Automation of Standard Cost Estimate (CK40N)

Introduction:
Calculation of standard cost is the annual event generally done at the beginning of financial year during Planning & Budgeting activities, which result into calculation and release of standard cost estimate.
CK40N is a powerful tool provided by SAP to calculate cost estimate with high level of accuracy for in-house produced material and material procured from outside. CK40N is executed in multiple steps from selection of material to release of cost estimate, which generally took of time to get executed. The purpose of this article is to specify how we can use the standard functionality of SAP to automate CK40N, for calculating cost estimates.

Automation of CK40N:
Product cost estimate through CK40N includes the below steps:

• Selection
• Structure Explosion for in-house produced materials
• Costing for all the materials at structure explosion
• Analysis for cost estimates
• Marking for cost estimate as future standard cost
• Release of future cost estimate as current standard cost estimates

Why Actual Activity Cost ZERO for Production Order

Purpose of writing this document is sometimes Actual Activity Cost does not get updated in KKBC_ORD against a production order. There are number reasons why activity cost not getting updated for production order as per SAP Note 380282 and the possible reason can be as below -

• The order must have a costing variant for actual costs (field CAUFVD-KLVARI).
• The confirmed operation must be relevant to costing (T430-KALKZ = "X"). This indicator is set in the operation control key.
• The order itself must have the "fully relevant to costing" attribute set (AFVGD-SELKZ = "X"). This indicator is copied from the routing and cannot be changed in the production order. For this, refer to SAP Note 378052, if necessary.
• The confirmed operation must have a work centre.
• The work centre must be assigned to a valid cost centre.
• In the work centre, a valid activity type as well as a formula must be defined for every activity whose costs you want to determine.
• These activity types also have to be specified accordingly in the order operation.
• For the activity types used in the work centre, the prices must be maintained for the cost centers of the work centre (transaction KP26).
• The confirmed operation must not be an external processing operation.
• During the confirmation, you must enter activities.

How to resolve CK466 error during confirmation production order

This time I will share my experiance for resvoling CK466 error which puzzled me a lot once before. I was serach CK466 in this community and found quite often questions casued by missing activity price in KP26.  In this case, you can use COFC to postprocess the CO document when you update price without reverse previouse confirmation.

However still some CK466 casued by mistical reason behind.  The solution given by the blog is not only valid for CK466 also valid for other CK errors during confirmation process.

Understanding the Standard Product Cost Estimate

Product costing is one of the key areas in Manufacturing and process industries. It is used for estimating and valuating the internal cost of a product.Product cost planning is used for estimating/predicting the cost incurred in producing a Finished Product . This estimate is also used for budgeting purpose . When the material is actually produced, the actual cost is incurred and the variance between planned cost and the actual cost is calculated. Based on the magnitude of variance, decision is taken to re-estimate the cost of the materials.

Standard Cost estimate is the basis of product cost planning . This is nothing but the estimation of cost of a particular product, being manufactured.

Before getting in to SAP terminologies, let’s relate it with a very simple practical scenario, so that it is more clear and understandable.
Suppose a company is manufacturing glass containers. The components used are

1. The Glass
2. The Cap