How to configure Mixed Costing

Former Member

May 17, 2010 4 minute read

61318,363

Mixed costing is very useful in some cases. For example, it’s the only way to release a standard cost estimate for each procurement alternative that is associated with a valuation type.

Recently I got some requests to explain in details how the mixed costing works. I hope this blog can help to explain.

The prerequisite for the mixed costing is as below:

– A quantity structure type is configured in the customizing

– This quantity structure type is associated to a costing version in the Customizing.

– The Procurement alternatives for the material have bee defined

– The mixing ratios for the procurement alternatives are defined based on the quantity structure type

– The material is costed with the above-defined costing version.

1. Define the quantity structure type

The path to configure mixed costing is as below (ECC 6.0):

The tcode for quantity structure type is OMXA.

Now I created the qty structure type “MIX”.

“Time Dependency” – This controls the time period in which the quantity structure will be used. It can be time indepenent, based on fiscal year, or based on each period.

“Percent validation” – Tick this indicator if you want to ensure that the sum of the existing mixing ratios for a material and quantity structure type totals 100%.

2. Associate the quantity structure type to a costing version

The path is right after that for the quantity structure type.

For the attached screenshot, the mixed costing will be called with the qty structure type MIX, when costing version = 1 & costing type = 19, or when costing version = 99 & costing type = 01 & valuation variant = 001. The system will not do mixed costing for the other combinations of costing version & costing type & valuation variant.

In this transaction, you can also define:

– Variant for transfer price determination

– Exchange rate type for currency translation

The configuration for the costing version can also be checked via costing variant configuration(tcode OKKN). It’s a more convenient way as the configuration is based on the combination.

In the Assignment tab, click the costing version button.

You’ll see for the costing variant PPC1 (costing type 01, valuation variant 001), costing version 99 is assigned the qty structure type “MIX”.

3. Define procurement alternatives

The tcode is CK91N. Here we need to create the procurement alt per material/plant.

I created two proc alternatives for different versions. It’s also possible to create alternatives for different valuation type/process cateogry/etc…

For process category

– Production

you can choose to create procurement alternatives for in-house production either with production versions or by using the BOM and routing.

– Purchase order

You can then enter a vendor and the relevant purchasing org in the initial screen.

In the cost estimate for a procurement alternative with reference to a vendor, strategy “L” (price from purchasing info record) is always automatically set to highest priority strategy. If you want to have a different logic, you may consider note 636967 and 319832.

You can also create an unspecified procurement alternative. To do this, do not enter a vendor or a purchasing organization. The material is then valuated with the prices in the material master and not using the purchasing info record.

– Subcontracting

In this case the system will require you to enter the information on the BOM, vendor and purchasing org.

– Stock transfer

You’ll be required to enter the source plant

4. Define Mixing Ratios for the procurement alternatives

The tcode is ck94

Here we can create the mixing ratios for the material per qty structure type.

Since our Qty Structure type “MIX” is based on fiscal year, here we only need to enter the “fiscal year” information.

If it’s based on period, we need to create the mixing ratios for each period.

Here all the proc alt created via CK91N will be displayed. And you can assign the mixing radio to them as you want.

– MR indicator

Set this indicator if you want to include a procurement alternative in mixed costing. It will ensure this procurement alt will be included in a mixed costing (even with a weighting of 0).

– Mixing Ratio

This is the most import figure in this transaction. You can enter equivalence numbers or percentages. But if “Percent validation” is ticked for the qty structure type, the sum of the existing mixing ratios must totals 100%.

5. Cost the material with the above-defined costing version.

Create a cost estimate for material YS-FRAME-01/plant IWS0 with costing variant PPC1 and costing version 99. The mixed costing is successfully carried out, as expected.

Please note, the costing lot size of mixed costing is different with the normal costing.

For more information please refer to note 402440, which provided very detailed explanation of the logic together with some examples.

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Former Member

May 31, 2010 at 9:00 pm

Hi Expert,

When i will post MB1B, system occur a error message F5800 of Inconsistent currency information as below:

Inconsistent currency information

Message no. F5800

Diagnosis

The currency information for the financial accounting component must be transferred fully for each currency type.

If, for example, the sending application sends corporate group currency data to Accounting, this currency data must be transferred for every company code line item.

An error has occurred for line item '0000000002' of the financial accounting document (company code '5000') with currency type '12' (currency key 'CNY'). This could be for one of three reasons:

Line item '0000000002' does not have any currency data for currency type '12', although at least one other line item has currency data for currency type '12'. Line item '0000000002' contains currency data for currency type '12', although at least one other line item contain no currency data for currency type '12'.

Line item '0000000002' has no currency data for currency type '12', although the currency type '12' corresponds to the local currency ( currency type '10').

System Response

Data processing within Financial Accounting can only take place with consistent currency information.

Procedure

The calling application probably contains a system error. Contact the calling application to locate the error.

PS: I have already activated transfer price with material ledger.

Could you please help to solve it? tks.

Like 0

Former Member

September 12, 2015 at 8:44 am

One of the best document on Mixed Costing !

