENANCE (PRIMARY
21
Internal settlement
90021220
Settlement Cost Elmt
21
Internal settlement
90021230
MAINTENANCE(INTERNAL
21
Internal settlement
90031100
RA- TECHNICAL
31
Order/project results analysis

for Calculation of WIP
90031110
ORDER/PROJECT RESULT
31
90031120
ORDER/PROJECT RESULT
31
90031130
RESULT ANA-SE 1
31
90031140
RESULT ANA-SE 2
31
90031150
COS-REV
31

90031160
COP-REV
31

90031170
PS-REV COST ELEMENT
31
90041100
ADMIN OVERHEADS
41

To Allocate Overhead Through
Cost Sheet
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90041110
90042100
90042110
90042120
90042130
41
42
42
42
42
90043110
SELLING OVERHEADS
ASSMT-POWER COST
QUALITY COST
UTILITIES COST
FACTORY SERVICES
OVERHEADMACHINEHOUR
90043120
OVERHEAD-LABOUR-INTE
43
90043130
OVERHEAD-LABOUR-EXT
43
90043140
OVERHEAD-POWER
43
90043150
OVERHEAD-WATER
43
90043160
OVERHEAD- FUEL
43
90043170
Overhead-Liquid Nitrogen
43
90043210
REPAIR INTERNAL LABO
43
90043220
43
90043320
REPAIR EXTERNAL LABO

RESOURC COSTCHEMIST
RESOURCE -GROUP
LEAD
90043330
RESR COST-SCIENTIST
43
90043310
5.1.2
43
43
43
SUPERSEDES: N/A
To Allocate Overhead Through
Cost Sheet
Assessment
Assessment
Assessment
Assessment
Internal activity allocation For
Process Orders
Process Orders
Process Orders
Process Orders
Process Orders
Process Orders
Process Orders
Maintenance Orders
Maintenance Orders
Internal activity allocation for
Project Systems
Project Systems
Project Systems
BBP_CO_MD5.1.2 Cost Element Groups
Cost elements will be grouped for the purpose of allocation, planning, analysis and reporting.
One cost element can be assigned to multiple groups, based on the reporting requirements.
The following are some of the Cost Element Groups for Arch:
Cost Element Group

GENCOSTS
MATCOST
OTH COST
Description
General costs
Material Cost (A1Settlement Structure)
Other Costs (A1 Allocation Structure)
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PERSONNEL
PM_001
PM_003
PM_005
PM_009
PM_020
PM_025
COPAINVREV
REVENUE
SECCOST
5.1.3
SUPERSEDES: N/A
Personnel Costs - A1 Source Structure

ZM-Material Cost - Allocation Structure
ZM External procurement -Allocation Stru
ZM Personnel costs- Allocation Structure
ZM Miscellaneous costs-Allocation Stru
ZM Activity allocation- Allocation Stru
PM Settlement Group
CO-PA Inventory Revaluation Elements
Revenue Cost Element Group
Secondary Costs
BBP_CO_MD5.1.3 Cost Center
Cost center is the smallest organizational unit within the companys overall organizational
structure which collects cost for the purpose allocation, analysis and reporting.
Creation of new Cost Center: Whenever a new Cost Center is to be created, the Cost
Center Group and the Profit Center for the same would have to be determined.
Change Cost Center: It will be possible to change the Cost Center Group for a Cost Center
in case the need arises.
Delete Cost Center: Cost Center can be deleted if there are no actual postings and if there
are no plan data for the same
Cost center will be codified in 10 digits and the following convention will be adopted:
10
Cost Center
Profit Center
Cost Group
increment
number
Cost Center Hierarchy -1000STD has been maintained for Arch Pharmalabs Limited as
given as Annexure-A to this document.
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Important Fields in Cost Center
Person responsible : Person responsible for the given cost center
Cost Center category: Cost center categories determine the type of activity /
department of the Cost Center belong to. For each category, default values can be
transferred to the master, for Lock" and "Record quantity" indicators. Maintain these
indicators only if the entry diverges from the default cost center category.
The following are the Standard Cost Center Categories:
Development
Production
Logistics
Service cost center
Management
Material
Social
Sales
Administration
Department: In this field, enter the name of the department to which the cost center
belongs. Then it can be used for evaluations
Hierarchy Area: under which hierarchy group the cost center going to be creating.
Company Code: For which company code cost center is created (1000 or 3000)
Profit center: The actual postings made to the Cost Center are updated to this Profit
Center As per the requirement.
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5.1.4
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BBP_CO_MD5.1.4 Cost Centre Groups
To combine similar cost centers to form cost center groups. You may then combine similar
groups into further groups to create a cost center hierarchy
You can use cost center groups:
In the information system to create reports for selected cost centers
To process multiple cost centers in a single transaction:
Cost center planning
Distribution
Assessment
Maintain the standard hierarchy for controlling area in the master data.
5.1.5
BBP_CO_MD5.1.5 Activity Types
The Activity Type classifies the specific activities that are provided by one or more Cost
Centers. If a Cost Center provides activities for other Cost Centers, Orders, Processes, etc.
then it implies that its resource is being used. The costs of these resources need to be
allocated to these receivers of the activity. Activity Types serve as the tracing factors for this
cost allocation. To plan and allocate the activities, the system records quantities that are
measured in activity units. The Activity Types are created as below:
Important Fields
Activity Unit: For production related activity type unit of measure hour is used.
Cost Center categories: Indicator determining for which cost center types an activity
type is allowed for planning and as a sender in internal activity allocation.
List of Activity Types

Activity ID
1100
Activity Description
Machine Hours
UOM
HR
SCE
90043110
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1200
1300
1400
1500
1600
1700
2100
2200
3100
3200
3300
5.1.6
Overhead-Labour-Inte
Overhead-Labour Exte
Power
Water (Lts)
Fuel (KG)
Liquid Nitrogen
Maint. Internal
Maint. External
Resource Cost-Chemist
Resource Cost-Scient
Resource Cost-Group
HR
HR
KWH
L
KG
KG
HR
HR
HR
HR
HR
SUPERSEDES: N/A
90043120
90043130
90043140
90043150
90043160
90043170
90043210
90043220
90043310
90043320
90043330
BBP_CO_MD5.1.6 Activity type groups
Activity type groups will be created for the purpose of analysis and reporting. The following
are the Activity Groups for Arch:
Activity Type group
1000
2000
3000
5.1.7
Name
Arch - Activity Group (Production Group)
Arch Activity Group (Maintenance)
Arch Activity Group (Project)
BBP_CO_MD5.1.7 Statistical key Figures
Statistical key figures serve as a basis for internal allocations and as references in the key
figure analysis framework.
Till now, the following Statistical Key Figures are identified. Additional SKFs will be kept in
KDS.
Statistical
Figure
10
20
30
EMPLYE
EFLUEN
SOLVEN
Key
Name
PS: Non-aggregated Percent of completion
PS: Aggregated Percent of completion
PS: Results Analysis % of completion
No of Employees
Affluent Generated
No of Batches
Solvent Processed
UOM
No
NO
No
Kgs
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BBP_CO_MD5.1.8 Internal Order
Internal Orders are used to plan, collect and settle the cost of specific activity or task. They
can be monitored through their entire life-cycle i.e. from their initial creation, the planning and
posting of actual costs and the final settlement wherever required.
Statistical Internal Orders can be used for monitoring objects in Cost Accounting whereas
real orders will be used to capture and monitor the costs, as a cost object.
Internal order Type Z001 is being used for the purpose of capital assets purchasing,
without Project Systems, for monitoring of budget.
Internal order Type Z005 Statistical postings, is being used to create the internal orders, to
capture the additional details, vehicles, telephone, etc. These internal orders will be used
along with cost center, to capture the cost each sub-element wise (i.e. Telephone or Vehicle
as the case may be).
5.1.9
BBP_CO_MD5.1.9 Profit Centers
A profit center is a management oriented organizational unit used for internal controlling
purposes. Dividing company into profit centers allows to analyze areas of responsibility and
to delegate responsibility to decentralized units, thus treating them as companies within the
company.
Important fields in Profit Center
Profit Center Group: The standard hierarchy is a tree structure which displays the
organization of all the profit centers in one controlling area. Each profit center must be
assigned to a node in the standard hierarchy for its controlling area. This ensures that the
standard hierarchy contains all the profit centers in the controlling area.
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Profit centers will be created each company code, Product and Location combination. This
will be assigned in the respective master data. The profit center will be 6 digits and the
following convention will be followed:
2
3
Plant / Location
5
6
Product / Common /
Corporate Group
Profit Centers for the Arch Pharmalabs Limited (1000) and Avon Organics are being placed
in the Annexure B.
5.1.10
BBP_CO_MD5.1.10 Material Master
Material master will be created part of the Logistics module.

For more details on the material types and material master refer the Business Blue Print
BBP_MM_MD_BP01: Material Master
Some of the important fields need to be updated in the Material master Costing Views ; the
same has been discussed below.
Important fields in Costing View
Origin Group: The combination of Cost Element and Origin Group is being updated in the
Cost Component Structure. ARCH will be using Origin Groups for some of the key Material.
This enables the analysis of material costs in the information system in more detail.
Define calculation bases for determination of overhead rates for particular material
groups.
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Define cost components in product costing for particular material groups.
Create rules for activating work in process for each material group.
The following are the Origin Groups assigned in the Material Master:
1001 Key Material
1002 Solvents
Material Origin: Origin group is a subdivision of Cost Element. When material costs are
calculated, each material is given a general ledger account to post the consumptions and
thus is assigned to a primary cost element. If origin group is maintained in the material
master, the combination of source group and cost element is updated.
If this indicator is selected, the material number will be written to the cost element itemization
in Controlling.
Based on this key, Cost of the materials will to be identified in a different line item, in cost
component structure.
With Quantity Structure: This indicator determines whether the material is costed using
costing with or without a quantity structure.
If you always cost your materials (including raw materials) using costing with quantity
structure, you should turn on this indicator. This improves performance, because the system
does not search in vain for existing cost estimates without a quantity structure for every
material when it explodes the BOM. Therefore, only turn on this indicator if you normally cost
the materials using costing without quantity structure.
Regardless of the setting, you can cost a single material with or without quantity structure.
However, you should bear in mind that this setting is always used in the Costing Run.
Meaning of Quantity Structure: Quantity structure means the combination of a bill of material
and a routing for the material to be costed. When you create a cost estimate for a material, you
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always use a costing variant. This variant is the link between the cost estimate and the quantity
structure control
Variance Key: A key that ensures the object is selected during variance calculation. Also
controls whether scrap costs are reported in a separate category.
Variances can only be calculated for the orders for which a variance key has been entered.
This key is defaulted through the costing view in the material master record. If the variance
key is activated variance calculation in the variance key, the value of the scrap is calculated
at target cost and subtracted from the actual costs before the variances are determined.
Standard Variance Key 000001- Variance Calculation for orders will be used.
Costing lot size is used as the basis for costing of the material. The base quantity of the Bill
of Material should be maintained as the Costing lot size. BOM Header quantity will be
Created for the same quantity as costing lot size.
In standard Functionality direct validation is not possible with the costing lot size and BOM
header quantity. An enhancement need to be written in consultation with the PP Team.
Do not Cost the material is excluded from selection and BOM explosion, so that no cost
component split will be created by the costing process. The following is not possible, if this is
activated:
Material cost estimate
Sales order cost estimate
Profit Center- In the material master profit center will be assigned. Based on the
assignment, while posting the financial transactions for the material movement, system will
determine the Profit Center, automatically from the Material master. Based on the material /
product segment, relevant profit center need to be assigned in the Material Master.
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5.1.10.1
SUPERSEDES: N/A
Raw / Packing and Lab Chemicals
These materials are procured from the External vendor through Purchase order Process.
The material can be procured different source of supply and need to be classified based on
its duties / tax payment status. To meet this requirement, these materials are maintained
based on the following split valuation types:
Raw Materials
o
Domestic purchase
Domestic Excise Paid (excise inventorised)
Imported purchase (Customs duty paid)
Imported purchases (against advance license No customs duty payment )
Lab Chemicals
o
Domestic purchase
Imported purchase
Packing Materials
o
Domestic purchase
The price control for all the above materials are V Moving Average Price.
5.1.10.2
Semi-finished and Finished Goods
In general goods which are manufactured internally are known as Semifinished goods or
Finished goods, based on its stage of manufacturing. In case of Arch some of the materials
are manufactured internally and purchased from external source. In view of this it is decided
to use a common material code, whether manufactured or procured. To identify the source of
the material, it has been decided to have the split valuation for the materials.
In case of Semi-finished goods the following are the split valuation types and their price
control as follows:
Inhouse Manufacturing
-S
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Domestic Job work
-V
Domestic Purchase
-V
Imported Purchase
-V
SUPERSEDES: N/A
In case of Finished goods the following are the split valuation types and their price control as
follows:
Inhouse Manufacturing
-S
Domestic Purchase
-V
Imported Purchase
-V
For some of the CRAMS products, Price Control will be maintained as V in the
manufacturing plant even though these material are Semi Finished/Finished materials. In all
the Depots the price control will be maintained as V for all material types.
5.1.10.3
Allied Products
Arch procuring some of the materials, based on the market demands and supplying to
customers and these materials are not manufactured internally.
These materials are
identified as Allied Products and received in Depots and sold to the customers from depots.
In case of Allied Products the following are the split valuation types and their price control as
follows:
Domestic Purchase
-V
Imported Purchase
-V
5.1.10.4
Stores and Spares / Operating Supplies
Spares and Operating supplies are in the nature of maintenance materials. Some of the
spares and consumables are being stored in the stores and consumed based on the
maintenance schedule or breakdown maintenance. Some of the materials are used as
regular consumption i.e. Consumables, Fuel, Coal, etc.,
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In case of Stores and Spares the following are the split valuation types and their price control
as follows:
Domestic Purchase
-V
Imported Purchase
-V
In case of Operating supplies the following are the split valuation types and their price
control as follows:
Domestic Purchase
-V
Imported Purchase
-V
Power / Fuel / Diesel
-V
5.1.10.5
Capital Inventory
Some of the materials, for construction of fixed assets and maintained as inventory, in the
stores. As and when required by the Project Engineering Department, stores department will
issue the goods to the project. All these nature of materials are created under the material
type Capital inventory. These materials can be procured locally and imported.
In case of Capital Items the following are the split valuation types and their price control as
follows:
Domestic Purchase
-V
Imported Purchase
-V
5.1.10.6
Material Types, Valuation Type, Valuation Class
MTyp
ValCat
Val.
Type
ZCAP
ZCAP
ZFIN
ZFIN
ZFIN
H
H
A
A
A
DOM
IMP
DOM
IMP
JOB
ValCl
7000
7050
4050
4100
4025
Prc
V
V
V
V
V
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ZFIN
ZINT
ZINT
ZINT
ZINT
ZINT
ZLAB
ZLAB
ZOPS
ZOPS
ZOPS
A
A
A
A
A
A
H
H
MFG
DOM
IMP
IMPAL
JOB
MFG
DOM
IMP
H
H
DOM
IMP
ZPKG
ZPKG
ZRAW
H
H
H
1200 V
1250 V
1000 V
ZRAW
DOM
IMP
DOM
DOME
P
ZRAW
ZRAW
H
H
IMP
IMPAL
1050 V
1050 V
ZSPA
DOM
6000 V
ZSPA
ZTRG
ZTRG
H
H
H
IMP
DOM
IMP
6050 V
4500 V
4550 V
Plnt
Profit
Ctr
AAG
1071
1071
1071
1100
1100
1100
10711
0
10712
0
10719
0
11000
0
11001
0
11002
0
4000
3100
3150
3150
3050
3000
1100
1150
6500
6100
6150
SUPERSEDES: N/A
S
V
V
V
V
S
V
V
V
V
V
1000 V
Depot
10 X
20 X
90 X
0 X
10 X
20 X
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1100
1100
1101
1101
1101
1101
1102
1102
1102
1102
1102
1103
1103
1103
1103
1103
1104
1104
1105
1105
1105
1105
11005
1
11005
2
11011
0
11012
0
11013
1
11013
2
11021
0
11022
0
11023
1
11023
2
11029
0
11031
0
11032
0
11033
1
11033
2
11039
0
11045
1
11045
2
11051
0
11052
0
11053
1
11053
2
SUPERSEDES: N/A
51 X
51 X
10
20
31
32
10
20
31
32
90
10
20
31
32
90
51 X
51 X
10
20
31
32
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1105
1106
1106
1106
1106
1107
1107
1151
1151
1151
1161
1161
1161
1161
1162
1162
1162
1162
1171
1171
1171
1172
11059
0
11061
0
11062
0
11063
1
11063
2
11073
1
11073
2
11511
0
11512
0
11519
0
11051
0
11052
0
11053
1
11053
2
11051
0
11052
0
11053
1
11053
2
11711
0
11712
0
11719
0
11721
0
SUPERSEDES: N/A
90
10
20
31
32
31
32
10 X
20 X
90 X
10
20
31
32
10
20
31
32
10 X
20 X
90 X
10 X
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1172
1172
1173
1173
1173
1200
1201
1201
1201
1202
1202
1202
1203
1203
1203
1203
1203
1252
1253
1271
1271
1271
11722
0
11729
0
11731
0
11732
0
11739
0
12000
0
12011
0
12013
1
12013
2
12021
0
12023
1
12023
2
12031
0
12032
0
12033
1
12033
2
12039
0
12522
0
12532
0
12711
0
12712
0
12719
0
SUPERSEDES: N/A
20 X
90 X
10 X
20 X
90 X
0
10
31
32
10
31
32
10
20
31
32
90
20 X
20 X
10 X
20 X
90 X
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1272
1272
1272
1301
1301
1301
1301
1301
1302
1371
1371
1371
1372
1372
1372
1471
1471
1471
1571
1571
1571
3101
12721
0
12722
0
12729
0
13011
0
13012
0
13013
1
13013
2
13019
0
13025
2
13711
0
13712
0
13719
0
13721
0
13722
0
13729
0
14711
0
14712
0
14719
0
15711
0
15712
0
15719
0
31011
0
SUPERSEDES: N/A
10 X
20 X
90 X
10
20
31
32
90
51 X
10 X
20 X
90 X
10 X
20 X
90 X
10 X
20 X
90 X
10 X
20 X
90 X
10
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3101
3101
3101
3101
3171
3171
3171
3200
3200
3200
3201
3201
3201
3251
3251
3251
3401
3401
3401
31012
0
31013
1
31013
2
31019
0
31711
0
31712
0
31719
0
32000
0
32001
0
32002
0
32011
0
32013
1
32013
2
32511
0
32512
0
32519
0
34011
0
34012
0
34019
0
SUPERSEDES: N/A
20
31
32
90
10 X
20 X
90 X
0 X
10 X
20 X
10
31
32
10 X
20 X
90 X
10 X
20 X
90 X
GAP-(ABAP-Enhancement): While creating/Changing the Material, standard SAP

system will not do the validation with the above combination. For this purpose
enhancement need to the written
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5.1.11
SUPERSEDES: N/A
Controlling Master Data Business Process Steps and Transactions
Sl.No
Transaction
T.code
1
Primary
Cost KA01
Element
/ GL
Input
Output
User Role
Controls
Account Primary Cost CO User
GL
account
KA02 / KA03 Number
Element will be
Validity Period
Cost
created
must
FI
Element
be
Master created in the
User
system
CO User
No
Type
2
Secondary
Cost KA06
Element
GL
Account
created
Delete
Cost KA04
Element
Display Changes to KA05
Cost Element
Cost
Element KAH1 / KAH2 Group ID
Group
/ KAH3
Cost
Element Cost
Number
Element CO BPO
will be deleted
with
same ID
No
postings
should made
CO User
CO User
Group Name
Assign the Cost
Cost
Center OKEON /
Elements
Controlling Are
Standard Hierarchy OKENN

7
Cost Center
Controlling
CO BPO
Area Standard
KS01 /
Hierarchy
External 10 digit Cost Center is CO User
Cost
KS02 /
Code
or
authorization
KS03
Validity Date & displayed
in
need
other
created
master the screen
to
be
maintained
data
8
Delete Cost center
KS04
CO BPO
If the postings
are not made
can be deleted
Display Changes to KS05
10
Cost Center
Cost Center Groups KSH1 /
11
Activity Types
CO User
External ID
KSH2 /
Assign the cost
KSH3
KL01 /
centers
4 Digit External
CO User
CO User
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KL02 /
12
13
KL03
Delete Activity Type KL04
Display changes to KL05
14
Activity Type
Activity Groups
15
Figures
number
CO BPO
CO User
KLH1 /
Group ID
KLH2 /
Assign
KLH3
key KK01 /
Statistical
KK02 /
CO User
Activity
Types
4 Digit code for
CO User
Cost Center
KK03
Statistical KK03DEL
16
Delete
17
key Figures
Profit
Center KCH1 /
Standard
Standard Hierarchy KCH5N
Hierarchy
18
SUPERSEDES: N/A
Profit Centers
CO BPO
COBPO
KCH6N
KE51 /
6 Digit Code for
KE52 /
profit center
CO User
19
KE53
Delete Profit Center KE54
Profit center to
CO User
20
Display
delete
Change in the a
CO User
21
Center Changes
Profit
Center KCH1 /
report
Profit
CO User
Groups
KCH2 /
Group ID
Internal Orders
KCH3
KO01 /
Order type
KO02
IO Number
22
23
24
Profit 6KEA
Center
No postings
CO User
Internal
KO03
Order KOH1 /
Groups
KOH2 /
Assign the IO
Material Master
KOH3
MM01
Material Type
MM02 /
Industrial Sector Master will be User
MM03
Plant
Group ID
Valuation
No postings
CO User
reporting
Material
maintained
Type,
Will be used in
MM Master Need
to
maintained all
Display
CO User
to the
relevant
views
etc.,
be
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5.1.12
SUPERSEDES: N/A
Controlling Master data Integration:
The following are the integration points:
Sl No
Module
Details
FI
To create the Primary Cost Elements, it is required to have the corresponding

General Ledger Account in the FI System.
Cost center and Profit center will be assigned corresponding Company code.
MM
Profit Center is being for financial reporting

Material Master is being created in Material Management module. Costing
Views will be extended to the materials. When Standard Cost Estimate is
released from CO Module, the same will be updated into the Material master.
And material valuation will be carried out accordingly.
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6 Business Processes Controlling

6.1 Business Process Scenario
Organization Structure from CO perspective
Assignment of company code controlling operating concerns

prospective
Operating Concern -1000
Controlling Area - 1000
Company Code-1000
Company Code-3000
30003000
The following are the business Processes considered in Controlling:
Cost Element Accounting
Cost Centre Accounting
Internal Order Accounting
Product Cost Controlling
Profit Centre Accounting
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Profitability Analysis
6.2 System Considerations

The following considerations will be taken in Controlling:
Cost elements
Activity Types
Controlling Versions
Statistical Key figures
Planning Profile
Assessment and Distribution cycles
Internal order types
Budget Profiles
Costing Variant
Cost Component Structure
Base Planning object
Settlement profiles
Result Analysis Version
Allocation Structures
Characteristics and Value Fields in Profitability Analysis
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6.3 Solution in detail

Business process in Overhead cost management:
Cost element accounting
Cost center accounting
Internal order management
6.3.1
Cost element creations
Using cost elements for

different business process
Cost center planning
Period
with activity types
activities
end
closing
Budget and planning of order for
Settlement of order to
different business process
different R/3 objects
BBP_CO_BP6.3.1 Cost Element Accounting
Cost Element Accounting is the part of accounting where you enter and organize costs
incurred during a settlement period. It is thus not an accounting system as such, but rather a
detailed recording of data that forms the basis for cost accounting.
In an integrated accounting system such as the SAP ECC 6.0 System, you do not need to
enter cost data in a special way. This is because each business transaction relevant to cost
accounting provides the (CO) component with detailed information for the cost element, and
for the account assignment object itself. Each consumption transaction in Material
Management (MM), each billing in Sales and Distribution (SD) (= revenue), and each
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external transaction for invoice verification flows directly through the G/L Account (= cost
element) to the corresponding account assignment object.
It is a prerequisite to create relevant general ledger accounts in FI, in order to create
corresponding primary cost elements in CO. Examples for primary cost elements are
material costs, salary costs. To be able to post to a primary cost element, We require cost
carrying object such cost centre or internal order etc. to identify the origin of the cost.
Secondary cost elements are used exclusively in CO to record internal value flows like
assessments, activity allocations and settlements. Secondary cost elements can be created
only in Controlling and they do not have any corresponding general ledger accounts in FI.
Cost and revenue elements (Accounts) describe the origin of costs, revenues. Cost
elements are defined as either primary cost elements or secondary cost elements.
Cost Element Groups are created to group together the cost elements of similar kind of
nature to process the cost elements collectively in cost centre planning, assessment etc.
The cost elements can be created in the system automatically or manually. If a new GL
Account is created, based on the category mentioned in the system, Cost Element can be
created automatically.
For more details on General Ledger Master record details, refer the FI Business Blue Print
5.1.1. FI Master Data General Ledger
The following is the sample list, of GL account assignment to create the Cost element
automatically. Based on finalization of GL Account Master necessary values will be
maintained, based on the requirement. Otherwise Cost elements will be created manually.
Account From
Account To
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21311000
21111000
31010010
31040020
40111000
40111010
40111055
40121065
40131110
40151200
40173245
40173255
40173275
40184005
40184055
40184105
40313900
41101180
41199990
42101010
23109900
21124300
31040010
31040050
40111000
40111040
40121050
40131100
40141150
40173230
40173245
40173255
40173310
40184005
40184055
40184170
41101160
41108050
41199990
51130040
90
90
11
11
01
01
01
01
01
01
01
01
01
01
01
01
01
01
22
01
SUPERSEDES: N/A
Statistical
Statistical
Revenues
Revenues
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
Primary costs
External Settlement
Primary costs
1. Normal Material Consumption Accounts - (Primary Cost Element Category- 1).

