Interview Questions.

Question 1. What Are The Important Terminologies In Product Costing?

Answer :

Results Analysis Key – This key determines how the Work in Progress is calculated
Cost Components - The split of the prices which get contemplated within the product costing eg. Material Cost, Labour Cost, Overhead etc
Costing Sheets - This is used to calculate the overhead in Controlling
Costing Variant - For All manufactured products the fee manage recommended is Standard Price. To come up with this widespread price for the completed correct cloth this cloth must be costed. This is completed the usage of Costing Variant. Further questions down beneath will give an explanation for this concept higher.
Question 2. What Are The Configuration Settings Maintained In The Costing Variant?

Answer :

Costing variant bureaucracy the link among the utility and Customizing, due to the fact that all cost estimates are finished and saved with regards to a costing version. The costing variation carries all of the manage parameters for costing.

The configuration parameters are maintained for costing type, valuation versions, date control, and quantity structure manipulate. In costing kind we specify which area within the material grasp have to be updated.

In valuation variant we specify the following

the series or order the machine must cross about accessing fees for the cloth master (planned price, wellknown price, transferring average fee and many others).
B) It additionally contains which fee have to be considered for pastime fee calculation and .
How the machine must select BOM and routing.
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Question 3. How Does Sap Go About Costing A Product Having Multiple Bill Of Materials Within It?

Answer :

SAP first prices the bottom degree product, arrives on the price after which goes and value the following maximum stage and in the end arrives on the price of the very last product.

Question 4. What Does The Concept Of Cost Roll Up Mean In Product Costing Context?

Answer :

The cause of the fee roll up is to encompass the fee of products synthetic of all substances in a multilevel production shape on the topmost degree of the BOM(Bill of Material) The costs are rolled up routinely the usage of the costing ranges.

The system first calculates the fees for the materials with the bottom costing degree and assigns them to price additives.
The substances in the subsequent highest costing level (including semifinished materials) are then costed. The fees for the substances costed first are rolled up and grow to be a part of the fabric charges of the subsequent highest stage.
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Question 5. What Is A Settlement Profile And Why Is It Needed?

Answer :

All the charges or revenues which can be accumulated in the Production order or Sales order for example must be settled to a receiver on the stop of the length. This receiver will be a Gl account, a price center, profitability evaluation or asset. Also examine the question “What is a fee item “ in the phase Controlling.

In order to settle the costs of the production order or income order a settlement profile is needed. In a agreement profile you outline a number of manage parameters for agreement. You ought to outline the settlement profile before you may enter a settlement rule for a sender.

The Settlement Profile is maintained within the Order Type and defaults at some stage in growing of order.

Settlement profile consists of:-

the retention duration for the settlement files.
Valid receivers GL account, cost middle, order, WBS detail, fixed asset, fabric, profitability section, sales order, cost objects, order objects, business method
Document kind is likewise attached here
Allocation structure and PA switch shape is also attached to the agreement profile e.G. A1
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Question 6. What Is Transfer Or Allocation Structure?

Answer :

The transfer shape is what facilitates in settling the price from one cost object to the receiver. It is maintained in the Settlement profile defined above.

The Transfer structure has 2 elements:

Source of fee elements you need to settle
Target receiver whether it's far a Profitability segment or constant asset or fee middle
Question 7. What Do You Mean By Primary Cost Component Split?

Answer :

Primary value split is defined whilst you create a price component shape. When you switch on this placing, the primary value from the fee middle are picked up and assigned to the various cost additives.

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Question eight. How Do Primary Costs Get Picked Up From Cost Center Into The Cost Component Structure?

Answer :

This is feasible when you do a plan activity price calculation from SAP. The number one cost element structure is assigned to the plan model zero in Controlling.

Question nine. Is It Possible To Configure 2 Cost Component Structures For The Same Product In Order To Have 2 Different Views?

Answer :

Yes it's miles feasible. We create another price thing shape and assign it to the primary value element structure. This fee thing structure is known as Auxiliary cost component shape which presents some other view of the price element shape.