Regards,

Sharvari Joshi.

Like 0

KAPIL MEHTA

February 28, 2018 at 2:42 pm

I read your article and it is very informative. I just have one query - Can you please suggest standard SAP report which gives standard cost breakup along with procurement alternative level information, if product involved Mixed costing.

I have checked S_ALR_87099930 & S_P99_41000111, but they do not show name/description/identification of Procurement alternative.

Regards

Kapil

Like 0

Former Member

March 29, 2018 at 2:27 am

Hi Expert,

Can this set up be apply for one material which have been set up two difference BOM and two difference production Line?

thank you,

TZM

Like 0

Tapan Rana

February 1, 2021 at 11:02 am

Yes

Like 0

Maria Cirjan

November 3, 2022 at 11:54 am

Hi,

Thank you for the very good description. I have managed to setup all settings displayed above and run costing run via CK40n.

I am facing two issues:

after running ck40n the material price still appears with status KA - costed w/o errors instead of released w/o errors. (mm03 doesn't execute it goes into an infinite loading loop for the mixed costing material)

i have other materials set up with different costing version for which I am no longer able to run a second costing run in the same period.

Any suggestions would be highly appreciated

Like 0

Mixed-Costing (a)Within-a-PLANT (b) Across-Plant/Comp.Code

SAP mixed costing –> to cost a material using multiple alternative methods, e.g. when you manufacture a material with different internal processes, then specify these through separate production versions. When we execute a cost estimate the system calculates the cost for each production version then calculates an average unit cost using weighting factors. When we display a cost estimate with transaction CK13N, we display the total cost and details of each procurement alternative.

Set-up :

CK91 – define how the material is procured, either internally (prod. Versions) or externally

CK94 – specify weighting factors, e.g. production volumes to be produced for the year using each of the production versions

For actuals, a Production-order is produced with a specific production version (e.g. we select P-ver 0001). The target costs for the Production-order are calculated based on the cost estimate data related to that production version. The credit for production uses the weighted average standard cost calculated. The difference between the two multiplied by the production quantity is calculated and reported as mixed price variance when executing the variance calculation transaction (KKS1 / KKS2) using the standard delivered variance categories. When the unit cost of the production version used is higher than the standard cost, unfavourable mixed price variance is calculated; when it is lower, favourable mixed price variance is calculated.

Example : Within-a-Plant, Say one Finished Goods has two production-versions which individually cost as follows

When we set-up MIXED-costing in SAP, example say for month-08, a monthly mix of 20% from Prod.Version 0001 & 80% from Prod 0002, then at that point of time system will calculate the cost of the Finished-prod. as follows

CK11N, for the Product shows the Mixed-costing value as well as drill-down to Individual Production-Version.

Mixed-Costing within a Plant

And when we Create the production-Order, say with Version-‘0001’ then the Production-Order’s TARGET Cost is costed as per Version-0001 & the variance is created for the difference.

CK91 – For Production

CK94 – Set-up Production-MIX

Mixed Costing – Thru Procurement Alternatives (Purchase-order, Subcontracting, Stock-Transfer) etc

CK91 : Procurement Alternative

In Stock-Transfer, one can set-up special-procurement plant thru which STO will come to plant for which the Procurement Alternative is being generatedOne procurement alternative is Stock transfer from Plant10 to Plant 21

Similarly we can set-up Procurement-alternative with another Plant Stock-transfer as well as Vendor’s Purchase and Subcontracting.

Again in CK94, we can select specific alternatives for each month/year and define the MIXING Ratios

When do do Costing-run CK11N or thru CK40N, (below screen-shot is of CK11N), System computes the costing as per mixing-ratio defined in CK94.

Mixed-Costing (a)Within-a-PLANT (b) Across-Plant/Comp.Code

Set-up :

CK91 – define how the material is procured, either internally (prod. Versions) or externally

CK94 – specify weighting factors, e.g. production volumes to be produced for the year using each of the production versions

Example : Within-a-Plant, Say one Finished Goods has two production-versions which individually cost as follows

CK11N, for the Product shows the Mixed-costing value as well as drill-down to Individual Production-Version.

Mixed-Costing within a Plant

And when we Create the production-Order, say with Version-‘0001’ then the Production-Order’s TARGET Cost is costed as per Version-0001 & the variance is created for the difference.

CK91 – For Production

CK94 – Set-up Production-MIX

Mixed Costing – Thru Procurement Alternatives (Purchase-order, Subcontracting, Stock-Transfer) etc

CK91 : Procurement Alternative

Similarly we can set-up Procurement-alternative with another Plant Stock-transfer as well as Vendor’s Purchase and Subcontracting.

Again in CK94, we can select specific alternatives for each month/year and define the MIXING Ratios

When do do Costing-run CK11N or thru CK40N, (below screen-shot is of CK11N), System computes the costing as per mixing-ratio defined in CK94.

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Mixed Costing

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Created by Humberto Ordosgoitia, last modified by Feng Dong on Mar 19, 2021

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Mixed Costing

You can use Mixed Costing when:

- Use different production process to manufacture a product. - Use different sources for procuring a process.