Process Order will be the cost object.
2. Job Work Out Accounts (Sub-contracting ) (Account Key - BSV, FRL, VBO) No
Cost Elements
3. Input Materials Variance Accounts price variance (PRD), Scrapping (VNG),
inventory variance (INV) Cost Element type 1. Default Cost Center derivations will
be maintained to trigger the cost centre based on the plant.
4. Revaluation (UMB) will be triggered to CO-PA as CO Object.
5. Input Materials Sampling Cost Accounts (VQP, VQY) cost elements will be
created. Default cost centre will be derived based on Plant.
6. Small Difference Posting (DIF) No Cost Element
7. Purchase (EIN) / Purchase offsetting (EKG) Purchase Freight (FRE)- No Cost
Element
8. Goods Receipt against process order (GBB-AUF), Process order Settlement
GBB- AUA - Cost Element will be created (Primary Cost Element Category- 1).
Process Order will be the Cost Object.
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9. Manufactured Materials Variance Accounts price variance (PRD), inventory

variance (INV), Scrapping (VNG) Primary Cost Element Category -1. Process
Order will be the Cost object
10. Manufactured Materials Sampling Cost Accounts (VQP, VQY) cost elements will
be created. Process Order will act as Cost Object.
11. Manufactured Small Difference Posting (DIF) No Cost Element
12. Goods issue to Cost Center GL account will be proposed by system based on the
consumption account. Cost object will be assigned manually in the screen.
13. General ledger account relating to Calculated WIP Account will not be created as a
cost element.
14. General ledger accounts relating to Production Variances will be created as cost
elements, (Primary Cost Element Category- 1). Process Order will be the Cost
Object.
15. Make to Stock Scenario - General ledger accounts relating to Cost of Goods Sold
posted without account assignments, will not be created as Cost Elements. (Account
Key VAX).
16. Make to Order Scenario- General ledger accounts relating to Cost of Goods Sold
posted with account assignments, will be created as Cost Elements. (Account Key
VAY / VKA /VKP). This is required in case of Make to Order / Make to Project
scenario. (Primary Cost Element Category- 1). The Concerned Project/Sales Order
will be the Cost Object.
17. Without Reference Goods Receipt (ZOB 501 / ZOF-521/531).Cost Elements will
be created. User will enter the cost center manually.
18. General Ledger Accounts between 30000000 & 39999999 will be recognized as
revenue elements. CO-PA acts as CO Object.
19. Sales Deduction accounts, if any(like Sales Discount) will be created with Cost
element category 12. CO-PA acts as CO Object.
The following are the list of GL Accounts, for which Cost Elements will not be created
as per Arch Requirements.
Chart
Of Acts
1000
1000
1000
GL Acct.
32060010
40111005
40111050
GL Description
Asset Sale Clearing
Cons of RM - Dom for JW
COGS of Input Materials Dom
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1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
40121055
40121060
40131105
40141155
40151205
40161255
40173005
40173050
40184106
40173110
40173160
40173230
40173240
40173250
40173260
40173270
40184000
40184050
40184100
40173330
40173350
40184025
41101175
40199900
40211000
40211010
40211050
40211100
40211150
40211200
40211250
40213100
40213150
40214050
40214100
40216000
40216050
40216100
40216150
40216500
40217000
40217050
40220100
41101170
41108060
SUPERSEDES: N/A
Cons of RM - Imp for JW

COGS of Input Materials Imp
Cons of Lab Chemi-Dom for JW
Cons of Lab Chem-Imp for JW
Cons of PM - Dom for JW
Cons- PM-Imp-JW
Cons of Semi Finished - Mfg for JW
Cons of Semi Finished JW
Cons of Finished Goods - JW in JW
Cons of Semi Finished Goods-Dom-JW
Cons of Semi Finished Goods-Imp-JW
Chg. in Inv. - Semi Finished JW
COGS - Semi Finished Mfg
COGS - Semi Finished Dom
COGS - Semi Finished Imp
COGS - Semi Finished JW
COGS of Finished Goods Mfg
COGS of Finished Goods Dom
COGS of Finished Goods Imp
COGS - Packing Material - Dom
COGS - Packing Material-Imp
COGS-Finished Goods-JW
COGS-Stores & Spares-Imp
Change in Work in Process
Purchase - Raw Materials Dom
Purchase-Delivery Cost
Purchase - Raw Materials Imp
Purchase - Lab Chemicals Dom
Purchase - Lab Chemicals Imp
Purchase - Packing Materials-Dom
Purchase - Packing Materials-Imp
Purchase - Semi Finished Goods-Dom
Purchase - Semi Finished Goods-Imp
Purchase - Finished Goods Dom
Purchase - Finished Goods Imp
Purchase - Stores & Spares Dom
Purchase - Stores & Spares Imp
Purchase - Consumables Dom
Purchase - Consumables Imp
Purchase - Power & Fuel
Purchase - Capital Items Dom
Purchase - Capital Items Imp
Purchase Off-Setting A/c
COGS of Stores & Spares
Material Small difference account
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1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
6.3.2
42207010
42209010
42212010
42212020
42213050
42213060
42213070
42404030
42404040
42505010
42505020
42505030
42505040
42505050
42505059
42505060
43110100
44110010
51110010
51110020
51110030
51120010
51120020
51130010
51130020
51130030
51130040
SUPERSEDES: N/A
Donations
Directors Sitting Fees
Profit \ Loss on sale of asset
Profit \ Loss on sale of Investment
Listing Fees
ROC Fees
AGM Expenses
Interest & Penalty-Service Tax & Excise
Interest paid- Others
Exch. Fluct. G/ L Export
Exch. Fluct. G/ L Import
Exch. Fluct. G/ L Loan
Exch. Fluct. G/ L ( Unrealised) - Export
Exch. Fluct. G/ L ( Unrealised) - Import
Exch. Fluct. G/ L ( Unrealised)-Others
Exch. Fluct. G/ L ( Unrealised) Loan
Foreign Cur Monetary Item Trans Diff - W
Prior Year Expenses
Provision for Taxation
Provision for Deferred tax
Short/Excess Provision for Taxation
Transfer to Debenture Redemption Reserve
Transfer To General Reserve
Dividend-Equity
Dividend Tax - Equity Shares
Dividend - Preference Shares
Dividend Tax Preferance Shares
BPP_CO_BP6.3.2 - Cost Centre Accounting
Cost Centre Accounting would be used for controlling purposes within an organization. Cost
Centre Accounting lets you analyze the overhead costs according to where they were
incurred within the organization.
To assign overhead costs accurately to individual products, services or market segments,
further allocation of costs to those cost centers directly involved in the creation of the
products or services is needed. We can then use different methods to assign the activities
and costs to the relevant products, services and market segments from these cost centers.
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The costs of each cost-accounting-relevant business transaction portrayed in the SAP ECC
System can be assigned through Cost and Revenue Element Accounting (CO-OM-CEL) to
an account assignment object in the Controlling component (CO). For overhead costs this
can be cost centers, internal orders, business processes or overhead projects.
GAP(ABAP-Enhancement): Standard authorizations are not available to restrict the users
to post only to authorized cost centers. If the cost centre authorization is needed, validation
by exit will to be activated.
6.3.2.1
Cost Center Planning
Cost centre planning involves entering plan figures for costs, activities, or statistical key
figures for a particular cost centre and a particular planning period. You can then determine
the variances from these figures when you come to compare these plan values with the
costs actually incurred.
6.3.2.2
Activity Type Planning
Activity types are used to determine the quantity-based output of a cost center. The plan
activity quantities of production and service cost centers must be reconciled with the master
production schedule of Process Orders. This determines the required plan activity quantity,
as well as the plan capacity.
Secondary Resources will facilitate the following.
In standard SAP in an operation we can assign 6 Activities in an operation.

Secondary Resource will facilitate to have this facility.
It will absorb the costs from the same cost centre, in which the costs were incurred.
No need to do separate assessment cycles for the sake of this.
Cost Split will be avoided.
Better control over the Utility cost as variable cost.
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The following are the Activity Types Identified for Product Costing:
SL No
Activity Type
Activity Type Description
1100
Machine Hours
1200
Labour Hours Internal
1300
Labour Hours External
1400
Power Units
1500
Water
1600
Fuel
1700
LIQUID NITROGEN
Activity types are used primarily to control the activity quantities on the cost centers. This
enables to measure the operating planned rate or the rate of capacity utilization of a cost
center.
In Cost Center Accounting, activity types can be defined uniquely using the bases Plan
activity, Capacity, Output quantity, Price and Equivalence number for each production
cost center wise. The price can be calculated by the system or entered manually.
Plan Activity Quantities in the following characteristics :
Version
From Period
- To Period
Fiscal Year
Cost Center Range
Activity Type Range
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Plan Cost Center Vs. Activity Type combination, the Plan Activity and Capacity Activity,
quantities. As the Activity independent costs (Service Cost Center costs) will be absorbed
through Machine Hours, keep the Equivalence Number as one for Machine hour and rest of
the activity types (Labour, Power, Water and Fuel) the Equivalence Numbers should be
Zero.
The following are the Activity Types Identified for Maintenance and planning will be carried
out similarly as Activity Dependent Planning:
Activity ID
2100 Repair Internal Labor

2200 Repair External Labour
UOM
HR
HR
SCE
90043210
90043220
The following are the Activity Types are Identified for R & D Cost monitoring and planning will
be carried out similarly as Activity Dependent Planning:
Activity ID
3100 Resource Cost-Chemist

3200 Resource Cost-Scientist
3300 Resource Cost-Group
6.3.2.3
UOM
HR
HR
HR
SCE
90043310
90043320
90043330
Activity Dependent Overhead Planning
Activity Dependent cost planning for primary costs will be made, based on the following
combinations:
Cost Center
Activity Type
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Cost Elements
Some of the cost can be directly identifiable in the above combinations. This involves
entering the planned costs that arise from the consumption of goods, services procured
externally, expenses incurred. The planned figures will be entered in the local currency INR
using the following versions.
Version
0
Description
Plan / actual Version
Overheads will be planned, in this activity. The overheads can be Fixed or Variable. The
following Cost Center / Cost Center groups will be planned Activity Dependent planning (i.e:
those are associated with production resource).
Example for plant 1101:
Cost Center Group /
Activity
Cost Center
Cost Element Group
1101101005,
10,20 Direct Costs overhead cost
etc
1101105005,
element groups - of Labour

Direct Costs overhead cost
1101105020,
element groups -
1101105045
related
Type
1200 & 1300
of Utility 1400,
1600
Remarks
Primary
resource
activities
1500, Secondary
resource
activities
Activity Dependent Planning for Secondary Resource:Some of the service cost center costs are directly allocable / identifiable to the product lines.
These costs are being transferred to products through service Activity Type. These service
cost are being planned to Service cost center Vs. Activity Type. These service cost center
and activity type will be used in the Secondary Resource of Product Recipe. Based on the
Secondary Resource assignment, cost will be absorbed by the product. Since the Secondary
Resource does not allow to confirm the from the same plants, these need to be created at
the HO plants.
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6.3.2.4
SUPERSEDES: N/A
Activity Independent Overhead Planning
Activity independent cost planning for primary costs without referring to specific Activity
Types. This involves entering the planned costs that arise from the consumption of goods
and services procured externally and indirect overheads, to be distributed to Production cost
centers. The planned figures will be entered in the local currency INR using the following
Versions in the following combinations:
Version
Period From To
Fiscal Year
Cost Centers or Cost Center Groups
Cost Elements or Cost Element Groups
The Activity-independent primary costs are planned for the combination of Cost Centers and
Cost Elements. The costs will be initially planned for the whole fiscal year and equally
distributed among the various periods or based on the distribution key or manual distribution
among the periods.
Normally service cost center will be planned activity independent planning. As a period
process these cost will be transferred to production cost centers.
6.3.2.5
Statistical Key Figure planning
This process is required for entering cost centre wise planned Statistical Key Figures. These
will be used in Distribution and Assessment cycle, for allocation of overheads from Service
Cost Center to Production associated cost centers.
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Arch will maintain the Planned Statistical Key Figures Vs. Overhead receiver cost center.
Based on these values, system will distribute the overheads and transfer the same to the
receiving cost center.
The Cost Center Vs. Statistical Key Figure will be kept in the KDS Document in the following
format.
SKF
Cost Center
Weight factor Purpose of usage
6.3.2.6
Periodic Allocation of Overheads:
In SAP System two methods of overhead allocation is possible:
Distribution: The original cost element is retained.
Assessment: The original cost elements are assigned cumulatively, or in groups, to

assessment (secondary) cost elements. The original cost elements are not recorded
on the receivers. The receiver side, Assessment Cost Element will be seen.
These are indirect overhead allocation methods. The following are the user defined
allocation methods:
TYPE
Fixed basis
Fixed basis
Fixed basis
Variable basis
Variable basis
Variable basis
Variable basis
Variable basis
Variable basis
BASIS
Fixed percentage
Fixed portions (Ratio)
Fixed amount
Actual cost of receiver
Planned cost of receiver
Actual SKF of receiver
Planned SKF of receiver
Actual Activities of receiver
Planned Activities of receiver
Arch will be creating the Assessment cycles for distribution of overheads plant wise. The
details of Assessment Cycles will be maintained in the KDS in the following format.
Plan Assessment Cycles

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Assessment
Cycle
1101C1
1102C1
1103C1
1104C1
Start Date
Text
01.01.2010
01.01.2010
01.01.2010
01.01.2010
Tarapur
Badlapur Unit
Taloja G - 6 Unit
Taloja R & D Unit
SUPERSEDES: N/A
The following is the format for the Segments.

Segment
Assessment
Sender
cost Element
center
costReceiver
center
costBasis
or
variable potion
& Basis
As per the Arch requirement Allocation Cycles will be maintained in the system. The similar
assessment cycles will be created even for actual data allocation.
Overheads Absorption to Projects- CAPEX, Product/Process Development project,

DMF .
It was proposed by Costing team that Overheads pertaining to Project management ,
Process Engineering , Purchase Engineering , Process Development Lab can be
absorbed to the Project by maintaining different activity Types for these Cost
Centers.
However, PS team/Commercial team cannot plan Overheads for these activities
separately for Product Costing & for Project along with Activity Quantity for
developing the different rates for absorption.
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Further, project team cannot confirm the actual no of hours spent by Project
management Staff, Process Engineering staff, Purchase Engineering staff for
different types of projects.
Hence, different activity types will not be maintained for absorbing these
costs. Since these costs pertain to Project Only, Costing team will not load Process
Development lab Exp , Project management Staff, Process Engineering, Purchases
Engineering for HO & Plant to regular products. Commercial team will absorb the
same to Different types of Projects based on their assumption.
6.3.2.7
Planning Profile
To load the overhead planning through Excel Sheet, a new custom developed planning
profile will be created. So that user can easily load the data through excel sheet.
ZARCH Arch CC Planning - Excel
6.3.2.8
Cost Splitting
Since Arch is not using Cost Splitting Process, this process is removed from BBP.
6.3.2.9
Activity Prices for a Cost Center
The activity price is determined per Cost Center/ Activity Type either manually or in
automatic activity of price calculation by the system using the Activity Price calculation
process.
Before processing the price calculation, user need to complete the indirect overhead
allocation process and cost splitting process.
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System will calculate the Activity prices based on overheads in the Cost center (direct +
allocated) and planned activity quantities for the cost center.
This Activity Price or rate is used in product cost planning / controlling to arrive at the
planned cost of production or standard cost estimate and actual production costs.
This price can also be maintained manually in the system.
6.3.2.10
Cost Center Planning -Transaction / Activity Chart:
Sl.No
Transaction
T.code
1
Activity
Output KP26
Planning & Prices
Input
Output
Cost Center and Production
Activity Type
Cost
center
output
2
Overhead
KP06
Planning
Cost
User Role
Controls
CO User
Based on planned
and
Activity Prices
Center, Overhead
CO User
production,
output
quantity need to be
maintained
Need
to
be
Activity
Type planning
synchronized with FI
and
Cost Activity
expenditure
Element
Dependent or
Or
Activity
postings
Cost Center and Independent

3
SKF Planning
KP46
Cost Element
Version, Period, Statistical Key CO User
Planned values will
Fiscal
be
Cost
4
Plan
Cycle
Distribution KSV7
KSV8
year, figures will be

Center, maintained for
SKF
/ Maintain
a Cost Center
Plan Cost can be CO User
Distribution
Cycle
allocate
distributed
maintained
for
Allocation
Allocation
ratios
need to be identified
to based Sender
the cost center to
service cost to receiver
cost
production cost center

5
Plan Assessment KSU7 /
centers
Maintain
Plan Cost can be CO User
Allocation
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Cycle
KSU8
Assessment
Cycle
allocate
SUPERSEDES: N/A
transferred
to based
on
the Sender
cost
service cost to center
to
production cost receiver

6
Execute
the KSVB
Distribution
centers
Assign
cost
center
the Cost can be CO User
Distribution
Cycle,
transferred
Month, based
Year
Sender
cost
the KSUB
Assessment
Assessment
Cycle,
Year
transferred
Month, based
Sender
cost
KSS4
Need to be identified
nature
expenditure
to
of
be
used for Distribution
cost
Cost
center
Center Cost will be CO User
Group,
Period, assigned
Year
be
to
receiver
Cost Splitting
to
used for Distribution
the
on
center
expenditure
of
cost
center
the Cost can be CO User
Assign
nature
to
receiver
Execute
Need to be identified
the
on
center
to
Cost
Center
and
Activity
Type
9
Activity
Price KSPI
Calculate the activity
10
Calculation
Review the Activity KP26
prices
Review the prices
Prices
calculated
by
system
6.3.2.11
Cost Center Planning Integration:
The following are the integration points:
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Sl No
Module
Details
PP
Cost centers and activity types are being assigned in the PP Resource / work
centers. These resources are being used to manufacture the products. Based
on product mix, planned capacity need to be arrived and maintained in the
Cost Center output

Based on the actual expenses incurred in the previous month / years,
FI
expenses plan will be maintained in the system, as a cost center planning
6.3.2.12
Actual Posting in Cost Center Accounting
The actual values are posted online to monitor costs on an ongoing basis. These postings
enable us to recognize variances at an early stage, and to take the necessary counter
measures.
Actual cost entry involves transferring primary costs from upstream components to the
Controlling (CO) application component. In the CO component, this transfer occurs real-time
from the components Financial Accounting, Asset Accounting, Materials Management,
Production Planning and Payroll Accounting. This is achieved by entering a cost accounting
object (such as a cost centre or an internal order) during account assignment.
Primary costs entered in other systems are allocated further using internal allocations and as
true to source as is possible. To enable this, costs are determined for each business
transaction, based on the valued internal activity. They are then posted real-time to the
sender and receiver object(s) (debit and credit postings).
Errors are unavoidable and may result particularly during initial days of SAP live operations.
Thus, there will be occasions where postings are assigned to the wrong controlling object,
and ARCH should be able to rectify posting errors related to erroneous assignment to
controlling objects.
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ARCH can repost primary costs from one controlling object to another using transactionbased transfers; the original cost element is always retained. This function is designed to
correct posting errors.
Posting errors should preferably be corrected in the application
component where they originate, so that external and internal accounting (FI and CO) is
always reconciled.
In ARCH, the assignment of CO objects to the transactions in other modules like FI, MM, SD
etc. is taken care of where ever possible, to post the entries automatically to the respective
CO objects, in order to reduce the chances of error occurrence.
Posting errors involving assignment to a controlling object (cost centre or internal order) can,
however, is corrected using a transaction-based reposting in CO. The reposting costs (or
revenues) transaction is simple transfer of cost (or revenue) from one controlling object to
another.
Alternatively, ARCH can repost line items from CO documents. To do this, the CO reposting
document must reference the original FI document that posted the costs to CO.
This
enables to track the movement of cost with in CO, and still preserve the link with the
originating FI document. In repost line items, facility is provide to enter multiple receiver
objects for a line item reposting, but the full amount of original line item must be reposted.
For some of the Cost Elements, users can not assign the Cost Object. Hence the cost
object need to be derived based on the Plant or Profit Center. The assignment of cost object
to the cost elements, will be identified, based on the GL Accounts (cost elements)
finalization.
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6.3.2.13
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Period End Closing Activities in Cost Center Accounting
Period-end closing in Overhead Cost Controlling is part of the work carried out at period-end
throughout the entire organization.
The tasks required at period-end, and the sequence in which they must be carried out,
depend on what system functions can be used and which cost accounting method. This topic
describes the basic elements of period-end closing. The explanations assume that all the
features available are being used.
ARCH will allocate the Costs collected on a cost center during the planning / actual posting,
during the accounting period to receivers, based on user defined ratio. The Activityindependent primary costs which are planned / posted in the combination of Cost Centers
and Cost Elements, need to be allocated to Production Cost Centers/secondary resource
cost centers, by using the Assessment and Distribution method.
6.3.2.14
Periodic Reposting
Actual Transactions are being posted from FI / SD / MM / PP components of SAP. Errors are
unavoidable and may result particularly during initial days of SAP live operations. Thus,
there will be occasions where postings are assigned to the wrong controlling object and
ARCH should be able to rectify posting errors related to erroneous assignment to controlling
objects.
ARCH can repost primary costs from one controlling object to another using transactionbased transfers; the original cost element is always retained. This function is designed to
correct posting errors.
Posting errors should preferably be corrected in the application
component where they originate, so that external and internal accounting (FI and CO) is
always reconciled.
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6.3.2.15
SUPERSEDES: N/A
Actual overheads Accruals
Arch is not using Actual Overhead Accruals.
6.3.2.15.1
Actual Allocation Assessment Cycle
Assessment is a method of allocating the Costs in Cost Center Accounting. The following
information is passed on to the receivers:
The original cost elements are assigned cumulatively, or in groups, via secondary
cost elements (assessment cost element). The original cost elements are not
recorded on the receivers.
Sender and receiver information
Allocation through assessment is useful when the composition of the costs is unimportant for
the receiver.
6.3.2.15.2
Actual Allocation Distribution Cycle
Distribution is used to allocate the primary costs of a cost center. The following information is
passed on to the receivers:
The Original Cost Element
Sender and receiver information
You can analyze the distribution results according to sender and receiver relationships.
To transfer the costs Assessment or Distribution cycles will be created in the system. The
cycles are split into various segments, if the distribution ratios are changed:
From the Sender Cost Center & Sender Cost Element will be transferred to receiving cost
center based on a tracing factor / percentage / identified ratio.
Costs collected in a Cost Center during a period are further allocated to other Cost Centers.
ARCH will be using Assessments & Distribution as a method of allocating both Primary and
Secondary Costs. The original Cost Elements are assigned cumulatively or in groups to
Assessment (Secondary) Cost Elements.
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Sender-receiver relationships between the various Cost Centers will be defined in the
various segments of the Assessment Cycle. During assessment, the original cost elements
will be summarized into the Assessment Cost Element. Line items are posted for both the
sender and receiver Cost Center while recording the allocation using the Assessment Cost
Element.
Statistical Key figures are used for Allocation of Electricity, Telephone, Cleaning, Gardening,
Maintenance expenses etc.
6.3.2.15.3
Variance Calculation
Variance calculation categorizes and display variances incurred on cost centers by cost
element. Variance calculation is based on the results of actual cost entry and the allocation
methods as well as planning.
Variances in the Controlling component (CO) at period-end closing can be due to several
causes:
Planning was overshot/undershot
The actual costs on the cost centre differ from the target costs
Over-/under-absorption occurs on the cost centre
Variance calculation is based on the reconciled planning of internal activity between cost
centers and the costs thereby incurred. Variances are the differences between actual costs
and plan costs. They are displayed separately for a cost center, for an activity type of a cost
center, divided into fixed and variable portions. Where possible, they are classified by cost
element.
Variance calculation distinguishes between cost centers with activity types (such as
production cost centers) and those without (such as administrative cost centers). Actual
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costs are always posted as activity-independent. To determine the activity input, you
therefore need to split the actual costs and the activity-independent plan or target costs of
cost centers with activity types on the activity types. In this way, analyze the reasons for the
Variances for a given cost center activity. Variance calculations compare detailed planning
on the activity type level with the corresponding actual costs.
Variance calculation allows, to analyze the actual balance. The system determines the
variances of the target costs from the actual costs split on the activity types, as well as from
the allocated actual costs in the different variance categories by cost element for each cost
center/activity type.
6.3.2.15.4
Actual Activity Price Calculation
During the actual price calculation, the system calculates iterative prices for activity types
based on actual costs and actual activities. The calculation takes into account all activity
exchanges between cost centers.
Price calculation which carried out during planning, is based on planned costs and planned
activity.
After running actual price calculation, revaluate actual activity at actual prices. This
revaluates the activity using the difference between plan and actual prices. By revaluing the
actual activity with actual prices, can fully balance sender cost centers.
6.3.2.16
CCA Period End Closing -Transaction / Activity Chart:
Sl.No
Transaction
T.code
1
Manual Reposting KB11N
Input
Cost Center
Output
User Role
Controls
CO Document CO User
Periodic
review
Cost Element
will be created
Amount
need to be carried
out by the CO User.
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Inform
to
the
respective users, if
any
2
Maintain Statistical KB31N/
Posting Date
Key figures (SKF) KB32N /
Rec.
KB33N
Maintain
for
Activity KB51N /
Secondary KB53N
Resource
CO Document CO User
Cost will be created