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Question 10. How Do You Go About Configuring For The Sales Order Costing?

Answer :

The waft is as follows:

Sales order -> Requirement Type-à Requirement Class-> All settings for controlling

In a income order you have a requirement type .In configuration, the requirement Class is hooked up to the requirement kind and on this requirement magnificence all configuration settings are maintained for controlling.

In the requirement magnificence we connect the costing variation, we connect the situation kind EK02 in which we need the income order price to be updated, and the account mission class. In the account venture class we outline whether or not the sales order will carry value or no longer. In case if we do now not need to hold cost on the income order we preserve the consumption posting discipline clean. We also outline here the Results Analysis version which facilitates to calculate the Results Analysis for the Sales order if required.

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Question eleven. What Is Mixed Costing In Sap? Give An Example To Explain?

Answer :

Mixed costing is needed when specific methods are used to fabricate the same cloth. Mixed costing is needed if you have special sources of supply for getting the material.

Let us take an example:-

There is a completed proper Xylene which may be manufactured by way of three exceptional processes.

The first manner uses an vintage device and labour. The processing time is 9 hrs to manufacture.

The 2d procedure uses a semi-automatic machine and labour. The processing time is 7 hrs to manufacture.

The 1/3 technique makes use of a completely automated machine and the processing time is five hrs. Thus fee of manufacture for the 3 methods is special. By the usage of Mixed costing you could create a mixed rate for the valuation of this finished accurate.

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Question 12. What Configuration Needs To Done For Using Mixed Costing?

Answer :

Quantity Structure type for combined costing ought to be configured. Here we specify the time dependency of the structure type .

The following options exist

You have no time dependency.
It is based totally on financial year
It is primarily based on length
This quantity structure kind is then assigned to the costing model.

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Question 13. Lets Say For A Product There Exists Three Production Versions. Explain The Process How You Would Go About Creating A Mixed Cost Estimate?

Answer :

The method of making a Mixed cost estimate would be as follows:-

Create procurement options for each of the manufacturing version.
Define Mixing ratios for the procurement alternatives
Select the configured quantity structure kind and execute a material price estimate based totally at the costing version.
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Question 14. What Is Mixing Ratios And Why Are They Required To Be Maintained Before Creation Of Cost Estimate?

Answer :

Mixing ratios are weighting factors assigned to the procurement alternatives. This weighting aspect is obtained from the making plans branch primarily based on using the procurement options during the making plans 12 months.

For e.G.

Procurement alternative 1 (manufacturing model 1) forty% can be synthetic

Procurement alternative 2 (production version 2) 35% will be manufactured

Procurement opportunity 3 (production model three) 25% will be manufactured

This % can be maintained as blending ratios.

Thus when machine calculates the blended fee estimate, machine will first price each of the production version and then multiply each of the charges with the weighting elements.

Thus

240 (value of prod. Vers 1) X forty = 9600

210 (fee of prod. Vers 2) X 35 = 7350

a hundred and sixty (fee of prod vers 3) X 25 = 4000

Mixed fees 17350/one hundred = 173.5

Question 15. There Are Result Analysis Categories In Wip (paintings In Process). What Do You Mean By The Result Analysis Category Reserves For Unrealized Costs?

Answer :

If you're calculating the work in process at real charges, the device will create reserves for unrealized prices if the credit for the manufacturing order primarily based on goods receipts is greater than the debit of the order with real prices incurred. The Result evaluation category RUCR (Reserves for unrealized fee) might want to be maintained. Normally this is not maintained in maximum of the corporations.

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Question sixteen. Which Is The Result Analysis Category Which Is Normally Maintained For The Wip (work In Process) Calculation?

Answer :

The Result analysis category WIPR - Work in method with requirement to capitalize costs is commonly maintained for WIP calculation

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Question 17. How Do You Define A By-product In Sap?

Answer :

A By-product in SAP is defined as an item with a bad quantity within the Bill of Material. By-product reduces the value of the main product. There is no Bill of Material for a By-product.

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Question 18. How Do You Calculate The Cost For A By-product In Sap?