A mixed cost estimate allows you to calculate a mixed price. You can update the mixed price as a standard price, and also use this mixed price to valuate materials controlled with S price.

To be able to create the mixed price, there must exist a procurement alternative for each of the production processes or supply sources.

The mixed price is resultant by applying a weighting factor for each of the cost estimates to the procurement alternatives using equivalence numbers. The system first costs the procurement alternatives, before mixing the cost estimates (using the defined mixing ratios) and calculating the mixed price.

How to carry out a mixed costing:

Define the Procurement alternatives: It is necessary to create one or more procurement alternative for each process category.

Define a quantity structure type in Customizing:

Define mixing ratios for the procurement alternatives in the application as based on the quantity structure type defined above:

Assign this quantity structure type to a costing version in Customizing:

You have carried out the material costing based on the above defined costing version:

Relevant notes

-If the costing lot size of a mixed costing cannot be explained please check the note 402440 which describes in detail how it is calculated.

-With mixed costing the system usually puts strategy 'Price form purchasing info record' to priority 1 if it is included in the valuation variant at any priority. Please see for further details notes:

898633 Mixed costing: Sequence of the valuation strategies. 319832 MixCostg: Only mat.master price w/cost est f.vendor.

-With the note 636967, when you enter strategy U (valuation price with USEREXIT) as priority 1, this strategy remains priority 1, and strategy L (price from purchasing information record), which is also required, receives priority 2.

-With mixed costing it is not possible to consider additive costs. Please see KBA note 1573495 ‘Additive Costs do not appear in a Mixed Costing Scenario’.

-Note 1995003 - CK74N/CK75N cannot be run in background.

-Note 1946259 - Dump RAISE_EXCEPTION in the program SAPLCKMLMVSCR running CK40N or CK11N

-With KBA 1664797 Release standard prices for valuation segments of split-valuated materials, it's possible to release the price on the valuation type level.

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Former Member

May 17, 2010 4 minute read

61318,371

Mixed costing is very useful in some cases. For example, it’s the only way to release a standard cost estimate for each procurement alternative that is associated with a valuation type.

Recently I got some requests to explain in details how the mixed costing works. I hope this blog can help to explain.

The prerequisite for the mixed costing is as below:

– A quantity structure type is configured in the customizing

– This quantity structure type is associated to a costing version in the Customizing.

– The Procurement alternatives for the material have bee defined

– The mixing ratios for the procurement alternatives are defined based on the quantity structure type

– The material is costed with the above-defined costing version.

1. Define the quantity structure type

The path to configure mixed costing is as below (ECC 6.0):

The tcode for quantity structure type is OMXA.

Now I created the qty structure type “MIX”.

“Time Dependency” – This controls the time period in which the quantity structure will be used. It can be time indepenent, based on fiscal year, or based on each period.

“Percent validation” – Tick this indicator if you want to ensure that the sum of the existing mixing ratios for a material and quantity structure type totals 100%.

2. Associate the quantity structure type to a costing version

The path is right after that for the quantity structure type.

In this transaction, you can also define:

– Variant for transfer price determination

– Exchange rate type for currency translation

The configuration for the costing version can also be checked via costing variant configuration(tcode OKKN). It’s a more convenient way as the configuration is based on the combination.

In the Assignment tab, click the costing version button.

You’ll see for the costing variant PPC1 (costing type 01, valuation variant 001), costing version 99 is assigned the qty structure type “MIX”.

3. Define procurement alternatives

The tcode is CK91N. Here we need to create the procurement alt per material/plant.

I created two proc alternatives for different versions. It’s also possible to create alternatives for different valuation type/process cateogry/etc…

For process category

– Production

you can choose to create procurement alternatives for in-house production either with production versions or by using the BOM and routing.

– Purchase order

You can then enter a vendor and the relevant purchasing org in the initial screen.

– Subcontracting

In this case the system will require you to enter the information on the BOM, vendor and purchasing org.

– Stock transfer

You’ll be required to enter the source plant

4. Define Mixing Ratios for the procurement alternatives

The tcode is ck94

Here we can create the mixing ratios for the material per qty structure type.

Since our Qty Structure type “MIX” is based on fiscal year, here we only need to enter the “fiscal year” information.

If it’s based on period, we need to create the mixing ratios for each period.

Here all the proc alt created via CK91N will be displayed. And you can assign the mixing radio to them as you want.

– MR indicator

Set this indicator if you want to include a procurement alternative in mixed costing. It will ensure this procurement alt will be included in a mixed costing (even with a weighting of 0).

– Mixing Ratio

5. Cost the material with the above-defined costing version.

Create a cost estimate for material YS-FRAME-01/plant IWS0 with costing variant PPC1 and costing version 99. The mixed costing is successfully carried out, as expected.

Please note, the costing lot size of mixed costing is different with the normal costing.

For more information please refer to note 402440, which provided very detailed explanation of the logic together with some examples.

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How to configure Mixed Costing

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