post
deviations
noticed
This SKF will be
used in Overhead
Center
to
SKF
Statistical Key
Quantity
Posting Date
Figure
CO document CO User
User has to know,
Cost Center
will be created
how
Activity Type
to
quantity
Quantity
Activity Types
post
the
distribution
the
much
actual
is
being
produced,
cost
center wise / activity

type wise.
Cost
Center
Vs.
Activity relation must

be established in the
4
Manufacturing
COR1 /
Material
Process Order PP User
Planning
Data will be copied
Process Order
COR2 /
Number
will be created
from
COR3
Plant
with an unique
(BOM / operations).
Process
the
Recipe
Order number
Type
Material
availability
Batch Quantity
will be checked
Batch Number
Start Date, etc.,
Cost
will
be
calculated
Review the Process
orders
5
Process
Order COR6N
Confirmations
CORR
Process
number
Phase
Order Confirmation
will be posted
PP User
and
statuses
Actual
its
Activity
Quantity need to be
confirmed
by
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(operation
user
number)
Actual
6
Goods
Issue
to MIGO
Process order
MB1A
Activity
Quantity
/ Process
Review
confirmations
Material Must
be
document will
available
in
the
be posted
identified
Storage
order Goods
number
the Order
Issue PP User
location
Review the Goods
7
Goods
Receipt MIGO
against
the
Process Order
Process
Order Goods
number
PP user
Receipt
Issue
Check the material
prices
Movement Type document will

be posted
Review the Goods

receipt against the
Maintain
Distribution
Distribution Cycle KSV2 /
Validity date
Cycle will be Team
to
Segments
created
and maintained
the KSV3
service cost center
Method
overhead
Distribution
Sender
CO
process
Core Distribution
Cycle ID
allocate
Actual KSV1 /
ratios
of
Cost
Center
Cost Elements
Receivers
9
Maintain
Cycle ID
Assessment CO
Assessment Cycle
Validity date
Cycle will be Team
to
Segments
allocate
Actual KSU1
the
created
service cost center
Cost Element
overhead
Method
Core Allocation
and maintained
of
Assessment
Sender
Cost
Center
ratios
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Cost Elements
Receivers
10
Cost Splitting
KSS2
Cost split need
Splitting
to be carried out
and Strategy need
based
to be maintained
on
the
Structure
Cost center and

Activity Type for
the splitting rule
11
12
Actual
Activity KSII
maintained
Actual Activity
Price Calculation
price calculation
Actual
in the system
Period,
year, Review
Activity KBK6 /
price
KBK7
the
Cost Center and prices

Activity Type
calculated by
the system
6.3.2.17
CCA Period End Closing - Integration:
Sl.No
Module
1
FI / MM
Details
While posting the actual transactions, user not in a position to enter the Cost
object (cost center / internal order, etc).
This need to be defaulted by
assigning the Cost Center based on a plant or profit center, through

2
PP-PI
configuration.
Part of the Manufacturing process, Process Orders will be created Goods
Issue, Confirmations and Goods Receipt will be posted in the system.
PM
Review the open process order and Technically completed process orders.
Maintenance order will be consuming the materials from stores and
maintenance activities as identified. Activity price arrived through CO process
PS
and absorbed based on the actual activity hours confirmation in the system.
Planned Orders will be created through project MRP. Planned orders will be
converted to process orders. The Consumption of materials and activity
confirmations will be happened to the process orders. Finally process orders
will be settled to projects. All the actual expenses and inventory will be
transferred to the project systems from Process Order. Project stock report
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can be viewed from T. Code MBBS.
SUPERSEDES: N/A
The project systems will finally be
transferred to CO-PA to analyse WBS wise information with regard to

Revenue and cost. The finished goods inventory will be posted with Project
moving average price maintained in the system.
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6.3.3
SUPERSEDES: N/A
BPP_CO_BP6.3.3 Internal Order Accounting
Internal orders are normally used to plan, collect, and settle the costs of internal jobs and
tasks. The system monitors the internal orders throughout their entire life cycle from initial
creation, through the budgeting and posting of all the actual costs, to the final settlement.
Orders used only for monitoring objects in Cost Accounting (such as, advertising,
trade fair or civil work orders).
Productive orders that are value-added, that is, orders that can be capitalized (such
as in-house construction of an asset).
The following table describes the high-level process flow for the Internal Order Master
Maintenance.
No
1
Process
Internal Order Types
Description
One Internal Order type for each of the tasks
namely CAPEX, Employee, Maintenance, Special
Events, Non-Operating Revenue, Sales Promotion
can be created. The number range and settlement
profile can be defaulted from Internal Order type.
Order type Z001 used for Investment Orders.
Internal Orders.
Order type Z010 used for all statistical Orders.

Internal Orders would be created under any of the
Internal Order Types defined and would carry the
no either internally generated or eternally assigned
depending on the configuration of the Number
Range assign to the Internal Order Type.
Internal Orders could be defined as True or
statistical depending on the settlement plan for the
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particular internal order. Statistical Order can not

be settled on any other cost or FI object
3
Internal Order Group
Internal Order groups can be created for the

purpose of analysis or reporting requirements.
The following Internal Order Number ranges are used for internal orders of Arch.
Order Type
Description
Number Range
Z001
Internal orders: Investment
1700000001 TO 1799999999
Z010
Other Statistical Orders
1800000001 TO 1899999999
6.3.3.1
Internal Order Planning
During internal order planning, you enter costs, activities and business processes that you
expect to incur during the life cycle of an order. Using internal order planning, you can
compare plan and actual costs, and carry out a differentiated variance analysis.
6.3.3.2
Budget Management for Internal Orders
The budget is the approved cost structure for an order and differs from the cost plan in that it
is binding. Having estimated the costs as accurately as possible using the different tools
during the planning phase, we then prescribe the funds available for the order in the form of
a budget. The budget is the device by which management approves the expected
development of order costs over a given timeframe.
The following different budget types exist:
Original Budget
This is the budget originally assigned, before any updates were made.
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Budget Updates
Unforeseen events, additional requirements, for example, price rises for external activities,
and so on. This may mean you need to update the original budget, in the form of:
Supplements
Returns
Current Budget
This is derived from the budget types already mentioned:

Original budget
Supplements
Returns
Current budget
Z001 Arch IO with Budget

o
Internal Number Assignment
Settlement Profile as Z3 IO Settlement Profile
Budget Profile Z00001 Budget profile for Arch
Z00001- Budget Profile for Arch Group

o
Time Frame for Past 1 year
Time Frame for Future 3 year
Total Value to budget overall values
Annual Values- to budget annual values
Availability check is active
Budget Activation will be automatic
More details refer the FI Business Blue Print - Assets under Construction with Internal Order.
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6.3.3.3
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Availability Control for Internal Orders
Availability control enables to control costs actively by issuing warnings and error messages
when costs are incurred. As per availability control ARCH is expecting the warning message
issue once budget consumption reaches 90%.Once the budget consumed fully (100%)
system issues error message. These controls assigned to the budget profile and as per this
assignment, system will give warning message once budget consumption reaches 90% and
gives error message and stop posting to order once budget consumption reaches 100%.
6.3.3.4
Actual Posting to Internal Order
An actual posting to internal order enables up-to-date monitoring of the costs incurred by the
organization. In this way, the variances can be identified at an early stage and correct them.
The following table describes the high-level process flow for the Posting to Internal Order.
No
1.
2.
Process
Data
flow
from
Description
Financial
All invoices and other entries related to the event
Accounting
will be posted to true or statistical internal order for
Data
information and plan checking.

All internal goods issue and all service order and
flow
from
Materials
Management
service entry sheet related to particular task will be

posted to Internal Order.
Expenses Vouchers Derive the Internal Order
From Purchase Order if defined in purchase order
6.3.3.5
Period End Closing - Internal Order Settlement
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An internal order is usually used as an interim collector of costs and an aid to the planning,
monitoring, and controlling processes needed. When the job has been completed, you settle
the costs to one or more receivers (cost center, fixed asset, profitability segment, and so on).
At ARCH, Internal orders are planned to be used for capturing costs of prospective orders
and for Assets under construction. In addition, a separate order type will be created for
budgetary control over Assets purchase, which will be statistical in nature.
When the job has been completed, user can settle the costs to one or more receivers. For
example, in the case of prospective orders if the order is firmed up, the accumulated costs
will be settled to the job and if it does not materialize, the costs will be settled to the
marketing cost center.
Periodic settlement of these internal orders will always be to the cost center which incurred
the costs
Settlement of orders would be based on the settlement rule for Internal Orders. This in turn
is controlled by the settlement profile for the order type. An Internal Order could be settled to
a GL Account or Fixed Asset, where as a capital Internal Order is always settled to Assets
under Constructions. Once the Order is approved for Capitalization, it would be settled to a
Fixed Asset manually.
6.3.3.6
Period End Closing - Carry forward to next year
In case of job is carried forward to next year the budget for that order has to be carried
forward.
6.3.3.7
Sl.No
Internal order - Transaction / Activity Chart:

Transaction
T.code
Input
Output
User Role
Controls
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Manual Reposting KB11N
Cost Center
Cost Element
Amount
Budgeting
Budget amount Budgeted

for the Order
amount
Carry
forward KOCO
internal
order
Budget
Budget
KO24
Supplement
Budget Returns
KO26
6.3.3.8
Sl.No
1
FI
KO22
CO Document CO User
will be created
CO User
Selection Varient Transfer

CO User
Fiscal Year
Document will
Document date be created
Internal order to CO document CO User
be entered
will be created
Internal order to CO document CO User
be entered
will be created
Periodic review need

to be carried out by
the CO User. Inform
to the respective
users,
if
any
deviations noticed
When
expenses
exceeding 90% it
gives
warning
message
As a year end
activity, this can be
executed.
User will enter the
changed values .
User will enter the
changed values .
Internal order - Integration:

Module
Details
Internal order will be created to budget the plug in assets or directly usable,
without any, installation process. For which budgeting is being carriedout
through Internal order
Some of the expenses are being posted to the statistical internal order to
capture cost in additional dimension.
6.3.4
6.3.4.1
BPP_CO_BP6.3.4 Product Cost Controlling
Product Cost Planning
Planned cost of the product is calculated
Using the BOM and the master records of the materials in the BOM
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Using the recipe, resource where the respective operations are carried out, the cost
centers, and the activity types.
When process order is released, the planned cost is calculated as follows:Cost Component
Material
Quantity
Standard BOM
Rate
Price
from
Resource
Material Not
Master
Labour Cost (Internal / Standard activities Plan price
applicable
Primary
External)
Machine Cost
in Recipe
Standard activities Plan price
Resource
Primary
Power Cost
in Recipe
Resource
Secondary
Water
in Recipe
Resource
Secondary
Fuel
in Recipe
Resource
Secondary
Liquid Nitrogen
in Recipe
Resource
Secondary
in Recipe
Cost Sheet
Resource
Overhead
Based on the Primary

cost (materials and / or
Labour) over head rate
mentioned
in
the
costing sheet
6.3.4.2
Origin Groups
Origin groups serve to subdivide the material costs based on the origin group assigned in
the Material Master. For controlling purposes, materials assigned to the same cost element
by automatic account determination can be separated into origin groups. Account
determination assigns each material to a G/L account and thus also to a primary cost
element.
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If an origin group is entered in the costing view of the material master record, the
combination of origin group and cost element is updated in the Controlling module.
If the Material origin indicator in the costing view of the material master record is
specified in addition to the origin group, the costs are updated under the combination
of material number, origin group and cost element in the Controlling component.
These Origin groups can be used in

o
Calculate Overhead
Assignment in Cost Component Structure
Variance calculation
Work in process calculation
The following Origin Groups will be used to differentiate the costs:
1001 Key Materials
1002 Solvent Materials
6.3.4.3
Overhead Cost Sheet
Overhead cost sheet controls and transfers the overheads to product, while releasing
standard cost estimate / valuating the materials. Overhead rates can be maintained to
transfer the value to inventory.
Overhead Cost Sheet contains the following elements;
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Calculation Base - The calculation base determines on which cost elements

overhead need to be applied. Assign individual cost elements or cost element groups
with or without origins, to form a calculation bases.
Overhead Rates: An overhead rate specifies the conditions under which overhead is
applied to an object. Overhead rates are limited in duration, periodically need to be
maintained. Overhead key also specify what are dependent key combinations,
i.e.Plant, company code, Overhead Key, Order type, etc.
Credits: Cost allocation is part of the process of determining overhead rates. If this
leads to an object being debited with actual costs, another object in Cost Accounting
must be credited at the same time, to balance the cost document in CO. This can be
either a cost center or order. This type of posting is recorded under a secondary cost
element of cost element category 41(overhead rates) in the SAP System.
ZP-PC1 ZP-PC1 Cost sheet ARCH
ROW
BASE
Overhead
10 B000
20
30
40 B010
50
60
70
80
90
Description
From
row
To row
Credit
Material
C000
C001
C002
C003
Material OH
Material usage
Production
Manufacturing OH
Production costs
Cost
of
goods
manufactured
Admin Overhead
Selling Overhead
10
E01
40
E02
10
10
E03
E04
The following components are being used:
B000 Material
Assigned the Cost Element 40111000
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C002 Admin Overhead
- Overhead 15% is being maintained
C003 Selling Overhead
- Overhead 15% is being maintained
E03-Cred. Administration
- Cost Element 90041100
E04-Cred.Sales & Dist
- Cost Element 90041110
The overhead is not part of the Valuation, the Secondary cost elements will be
assigned to the Cost Component Structure, which are part of the Cost of Goods
Sold.
6.3.4.4
Costing Variant
Costing Variant is a variant that contains all control parameters for costing, including
parameters that control how cost estimates are executed and the material prices or activity
prices that are used to valuate the costing items.
In material costing, the costing variant determines the following:
The purpose of the cost estimate (costing type)
The prices that are selected to valuate the quantity structure and calculate overhead
expenses (valuation variant)
The dates that apply to the actual cost estimate and to the explosion and valuation of
the quantity structure (date control)
How the BOMs and routings are selected to create the quantity structure (quantity
structure control; only relevant for cost estimates with a quantity structure)
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In unit costing (base object costing and unit costing for orders), the costing variant
determines the following:
The purpose of the cost estimate (costing type)
The prices that are selected to valuate the costing items (valuation variant)
Whether the individual costing items are assigned to cost elements
The following Costing Variants are being used for Arch

Costing
Description
Costing Type
Valuation Variant
Variant
1. Costing Variants used in Standard Cost Estimate
PPC1
Standard
01-Standard Cost Estimate
Cost
Z001
Z002
Est.
Control
001-Planned Valuation PC01-Std.
Material
(Mat.)
SCE
11-Inv Costing Commercial Z01-
Commercial
Price
Material CP
Price
Arch
10- Inv Costing Tax Law
Z01-
Material
Date
Cost Est.
Valuation PC01-Std.
Cost Est.
Valuation PC01 Std
Material CP
Cost
Value to Tax
Estimate
Price
2. Costing Variants used in Production Process
PPP1
Production
06Production
Order 006-Production Order
Order:
Planned
Planned
Planned
Production
07- Production Order Actual
007-Production Order
Order:
Actual
PPP2
Actual
3. Costing Variants used in Project
Network:
06-Production
PS02
Planned
Order 010-Network Planned
Planned
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PS03
Network:
07-Production Order Actual
011-Network Actual
Actual
Base
02 Base Planning Object
012 Base Planning
Planning
PG
SUPERSEDES: N/A
Object
Object
6.3.4.4.1
Valuation Variant
Valuation Variant determines the prices that the SAP 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:
The price in the material master (such as the standard price) or in the purchasing info
record (such as the net order price) that is used to cost a material in the BOM
The planned or actual price that is used to valuate the internal activities
The version in Cost Center Accounting that is used to valuate internal activities
The cost sheet that is used to calculate overhead
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.
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6.3.4.4.2 Date Control

Date Control that controls the dates for material cost estimates. Date control to define the
day for selecting the quantity structure when costing with a quantity structure, cost estimate
validity dates. Costing Date from, is the date on which the cost estimate has to be released
other wise another cost estimate has to be made and released on released date.
The following dates are relevant for a material cost estimate and a costing run:
Quantity structure date

Valuation date
Costing date from/to
The quantity structure date determines how the system selects a valid quantity structure for
the cost estimate. Based on this date, a BOM and a routing are selected, exploded and
costed.
The valuation date determines how the system searches for valid data to calculate the
following prices:
Prices for stock materials from the material master record

Activity prices for activity types from cost center planning
You set the validity period of the cost estimate with the Costing date from and Costing date
to indicators. The validity period of the cost estimate is relevant for Cost Object Controlling.
The results of the standard cost estimate are used in the calculation of Variances during that
period.
6.3.4.4.3 Valuation Strategy for Material Component:

Strategy sequence that determines the valuation of the materials used in the cost estimate . The materials
are valuated using the price in the material master record or the values calculated in a material cost
estimate. You can enter a single strategy, or you can enter multiple strategies in the form of a strategy
sequence. If you enter multiple strategies, the priority of the strategy determines what price or what values
are selected.
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the following strategy sequence is entered for material valuation for ARCH
Priority
1
2
Strategy Sequence
4 Planned Price
7 Valuation Price According to Price Control in Material
3
4
5
Master
9 Future Standard Price
G Future Price From Accounting
B Valuation Price 1 Based on Commercial Law
6.3.4.5
Cost Component Structure
This shows the costs calculated in a material cost estimate or sales order cost estimate
across all production levels, broken down into cost components. Analyze the costs of the
cost component split for the cost of goods manufactured and the costs of the primary cost
component split.
The results of a cost estimate are updated as cost components (this is called a cost
component split). The cost components break down the cost of a material across the entire
production structure into material costs, production costs, material overhead, production
overhead, and other costs. The costs for internal activities normally flow into the cost
component split under secondary cost elements. In order to present primary costs for
internal activities, use a primary cost component split as an alternative way of outlining the
cost components.
The cost component split enables:
Analyze the cost origin across multiple production levels.
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Analyze the value added within a multilevel production structure. The costs of the
Cost Component Structure Consists of internal activities and the overhead costs that
are incurred at that level and material components.
In the cost component view, specify which cost elements are displayed in the report.
For example, select the cost of goods manufactured or the cost of goods sold, or the
costs that are relevant to inventory valuation. Specify various cost component views
in for Product Cost Planning. For each cost component, you can decide which share
of the costs contained therein (fixed, variable, full) is displayed in which cost
component view.
10 Arch Cost Component View, details are as follows:
ID
ID Description
Type
10
Materials - Key
COGM
Origin
1001
Cost Elements
40111000,40121050,40161250,
40173000,4017310040173150,
40173200,40173310,40184120,
20
Material - Solvents
COGM
1002
40184160,40313900,41108010.
40111000,40121050,40161250,
40173000,4017310040173150,
40173200,40173310,40184120,
30
Materials -Others
COGM
40184160,40313900,41108010.
40111000,40121050,40161250,
40173000,4017310040173150,
40173200,40173310,40184120,
40184160,40313900,41108010.
40
50
60
64
68
69
Packing Materials
Overhead Labour
Overhead - Power
Overhead Water
Overhead Fuel
Overhead Liquid
COGM
COGM
COGM
COGM
COGM
COGM
41109010
40111200 to 40151225, 40161220
90043120 to 90043130
90043140
90043150
90043160
90043170
70
Nitrogen
Overhead Other
COGM
90043110
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Mfg.
Admin Expenses
Selling Expenses
90
95
COGS
COGS
SUPERSEDES: N/A
90041100
90041110
Cost component Structure Z1- Arch Stat.Mat.Value Tax, will be used for the purpose of
calculation of only material costs. It does not have the overheads part of the inventory value.
This is being associated with cost costing variant Z002.
6.3.4.6
Standard Cost Estimate
Create a standard cost estimate for a material at the beginning of a fiscal year or a new
season or a period. The standard cost estimate then remains valid for the entire year or
period or season. It will be used to establish a standard price for materials for the time
period.
Standard Cost Estimate should not change during this time. The standard costs then remain
constant and are not influenced by price fluctuations or changes in the production structure
during the planning period.
Valuate the planned quantity structure of a standard cost estimate with standard prices. A
standard cost estimate for a material is not associated with an order or production version.
Create a cost estimate based on a costing variant. For a standard cost estimates, the
costing variant contains the following defaults:
Costing type specifies that the costing results can be updated to the material master as the
standard price.
Valuation variant specifies that the materials are valuated at the standard price or planned
price or according to the price control of the material master.
Date Control specifies that the validity dates of Quantity Structure, Valuation, Cost estimate
valid from and valid up to.
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The standard cost estimate calculates a standard price for materials and updates the price
control S in the material master. When Standard Cost Estimate is marked, the system writes
the result of the cost estimate to the costing view of the material master record as the future
standard price. This price can be used to valuate a material component in the cost estimate.
When Standard Cost Estimated is released, the system writes the result of the standard cost
estimate to the material master record in Accounting 1 View standard price field. This price is
then active for Financial Accounting and is used to valuate the material until the next time a
standard cost estimate is released.
From this period onward, all transactions involving
products produced in-house are valuated in Logistics using the standard price (that is, the
result of the standard cost estimate). In Arch it is decided that the moving average price V
will be maintained at the depots. When a material with standard price control is transferred to
the warehouse, system will update the inventory of receiving plant with the sending plant
inventory value. Moving average price will be updated automatically.
6.3.4.7
Base Planning Object Costing
Base planning objects will be used in the following purposes:

At the beginning of the planning phase
At the draft stage of planning new products
No master data (material master, BOM, master recipe) in the system
When base planning object is created, necessary master data can be referenced from the
system. This data includes materials and material cost estimates, internal activities, services,
cost centres, cost elements and activity types, work centres, and other base planning
objects.
Costing Variant used by the system by default PG Base Planning Object. The costing lot
size can be specified as per the requirement of the product.
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The entries are maintained in the system manually by the user, if the reference data existing,
it will copy other wise user can enter the prices manually.
M - Material items (category M),
E - Internal activity items (category E),
B - Base planning objects (category B),
V- Variable items (category V)
S Total (category S)
L Subcontracting (category L)
O Arithmetical Operation
T Text Item
Based Object planning can be defined and kept for reference and re-use.
The following Base Planning Object Groups are being used to define the base plant object:
1001
Arch New Product - Intermediates
2001
Arch New Product - API
3001
Arch New Product - CRAMS - Intermediates
3005
Arch New Product - CRAMS- API
9000
Other Products
The Base Object Group is assigned in the master data of a base object costing. By
assigning the base object costing to a base object group you can divide the base object
costing into logical groups.
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6.3.4.8
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Additive Cost
Additive costing will allow the user to add costs to a material cost estimate, inaddition to cost
calculated based on Recipe.
As a rule, costing calculates the costs of a material on the basis of the quantity structure.
This type of cost estimate is performed automatically by the system. However, user can also
manually enter estimated values for costs that cannot be calculated by the system. This
allows to add costs to a cost estimate that was calculated automatically.
The main prerequisite for including additive costs in an automatic cost estimate is to carry
out both automatic and additive costing on the basis of the same costing variant and costing
version.
The valuation variant must allow to include the additive cost part of the cost estimate part of
the product cost planning.
If any change in additive cost manually for a material, these costs are not automatically
rolled up. Need to create a new material cost estimate or execute a new costing run so that
the changes are included and rolled up. If additive costs have been included, the system
sets the Additive costing exists indicator in the overview screen of the cost estimate.
The additive costs are added in their line item form to the itemization of a cost estimate with
quantity structure, in doing so item categories S (total) and T (text) are not transferred.
Additive cost estimates with dates that are not within the period of validity of the automatic
cost estimate are not included in the automatic cost estimate.
Arch would like to add the cost of samples, as part of the Standard Cost Estimate. Based on
the requirement Arch will maintain the additive cost estimate for the manufactured materials.
While releasing the standard cost estimate for that product, system will automatically
considers the cost based on the Quantity structure and additive cost estimate.
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6.3.4.9
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Costing BOM
In SAP system the BOM usage can be assigned, while defining the bills of materials. Costing
BOM Usage type can be used to value the material, based on the Cost BOM. The cost BOM
will be explored by the system, while calculating the cost estimate. Cost BOM will not
relevant for consumption or MRP.
Arch would like to use the costing BOM to value the by-products / recovered materials. As
these materials are being assigned in the BOM as negative quantity. To have the inventory
value and to post the credit the manufacturing material, associated BOM will be created with
usage type as 6 - Costing BOM.
GAP:
BOM can be created as Recursive BOM. Material will be costed in that cycle
iteratively. Iteration ends after the convergence criterion "Total amount of all price changes is
zero" has been reached.
Prerequisites for a successful cost estimate are as follows:
-
The solution is positive
The usage is less than the yield
The yield is significantly higher than the usage
When no solution exists and the cost estimate does not converge, the system recognizes this and
issues an error message.
Then the component which is recursive in nature, Not Relevant to costing has to be
activated. Pairing has to be maintained with an alternate material to give the costing effect.
6.3.4.10
Product Cost Planning - Transaction / Activity Chart:
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Sl.No
Transaction
T.code
Input
SUPERSEDES: N/A
Output
User Role
Controls
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Display BOM
CS03
Material, Plant, Displays
the CO user
BOM need to be
Display Resource CRC3
BOM Usage
BOM
Plant, Resource Displays
the CO User
created for the Plant

Resource need to
Display Recipe
Create
4
C203
Cost CK11N
Estimate (single)
Material, Plant
identified
be defined in the
resource data
Displays the CO User
system
Recipe
must
be
Master Recipe
defined
in
the
Material, Plant, System
CO User
Costing Variant, derives
the
Price
update CK24
(single)
Costing Run
costing
and
Costing Lot size of
place
Period/
size
year, Marking
Material,
CK40N
data
planning must be in
the
lot
and CO User
releasing ,
Cost must be saved

before
Company Code,
6
master
Costing Version, Standard cost

selected
5
system
Necessary
release
CK11N
Plant
Costing Run ID, Different
CO BPO
Date,
levels
Description,
execution will
of
Necessary
Master
data in place
Costing Variant be carried out.

Co Code
Selection,
Controlling Area Structure

Costing Version Explosion,
Costing
Analysis
Marking
7
Base Planning
KKE1 /
Object ID
Release
Re-usable
Object
KKE3 /
Base Unit
refrencable
KKE4
Plant, Company base planning

Code,
Profit object
Center,
/ CO User
Freely definable
has
been created
Description,&
in
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detailed
7
Additive Cost
CK74N/
planning
Material
Additive Cost CO User
Object
CK75N/
Plant
has
CK76N
Costing Variant created for a

Resource
Freely definable
been
material.
Cost Element
Price
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6.3.4.11
Product Cost Planning - Integration:
Sl.No
Module
1
PP-PI
2
MM
6.3.4.12
SUPERSEDES: N/A
Details
Integrated with production process. The master data of PP is being used to
release the standard cost estimate
Material master and prices are being taken from the Material Management
Product Cost Object Controlling
CO-PC Cost Object Controlling component deals, with actual cost of product. The process
order captures all the cost, which are incurred during the production process.
6.3.4.13
Result Analysis Version:
Result Analysis data is the data in, work-in-Process in the Product Cost by Period
component, and work in process or reserves for unrealized costs in the Product Cost by
Order component will be calculated in results analysis is updated on the order with reference
to the Results analysis version.
The results analysis version shows the following:
Which valuation view the results analysis data was updated in i.e. Legal Valuation
Whether the version is relevant to settlement. The version relevant to settlement is

the results analysis version of operational valuation view and the results analysis
versions of multiple valuation views referring to that version.
Whether the data is transferred to Financial Accounting. Transfer the results analysis
versions of multiple valuation views to Financial Accounting.
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Result Analysis Technical RA Cost Element. Assigned the Cost Element 90031100
RA Technical, with secondary cost element type 31. This element used by the system
to calculate the valuated cost in the order.
The following Result Analysis Keys will be used:

000002
WIP Calculation at Actual Costs
000003
WIP Calculation at Target Costs
Result Analysis Key specifies that the object is to be selected during results analysis or when
work in process is calculated.
The following valuation control parameters are linked to the Result Analysis Key:
whether results analysis is revenue-based, quantity-based or manual
on which basis (planned or actual data) results analysis is carried out
whether the inventory, reserves and cost of sales are to be split
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6.3.4.14
SUPERSEDES: N/A
Valuation Methods:
Based on the Status of the process order the valuation need to be carried out. The following
strategy will be adopted:
CC
RA
Area
Version
RA Key
Status
Types
RA Type
1000
1000
0
0
000002
000002
PREL
REL
1
2
WIP Calculation on Basis of Actual Costs

WIP Calculation on Basis of Actual Costs
Cancel Data of WIP Calculation and Results
1000
000002
DLV
Analysis
1000
1000
1000
0
0
0
000002
000003
000003
TECO
PREL
REL
4
1
2
Analysis
WIP Calculation on Basis of Target Costs
WIP Calculation on Basis of Target Costs
1000
000003
DLV
Analysis
1000
000003
TECO
Analysis
6.3.4.14.1
Status
Posting of calculated WIP:
The General ledger Accounts of Financial Accounting to which the work in process is settled.
Based on the results analysis / cost element / a group of results analysis cost elements to
two G/L account (PL account and Balance Sheet account). The following accounts will be
used to post the WIP Values:
Calculated WIP Balance Sheet Account
23106099-Work-in-Process(BS)
Calculated WIP Profit and Loss Account
40164099-Work-in-Process (PL)
6.3.4.15
Variance Variants:
Standard Variance Key 000001 Variance Calculation for orders will be used and assigned
to the all manufacturing plants.
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The Standard Variance Variant 001- Standard, will be capture the following variance types:
Input Price Variance
Mixed Price Variance
Output Price Variance
Resource usage variance
Input Quantity variance
Scrap Variance
Process Order Variances Can be settled to CO-PA for the following value fields.
Z0 - Arch Process Order COPA
Line
Sender CE Variance
Value
ID
110
120
130
Line Description
Mat-Input price variance
Mat-Input quantity variance
Mat-Resource-usage
Group
MATCOST
MATCOST
Type
PRIV
QTYV
Variance Description
Field
VV350
Input Quantity Variance VV350
Resource-Usage
variance
Mat-Remaining
MATCOST
RSUV
140
Variance
Remaining
150
160
170
variance
MATCOST
Mat-Mixed-price variance
MATCOST
Mat-Output price variance
MATCOST
Mat-Lot
size-/fixed-cost
INPV
MXPV
OPPV
Variance
VV350
Mixed-Price Variance
VV350
VV350
Lot
SizeVar/Fixed-
180
190
210
220
230
varia
Mat-Remaining variance
Mat-Scrap
OH-Input price variance
OH-Input quantity variance
OH-Resource-usage
MATCOST
MATCOST
MATCOST
SECCOST
SECCOST
LSFV
REMV
SCRP
PRIV
QTYV
CostVar
Remaining Variance
Scrap
Input Quantity Variance
Resource-Usage
VV350
VV350
VV350
VV355
VV355
variance
OH-Remaining
SECCOST
RSUV
Variance
Remaining
VV355
240
250
260
variance
OH-Mixed-price variance
OH-Output price variance
input
input
SECCOST
SECCOST
SECCOST
INPV
MXPV
OPPV
VV350
Input
Input
Variance
Mixed-Price Variance
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270
OH-Lot
280
290
varian
OH-Remaining variance
OH-Scrap
6.3.4.16
SUPERSEDES: N/A
size-/fixed-cost
Lot
SECCOST
SECCOST
SECCOST
LSFV
REMV
SCRP
SizeVar/Fixed-
CostVar
Remaining Variance
Scrap
VV355
VV355
VV355
Settlement:
Settlement transfers the actual costs assigned to the order to one or more receivers
(normally the material being manufactured, in case of process orders). The variances
between the original inventory valuation and the actual costs are transferred to Financial
Accounting and Profitability Analysis. Work in process is always settled by period.
This settlement rule determines the settlement receiver (such as a material or sales order).
The settlement rule is linked through Settlement profile.
6.3.4.17
Production Process:
Product costing is closely tied to production. The financial and costing entries automatically
result from the daily production transactions entered into the system. The month-end
processes are necessary to complete the financial picture for product costing.
The following process to be adopted for Product Costing:
6.3.4.17.1
Creation of Process order:
For every batch of production a process order is raised in the production department. The
process order contains the details of BOM and recipe.
The Bill of Material (BOM) details the raw material and packing material in the required
portions that are required for production.
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The recipe contains the details process of production activity including resource such
as manufacturing vessel, equipment. Each operation is assigned to its resource and
each resource assigned to relevant activities such as Labour, fuel, power etc.
(maximum of six parameters for each resource as a primary activity types). Secondary
resources are being used to capture utility cost to the products (Activity types like
Power, Fuel, Water and Nitrogen There is no limitation on the secondary Activities) .
Each resource is attached to a cost centre.
The recipe and BOM are copied to process order automatically when the order is
created. The quantities of materials and activities are determined at standard levels
(Planned costs).
6.3.4.17.2
Process Order release
Reservation of material for an order will be done at the time of release of order. Material will
be reserved batch wise for the order. The reservation also serves as pick list for picking
materials from stores. Any unplanned issues will have to be added manually.
6.3.4.17.3
Creation of batch number:
A unique batch number has to be assigned to the order. Batch number can be internally
generated / manually as per the logic decided.
6.3.4.17.4
Creation of Inspection lot:
Release of process order will result in generation of inspection lot. The inspection lot will be
used to record quality parameters for the order.
6.3.4.17.5
Issue of materials to order:
Issue of materials to an order can be done either before execution of the order or at the time
of confirmation (Back flushing)
6.3.4.17.6
Confirmation of Process order:
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Confirmation of the order means declaration of production against the order. The order has
to be confirmed completely. Confirmation is possible for release order only. Confirmation will
result in stock up of product, reduction in stock of all raw materials.
At the time of confirmation standard activities (machine, labour) & quantities as per BOM are
proposed. Changes can be done at this stage. The actual cost is updated depending upon
the actual quantities confirmed. Goods receipt quantity (Yield) is posted to storage location
specified.
Following data are confirmed at confirmation stage phase wise:
Quantities Confirmation of quantity processed in a phase.
Activity data Confirmation of activity used to carry out the phase, such as the
duration of the processing time.
Times and dates Confirmation of start and finish time of phase
Resource confirmation of the resource at which the phase was carried out
Posting date - A posting date is to be entered for every completion confirmation. The
system automatically proposes the current date as the posting date. One can,
however, enter a different date.
Long text - Long text can be entered to describe the completion confirmation
6.3.4.17.7
Technical Completion of Order:
It is the completion of a process order from the logistics point of view. This function is used to
terminate execution of an order prematurely, or if the order was not properly executed and
we want to delete open requirements of the order (for example, reservations, capacity
requirements).
The following actions are carried out when the order is technically completed:
The order is not indicated as relevant to MRP anymore
The reservations are deleted
The capacity requirements are deleted
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Purchase requisitions that may exist for externally processed operations are deleted
The system status Technically Completed (TECO) is set for the order and the
operations
6.3.4.17.8
Revaluation of Process Orders
Initially cost planned in cost centre accounting against activity types are used for valuating
the materials that are produced. At the month end when actual cost are booked from
financial accounting, revised activity price calculation is carried in cost centre accounting and
with this prices the Process Orders are revalued. The revaluation is carried to the extent of
difference between planned vs. actual activity prices. The revaluation Process Orders will
not be carried, if the Process Order is settled immediately on TECO.
6.3.4.17.9
Order Settlement:
Settlement rule will be derived from the process order (i.e. process order type). For other
objects like maintenance order type will defaults the Settlement rule. In case of Project
systems, project profile will default the settlement rule, where ever the clear guidelines are
available.
Settlement transfers the actual costs assigned to the order to one or more receivers
(normally the material being manufactured, in case of process orders). The variances
between the target costs in the process order and the actual costs are transferred to
Financial Accounting and Profitability Analysis. Work in process is always settled by period.
Target Cost: When the process order is created system will create the planned cost based
on the production order quantity and the standard cost estimate of the material. Target Cost
means the standard cost estimate for the material being produced.
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6.3.4.17.10 Order closing:

It is the final closure from production point of view. The Closed (CLSD) status is set in the
Process Order. It has the following characteristics:
No more costs can be posted to the order, that is, confirmations and goods
movements are no longer permitted for the order.
The order can no longer be changed.
All actions relating to the status technically completed (TECO) are executed.
6.3.4.18
Product Cost Period End Activities
6.3.4.18.1
Revaluation of Process order
Calculation of actual activity prices carried out in cost center accounting. At the time of
activity confirmation system posts activity cost at planned price. In the month end we
calculate actual activity price on the basis of actual cost incurred and actual activity quantity.
Once calculate actual activity price, revaluate the process orders with actual activity prices.
System will recognize the variances if any at Process Order level. System will show new
variances after revaluation.
6.3.4.18.2
Work in Process for the Process Order
If the process orders still open at month end we need to calculate work in process to update
financial accounts. WIP calculated on the basis of status of process order.
When the WIP runs , WIP calculated Process orders with a Released (REL) and partially
delivered (PDLV) status, When the WIP process is run, WIP is canceled for production
orders with a status of Finally delivered (DLV) and Technically complete (TECO)
At month-end, for closing the books of accounts, we need to realize any Work-in-process out
of the material consumption posted, which can be shown as inventory. If a process order is
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open, the balance of the order (costs debited minus standard cost of completed finished
goods credited) is calculated to be the WIP amount. Result Analysis cost elements created
to track the WIP amounts so that these amounts are not directly posted to the process order.
The WIP cost elements are then used to make the entry to the G/L during production order
settlement.
6.3.4.18.3
Settlement Profile
The WIP previously described update secondary cost elements, but these values remain in
CO. When process order settlement is run at the end of each period, the WIP and variance
values are posted to FI and the appropriate G/L accounts are updated. Settlement Profile is
being taken from the respective objects.
Sample Accounting Entries

Process
Recognition of Work-in-process at period-
Accounting Entry
Work-in-process Stock (B/S) A/c 23109900
end
Dr.
To Work-in-process stock change A/c (P&L)
40199900
Reversal of Work-in-process at period end Assume that Process Order is completed
(subsequent month)
Variances in the Process Order
Order settle- Finish GL a/c 40184170 Dr

To Price Difference A/c -40184130
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This settlement rule determines the settlement receiver (such as a material or sales order).
The settlement rule is linked through Settlement profile. The following are the settlement
profiles are being used:
Actual
Costs
40
To Be
Settled in
Full
Allocation
Default
Structure
Object
Maintenance Measure
ZM - Arch PM
CTR - Cost
Structure
Center
AI
To be
Settled in
Full
Settlement assets under const.

A1-Co Allocation
FXA-Fixed
Asset
PI01
To be
Settled in
Full
Process order
A1-Co Allocation
ZPS1
To be
Settled in
Full
Project Settlement PSG

Z1-PS Allocation
PSG Structure
Profitability
Segment
ZPS2
To be
Settled in
Full
Project Settlement - Cost Center

Z1-PS Allocation
CTR - Cost
Structure
Center
ZPS3
Project Settlement - Intl Ord
MatMaterial
Valid
Other
Receivers
Indicators
Parameters
Used in the Maintenance Orders
Cost Center
Settlement % Doct. Type SL
Order
Equivalence
WBS Element
numbers
Fixed Asset
Direct AUC Settlements - in Fixed Asset
Module
Fixed Assets
Settlement % Doct. Type Equivalence
AA
numbers
Process Order Settlements
Cost Center
100%
Order
Validation
WBS Element
Settlement %
Material
Sales Order
Cost Objects
Order Item
Doct. Type SL
No of Lines -3
Res. Time - 3
Project Systems settlement to PA Segment

Profitability
Settlement % Doct. Type Segment
Equivalence
SL
numbers
No of Lines -1
Res. Time 12
Project Systems settlement to Cost Center
Cost Center
Settlement % Doct. Type Equivalence
SL
numbers
No of Lines -1
Res. Time 12
Project Systems settlement to a Order
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To be
Settled in
Full
Z1-PS Allocation
Structure
ZPS4
To be
Settled in
Full
Project Settlement General

Z1-PS Allocation
G/L GL
Structure
Account
ZPS5
To be
Settled in
Full
PS Settlement to Fixed Asset

Z1-PS Allocation
FXA - Fixed
Structure
Assets
ZSD1
To be
Settled in
Full
Sales order make-to-order prod

A1-CO Allocation
PSG
Structure
Profitability
Z3- PA Transfer
Segment
Structure
6.3.4.18.4
ORD
Order
Order
SUPERSEDES: N/A
Settlement %
Equivalence
numbers
Doct. Type SL
No of Lines -1
Res. Time 12
Project Systems settlement - General Objects
G/L Account
Settlement % Doct. Type Order
Equivalence
SL
WBS Element
numbers
No of Lines -1
Res. Time 12
Project Systems settlement - Fixed Assets
Fixed Assets
Settlement
Doct. Type %;
SL
Equivalence
No of Lines
numbers;
-99
Amount
Res. Time Settlement
12
Sales Order Settlement
Profitability
Settlement
Doct. Type Segment
%;
SL
Equivalence
No of Lines -3
numbers;
Res. Time 12
Allocation Structure:
During settlement, costs incurred under the primary and secondary cost elements by a
sender are allocated to one or more receivers. When cost are settled by cost element, settle
using the appropriate original cost element.
An Allocation Structure comprises one or several settlement assignments. An assignment
shows which costs (origin: cost element groups from debit cost elements) are to be settled to
which receiver type (for example, cost center, order, and so on).
You have two alternatives in settlement assignment:
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Assign the debit cost element groups to a settlement cost element.
Settle by cost element - that is, the debit cost element is the settlement cost element.
Each allocation structure must fulfill the following criteria:

o
Completeness
An allocation structure is assigned to each object to be settled. All cost
elements in which costs are incurred, must be represented in the appropriate
allocation structure.
Uniqueness
Each cost element in which costs are incurred may only appear once in an
allocation structure. Only one settlement cost element may be assigned to a
source within a particular allocation structure.
The following allocation structure are required for Arch to use in various application:
ZM Arch PM Allocation Structure
ID
ID Description
Source
Receiver
SettlementFXA
001
Material costs
External
procurement
PM_001
41199990
90021210
PM_003
41199990
90021210
PM_005
41199990
90021210
009
Personnel costs
Miscellaneous
costs
PM_009
41199990
90021210
020
Activity allocation
PM_020
41199990
90021220
025
Settlement
PM_025
41199990
90021230
003
005
Receiver
SettlementCTR
Receiver
SettlementORD
Receiver
SettlementWBS
Receiver
SettlementG/L
A1 CO Allocation Structure
Receiver
SettlementCTR
Receiver
SettlementORD
Receiver
SettlementWBS
Receiver
SettlementG/L
Receiver
SettlementSDI
ID
ID Description
Source
010
Personnel costs
Raw-/service
material consump.
PERSONNEL
MATCOST
020
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030
Other costs
OTHCOST
040
Secondary costs
SECCOST
90021220
050
Revenues
REVENUE
Receiver
SettlementFXA
Receiver
SettlementPSG
Receiver
SettlementCTR
Receiver
SettlementORD
Receiver
SettlementWBS & G/L
Z1 PS Allocation Structure
ID
ID Description
Source
010
PERSONNEL
020
Personnel costs
Raw-/service
material consump.
MATCOST
030
Other costs
OTHCOST
040
Secondary costs
SECCOST
41199990
050
060
Revenues
RA-Primary-PS
REVENUE
90031150
070
RA-Secondary-PS
90031160
90021160
90021160
080
RA-Revenue-PS
90031170
90050100
90021170
6.3.4.18.5
X
90021150
X
90021150
Process Order
Process Order will be acting as a cost object to transfer the costs to Controlling.
Process order will be having the following costs:
Goods Issue - Material Costs based on goods issue to the process order and
price from the material master
Activity Costs based quantity confirm actual activity confirmed, with respect
the planned activity price
Goods Receipt Bi-products Based on the standard price in the Material

Master
Goods Receipt Main Material Based on the Price control in the material
master
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Process order will be having the planned cost and actual costs. The plan costs will
be based on the Standard Cost Estimate made to the product.
Actual cost will be based on actual good issue, goods receipt and Activity
confirmation postings. As a month end process, process order will be revaluated and
variance will be calculated by the system.
Till Final Confirmation made, system will recognize the Work in process, based on
the Process Order status / values.
6.3.4.18.6
Maintenance Order Cost
Maintenance order will be created to perform the maintenance process. Maintenance

order will be having the following costs:
Material - Stores and spares
Material - Operating supplies
Services External repairs
Services Employee services - Activity hours
Material costs will be transferred to the Maintenance orders based on the goods
issue. Employee service costs will be transferred to the maintenance orders based
on the activity type confirmation in the Maintenance order.
Maintenance cost center overheads need to be planned for the Activity type Repairs, to arrive the absorption rate towards maintenance costs. The cost will be
transferred to the maintenance order based on the planned rate.
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Maintenance order will be settled to the identified cost center. Corresponding

settlement rule need to be maintained, as a receiver. The following are possible
receivers:
Cost center - Based on Equipment / functional area
Cost Center Based on manual entry in the Maintenance Order
The other receivers can be as follows;
Assets in case any maintenance cost need to capitalized
Project WBS in case of project based maintenance and cost need to be

absorbed by the project
Settlement Order (internal order) to collect the total maintenance and redistribute the same to, different receivers.
Part of the Maintenance order the settlement profile is 40 and allocation structure
is ZM is being used.
6.3.4.18.7
Research and Development Cost
R & D is being carried out at R & D plant. The plants are approved by the competent
authority. The expenses incurred at this plants will get special exemptions. Hence the cost
will be captured and reported in a separate cost centers.
6.3.4.18.8
Cost in Project System
In Project System there is a facility to use cost planning to monitor and control cost
variances in a report. Plan the services for internally/externally-processed work, and the
required resources in network activities. The system uses the quantity and price structures
defined in the network to calculate the planned costs likely to occur as the work is executed.
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Whenever the project structure is created, planned cost will be updated (CJ40)ie. Cost
estimation. CO Team will compare the cost with the notification. After comparing the same
with notification, project status will be updated by CO Team. After changing the status, it
shows as CEPR CO Cross Checked.
Once a project is planned and released we start executing the activities and confirm the
actual work carried out against the planned work in each Activity and/or Activity Element.
After confirmation the updated planned and actual costs and its variance can be seen in
report.
Costs and revenues are temporarily collected and stored in projects ,which need to be
settled to one or more receivers as part of period-end processing.
Overheads Absorption to Projects- CAPEX, Product/Process Development project,