Answer :

The fee for the By-product is the internet realizable cost. This is manually maintained within the gadget for the by-product through transaction code MR21 Price trade.

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Question 19. How Do You Define A Co-product In Sap?

Answer :

A Co-product (primary product or derivative) is indicated with the aid of a tick in the costing view of the material grasp. In the BOM all the number one merchandise are represented as an item with negative amount. A number one product is also indicated as a co-product within the BOM of the main coproduct.

For number one merchandise the expenses are calculated the usage of the apportionment technique, at the same time as for by-products the net realizable cost approach applies.

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Question 20. Is It Possible To Use Standard Sap Co-product Functionality In Repetitive Manufacturing?

Answer :

No. It is not possible to use the Standard Co-product functionality in repetitive manufacturing

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Question 21. How Do You Got About Defining Co-product Functionality In Repetitive Manufacturing?

Answer :

In the Repetitive production you need to apply the Costing BOM for the other co-product. Through arithmetical calculation you need to maintain the quantities inside the costing BOM. This co-product will be proven as a negative object within the leading co-product.

Question 22. In The Above Scenario How Do You Know Which Cost Element Is Being Called For?

Answer :

In this case you need to the use simulation mode OMWB in MM and enter the material code plant and the movement kind 261 (issue towards manufacturing order). You will see the account modifier VBR and towards which the GL code is available.

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Question 23. What Is The Difference Between A Product Cost Collector And Production Order?

Answer :

Both of these are cost objects which gather manufacturing costs for synthetic product. Product value collector is a single order created for a material. All the prices throughout the month for that fabric is debited to unmarried product value collector. No costing through lot size is needed in case of product price collector. The latter is wherein there are many production orders for a unmarried fabric in the course of the month. Costs are amassed on each of this manufacturing order. Costing by lot size is the main requirement in case of production orders.

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Question 24. Why Is Preliminary Cost Estimate Required?

Answer :

The initial price estimate is needed for the following:-

Confirm the real activity quantities.
Evaluate paintings in method
Calculate production variances in variance calculation
Evaluate the unplanned scrap in variance calculation
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Question 25. How Are Scrap Costs Shows In The Standard Cost Estimate?

Answer :

Scrap fees are assigned to the applicable cost factor and may be shown separately for a material inside the costed multilevel BOM.

Question 26. How Are Scrap Variances Calculated?

Answer :

Scrap variance are calculated through valuating the scrap portions with the amount of the real prices less the deliberate scrap expenses.

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Question 27. What Do You Mean By Component Scrap And How Is It Maintained In Sap?

Answer :

Component scrap is the scrap of a cloth this is expected to occur throughout manufacturing. When an assembly is produced with this factor, the machine has to boom the component amount to permit to attain the required lot size. The factor scrap may be entered within the BOM item or inside the MRP 4 view of the fabric master

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Question 28. How Do You Configure Split Valuation?

Answer :

The configuration steps worried in break up valuation:-

Activate split valuation – Configure whether or not cut up valuation is allowed for the company code.
Determine the valuation categories and valuation types that are allowed for all valuation areas.
Allocate the valuation sorts to the valuation classes
Determine the local valuation classes for each valuation location and activate the kinds for use to your valuation place.
Question 29. What Are The Steps Involved Before You Run A Cost Estimate For A Split Valuated Material?

Answer :

The following are the stairs:-

Create procurement options based totally at the valuation types for the cloth.
Maintain Mixing ratios for the procurement options
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Question 30. How Do You Prevent The System From Calculating The Cost Estimate For Raw And Packing Material When You Run A Standard Cost Estimate For The Finished Goods?

Answer :

To prevent the system from calculating cost estimates for uncooked and packing cloth, you want to pick out the “No costing” checkbox inside the costing view of the cloth master.

Question 31. When A Standard Cost Estimate Is Run For A Finished Good Does Sap Calculate Cost Estimate For Its Components Such As Raw And Packing Material?

Answer :

Yes. SAP calculates the price estimate even for raw and packing cloth and stores it inside the popular price area for facts purposes