DMF .
It was proposed by Costing team that Overheads pertaining to Project management ,
Process Engineering , Purchase Engineering , Process Development Lab can be
absorbed to the Project by maintaining different activity Types for these Cost
Centers.
However, PS team/Commercial team cannot plan Overheads for these activities
separately for Product Costing & for Project along with Activity Quantity for
developing the different rates for absorption.
Further, project team cannot confirm the actual no of hours spent by Project
management Staff, Process Engineering staff, Purchase Engineering staff for
different types of projects.
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Hence, different activity types will not be maintained for absorbing these
costs. Since these costs pertain to Project Only, Costing team will not load Process
Development lab Exp , Project management Staff, Process Engineering, Purchases
Engineering for HO & Plant to regular products. Commercial team will absorb the
same to Different types of Projects based on their assumption.
6.3.4.18.9
Cost in Job work-in
Arch will be carrying out the job work for external customer or internal customer. In case of
job work, the requirement material will be supplied by the customer. In this case, the material
received from the customer should not be form part of our valuation. Inview of this, it is
required to treat these materials as non-valuated materials.
When the materials are
received from the customer, goods receipt will be made with the non-valuated material code.
Even manufacture / FG code will be non-valuated. These materials will be controlled only
for quantity.
Separate Process order type will be used to manufacture these goods. So that user will
know the details based on the process order and reports can be drawn accordingly.
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6.3.4.19
SUPERSEDES: N/A
Settlements and Transfer:
If the Controlling Object is having the balance of cost and the same can be settled to
different receiver. The following are the Settlement Transfer being used at Arch:
In case of process orders/Projects/Maintenance Order the Teco will be done by the
Concerned PP/Project team/Maintenance Team. Settlement and closure will be done
by CO Team.
Sl. No
Sender
Possible Receiver
1
Process Order With make The balance cost will be
to stock (i.e. without
Dependent Structures
Variances will be posted the
represented as Variance in the financial accounting using the
account assignment project Process Order. Balance will be Settlement profile PI01- Process
or sales order)
settled to CO-PA value filed.
order.
The following are the Order
The Variance also Transferred to
Types:
CO-PA using the Transfer Structure
BT01
Manufacturing
BT02
Packaging
BT03
Reprocessing A
BT04
Repacking
BT05
Rework
Z0- Arch Process Order COPA
BT08 Crams
Process Order With make The Job work in is being
Settlement profile PI01- Process
to order (i.e. job work in
handled through non-valuated
order is being used.
with account assignment
materials. The Process order
sales order). The following will be having the costs relating The Process order does not have
are the Process Order
to overheads. Process order
any variances and total cost will be
Types:
will be settled to the Sales
transferred to the Sales Order. In
order. The cost in the process
this case, the sale order become
order will be transferred to
the cost object.
BT09
Job Work
Manufacturing
BT10
Job Work Packing Sales order.
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Sl. No
BT11
Sender
Job work
Possible Receiver
SUPERSEDES: N/A
Reprocessing
BT12
Job work
Repacking
BT13
Job work Rework
BT14
Job work
equipment cleaning
Process Order
The Material cost and
Manufacturing towards
manufacturing overhead will be order is being used.
Projects. The following
transferred to the project.
Process Order Type is
Necessary settlement rule need
being used.
to be maintained in the Process
BT08 Crams
Process Order Some of
Order.
Based on the business call, CO Settlement profile PI01- Process
the costs in the order type
Team will maintain the
need to be settled based
settlement rule, before settling
Settlement profile PI01- Process
order is being used
on the requirements. These the process order

order types are:
BT06
Equipment
Cleaning
BT07
Exhibit
BT15
Validation Batches
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Sl. No
Sender
Possible Receiver
5
Project Settlement AUC / Cost will be captured by direct
Capex
posting to project from FI or
Project Profile Z000003-
MM or settlement of
Capex Projects
Maintenance order. When
SUPERSEDES: N/A
Settlement Profile ZPS5 - PS
Settlement to Fixed Asset
Project is settled the cost will

be transferred to AUC Asset, on
periodic basis. When project
finally settled, it will transfer the
cost from AUC to regular asset
based on the settlement rule
maintained.
In case of AUC asset, based on
investment profile (Z00001)
system will create the AUC
asset under the Asset Class
6
Project Settlement with
5300.
Mfg. Cost will be transferred
Settlement Profile ZPS1 - Project
sales Revenue COPA
from Process Order to Project
Settlement PSG
WBS element. On settlement of
CRAMS Projects
Process Order, if any variance
CO-PA Transfer Structure
between the planned cost
Z1 - PA Transfer Structure PS
determined at the time of

release Vs. actual cost, will be
transferred to Project WBS
element.
From WBS can be settled down
to Profitability Segment, total
revenue and cost will be
7
Project Settlement
transferred to CO-PA.
The cost will be settled to Cost Settlement Profile
Expenses Cost Object
Center or a Profitability
ZPS4-Project Settlmnt - Genl
Segment
COPA Transfer Structure
Expense Projects
Sales Order The Job
Sale order will be settled to
Z2- PA Tran Struct PS Dev Projects

Settlement Profile
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Sl. No
Sender
work in is being handled
Possible Receiver
Profitability Segment.
through non-valuated
SUPERSEDES: N/A
ZSD1 - Sales order make-to-order
prodn.
materials against Sales

Order as assignment. The
COPA Transfer Structure:
Process order will be
Z3 PA Transfer Structure PS
having the costs relating to

overheads. Process order
will be settled to the Sales
order. The cost in the
process order will be
transferred to Sales order.
The sales Order costs and
revenue need to be settled
to COPA Segment
Sales order Type
ZO18- Jobwork Ord No
Excise
ZO19- Jobwork Ord
Excise
9
Maintenance Order
Maintenance order will be
Settlement Profile
ZM01
Break Down Order having the cost posted through 40 - Maintenance measure
ZM02
Preventive
Maintenance Order
ZM03
material consumption, activity

confirmation, etc.
Preventive
Maintenance Quality Dept. These cost need to be settled

Ord
ZM04
to Cost center based on the

Calibration Order-
Engineering
ZM05
equipment or Projects if the
Quality Department services are being used for
Calibration Order
ZM06
functional location or
project or a general cost center
Re-Validation / Re- based on the manual
Qualification Order
assignment of settlement rule
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ZM07
SUPERSEDES: N/A
small Modification
from user department

ZM08
Modification Order
Through PS
6.3.4.20
Product Cost Controlling- Transaction / Activity Chart:
Sl.No
Transaction
1
Display BOM
T.code
CS03
Display Resource CRC3
Display Recipe
Create
C203
Cost CK11N
Estimate (single)
Input
Output
User Role
Controls
Material, Plant, BOM Displays the CO user
BOM need to be
Usage
BOM
created
Plant, Resource
Plant
Resource need to
identified
be defined in the
resource data
system
Recipe must
be
Master
defined
the
Material, Plant
Recipe
Plant, System
Material,
Costing
Variant, derives
Costing
Version, Standard
Costing Lot size
Price
update CK24
(single)
6
Costing Run
CK40N
cost
CO User
the
data and costing

planning must be
of
the
selected
lot
in place
Cost
Company Code, Plant releasing ,
saved
Costing Run ID, Date, Different

Costing levels
in
CO BPO
of
Variant
execution will
Co Code
be
Controlling Area
out.
Costing Version
Selection,
must
be
before
release in CK11N
Necessary Master
data in place
carried
Structure
the
system
Necessary master
size
Period/ year, Material, Marking and CO User
Description,
for
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SUPERSEDES: N/A
Explosion,
Costing
Analysis
Marking
Process order
CR03
Release
Provide
Process Order
the CO User
details of the
Process
Order
Type
process
order,
materials,
8
Revaluate
MFN1
Process Order
CON2
Work in Process KKAX

KKAY
10
11
Variance
Settlement
KKS2
/ Process
order
Period / Fiscal Year
/ Process
order
cost, etc
/ Revaluate
CO user
Plant
activity price
/ Calculates
CO User
Plant
the
process
order
based
on
actual
Period / Year / RA the WIP

Key
/ Process
Order
KKS1
KO88 /
Process
CO88
Order
/ Variance will CO User
Plant
be calculated
order wise
/ Variance
/ CO User
Plant
WIP will be
posted to the
Financial
12
Close CO period OKP1
CO
Year
Area,
Accounting
Period, Select
the BPO
Period control
business
process
month
/
to
close
6.3.4.21
Product Cost Controlling - Integration:
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Sl.No
1
PP
Module
SUPERSEDES: N/A
Details
BOM, Resource and Recipe details are taken from the PP module. Standard
Price arrived in Product cost controlling is compared with the actual of PP
2
3
module
Integrated with Financial Accounting to arrive the actual overheads
Cost of Project System will be settled using the Settlement Structure of CO.
FI
PS
Based on the Allocation structure (which is derived from the settlement

structure), necessary senders and receivers will be identified. The Senders
4
will be identified through Cost element groups.

Maintenance cost will be captured to Maintenance Orders. These cost can be
PM
settled using the Settlement Structure, to respective cost centers or projects

5
SD
or other maintenance orders.

Job-work orders will be followed as Make-to-order and product will be
CO-PA
manufactured against specific orders.

When the process Orders are settled to, system will post the variances to the
Costing based CO-PA.
6.3.5
BBP_CO_BP6.3.5
Inventory
Valuation
considerations
and
costing impacts
6.3.5.1
Solvent Recovery should not absorb Overheads:
This bi-product will be identified and costing BOM will be maintained for the valuation. To
activate costing, this BOM should not be a recursive BOM. If the BOM is maintained as
Recursive BOM, The recursive component has to be maintained as Not Relevent for
Costing.
6.3.5.2
Slow Moving and Non-Moving Stocks Information
SAP tracks the details based on the goods movements of the materials and provides
the necessary information by way of reports (T.code MC46 and MC50)
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6.3.5.3
SUPERSEDES: N/A
Treatment of short receipt quantity.
GR has to be made for actual quantities or based on the Arch policy the process of debit
note can be followed.
6.3.5.4
Stock Ageing Analysis.
In case of material with Batch management, it is possible. As per Arch, every location
the batch number is getting changed and new batch is being created. This is a GAP
in standard functionality, an ABAP program need to be developed.
6.3.5.5
Inventory Classification:
Classification own inventory, job work in inventory, job work out inventory, usable
inventory, rejected inventory is possible in standard system by taking material type
wise inventory reports with the combination of Split Valuation
6.3.5.6
Loss In Transit during Inter location Transfers :
Prepare GRN for full quantity and post the loss in transit stock as Blocked stock.
Subsequently the loss in transit needs to be issued to a cost center or post the
physical inventory difference.
6.3.5.7
Invoice Booking Should be only after Quality Approval :
Invoice will be allowed even before QC approval. But it will be blocked for payment in case
of QC not approved in the standard SAP functionality. It is a GAP in standard SAP. An
enhancement is to be made to get this facility.
6.3.5.8
Transport Charges Treatment in STO:
At the time of PO preparation it should be included in one of the conditions. If the receiving
end the price control in the Material Master is V- system will add the transportation cost to
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SUPERSEDES: N/A
the materials. If the price control is S system will valuate based on the Material master
price and difference will be posted to the Stock transfer difference account
6.3.5.9
Incidental Charges inventorisation on imports:
To load the Transit Insurance, Warehousing charges and clearing charges to the inventory
these terms need to be maintained in the Purchase order as conditions.
6.3.5.10
Treatment of Inventory Written Off:
SAP system is having the following process:

1. Goods issue to Cost Center
2. Scrapping
3. Physical Inventory difference
System will post the corresponding accounting entries to financial accounting and to
Controlling.
6.3.5.11
Impact in Costing while destroying Stocks :
Based on the process adopted by Arch, the inventory value will be charged off. If the
goods are issued to a Cost Center and the same can be analyzed
6.3.5.12
BOM Accuracy :
System will provide the details of Material components in the Bill of Materials. Hierarchical
BOM, will provide the various stages of material components.
6.3.5.13
Inventory Landed Cost Break UP :
Necessary conditions need to be maintained in the Purchase order. Based on which system
will valuate the material and update the inventory. Exact report is a GAP in standard SAP. To
present the same in the required format, a Report need to be developed.
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6.3.5.14
SUPERSEDES: N/A
Inventory Controls.
PO Amendment after GRN : Standard SAP allows to amend the PO even
after GRN.
Control on GR Reversal: It Is Possible to restrict the system not to

allow to reverse GRN, unless the corresponding MIRO against that GRN is
reversed. System will give error message
Difference in Inventory Valuation between Finance & Logistics: SAP
System will maintain the integration between the Material accounting and
Financial accounting system. Values are flown automatically to Financial
Accounting from the logistics and no difference between both modules.
Not to allow manual postings to Inventory Accounts & Invenory

Consumption Accounts:
While creating the general ledger accounts the Automatic Posting fields
needs to be selected. These field will made be made mandatory for the stock
related GL accounts. But if this control is activated to Consumption accounts,
system will not allow to do WBS Consumption procurements.
To allow the WBS Consumption while making the purchase order, Post
Automatically Only check box has to be removed from the GL master. In
order to facilitate to control the consumption accounts from other manual
postings, an enhancement need to be written. It is a GAP standard SAP.
Inventory Revaluation Authorization for MR21/MR22 will be given to

authorized users.
6.3.5.15
Batch wise Recoveries Information With Quantities:
Manufacturing will be taking place for each batch and corresponding process order will be
created. Recoveries (Solvents /Crude Mother/ liquor)are being posted against the Process
Order and details can be drawn against the process order (i.e. batch)
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6.3.5.16
SUPERSEDES: N/A
FG/ Intermediataries Valuation:
FG/ Intermediataries Valuation Can be achieved through Standard cost estimate. Based on
recipe and overhead rates maintained in the system, material will be valuated when user
release the Standard Cost Estimate
6.3.5.17
Treatment of Materials Used in Cleaning Batches:
Separate Process Order type is being used for cleaning activity and data will be captured at
process order level, in case of campaign change.
In case of batch to batch cleaning activity, the cost will be captured through machine activity.
Necessary material will be issued to the respective cost centers/ process order.
6.3.5.18
Treatment of Failed batches:
In case of failed batch, user has to make the GR against the Process order. These materials
are being tested by the Quality Control team and identify them as failed batch. Based on
which these batches need to be scrapped or reprocessed. The goods can be issued to the
respective process order. The process represents more variances.
If no output is being generated, no yield will be reported and final confirmation will be made
and process order has to be settled with variances.
6.3.5.19
Capacity Utilization / Idle capacity:
User need to identify the capacity, part of the planning activity. The same need to be
maintained, in the system part of the CO planning. The actual values will be posted by the
system based on the confirmation of Process orders. The actual values can be seen against
the cost center. User can see the actual value and planned value against a cost center
6.3.5.20
Re Process Batch Information:
Separate order type is being used for re-process of the materials. Based on the process
order, user can arrive at the cost of re-processing i.e. material consumed and activity types
used. If settlement rule is maintained, the cost of the Re-process can be settled to the main
process order
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6.3.5.21
SUPERSEDES: N/A
Cost Component Structure information:
Planed costs can be seen cost component structure wise after completion of cost estimate at
material level or plant level. Actual costs are available only for the particular level
components and activities.
Actual cost of Raw Material Packing Material break-up at each stage of production is not
possible for each stage of production. It is not feasible to develop the same. It is a GAP in
the System.
6.3.5.22
Variance Details:
Variances will be calculated based on the process order. In case of 2 nd Crop process order
the same need to be settled to the main process order to arrive the total variances of the
order.
6.3.5.23
Cost Component Information of Intermediaries:
As per the BOM and Recipe standard cost will be updated in the Material Master. Actuals are
available only for the particular level components and activities.
GAP: Actual cost of Raw Material Packing Material break-up at each stage of production is
not possible for each stage of production. It is not feasible to develop the same. It is GAP in
standard SAP Functionality.
6.3.5.24
Batch Type Harmonization in the production:
In SAP System it is being created different Process order types to represent the Batch
Types. Based on the Order types, user can draw the reports and analyze the same.
6.3.5.25
Validation for posting of recoveries with rates:
It is required to have the same quantity of costing lot size in the BOM header quantity. It is a
GAP as per requirements and direct control is not possible to have the same costing lot size
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SUPERSEDES: N/A
in the BOM header quantity. Still if this is need to be controlled, ABAP enhancement need to
be done in consultation with PP Module.
6.3.5.26
Average Inventory Holding Period:
Based on the specified formula, the report need to calculate the raw material stock on hand,
in terms of sales. The report is a GAP in the standard functionality and ABAP report has to
be developed.
6.3.5.27
Treatment of Second Crop Production:
SAP will post Goods Receipt for the recovered materials, based on the BOM components.
6.3.5.28
Cost of By-Product to be reduced from Main product.
This can be achieved by defining the costing BOM for bi-product. System will reduce the
value of the byproduct from the main product.
6.3.5.29
Subcontract Recovered Stock valuation:
Valuation will be associated with Sending plant inventory valuation. Valuation will be
automatically updated by the system when the sub-contract stocks were entered while
making the GRN against sub-contracting PO.
6.3.5.30
Inter location job work cycle within a company code
Sending plant will follow the Sub-contracting process, as if the material sent to external
vendor. The receiving plant follows the Job work in process, as if the material received from
the external customer. The material codes used in the job work in process are non-valuated
materials. There is no relation between the JW in and JW out process.
Both will be
operating independently. Job work charges can be maintained as condition type in the
purchase order. System will post the financial charges at the time of GR. In order to load the
transportation charges necessary conditions are to be maintained in the sub-contracting
purchase order.
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SUPERSEDES: N/A
GAP: Information On Changes to Sub-Contracting BOM While Executing Transaction :

While consuming the Sub-Contracting Stocks against the GR, system will not have any
standard validation on the component consumption quantities against the Sub-Contracting
BOM. There is no process to give warning to the any users about the changes in the subcontracting components. standard report ME80FN is available to show the sub-contracting
header quantity and the components consumptions against sub-contracting purchase order.
The Validation with regard to BOM quantity & quantity issued in case of Sub Contracting PO,
will be decided in MM Module. The same point will be covered in BBP of MM Module.
6.3.5.31
Subcontract Material Usage and Inventory Control:
System need to provide the information Raw material Vs. Finished Goods, based on the
BOM maintained in the system. ABAP Program need to be developed, if the format of
standard program is not sufficient.
6.3.5.32
Issue of processed material to cost centre:
Inventory is being valued based on the Price Control. The price control will be S for the
Manufactured materials. The Standard Price will be inclusive of Material price and
overheads. It is not possible to isolate the overhead part and it is a GAP.
6.3.5.33
Capture of R&D Expenses:
Need to be created these departments as Cost Centers. All relevant expenses can be
posted to the respective cost centers. Based on the cost centers a report can be drawn
6.3.5.34
Period Closure:
Part of the CO Processes, user need follow the necessary closing steps to complete the
periodic process
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6.3.5.35
SUPERSEDES: N/A
Effect and result of CSA:
Necessary allocation cycles need to be created to transfer the service cost center costs to
production cost center
6.3.5.36
Expenses provision in finance to move to cost centers.
Part of the period reporting, it is required to make necessary provisions, in Financial

accounting. Based on the provisions made in FI the expenses will be available in CO for
reporting
6.3.5.37
Payroll Expenses to post to cost centers:
Payroll details are being maintained in the external system. Payroll details will be loaded into
SAP Cost Center wise, through an interface program. Since SAP payroll is not implemented
it is a GAP in standard SAP. An ABAP interface program need to be developed.
6.3.5.38
Sample should be form part of COGS:
These can be form part of billing from Sales and Distribution module
6.3.5.39
Reprocessing Cost Information:
Reprocessing is being carried out through another Batch type. Based on which necessary
cost analysis can be carried out
6.3.5.40
: Optimum Product Mix
Based on the standard cost and contribution of the product, user has to arrive the Optimum
Product Mix
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6.3.5.41
SUPERSEDES: N/A
Log Sheet Maintenance for Utilities:
Part of the Plant Maintenance module, necessary log sheet will be maintained for utility
consumption. Fuel consumptions can be tracked by way of issues to the cost centre. Yield
from the cost centre can be recorded through plant maintenance measuring points.
6.3.5.42
Log Sheet Maintenance for Utilities:
Utility per unit cost is being arrived in the respective cost centers. Based on the secondary
resource usage, utility cost will be transferred to product. Quantities will also be captured to
the cost centre.
6.3.5.43
Yield against Utility Cost:
Information is available in the cost centers. If any specific output formats are needed, it is a
GAP. An ABAP Report need to be developed, as per Arch requirement
6.3.5.44
Coal Purchases tracking by source
Based on the Purchase order, the same can be known about the source of supply. If
required the same can be maintained in the split valuation
6.3.5.45
Unauthorized PTN/PTNI Valuation:
System will valuate the materials, based on the Goods receipt and as per the price in the
material master based on the price control
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6.3.5.46
SUPERSEDES: N/A
Unauthorized PTN/PTNI Valuation: Standard report MRN9 is
available to compare the inventory with material master price and the
commercial price.
6.3.6
BBP_CO_BP6.3.6 Profit Center Accounting
Profit center accounting
Profit center Planning
Period-end
closing
of
PCA
A profit center is a management-oriented organizational unit used for internal controlling

purposes.
Dividing the company into profit centers allows you to analyze areas of responsibility and to
delegate responsibility to decentralized units, thus treating them as companies within the
company.
The profit center differs from a cost center. The cost centers merely represent the units in
which capacity costs arise, whereas the person in charge of the profit center is responsible
for its balance of costs and revenues. The main aim of Profit Center Accounting is to
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SUPERSEDES: N/A
determine profit for internal areas of responsibility. It lets you determine profits and losses at
each profit centre.
Every profit center is assigned to the organizational unit Controlling Area. The profit centers
in a company code belong to a standard profit center hierarchy that is also assigned to the
Controlling Area.
All profit-relevant business transactions are updated in the profit center hierarchy according
to G/L account at the same time they are processed in the original module of the SAP
system. This ensures that the entire flow of goods and services within a company is
transformed in goods and services relationships between profit centers. This is true both with
actual postings and in planning.
In SAP all P & L account postings originating from either Logistics or Finance will be passed
on real time to PCA.
Versions
Versions are required for collection of plan and actual data for one Controlling Area.
Versions enable to carry parallel sets of planning data for the same object. The planning
data should be updated in the version for the revenue element at the Profit Center level in
the format of Profit Center/ Revenue Element.
Actual data is always compared against the plan values set in version 0. Typically, version 0
corresponds to approve Budget figures for meaningful comparison.
Version Purpose
Approved Values
Plan Values
Version Name
Version 0
Version 1
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6.3.6.1
Automatic
derivation
of
SUPERSEDES: N/A
profit
center
in
actual
transactions
The profit center can be maintained in the masters and while doing actual transactions the
profit center is derived. The profit center derivation logic is explained in the following table.
Sl.
No.
1.
Particulars
Expenditure
Logic
Cost of goods sold: Each Material at plant level is
assigned to a Profit Center at the material master. At
the time of booking of sale the Profit Center will be
automatically derived from the Material master.
Price Difference: The same will be derived from the
Material master.
Internal consumption: At the time of booking of
consumption, Cost Center / order is a mandatory
field. This will in turn derive the Profit Center.
Inventory Shrinkage/Lost in transit: The same will
be booked to a Cost Center, which in turn will derive
the Profit Center.
Other Direct and Indirect Expenditure: At the time
of booking of expenditure Cost Center is to be given.
This will in turn derive the Profit Center.
The Cost Center field should be mandatory in case
of booking of any expenditure.
2.
Income
Sales of material / Scrap: Each material / Service at

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SUPERSEDES: N/A
plant level is assigned to a Profit Center at the

master level. At the time of booking of sale the Profit
Center will be automatically derived from the material
master.
Other operating income: in case of manual FI entry,
Profit Center has to be manually entered at the time
3.
of entry. The same has to be a mandatory field.

At the time of booking of fixed asset, Profit Center
Fixed Assets
will be derived from the cost center assigned in the

asset master.
4.
Inventory
Each Material at plant level is assigned to a Profit

Center at the Material master.
5.
Debtors
and
related
special
other The Profit Center will be derived from the offsetting

GL line item. In case there are multiple offsetting line
transactions
(excluding
items, the system will break the debtors in the ratio of

advance the offsetting line item.
received)
6.
Advance
received Manual entry at the time of booking
from customers
7.
Creditors
related
and
other Same as Debtors
special
GL
transactions
(excluding
advance
given)
8.
Advance
given
to Manual entry at the time of booking
vendors
9.
Share Capital
Profit Center can be attached at the GL level
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10.
Secured
SUPERSEDES: N/A
and Profit Center can be attached at the GL level
Unsecured Loans
6.3.6.2
Actual Posting in Profit Centre Accounting
All the postings in Financial Accounting, Materials Management, Asset Management and
Sales and Distribution and Controlling that affect profits are reflected in Profit Centre
Accounting. Profit centers cannot receive direct postings in the SAP ECC System. Instead,
the data is posted to other objects and passed on from there to a profit centre in Profit
Centre Accounting. This makes it possible to display companys results by profit centre
based on the original postings and with no additional work.
6.3.6.3
Profit Centre Account Analysis
Classic profit centre accounting is not activated in Arch. In new ledger concept, profit centre
is acting as financial Organizational element than controlling organizational element. The
information system lets one analyze all the Data in Profit Centre Accounting individually as
well as in a summarized form according to different criteria. The reports in the Profit Centre
Accounting information system can be classified into two groups:
Drilldown reports
S_AC0_52000888: Payables Profit centre wise
S_AC0_5200087: Receivables profit centre wise
FAGLL03: GL Line item report with profit centers
Report Painter reports (and Report Writer reports)

Profit centre wise trial balance
Profit centre wise balance sheet
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6.3.7
SUPERSEDES: N/A
BPP_CO_BP6.3.7 Profitability Analysis
Detailed Business Blue print on Controlling Profitability Analysis is being provided in a

separate document.
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6.4 Business Process Steps & Transactions

Main Process
Description
Process Of SAP
Transaction Code
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6.4.1
Cost
This Will cover Cost element Display
KA03
the
KA23
cost Display Cost Elements
Element Element
Accounting
Cost
Reports.
This Will cover Actual cost line items : CC KSB1
6.4.2
the cost centre Wise

Centre reports.
Accounting
Internal
S_ALR_87013615
Breakdown by partners.
S_ALR_87013616
Breakdown by transactions
S_ALR_87013623
Quarterly Comparision
S_ALR_87013613
Range Cost Elements
KS13
Cost Centre Master Reports
KSBT
Activity Prices List

This Will cover Actual Line Items
6.4.3
the
Order order Reports.
6.4.4
6.4.5
Inventory
Valuation
S_ALR_87012993
Order Plan/Actuals
S_ALR_87012997
List : Cost Elements By Order

This will cover Process
the
Order
Information COOIS_PI
product Syst
Product Cost Cost Reports

Controlling
Internal KOB1
Internal Order
Accounting
6.4.6
SUPERSEDES: N/A
S_ALR_87099930
Results Of Costing Run
S_ALR_87099931
Price Vs.Cost Estimate
S_ALR_87099931
Variances between two runs

This will cover Stock On Posting date
MB5B
the
MB52
inventory Display wharehouse stocks
reports
of Material Document List
MB51
Maaterial
Valuated Sales order or proj MBBS
management
stk
MMBE
Stock Overview
This will cover CO-PA Line Item Report
KE24
the Reports of CO-PA Plan Line Item Report
KE25
Page 148 of 206
Business Blue Print
PAGE:
149 of 206
Profitability
SUPERSEDES: N/A
Profitability
analysis
Analysis
7 Functional Requirement
URS
URS
Req. No
Details
Req.
SAP Process
BBP
Status
No
Valuation and consumption cost of Raw Material/ Packing

Material/ Lab Chemicals
001/001
The stock needs to SAP System will value the BBP_C
Standard
be valued as soon goods based on the Goods O_MD

as the GRN is Receipt,
based
on
the 5.1.10.1
entered
in
the Purchase Order terms and to

post
the
value
to 5.1.10.6
system.
corresponding General Ledger

001/002
Accounts
Proper System to All the delivery cost need to be
BBP_C
Standard
capture
expenses maintained in the purchase O_MD

incidental
to order, to add to the inventory 5.1.10.1
purchase
material
of cost and to arrive the landed

to
form cost
part of landed cost

001/003
of that material.
Proper
Coding Based on the Material types
structure
BBP_C
Standard
for and Split valuation process the O_MD

same will be achieved
5.1.10.6
purchased,
produced and sub

contracted material
001/004
should be there.
Controlled
Price A Pricing condition will be BBP_S
Products
details provided
to
maintain
Standard
the D_MD5
Page 149 of 206
Business Blue Print
PAGE:
150 of 206
URS
Req. No
URS
Req.
Details
should
SUPERSEDES: N/A
SAP Process
BBP
Status
No
be Controlled price of a product.
available.
The price will be maintained in

the sequence of Company
001/005
Code and Material Code.

System to ensure Materials are classified based BBP_C
inventory
in the Material Types.
Split
Standard
O_MD
classification raw valuation has been activated 5.1.10.6

material, packing to obtain the source of the
material,
lab materials.
Correspondingly
chemicals,
these materials are linked to
intermediates,
respective Valuation class to
finished goods, bi post
the
Corresponding
product, fuel items General ledger accounts

and
001/006
engineering
items.
Non Moving and SAP tracks the details based
slow
stocks.
BBP_C
Standard
moving on the goods movements of O_BP

the materials and provides the 6.3.5.2
necessary information by way
of reports (T.code MC46 and
001/007
MC50)
Proper treatment of GR has to be made for actual BBP_C
short
quantity.
001/008
Standard
receipt quantities or based on the O_BP

Arch policy the process of 6.3.5.3
debit note can be followed.

Ageing Analysis of In case of material with Batch
Stocks.
BBP_C
History management it is possible. As O_BP

should be carried per Arch every location, the 6.3.5.4
forward in case of batch
interlocation
number
is
ABAP
Developm
ent
getting
changed and new batch is
Page 150 of 206
Business Blue Print
PAGE:
151 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Details
transfer of material being created. This need to be
Status
No
with the first GRN developed as a report, as per

date to carry for the specifications of Arch.
001/009
ageing purpose.
Material
Mix
Split
Local & Imported.
identify
the
separately.
Inventory It is possible
Proper
System
Classification
be BBP_C
will
Standard
activated to classify the local O_MD

and imported material values 5.1.10.6
and
001/010
Valuation
in
stock
standard BBP_C
for system by taking material type
O_BP
wise inventory reports with the
6.3.5.5
Standard
own inventory, job combination of Split Valuation.

work in inventory,
job
work
inventory,
out
usable
inventory, rejected
001/011
inventory.
Inter
location Prepare GRN for full quantity
BBP_C
transfer of material and post the loss in transit
O_BP
and loss in transit stock
6.3.5.6
treatment
in
system.
the Subsequently
the
stock.
loss
in
center
or
post
the
physical inventory difference.

Invoice Should be Invoice will be allowed even BBP_C
allowed
001/013
Blocked
transit needs to be issued to a

cost
001/012
as
Standard
to
book before QC approval. But it will
O_BP
after it is approved be blocked for payment in 6.3.5.7

by QC
case of QC not approved.
Transportation of At the time of PO preparation BBP_C
Standard
Standard
Page 151 of 206
Business Blue Print
PAGE:
152 of 206
URS
Req. No
URS
Req.
Details
interlocation
transfer
SUPERSEDES: N/A
SAP Process
BBP
Status
No
to
loaded
it should be included in one of
O_BP
be the conditions. If the receiving
6.3.5.8
on end the price control in the
inventory
Material Master is V- system

will add the transportation cost
to the materials. If the price
control is S system will
valuate based on the Material
master price and difference
will be posted to the Stock
001/014
transfer difference account

System to work out All the terms need to be BBP_C
Standard
Transit Insurance, maintained in the Purchase O_BP

Warehousing
order to add the same 6.3.5.9
charges
and inventory cost.
clearing charges to
be
loaded
on
inventory in case of
001/015
import.
System
for
treatment SAP system is having the BBP_C
write
off
material
of following process:
and
accounting
treatment thereof
entries
Goods
O_BP
4. Goods issue to Cost 6.3.5.10

Center
5. Scrapping
6. Physical
Inventory
difference
System
will
post
the
corresponding
001/016
to
accounting
Financial
accounting.
destroyed Based on the process adopted BBP_C
Standard
Standard
Page 152 of 206
Business Blue Print
PAGE:
153 of 206
URS
Req. No
URS
Req.
Details
effects in costing
SUPERSEDES: N/A
SAP Process
BBP
Status
No
by Arch, the inventory value
will be charged off.
O_BP
If the 6.3.5.11
goods are issued to a Cost

Center and the same can be
001/017
Bill
analyzed
Material System will provide the details
Of
BBP_C
Standard
should be accurate of Material components in the O_BP

to capture requisite Bill of Materials. Hierarchical 6.3.5.12
quantity
of
Raw BOM, will provide the various
materials required stages of material components

at various stages
001/018
of recipie.
Break up of landed Necessary conditions need to BBP_C
ABAP
cost
Developm
of
Material
Raw be
the O_BP
basic Purchase order. Based on 6.3.5.13
ie
maintained
in
ent
price & other add which system will valuate the

up
cost material
components
and
update.
To
present the same in the form

of Cost component model, a
001/019.A
Report need to be developed

Standard SAP allows to BBP_C
Controls-
Standard
The
System amend the PO even after O_BP

should not allow to GRN
6.3.5.14
amend
the
P.O
after the first GRN

is prepared.
001/019.B
- If the MIRO is It is possible restrict GRN BBP_C

booked
GRN,
Standard
against reversal after MIRO posting. O_BP

system System
will
give
error 6.3.5.14
Page 153 of 206
Business Blue Print
PAGE:
154 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Details
should not allow to message.
reverse
Status
No
GRN,
unless
the
corresponding
MIRO against that
GRN is reversed.
001/019.C -There should not SAP System will maintain the
be any difference integration
in
Raw
Material Material
between
accounting
BBP_C
Standard
the O_BP
and 6.3.5.14
valuation between Financial accounting system.

MM Module & FI Values are flown automatically
Module.
001/019.D -
No
and no difference between the

system.
Manual While creating the general BBP_C
Standard/
postings should be ledger accounts the Automatic O_BP

allowed in Raw Posting fields needs to be 6.3.5.14
ABAP
Material
Cosumptio
related selected. These field
Automatic
will
GL made be made mandatory for
to
control
n
Accounts ie Stock the stock related GL accounts.
Accounts
of Raw Material ,
Raw
Material
consumed.
001/019.E
- No Authorization Authorization to price change BBP_C

to
anybody
for transaction code i.e.MR21 will
artificially changing be provided to identified user.
Standard
O_BP
6.3.5.14
valuation of Raw
Material - ie MR21,
MR22.
Page 154 of 206
Business Blue Print
PAGE:
155 of 206
URS
URS
Req. No
Details
Req.
SUPERSEDES: N/A
SAP Process
BBP
Status
No
Valuation and consumption cost of Semi-Finished Materials

002/001
System for batch Manufacturing will be taking BBP_C
Standard
wise recoveries of place for each batch and O_BP

solvents/
crude/ corresponding process order 6.3.5.15
spent/
mother will be created. Recoveries
liquor needs to be are being posted against the

in place.
Process Order and details can

be drawn against the process
002/002
order (i.e. batch)

Manufacturing will be taking BBP_C
Accurate
information
material
Standard
on place for each batch and O_BP

content corresponding process order 6.3.5.15
and usage of the will be created. Recoveries

recovered material are being posted against the
needs
to
captured.
002/003
Intermediate
Avon
be Process Order and details can

order (i.e. batch)
at Can be achieved
Organics Standard
through BBP_C
Standard
estimate. O_BP
needs to be valued Based on recipe and overhead 6.3.5.16
properly.
rates
system,
cost
maintained
material
in
the
will
be
valuated when user release

002/004
Harmonization
the Standard Cost Estimate.

in In SAP System it is being
different batch type created

for
BBP_C
Standard
different
Process O_BP
production, order types to represent the 6.3.5.24
which are not used Batch Types. Based on the

diligently.
Order types, user can draw

the reports and analyze the
Page 155 of 206
Business Blue Print
PAGE:
156 of 206
URS
URS
Req. No
Details
002/005
Material
Req.
SUPERSEDES: N/A
SAP Process
BBP
Status
No
used
cleaning
same
in Separate Process Order type
batches is being used for cleaning
should be treated activity

as a direct cost captured
rather
and
data
at
BBP_C
Standard
O_BP
will
process
be 6.3.5.17
order
than level, in case of campaign
overheads to the change.

products
in
the In case of batch to batch
system.
cleaning activity, the cost will

be captured through machine
activity.
Necessary
material
will be issued to the respective

002/006
Solvent
cost centers.
recovery This
bi-product
will
be BBP_C
batches should not identified and costing BOM will

absorb overheads, be
O_BP
the 6.4.4.1
coz it is not a valuation. To activate costing,
production.
maintained
Standard
for
this BOM should not be a

recursive
BOM.
component
is
If
recursive
the
in
nature, then it has to be

activated Not Relevent
to
costing. Pairing has to be

maintained to give the costing
002/007
Proper
effect.
Coding It is achieved through split
structure
for valuation for materials
purchased,
BBP_C
Standard
O_MD
5.1.10.6
produced and sub

contracted material
Page 156 of 206
Business Blue Print
PAGE:
157 of 206
URS
Req. No
002/008
URS
Req.
Details
Controlled
SUPERSEDES: N/A
SAP Process
BBP
No
Products
details provided
should
to
maintain
Standard
the D_MD
available.
Status
5.0

002/009

System to ensure Materials types are being
BBP_C
Standard
inventory
identified and codification has O_MD

classification raw been made accordingly. In 5.1.10.6
material,
lab addition to the material types,
chemicals,
split
valuation
is
being
intermediates,
activated to identify the stocks,
finished goods, bi based on source of supply and

product, fuel items inventory value.
and
002/010
engineering
items.
BBP_C
Stocks.

should be carried per Arch every location, the 6.3.5.4
forward in case of batch
interlocation
number
is
ABAP
Developm
ent
getting
changed and new batch is
transfer of material being created. This need to be

with
the
first developed as a report, as per
production date to the specifications of Arch.

002/011
carry the ageing.

Proper treatment of In case of failed batch, user
BBP_C
failed
O_BP
batches has to make the GR against
where there is no the
These 6.3.5.18
output. It should be materials are being tested by
taken
as
Process
Standard
order.
an the Quality Control team and
Page 157 of 206
Business Blue Print
PAGE:
158 of 206
URS
Req. No
URS
Req.
Details
abnormal loss.
SUPERSEDES: N/A
SAP Process
BBP
Status
No
identify them as failed batch.
Based on which these batches
need
to
be
scrapped
or
reprocessed. The goods can

be issued to the respective
process order. The process
represents more variances.
If
no
output
is
being
generated, no yield will be

reported and final confirmation
will be made and process
order has to be settled with
002/012
variances.
Capacity Utilization User need to identify the BBP_C
and idle capacity.
capacity, part of the planning
O_BP
activity. The same need to be
6.3.5.19
Standard
maintained, in the system part

of the CO planning.
The
actual values will be posted by

the system based on the
confirmation
of
Process
orders. The actual values can

be seen against the cost
center. User can
actual
002/013
value
and
seen the
planned
value against a cost center

TRT hrs utilized in Separate order Type are being BBP_P
each
production created
to
cost centre for our production
track
and
the
own
Standard
P-
job-work PI_BP0
Page 158 of 206
Business Blue Print
PAGE:
159 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Status
Details
No
own
production production. Based on order 3
and
third
party types data will be accumulated
production
(job and provided the information,
work in) for each through summarization reports

002/014
product.
Reprocess
batch Separate order type is being BBP_C
Standard
details
with used for re-process of the O_BP

material loss and materials. Based on the 6.3.5.20
overheads incurred process order, user can arrive
in reprocessing.
the cost of re-processing i.e.

material
activity
consumed
types
and
used.
If
settlement rule is maintained,

the cost of the Re-process can
be settled to the main process
002/015
order
Raw Planed costs can be seen cost BBP_C
Separate
material
and component
overhead
cost after
component
breakup
structure
completion
of
wise
O_BP
cost
6.3.5.21
GAP
estimate at material level or

of
the plant
level.
Actual
are
material at every available only for the particular

stage of production level
002/015
and
for each product.

activities
Variance in yield Variances will be calculated
BBP_C
batch wise, product based on the process order.
O_BP
wise (including 2
crop)
002/016
components
and
nd
6.3.5.22
loss
thereof.
Standard
BBP_C
Standard
Page 159 of 206
Business Blue Print
PAGE:
160 of 206
URS
Req. No
URS
Req.
Details
slow
SUPERSEDES: N/A
SAP Process
BBP
Status
No
stocks.

of reports (T. code MC46 and
002/017
MC50 )
Inventory Based on the Material types
Proper
System
Classification
BBP_C
Standard
for and Split valuation process the O_BP

6.3.5.5
own inventory, job

work in inventory,
job
work
inventory,
out
usable
inventory, rejected
002/018
inventory.
Interlocation
Prepare GRN for full quantity;
transfer of material in same GRN maintain loss
BBP_C
Standard
O_BP
and loss in transit stock as Blocked stock. Goods 6.3.5.6

treatment in the need to be written off, as per
002/019
system.
Transportation
the accounting policy.

of At the time of PO preparation
interlocation
transfer
it should be included in one of
to
loaded
002/020
be the conditions.
write
Standard
O_BP
6.3.5.8
on
inventory.
System treatment It is possible in Inventory
for
BBP_C
off
material
of Management
BBP_C
Standard
module
with O_BP
and movement type 551/553/558 6.3.5.10
accounting
in MIGO or MB1A. Based on
treatment thereof.
the Arch accounting policy the

accounting treatment of these
Page 160 of 206
Business Blue Print
PAGE:
161 of 206
URS
URS
Req.
Req. No
Details
SUPERSEDES: N/A
SAP Process
BBP
Status
No
materials can be posted into
002/021
the system.
As per the BOM and Recipe
Intermediates
valuation
should standard cost will be updated
BBP_C
Standard
O_BP
consist of following in the Material Master. If the 6.3.5.23

cost components ie actual
Raw
Material
Raw
Material, components need to be seen
Direst
002/022
Cost, at all stages, a custom system
Power/Fuel,
will provide report based on
Manufacturing
the cost estimates and at plant
Ohds
Controls-
level or at material level.

SAP System will maintain the
-There should not integration

be any difference Material
in
between
accounting
BBP_C
Standard
the O_BP
and 6.3.5.14
Intermediates Financial accounting system.
valuation between Values are flown automatically

MM Module & FI and no difference between the
Module.
-
No
system.
Manual MR21 will not be allowed for
postings should be automatically

allowed
posting
GL
in accounts
Intermediates
related
GL
Automatic
Accounts
Stock
Intermediates
ie
of
,
Change
in
Inventory
Intermediates
Page 161 of 206
Business Blue Print
PAGE:
162 of 206
URS
Req. No
URS
Req.
Details
Cost of
SUPERSEDES: N/A
SAP Process
BBP
Status
No
Goods
Sold
- No Authorisation
to
anybody
for
artificially changing
valuation
of
Intermediates - ie
MR21, MR22.
Valuation and consumption cost of Finished goods

003/001
for Manufacturing will be taking BBP_C
System
batchwise
Standard
place for each batch and O_BP

of corresponding process order 6.3.5.15
recoveries
solvents/
crude/ will be created. Recoveries
spent/
mother are being posted against the
liquor needs to be Process Order and details can
003/002
in place.
Accurate
order (i.e. batch)

Based on the inspection plan
information
on and testing of the materials,
BBP_C
Standard
O_BP
material
content the results can be recorded 6.3.5.15

and usage of the into the system. Based on
recovered material which user, has to do the
needs
003/003
to
be analysis and take the decision
captured.
on its usage
Finished goods at Finished goods can be valued BBP_C
Avon
Organics at
The O_BP
need to be valued manufactured finished goods, 6.3.5.16
properly.
standard
Standard
price.
will be having the Recipe

(BOM & Operations), based
on which system will valuate
Page 162 of 206
Business Blue Print
PAGE:
163 of 206
URS
URS
Req.
Req. No
Details
SUPERSEDES: N/A
SAP Process
BBP
Status
No
the
Material
cost
and
overheads to manufacturing
003/004
the finished good.

in In SAP System it is being
Harmonisation
different
batch created
production,
not
Material
different
which Batch Types. Based on the

used Order types, user can draw
diligently.
003/005
Standard
Process O_BP
for order types to represent the 6.3.5.24
types
are
BBP_C
the reports and analyse the

used
cleaning
same
in These materials should form
batches part BOM to include in direct
should be treated cost
BBP_C
Standard
O_BP
6.3.5.17
as a direct cost
rather
than
overheads to the
products
003/006
system.
Solvent
in
the
recovery This
bi-product
will
be BBP_C
batches should not identified as no cost relevancy
O_BP
absorb overheads,
6.4.4.1
Standard
coz it is not a
003/007
production.
Proper
Coding Coding structure completed BBP_C
structure
for properly
Standard
O_MD
purchased,
5.1.10.6
produced and sub

003/008
contracted material
Controlled
Products
details provided
to
maintain
Standard
the D_MD5.
Page 163 of 206
Business Blue Print
PAGE:
164 of 206
URS
Req. No
URS
Req.
Details
should
SUPERSEDES: N/A
SAP Process
BBP
available.
Status
No
0

003/009

BBP_C
Stocks.

should be carried plant specific batch number is 6.3.5.4
ABAP
Developm
ent
forward in case of getting activated, at each plant

interlocation
level new Batch is getting
transfer of material generated.

with
the
Hence custom
first developed report need to be
production date to generated

003/010
carry the ageing.

BBP_C
failed
O_BP
These 6.3.5.18
taken
as
Process
Standard
order.
abnormal loss.

need
to
be
scrapped
or

represents more variances. In
some cases, without reporting
the
yield
process
will
be
closed and variances will be

003/011
Reprocess
reported to that process order.

batch Separate order type is being BBP_C
Standard
Page 164 of 206
Business Blue Print
PAGE:
165 of 206
URS
Req. No
URS
Req.
Details
details
SUPERSEDES: N/A
SAP Process
BBP
Status
No
with used for re-process of the O_BP
material loss and materials.
Based
on
the 6.3.5.20
overheads incurred process order, user can arrive

in reprocessing.
the cost of re-processing i.e.

material
003/012
consumed
and
activity types used.

Report on capacity User need to identify the BBP_C
Utilization and idle capacity, part of the planning
O_BP
capacity.
6.3.5.19
activity. The same need to be
Standard
maintained, in the system part

of the CO planning.
The
actual values will be posted by

the system based on the
confirmation
of
Process
orders. The actual values can

be seen against the cost
center. User can
actual
003/013
value
and
seen the
planned
value against a cost center

TRT hrs utilized in Separate order Type are being BBP_P
each
production created
cost centre for own

production
to
production
track
and
the
own
Standard
P-
job-work PI_BP0
and production. Based on order 3
third
party types data will be accumulated
production and for and provided the information,

003/014
each product.
through summarization reports
Separate
Raw As per the BOM and Recipe
BBP_C
material
and standard cost will be updated
O_BP
overhead
cost in the Material Master. It is a
6.3.5.21
component
GAP
break GAP in the system and not
Page 165 of 206
Business Blue Print
PAGE:
166 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Details
up of the material feasible to develop the report.
Status
No
at every stage of
production for each
003/015
product.
Variance in yield Process Order wise variances
BBP_C
batch wise, product can be seen and the data can
O_BP
wise.
6.3.5.22
(including be summarized at Product
Standard
2nd crop) and loss level.

thereof
In case of 2nd Crop process
order the same need to be
settled to the main process
order
003/016
to
arrive
the
total
variances of the order.

slow
BBP_C
Standard

stocks.

003/017
MC50)
Inventory Based on the Material types
Proper
System
Classification
BBP_C
Standard
for and Split valuation process the O_BP

6.3.5.5
own inventory, job

work in inventory,
job
work
inventory,
out
usable
inventory, rejected
003/018
inventory.
Interlocation
Prepare GRN for full quantity, BBP_C
Standard
Page 166 of 206
Business Blue Print
PAGE:
167 of 206
URS
Req. No
URS
Req.
and loss in transit stock as Blocked stock.
6.3.5.6
in
to
loaded
No
of Can
be
achieved
by BBP_C
Standard
maintaining price indicator V in O_BP

be material master of receiving 6.3.5.8
on plant
inventory.
System treatment Goods can be written by way
BBP_C
for write off of F.G.
O_BP
and
Status
the
system.
Transportation
transfer
issuing the same to Cost
accounting Center or posting the physical
treatment thereof.
F.G.
6.3.5.10
post
the
accounting
document automatically
valuation This can be achieved through BBP_C
should consist of product cost estimate
O_BP
following
6.3.5.21
cost
components
Raw
Standard
inventory difference. System

will
003/021
BBP
O_BP
interlocation
003/020
SAP Process
Details
transfer of material in same GRN maintain loss
treatment
003/019
SUPERSEDES: N/A
Standard
ie
Material,
Direst
Cost,
Power/Fuel,
Manufacturing
003/022
Ohds
Controls-

in
between
accounting
valuation Financial accounting system.
between
MM Values are flown automatically

&
Standard
the O_BP
and 6.3.5.14
F.G.
Module
BBP_C
FI and no difference between the
Page 167 of 206
Business Blue Print
PAGE:
168 of 206
URS
Req. No
URS
Req.
Details
Module.
-
SAP Process
Status
No
Manual MR21 will not be allowed for
postings should be automatically

allowed
GL
BBP
system.
No
in
related
SUPERSEDES: N/A
posting
GL
FG accounts
Automatic
Accounts
Stock
of
ie
F.G.,
Change
in
Inventory F.G.,
Cost
of
Goods
Sold
- No Authorisation
to
anybody
for
valuation of F.G.- ie
MR21, MR22.
Valuation of recovered material

004/001
System for batch Manufacturing will be taking BBP_C
Standard
wise recoveries of place for each batch and O_BP

solvents/
crude/ corresponding process order 6.3.5.15
spent/
mother will be created. Recoveries
liquor needs to be are being posted against the

in place.
Process Order and details can

004/002
Accurate
information
order (i.e. batch)

Based on the inspection plan
on and testing of the materials,
BBP_C
Standard
O_BP
material
content the results can be recorded 6.3.5.15

and usage of the into the system. Based on
recovered material which user, has to do the
Page 168 of 206
Business Blue Print
PAGE:
169 of 206
URS
Req. No
004/003
URS
Req.
Details
needs
SUPERSEDES: N/A
SAP Process
BBP
Status
No
to
be analysis and take the decision
captured.
on its usage
BBP_C
Stocks.

ABAP
Developm
ent

inter-location
Hence custom
with the first MRT developed report need to be

date to carry the generated
004/004
ageing.
slow
stocks.
BBP_C
Standard

004/005
MC50)
There needs to be Since
a
Costing
BOM
is BBP_C
validation
for maintained recoveries will be O_BP

posting recoveries updated with standard cost
6.3.5.25
ABAP
Developm
ent
only after updation

004/006
of rates.
Bill Of
Materials Production department should BBP_C
should be accurate give correct inputs for BOM
O_BP
to capture correct
6.3.5.12
of
Standard
Solvents
recovered
at
various stages of
recipe.
Valuation of work in progress

005/001
Unauthorized PTN/ System
will
valuate
the BBP_C
Standard
Page 169 of 206
Business Blue Print
PAGE:
170 of 206
URS
Req. No
URS
Req.
Details
PTNI should
SUPERSEDES: N/A
SAP Process
BBP
be materials, based on the Goods
valued at cost of receipt and as per the price in

production.
005/002
Status
No
O_BP6.
3.5.45
the material master based on
the price control

BBP_C
failed
O_BP
These 6.3.5.18
taken
as
Process
Standard
order.
abnormal loss.

need
to
be
scrapped
or

005/003
represents more variances.

Raw Planed costs can be seen cost BBP_C
Separate
material
and component
overhead
cost after
component
structure
completion
wise
O_BP
cost
6.3.5.21
of
break estimate at material level
up of the material plant
level.
Actuals
GAP
or
are
at every stage of available only for the particular

production.
005/004
Material
level
Mix
components
and
activities
If the Material is subject to
BBP_C
Local & Imported split valuation it is possible to O_MD

for
purchase, get the details of consumption 5.1.10.6
consumption
005/005
stocks.
Controls-
Standard
and split valuation type wise

BBP_C
Standard
Page 170 of 206
Business Blue Print
PAGE:
171 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
Details
BBP
between
accounting
Status
No
the O_BP
and 6.3.5.14
in S.F.G. valuation Financial accounting system.

between
MM Values are flown automatically
Module
&
FI and no difference between the
Module.
-
system.
No
Manual
postings should be MR21 will not be allowed for

allowed in S.F.G. automatically
related
GL
GL
Automatic accounts.
Accounts
Stock
posting
of
ie
S.F.G.,
Change
in
Inventory S.F.G.,
- No Authorization
to
anybody
for
valuation of S.F.G.ie MR21, MR22.
Valuation of Traded goods

006/001
Standard

based
on
the 5.1.10.1
entered
in
system.

post
the
value
to 5.1.10.6
006/002
Accounts
Proper System to Enter
the
delivery
cost BBP_C
Standard
capture
expenses conditions in PO to capture O_MD

incidental
to the cost. Unplanned cost can 5.1.10.1
Page 171 of 206
Business Blue Print
PAGE:
172 of 206
URS
Req. No
URS
Req.
SAP Process
BBP
Details
purchase to form be entered at the time of IR
part of landed cost
006/003
SUPERSEDES: N/A
structure
No
preparation provided stock is
available
Coding Material types
Proper
Status
for identified,
are
Standard
the O_MD
material usage. Split Valuation 5.1.10.6
purchased,
based
being BBP_C
on
produced and sub also activated based on the

contracted
006/004
source of supply
material.
BBP_C
Stocks.

ABAP
Developm
ent

interlocation
Hence custom
with the first GRN developed report need to be

date to carry the generated
006/005
ageing.
slow
stocks.
BBP_C
Standard

006/006
Inventory
MC50)
Holding Based
Period Average
on
the
specified BBP_C
formula, the report need to

calculate
material 6.3.5.26
stock on hand, in terms of
006/007
the
O_BP
raw
sales
Break up of landed Details are available in the BBP_C
ABAP
Developm
ent
ABAP
Page 172 of 206
Business Blue Print
PAGE:
173 of 206
URS
Req. No
URS
Req.
Details
cost
of
goods
SUPERSEDES: N/A
SAP Process
BBP
Status
No
traded Purchase order. If need to be
ie
basic printed in a specified form,
O_BP
Developm
6.3.5.18
ent
BBP_C
Standard
price & other add need to developed

up
006/008
cost
components
Controls-

in
Traded
between
accounting
the O_BP
and 6.3.5.14
goods Financial accounting system.
valuation between Values are flown automatically

MM Module & FI and no difference between the
Module.
-
No
system. MR21 will not be

Manual allowed
for
automatically
postings should be posting GL accounts

allowed in Traded
goods
related
Automatic
GL
Accounts ie Stock
of Traded goods ,
Change
in
Inventory Traded
goods , Cost of
Goods Sold
- No Authorization
to
anybody
for
valuation of Traded
goods - ie MR21,
MR22
Page 173 of 206
Business Blue Print
PAGE:
174 of 206
URS
URS
Req. No
Details
Req.
SUPERSEDES: N/A
SAP Process
BBP
Status
No
Valuation and consumption cost of subcontract material

007/001
Standard

based
on
the 5.1.10.1
entered
in
system

post
the
value
to 5.1.10.6
007/002
Accounts.
material This can be achieved by BBP_C
Actual
cost
Standard
of
the defining the costing BOM for O_BP

processed product bi-product.
6.3.5.27
should be net of bi
007/003
product cost
Actual
cost
second
of SAP will post Goods Receipt

crop for the recovered materials,
production has to based
on
the
BBP_C
Standard
O_BP
BOM 6.3.5.27
be accounted by components.
valuing the mother
liquor recovered at
007/004
job workers place

Stock of recovered Valuation will be associated
BBP_C
Standard
solvent and mother with Sending plant inventory O_BP

liquor lying at job valuation. Valuation will be 6.3.5.27
workers
place automatically updated by the
should
be system
accounted
included
007/005
stock
Proper
and
in
our
Coding Based on the Material Type BBP_C
structure
for and Split valuation, system will
O_MD
Standard
Page 174 of 206
Business Blue Print
PAGE:
175 of 206
URS
Req. No
URS
Req.
Details
purchased,
SUPERSEDES: N/A
SAP Process
BBP
Status
No
5.1.10.6
provide the necessary break.
produced and sub

007/006
contracted material
BBP_C
Stocks.

ABAP
Developm
ent

interlocation

with
the
Hence custom
first developed report need to be
production date to generated

007/007
carry the ageing.

Proper Mapping of Sending plant will follow the BBP_C
GAP
inter location job Sub-contracting process, as if O_BP

work cycle within a the material sent to external 6.3.5.30
company code.
vendor. The receiving plant

follows
the
Job
work
in
process, as if the material

received from the external
customer. The material codes
used
in
the
process
job
are
work
in
non-valuated
materials. There is no relation

between the process.
will
007/008
be
job work charges in maintained

case
on
inter contracting
location job work.
operating
independently.
of Job
work
charges
Determination
Both
in
the
PO
and
are BBP_C
Standard
Sub- O_BP
Sales 6.3.5.30
order
Page 175 of 206
Business Blue Print
PAGE:
176 of 206
URS
Req. No
007/009
URS
Req.
SUPERSEDES: N/A
SAP Process
Details
Financial impact of Necessary
BBP
receivables
No
and BBP_C
inter location job payables are being posted in
Status
Standard
O_BP
work
007/010
the system and the same 6.3.5.30

need to be adjusted
Non Moving and SAP tracks the details based BBP_C
slow
stocks.
Standard

007/011
Separate
MC50)
Raw . Planed costs can be seen
material
and cost component structure wise
O_BP
overhead
cost after
6.3.5.21
component
completion
of
cost
BBP_C
GAP
break estimate at material level or
up of the material plant
level.
Actuals
are
at every stage of available only for the particular

production
007/012
Material
level
components
and
activities
Split valuation is active for BBP_C
Mix
Standard
Local & Imported local and imported, based on O_MD

for
purchase, which separate GL
5.1.10.6
consumption
007/013
007/014
and
stocks.
Material Usage & System need to provide the BBP_C
ABAP
Inventory Control
Developm
information Raw material Vs. O_BP

Finished Goods, based on the 6.3.5.31
BOM maintained in the system

Variance in yield Process Order will be created
BBP_C
batch wise, product for each batch and yield will
O_BP
wise. (including 2
nd
ent
Standard
be recorded for each process 6.3.5.22
Page 176 of 206
Business Blue Print
PAGE:
177 of 206
URS
Req. No
URS
Req.
Details
crop) and
SUPERSEDES: N/A
SAP Process
BBP
Status
No
loss order wise. Even for 2nd crop,
thereof
another process order will be

created and analysis can be
007/015
carried out
Transportation and Necessary Conditions need to BBP_C
Standard
other expenses to be maintained in the sub- O_BP

be
loaded
on contracting purchase order. If 6.3.5.30
subcontract
the manufactured materials
material.
price
control
transportation
is
V,
the
cost
will
be
added to the material value.
Valuation and consumption cost of Engineering Material

008/001
Standard

based
on
the 5.1.10.1
entered
in
system.

post
the
value
to 5.1.10.6
008/002
Accounts
Proper System to Enter
the
delivery
cost BBP_C
Standard
capture
expenses conditions in PO to capture O_MD

incidental
to the cost. Unplanned cost can 5.1.10.1
purchase to form be entered at the time of IR
part of landed cost.
008/003
Harmonization
preparation provided stock is
available
in Materials are being classified
BBP_C
Standard
coding
structure based on the Material Types O_MD

and categorization and Split Valuation. This will 5.1.10.6
of material
helps the users to identify the

materials and post the values
Page 177 of 206
Business Blue Print
PAGE:
178 of 206
URS
URS
Req. No
Details
008/004
Req.
SUPERSEDES: N/A
SAP Process
BBP
Status
No
to Financial accounting.
System to ensure System will recognize
inventory
the BBP_C
materials with material type
classification raw code

material,
Standard
O_MD
5.1.10.6
packing
materials,
lab
chemicals,
intermediates,
finished goods, bi
product, fuel items
and
008/005
engineering
items.
slow
BBP_C
Standard

stocks.

MC50)
008/006
Controls-

in
accounting
Standard
the O_MD
and 5.1.10.6
engineering Financial accounting system.
items
valuation Values are flown automatically
between
Module
MM and no difference between the

&
FI system.
Module.
-
between
BBP_C
No
MR21 will not be allowed for

Manual automatically
posting
GL
postings should be accounts

allowed
in
Page 178 of 206
Business Blue Print
PAGE:
179 of 206
URS
Req. No
URS
Req.
Details
engineering
related
GL
SUPERSEDES: N/A
SAP Process
BBP
Status
No
items
Automatic
Accounts
ie
Stock
of
engineering items ,
engineering
items
consumed.
- No Authorization
to
anybody
for
valuation
of
engineering items ie MR21, MR22.
Primary and Secondary allocation of expenses

009/001
Robust System to Financial Accounting has been BBP_C

ensure proper cost integrated
centre accounting.
with
Controlling.
Standard
O_BP
Expenses GL Accounts are 6.3.2

being identified as Cost
Elements. Each department
has been identified as the cost
center.
When
ever
user
posting a transaction, system

looks for a cost object, i.e.
Cost Center. So that data will
009/002
automatically flow to CO.

and SAP is having the Activity BBP_C
Accurate
better
keys
apportioning
009/003
for Types
and
Statistical
Key O_BP
of figures, to use as keys for 6.3.2.2
expenses.
apportionment of expenses.
When a processed Inventory is being valued BBP_C
Standard
GAP
Page 179 of 206
Business Blue Print
PAGE:
180 of 206
URS
Req. No
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Details
material is issued based on the Price Control.
O_BP
to cost centre, it The price control will be S for
6.3.5.32
Status
No
should not take the the Manufactured materials.

overhead part of it.
The Standard Price will be

inclusive of Material price and
overheads. It is not possible to
009/004
isolate the overhead part.

System to capture Need to be created these BBP_C
expenses
on departments as Cost Centers.
process
development
R&D
009/005
Period
centers. Based on the cost

centers a report can be drawn
Closure Part of the CO Processes, BBP_C
be there
009/007
O_BP
All relevant expenses can be 6.5.5.33

and posted to the respective cost
discipline needs to user
009/006
Standard
need
follow
the O_BP
necessary closing steps to 6.3.5.34
complete the periodic process

Effect and result of Necessary allocation cycles BBP_C
CSA.
need to be created to transfer
Overhead
the service cost center costs 6.3.5.35

to production cost center
Based
on
the
Activity BBP_C
Absorption and idle confirmation,

time loss.
Standard
system
will
Standard
O_BP
Standard
O_BP
absorb the overhead.
User 6.3.2.9
can arrive the idle time based
on the planned capacity and
009008
Variance
actual time confirmed

Variances can be calculated in BBP_C
Reporting.
Product
cost
controlling,
Standard
O_BP
based on planed cost Vs. 6.3.2.15
Page 180 of 206
Business Blue Print
PAGE:
181 of 206
URS
URS
Req. No
Details
Req.
SUPERSEDES: N/A
SAP Process
BBP
actual postings. The details
Status
No
.3
can be drawn each process

009/009
order wise.
Part of the period reporting, it
Proper
Provisioning
BBP_C
Standard
of is required to make necessary O_BP

and provisions,
in
Financial 6.3.5.36
expenses
liabilities.
accounting.
Based on the
provisions made in FI the

expenses will be available in
009/010
CO for reporting
Cost Centre wise Payroll details
payroll
and maintained
009/011
reimbursement
accounting.
loaded into SAP Cost Center
Samples
sales.
Sales
through
Standard
the
an
interface
program.
should These can be form part of BBP_C
form part of cost of billing

009/012
being BBP_C
external O_BP
system. Payroll details will be 6.3.5.37
wise,
in
are
from
Sales
Distribution module
budgeting Sales
budget
can
Standard
and O_BP
6.3.5.38
be BBP_C
product wise. (Qty maintained part of the CO-PA.
O-PA
& Rate)
5.0
Standard
Product wise Profitability & FICO Reconciliation

010/001
Robust System to Financial Accounting has been BBP_C

ensure proper cost integrated
centre accounting.
with
Controlling.
Standard
O_BP
Expenses GL Accounts are 6.3.2

being identified as Cost
Elements. Each department
has been identified as the cost
center.
When
ever
user
posting a transaction, system

Page 181 of 206
Business Blue Print
PAGE:
182 of 206
URS
URS
Req.
Req. No
Details
SUPERSEDES: N/A
SAP Process
BBP
Status
No
looks for a cost object, i.e.
Cost Center. So that data will
010/002
automatically flow to CO.

Capacity utilization Based
on
the
Activity BBP_C
and idle time cost.
confirmation,
system
will
Standard
O_BP
absorb the overhead.
User 6.3.5.19
can arrive the idle time based
on the planned capacity and
actual time confirmed. Idle
time need to calculated and
posted
based
on
the
requirements. Other wise, can

be
identified
through
an
activity type and confirmed

through
010/003
process
order
to
capture the Idle time.

estimation Overheads are estimated with
Proper
BBP_C
Standard
of
Standard help of historical data and the O_BP

overheads to be same will be compared with 6.3.2.3
010/004
derived.
actual
Manufactured
6.3.2.4
Area wise sales reports are BBP_C
products
through
such
sold possible in COPA

depots,
&
Standard
OPA1.0
transactions
should be properly
mapped
in
to
derive the location

010/005
wise profitability
Job
Work
In It is possible in COPA reports
BBP_C
Standard
Page 182 of 206
Business Blue Print
PAGE:
183 of 206
URS
Req. No
010/006
URS
Req.
SUPERSEDES: N/A
SAP Process
BBP
Details
profitability.
Status
No
O-
Reprocessing cost Reprocessing

incurred on failed carriedout
or rejected batches
PA1.0
being BBP_C
is
through
another O_BP
Batch type. Based on which 6.3.5.39
necessary cost analysis can
010/007
010/008
be carriedout
Proper mapping of All the relevant expenses are
BBP_C
expenses
being posted to the Sales and
O_BP
incidental to sales.
Marketing Cost Center.
6.3.2.1.
2
and Activity Types, Statistical Key BBP_C
Accurate
better
keys
apportioning
expenses.
010/009
for Figures, Fixed percentage or
Standard
Standard
O_BP
of Equalant number can be used 6.3.2.1.

for
apportionment
of 5.2
expenses.
When a processed Inventory is
valued BBP_C
being
material is issued based on the Price Control.
O_BP
to cost centre, it The price control will be S for
6.3.5.32
GAP
should not take the the Manufactured materials.

overhead part of it.
The Standard Price will be

inclusive of Material price and
overheads. It is not possible to
010/010
Period
isolate the overhead part.

Closure Part of the CO Processes, BBP_C
discipline needs to user
010/011
be there.
the O_BP
necessary closing steps to 6.3.5.34
Optimum
complete the periodic process

Product Based on the standard cost BBP_C
Mix.
and
need
Standard
follow
contribution
Standard
of
the O_BP
product, user has to arrive the
Page 183 of 206
Business Blue Print
PAGE:
184 of 206
URS
URS
Req. No
Details
010/012
Req.
SUPERSEDES: N/A
SAP Process
BBP
No
6.3.5.40
and BBP_C
Optimum Product Mix

and Based on the costs
Costing
Status
Standard
Profitability of R&D revues, generated, a report OServices.
can be drawn in CO-PA
PA1.0
Utility Cost
011/001
Log
sheet
in Part of the Plant Maintenance
BBP_C
Standard
system relating to module, necessary log sheet O_BP

utility to ensure will be maintained for utility 6.3.5.41
011/002
accuracy of data
consumption
Utility Costing & Utility per unit cost is being
efficiency thereof
BBP_C
Standard
arrived in the respective cost O_BP

centers.
Based
on
the 6.3.5.42
secondary
resource
usage,
utility cost will be transferred

011/003
to product
Cost Centre Wise Cost and quantities will be BBP_C
Standard
Utility Details
011/004
011/005
captured utility cost center O_BP

wise.
6.3.5.42
Yield for material Report need to be developed, BBP_C
ABAP
used
Developm
to
produce as per Arch requirement
utility
6.3.5.43
Purchase of Coal Based on the Purchase order, BBP_C
to be categorized the same can be known about
O_BP
into purchase and the
6.3.5.44
controlled source
source
Consumption
of
supply.
If
ent
Standard
required the same can be

maintained
011/006
O_BP
in
valuation
of Fuel consumption
the
can
split
be BBP_C
Standard
fuel material with tracked, by way of issue to O_BP

output and yield
cost center. The yield from the 6.3.5.41
cost center can be recorded
Page 184 of 206
Business Blue Print
PAGE:
185 of 206
URS
URS
Req.
Req. No
Details
SUPERSEDES: N/A
SAP Process
BBP
No
through
Plant
Maintenance
measuring points
Allocation of ETP Through CO allocation cycles,
011/007
cost
Status
BBP_C
Standard
to
the the ETP cost center cost can O_BP

products using it
be transferred to production 6.3.2.6
cost centers
Cost Chart
Cost Centre should As per the Arch requirements, BBP_C
012/001
be
Standard
opened
for the required cost centers can O_BP

various Production be defined freely. Each 6.3.2
Cost
Centres, department / production bloc,
Utility
Centres, etc., is being identified as cost
Factory
Services center
Centre,
012/002
Central
Services Centre
Coding of Cost As per the Arch requirement,
BBP_C
Centre
O_BP
should the Cost Centre condification
Standard
indicate the Plant, has been finalized. The cost 6.3.2

Profit
Centre, center is having 10 digit length
Department
and Plant and profit center is

part of the code.
8 Reporting Requirement
URS Rpt
Report Name
BBP No.
No
Reporting
Stdandard/ABAP
Categories
Development
Valuation and consumption cost of Raw Material/ Packing Material/

Lab Chemicals
001
Stock Ledger
/REP
BBP_CO_
Company
BP6.4
Plant,
Code,
Storage
Standard T Code
MB5B
Page 185 of 206
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PAGE:
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URS Rpt
Report Name
BBP No.
No
-001
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Location, Material
Development
Type,
Group,
001
/REP
Stock Balance and valuation
BBP_CO_
(WAC)
BP6.4
Plant,
Material
Type,
Material
Group,
/REP
Material
Movement
Summary
BBP_CO_
Range
Company
BP6.4
Plant,
-003
Group,
Plant
wise
Average
/REP
inventory Holding Period for
-004
different Raw Material types.
001
Batch
Consumption
/REP
cost
-005
break up.
centre
and
consumption
BBP_CO_
Range
Company
BP6.4
Plant,
Standard T Code
MB52
Date
Code,
Storage
Standard T Code
MB51
Quantitative details required
Material
Date
Code,
Storage
ABAP
Development
Location, Material
Type,
Material
Group,
Material
BBP_CO_
Code
Company
BP6.4
Plant,
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
001
Code,
Location, Material
Type,
001
Date
Range
Company
-002
001
Material
BBP_CO_
Material
Group,
Date
Range,
Cost
Center,
Process
order
Company
Code,
Standard T Code
Page 186 of 206
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SUPERSEDES: N/A
URS Rpt
Report Name
No
/REP
as
per
-006
Companies Act as under:
Location, Valuation
Opening
Class,
Sch
VI
to
Stock,
the
BBP No.
Reporting
Stdandard/ABAP
BP6.4.5
Categories
Plant,
Storage
Development
MB5B, MB51
Qty
Material
Purchased, Qty Consumed,
Type, Date Range,
Closing Stock.
Material Code
(Above details required for

Local
&
Imported
Raw
Material separately)
Valuation and consumption cost of Intermediates

002/RE
Stock Ledger
P-001
BBP_CO_
Company
Code,
BP6.4.5
Plant,
Material
Standard T Code
Type,
Material
MB5B
Group,
002/RE
P-002
002/RE
P-003
Stock
Balance
and
valuation (WAC)
Material
Movement
Summary
Date
BBP_CO_
Range
Company
BP6.4.5
Plant,
Material
Type,
Material
Code,
Group,
Date
Range,
Valuation
BBP_CO_
Class
Company
BP6.4.5
Plant,
Standard T Code
Code,
Storage
Standard T Code
MB52
Standard T Code
MB51
Location, Material
Type,
Material
Group,
002/RE
P-004
Production
Note Summary
Transfer
Range
Company
Plant,
Date
Code,
PP Development
Material
Type, Date Range,

Material Code
Page 187 of 206
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SUPERSEDES: N/A
URS Rpt
Report Name
BBP No.
Reporting
Stdandard/ABAP
No
002/RE
Material Mix Local &
BBP_CO_
Categories
Company
Code,
Development
Standard T Code
P-005
Imported.
BP6.4.5
Plant,
Material
MB5B, COOIS_PI
BBP_CO_
Type,
Material
BP6.4.4
Group,
Date
Range,
Material
002/RE
P-006
Plant
wise
inventory
Period
002/RE
P-007
002/RE
P-008
for
Average
Code
Company
Holding
Plant,
Material
different
Type,
Material
Code,
ABAP
Development
Intermediates Group.
Group,
Monthly
Range, Material
Company
Code,
ABAP
Plant,
Development
and
yearly
actual cost Sheet of a

product.
Quantitative
Date
Product
BBP_CO_
Code, Date Range

Company
Code,
Standard T Code
BP6.4.5
Plant,
Material
MB5B, MB51
to the Companies Act
Type,
Material
as under:
Group,
Date
Range,
Material,
details
required as per Sch.VI
Opening
Stock,
Manufactured
Qty
/
Valuation Class
Purchased, Qty Sold,

Closing Stock.
Valuation and consumption cost of Finished Goods

003/RE
Stock Ledger
P-001
BBP_CO_
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB5B
Location, Material
Type,
Group,
003/RE
Stock
Balance
and
BBP_CO_
Range
Company
Material
Date
Code,
Standard T Code
Page 188 of 206
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SUPERSEDES: N/A
URS Rpt
Report Name
BBP No.
Reporting
Stdandard/ABAP
No
P-002
valuation (WAC)
BP6.4.5
Categories
Plant,
Material
Development
MB52
Type,
003/RE
P-003
Material
Movement
Summary
Material
Group,
Date
Range,
Valuation
BBP_CO_
Class
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
Group,
003/RE
P-004
Production
Range
Company
Transfer
Note Summary
Plant,
Material
Date
Code,
Storage
PP
ABAP
Development
Location, Material
Type,
003/RE
P-005
Material
Material Mix Local &
BBP_CO_
Code, Date Range

Company
Code,
Imported.
BP6.4.5
Plant,
Storage
Standard T Code
MB5B, COOIS_PI
Location, Material
Type,
Group,
003/RE
P-006
Plant
wise
inventory
Period
for
Average
Holding
Plant,
different
Location, Material
Type,
Group,
P-007
Monthly
and
yearly
actual cost Sheet of a
Date
Range
Company
Product Segments.
003/RE
Material
Range
Company
Plant,
Code,
Storage
MM
ABAP
Development
Material
Date
Code,
Storage
(PP / CO / FI )
ABAP
Page 189 of 206
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PAGE:
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URS Rpt
Report Name
BBP No.
No
product.
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Location, Material
Development
Development
Type,
Group,
003/RE
P-008
Quantitative
details
required as per Sch VI
BBP_CO_
Range
Company
BP6.4.5
Plant,
Material
Date
Code,
Storage
Location, Material
as under:
Type,
Opening
Stock,
Qty
Group,
Maufactured/
Standard T Code
MB5B, MB51
Material
Date
Range

Closing Stock.
Valuation of Recovered Materials

004/RE
P-001
Material
Movement
Summary
BBP_CO_
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
Group,
004/RE
Stock Ledger
P-002
PTN Summary
P-003
Date
BBP_CO_
Range
Company
BP6.4.5
Plant,
Material
Type,
Material
Group,
004/RE
Material
Range
Company
Code,
Standard T Code
MB5B
Date
Code,
Plant,
Material
Type,
Material
Group,
Date
Range,
Material
PP
Development
Code
ABAP
Page 190 of 206
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PAGE:
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URS Rpt
Report Name
No
004/RE
Stock
P-004
valuation (WAC)
Balance
and
SUPERSEDES: N/A
BBP No.
Reporting
Stdandard/ABAP
BBP_CO_
Categories
Company
Code,
Development
Standard T Code
BP6.4.5
Plant,
Material
MB52
Type,
Material
Group,
004/RE
P-005
Quantitative
details
required as under:
Opening
Stock,
BBP_CO_
Range
Company
BP6.4.5
Plant,
Qty
Code,
Storage
Standard T Code
MB5B, MB51
Location, Material
purchased/ recovered ,
Type,
Qty
Group,
re-used,
Date
Closing
Stock.
Material
Date
Range
Valuation of Work in Progress

005/RE
P-001
Material
Movement
Summary
BBP_CO_
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
Group,
005/RE
In process stock details.
P-002
BBP_CO_
Range
Company
BP6.4.5
Plant,
Material
Date
Code,
Storage
Standard T Code
MB52
Location, Material
Type,
Material
Group,
Material
Code, Date Range,
Valuation of Traded Goods

006/RE
Stock Ledger
P-001
BBP_CO_
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB5B
Location, Material
Type,
Group,
Material
Date
Page 191 of 206
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URS Rpt
Report Name
BBP No.
No
006/RE
P-002
Stock
Balance
and
valuation (WAC)
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Range
Development
BBP_CO_
Company
Code,
BP6.4.5
Plant,
Material
Type,
Material
Group,
006/RE
P-003
Material
Movement
Summary
BBP_CO_
Range
Company
BP6.4.5
Plant,
Standard T Code
MB52
Date
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
Material
Group,
006/RE
P-004
Plant
wise
inventory
Period
for
Average
Range
Company
Holding
Plant,
Material
different
Type,
Material
Product Segments.
006/RE
P-005
Date
Quantitative
Code,
Group,
details
required as per Sch VI
BBP_CO_
Range
Company
BP6.4.5
Plant,
Code,
Storage
Location, Material
as under:
Type,
Stock,
Qty
Group,
Range
ABAP
Development
Date

Opening
MM
Standard T Code
MB5B, MB51
Material
Date
Closing Stock.
Valuation and consumption cost of Sub-contract Materials

007/RE
P-001
Stock Ledger Job out
BBP_CO_
Company
(Subcontract)
BP6.4.5
Plant,
Code,
Vendor,
Material
Type,
Material
Group,
Standard T Code
MB5B
Date Range
Page 192 of 206
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PAGE:
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URS Rpt
Report Name
No
007/RE
Stock
P-002
valuation (WAC)
Balance
and
SUPERSEDES: N/A
BBP No.
Reporting
Stdandard/ABAP
BBP_CO_
Categories
Company
Code,
Development
Standard T Code
BP6.4.5
Plant,
Material
MB52
Type,
Material
Group,
007/RE
P-003
Material
Movement
Summary
BBP_CO_
Range
Company
BP6.4.5
Plant,
Date
Code,
Storage
Standard T Code
MB51
Location, Material
Type,
Material
Group,
007/RE
Date
Range
Company
PTN Summary
P-004
Plant,
Code,
Vendor,
Material
Type,
Material
Group,
PP
ABAP
Development
Date Range
Valuation and consumption cost of Engineering Materials

008/RE
Stock Ledger
P-001
BBP_CO_
Company
BP6.4.5
Plant,
Code,
Storage
Standard T Code
MB5B
Location, Material
Type,
Group,
008/RE
P-002
Stock
Balance
and
valuation (WAC)
P-003
Material
Summary
Movement
Date
BBP_CO_
Range
Company
BP6.4.5
Plant,
Material
Type,
Material
Group,
008/RE
Material
BBP_CO_
Range
Company
BP6.4.5
Plant,
Code,
Standard T Code
MB52
Date
Code,
Storage
Standard T Code
MB51
Page 193 of 206
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URS Rpt
Report Name
BBP No.
No
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Location, Material
Development
Type,
Material
Group,
008/RE
P-004
Quantitative
details
required as under:
Opening
Stock,
BBP_CO_
Range
Company
BP6.4.5
Plant,
Date
Code,
Storage
Qty
Location, Material
Purchased,
Qty
Type,
Consumed,
Closing
MB5B, MB51
Material
Group,
Stock.
Standard T Code
Date
Range
Primary and Secondary Allocation of Expenses

009/RE
Cost Head Ledger
BBP_CO_
Controlling
BP6.4.2
Cost Center
BBP_CO_
Controlling
BP6.4.2
Cost Center
BBP_CO_
Controlling
BP6.4.2
Cost Center
BBP_CO_
Controlling
Area,
Standard T Code
Report.
Costing Trial Balance
BP6.4.2
BBP_CO_
Cost Center
Controlling Area,
KSB1
Standard T Code
P-005
009/RE
Plant
BP6.4.2
CO
Cost Center
Controlling Area,
KSB1
Standard
P-006
009/RE
secondary allocation.
Plant wise, production
BBP_CO_
Cost Center
Controlling Area,
Standard T Code
P-007
block wise, absorption
BP6.4.2
Cost Center
S_ALR_87013615
P-001
009/RE
CSA
P-002
009/RE
CSA Reconciliation.
P-003
009/RE
P-004
009/RE
GL
to
Cost
wise
Head
basis
of
Area,
Standard T Code
KSB1
Area,
Standard T Code
KSB1
Area,
Standard T Code
KSB1
rate (Variable & Fixed)

per
every
level
of
activity.
Page 194 of 206
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URS Rpt
Report Name
BBP No.
No
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Development
(MHR,LHR,QCR,Power)
009/RE
P-008
P&
Reconciliation-
Over/ under absorption
BBP_CO_
Controlling
Area,
BP6.4.2
Cost Center
Standard T Code
S_ALR_87013615
of Overheads & reasons

for that ie change in
level of activity, change
in planned cost.

010/RE
CSA Reconciliation.
P-001
010/RE
Costing Trial Balance
P-002
010/RE
P-003
P&
BBP_CO_
Company
BP6.4.2
Date
BBP_CO_
Company
BP6.4.2
Date
Reconciliation-
Code,
KSB1
Code,
Standard T Code
KSB1
Company
Over/ under absorption
Standard T Code
Code,
GAP
Code,
CO-PA
Date
of Overheads & reasons

for that ie change in
level of activity, change
010/RE
P-004
in planned cost
Plant wise, Segment
BBP_CO_
Company
wise,
Product
BP6.4
Plant,
wise
Gross
family
Margin
Product
Development
family, Date
Report
Cost Audit Record
Company
Code,
GAP
P-005
010/RE
Raw
Date
Company
Code,
ABAP
P-006
010/RE
report.
Unit cost
Q-007
should
010/RE
Material
of
Margin
product
consist
following
of
BBP_CO_
Date, Material
Company
Code,
Development
Standard T Code
BP6.4.6
Date
KE24
cost
Page 195 of 206
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URS Rpt
Report Name
BBP No.
No
components
Material,
ie
Raw
Direst
Cost,
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Development
Power/Fuel,
010/RE
Q-008
Manufacturing Ohds
Product wise, product
BBP_CO_
Company
group wise , batch wise
BP6.4.6
Date
profitability
Code,
Standard T Code
KE24
location
wise, business segment

wise, market wise (local
or export), consignment
wise,
customer
therapeutic
010/RE
Q-009
wise,
use
wise
profitability.
Through COPA,
real
time- on line Product
Company
Date
Code,
COPADevelopment
wise profitability should

be available in following
format.
Gross Sales
Less: Excise Duty
Less: Sales Tax
Net Sales Level I
Less:
Discount/Commission
Less:
Freight
Outward/Octroi
Net Sales Level II
Less: Cost of Goods
Sold (R.M. Cost, Direst
Page 196 of 206
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URS Rpt
Report Name
BBP No.
SUPERSEDES: N/A
Reporting
Stdandard/ABAP
Categories
Development
BBP_CO_
Cost Center,
Standard T Code
(Utility Template)
BP6.4.2
Date Range
S_ALR_87013613
Cost Centre Chart
BBP_CO_
Cost Centers,
Standard T Code
BP6.4.2
Date Range
KS13
No
Cost,
Power/Fuel,
Manufacturing Ohds)
Net Contribution
(Above
information
should also be available

for per MT for relative
analysis )
Utility Cost
011/RE
P-001
Maintenance
Template
Cost Chart
012/RE
P-001
URS
Out put Name
BBP No.
Output
Output
Standard/Devel
Categories/Data
opment
Number
Valuation and consumption cost of Raw Material/ Packing Material/

Lab Chemicals
001/O
UT-001
RM/ PM/ LC is valued
Company
at landed cost.
Plant,
Location,
Class,
Code,
Storage
MM
ABAP
Development
Valuation
Material
Type, Date Range,

001/O
Closing Stock qty and
BBP_CO_B
Material Code
Company
Code,
Standard T Code
Page 197 of 206
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URS
Out put Name
BBP No.
Output
Number
UT-002
value.
P6.4.5
SUPERSEDES: N/A
Output
Standard/Devel
Categories/Data
opment
Plant,
MB5B
Location,
Class,
Storage
Valuation
Material
Type, Date Range,

Material Code
Valuation and consumption cost of Intermediates

002/O
UT-001
Intermediate is valued
BBP_CO_B
Company
Code,
at cost of production.
P6.4.5
Plant,
Material
Type,
Material
Standard
MB5B
Group, Date Range,

Material,
002/O
UT-002
Valuation
BBP_CO_B
Class
Company
value
P6.4.5
Plant,
Material
Type,
Material
Code,
Standard
MB5B
Group, Date Range,

Material,
Valuation
Class
Valuation and consumption cost of Finished Goods

003/O
UT-001
Finished
valued
goods
at
cost
are
of
BBP_CO_B
Company
P6.4.5
Plant,
Material
Type,
Material
production.
Code,
Standard
MB52
Group, Date Range,

003/O
UT-002
BBP_CO_B
Valuation Class
Company
Code,
Standard
value
P6.4.5
Plant,
Material
MB52
Type,
Material
Group, Date Range,

Valuation Class
Page 198 of 206
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199 of 206
URS
Out put Name
BBP No.
Output
SUPERSEDES: N/A
Output
Standard/Devel
Categories/Data
opment
Standard T Code
Number
Valuation of Recovered Materials

004/O
UT-001
Recovered Material is
BBP_CO_B
Company
valued
P6.4.5
Plant,
Material
Type,
Material
at
standard
cost.
Code,
MB5B
Group, Date Range,

004/O
UT-002
BBP_CO_B
Material Code
Company
Code,
Standard T Code
value.
P6.4.5
Plant,
Material
MB52
Type,
Material
Group, Date Range,

Material Code
Valuation of Work in Progress

005/O
UT-001
WIP is valued at actual
BBP_CO_B
Company
material
P6.4.5
Plant,
Storage
Location,
Material
Type,
Material
Group,
Material
cost
previous
and
stages
overhead.
005/O
UT-002
Code,
Standard T Code
MB52
BBP_CO_B
Code, Date Range,

Company
Code,
Standard T Code
value.
P6.4.5
Plant,
Storage
MB52
Location,
Material
Type,
Material
Group,
Material
Code, Date Range,
Valuation of Traded Goods

006/O
UT-001
Traded
goods
are
valued at landed cost.
BBP_CO_B
Company
Code,
P6.4.5
Plant,
Material
Type,
Material
Standard T Code
MB52
Group, Date Range
Page 199 of 206
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PAGE:
200 of 206
URS
Out put Name
BBP No.
Output
SUPERSEDES: N/A
Output
Standard/Devel
Categories/Data
opment
Standard T Code
Number
006/O
Closing Stock Qty and
BBP_CO_B
Company
UT-002
value.
P6.4.5
Plant,
Material
Type,
Material
Code,
MB5B
Group, Date Range
Valuation and consumption cost of Sub-contract Materials

007/O
UT-001
Subcontract material is
BBP_CO_B
Company
valued
P6.4.5
Plant,
at
cost
of
production
Material
Code,
Vendor,
Standard T Code
MB5B
Type,
Material Group, Date

007/O
UT-002
BBP_CO_B
Range
Company
value.
P6.4.5
Plant, Material Type,
Code,
Standard T Code
MB5B
Material Group, Date

Range
Valuation and consumption cost of Engineering Materials

008/O
UT-001
Engineering material is
BBP_CO_B
Company
valued
P6.4.5
Plant,
Storage
Location,
Material
at
moving
average method.
Code,
Standard T Code
MB52
Type, Material, Date

Range
Primary and Secondary Allocation of Expenses

009/O
UT-001
009/O
CSA
BBP_CO_B
Controlling
Rate per TRT hrs.
P6.4.2
BBP_CO_B
Cost Center
Controlling
P6.4.2
Cost Center
UT-002
Area,
Standard T Code
Area,
KSB1
Standard T Code
KSBT

010/O
UT-001
Product wise , product
BBP_CO_B
Company
group wise, batch wise,
P6.4.6
Date
segment
profitability
wise
Product
Code,
Range,
Standard T Code
KE24
group,
Segment
Page 200 of 206
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PAGE:
201 of 206
URS
Out put Name
SUPERSEDES: N/A
BBP No.
Output
Standard/Devel
Categories/Data
opment
BBP_CO_B
Company
Standard T Code
Output
Number
010/O
Location
UT-002
Profitability.
P6.4.6
Date Range
KE24
Utility Cost Cost-centre
BBP_CO_B
Cost Center, Date
Standard T Code
wise
P6.4.2
Range
S_ALR_870136
wise
Code,
Utility Cost
011/O
UT-001
13
011/O
UT-001
Cost per unit of utility,
BBP_CO_B
Cost Center, Date
Standard Code
Yield and efficiency.
P6.4.2
Range
S_ALR_870136
13
9 Integrations Points
Process
BBP No.
Cost Element BBP_CO
FI/PS
GL
Account
MM
SD
creation
_BP5.1.1
needed
Material
2
BBP_CO
Costing
Master
_BP5.1.1
views
extended. In
PPQM/PM
is
are
material
master
FI Postings
BBP_CO
While
posting
FI
_BP6.3.2.
Entry Cost Object is
17
BBP_CO
necessary.
PP-PIProcess
_BP6.3.2.
manufacturing
Orders
17
process
As a part of
materials
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Process
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FI/PS
MM
SD
PPQM/PM
issued
process
to
order,
confirmations
will
be
done
and
is
technically
completed
for
PM-
BBP_CO
settlements.
Maintenance
Maintenance
_BP6.3.2.
Orders will be
17
consuming
Order
materials
and
maintenance
activities will be
identified.
Activity
prices
arrived through
CO process.
Internal order BBP_CO
When the assets/ are
Integration _BP6.3.3.
posted
With
orders, system will
to
internal
Assets/Expe
control the budgets.
nses
Statistical
will
be
capture
Cost Estimate
postings
made
to
additional
BBP_CO
information
Integrated with FI to Material
Master Data of
_BP6.3.4.
arrive
PP is used to
actual
over master
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Process
BBP No.
11
FI/PS
heads
Integration with
BBP_CO
Project System will
projects
_BP6.3.4.
settle the expenses
21
through
SUPERSEDES: N/A
MM
prices
SD
are
taken.
PPQM/PM
do
cost
estimates
settlement
structure of CO.
Job work
BBP_CO
Job
_BP6.3.4.
work
21
is
make
to
order
scenari
o
9.1 CO FI Integration
The operating chart of accounts is being shared by Financial Accounting as well as
Controlling. The general ledger accounts in the chart of account, will be created as cost
elements, based on the requirements of Controlling. Some of the Costs are not relevant for
Controlling module, i.e. profit / loss on sale of assets, foreign exchange gain or loss, etc..
These accounts will not be created as cost elements. Any posting to Cost Element GL
Accounts, system looks for a Cost Center, i.e. Cost Object and data automatically available
for CO for futher use and Allocation.
9.2 CO Material Management

The material master contains the profit center. Based on the material movement, value will
be captured to financial accounting along with profit center as account assignment. So that
profit center wise Balance sheet / Profit and loss account can be drawn.
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At the time of goods issue, system looks for a cost object, if the consumption account /
expenses account is a cost element. User has to enter the Cost center if it is possible (i.e. to
cost center). In some of the process, user can not enter the cost center, and the same has
to be defaulted, based on the profit center or valuation area.
Cost of Goods sold will be transferred to CO-PA for profitability analysis at the time of Sale of
the goods.
9.3 CO Sales and Distribution

Revenue will be transferred to CO-PA at the time posting the billing document. Along with
revenue, system will also transfer the COGS to CO-PA, to arrive the product contribution.
Profit center is being identified to Sales order, based on the Product is being sold (i.e.
material master).
9.4 CO Production Process

Cost Centres and Activity Types will be assigned in the PP Resources. Based on
this assignment, the overheads will be absorbed by the product and part of the
Standard Cost Estimate.
Process Order will be recognized as a cost object for posting of the values to CO.
The profit centre will be identified based on the material master (ie. Manufacturing
goods).
9.5 CO Plant Maintenance
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Maintenance activity is being carried out through maintenance order. The

maintenance cost inclusive of Spares consumption, external service charges and
Internal activity cost (labour charges). Based on actual consumption the cost will be
captured into the maintenance order. Based on maintenance activity, the settlement
rule will be maintained and transferred the cost to the respective cost object i.e.
Production cost centre or service cost centre, which will be determined based on the
equipment / functional location.
10 Authorization
Authorization matrix will be prepared as per the Arch role matrix.
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History of Change
Date
Version
Section
Reason for Revision
Number
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Business Blue Print

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Ms. Himanshi Parekh

Mr. Govind Joshi

Mr. Paresh Jain

2010 Zensar Technologies Limited

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3rd December, 2010

Bhushan P Arch Pharmalabs Limited

2010 Zensar Technologies Limited

Business Blue Print

2010 Zensar Technologies Limited

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Financial Accounting Key Components..................................................................................12

Credit Control Area...........................................................................................25

Financial Management Area.............................................................................25

Planning Plant and Maintenance Plant..............................................................26

Controlling Master Data............................................................................................................ 33

2010 Zensar Technologies Limited

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5.1.9 BBP_CO_MD5.1.9 Profit Centers....................................................................44

Raw / Packing and Lab Chemicals........................................................................... 47

Semi-finished and Finished Goods...........................................................................48

Stores and Spares / Operating Supplies...................................................................49

Material Types, Valuation Type, Valuation Class.........................................................50

Controlling Master Data Business Process Steps and Transactions..........54

Business Processes Controlling.......................................................................................... 58

Cost Center Planning............................................................................................. 66

Activity Type Planning............................................................................................ 67

Activity Dependent Overhead Planning.....................................................................69

Activity Independent Overhead Planning...................................................................70

Statistical Key Figure planning................................................................................ 71

Periodic Allocation of Overheads:............................................................................ 71

Activity Prices for a Cost Center.............................................................................. 74

Cost Center Planning -Transaction / Activity Chart:.....................................................75

Cost Center Planning Integration:..........................................................................77

Actual Posting in Cost Center Accounting.................................................................77

Period End Closing Activities in Cost Center Accounting..............................................79

Actual overheads Accruals...................................................................................... 80

Actual Allocation Assessment Cycle.................................................................80

Actual Allocation Distribution Cycle...................................................................80

Actual Activity Price Calculation..........................................................................82

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CCA Period End Closing -Transaction / Activity Chart:...............................................83

CCA Period End Closing - Integration:...................................................................... 85

BPP_CO_BP6.3.3 Internal Order Accounting...................................................87

Internal Order Planning.......................................................................................... 88

Budget Management for Internal Orders...................................................................88

Availability Control for Internal Orders.......................................................................90

Actual Posting to Internal Order............................................................................... 90

Period End Closing - Internal Order Settlement..........................................................91

Period End Closing - Carry forward to next year.........................................................91

Internal order - Transaction / Activity Chart:...............................................................92

Internal order - Integration:..................................................................................... 92

BPP_CO_BP6.3.4 Product Cost Controlling.....................................................93

Product Cost Planning........................................................................................... 93

Overhead Cost Sheet............................................................................................ 95

Valuation Strategy for Material Component:.........................................................100

Cost Component Structure................................................................................... 101

Standard Cost Estimate....................................................................................... 103

Base Planning Object Costing............................................................................... 104

Additive Cost...................................................................................................... 105