Process: Product Costing

Responsibility area: Internal Control Monitor 

Risk

Wrong fixed cost absorption in inventory, plant costing model do not comply with group rules  

Objective

Service Unit Management accounting control plant costing model yearly update

Process description

Costing model is the document which explains the way fixed costs and depreciations are allocated to product costing in order to determine the cost of sales and inventory valuation. FRA are in charge of preparing the costing model based on the budget using the respective template of WP2 or provided by SU MAC (e.g. extract of the cycle structure for PF2).

The instruction notes to complete the template of WP2, under FRA responsibility, are below:

Costing Model - FRA preparation

FRA asks for the validation of the GCCO.

Control description

Service Unit Management Accounting reviews through a checklist, costing models prepared by each Finance responsible assigned (FRA) of his/her zone and the respective update in SAP done by Service Unit Management accounting. SU MAC is making sure that costing model has been reviewed and validated by the GCCO for each plant in the scope of internal control

Scope
WP2 / PF2
Frequency

Due date : January

Control owner

Service Unit Management accounting - Costing user by region

References


Control evidences

IAC 01.01 Validation of costing model by SU MAC.xlsx

  • Checklist
  • Costing model - Provided by FRA
  • Validation from GCCO - Provided by FRA

Costing Model - FRA preparation  << >> OP.013 & OP.028



  Guideline  

   
   
   
 I am informed once the standard rates are calculated in the system  
   
 I inform the requester that the standard rates are in the system  
   

Use transaction ZWFAR600 to extract the cycles for the year that is ending.

Choose the following variant "COSTING MODEL"

Updating the cycles and start date


Cycle should be completed like this:

  • FO01CCCC*: for COPA cycles
  • CHEFCCCC*: for Assessment cycles

Start date, to be completed with the full year that is just ending

And now, transaction can be executed to get the following view


 

Below see the details of this report:

 

When transction ZWFAR600 is executed and you have the list of all cycles, it is time to extract to excel.

1) Go to List → Export → Spreadsheet

This excel document will be the COSTING MODEL of your company.

1) Send through Solvay One the COSTING MODEL extracted in previous step to the FRA/Controller to be used in the review of the cycles for the new year

After the review, I receive from FRA the cycle changes for the new year.

  • With the changes highlighted in the COSTING MODEL
  • Or, changes detailed in the freshdesk

Depending on the type of cycle, I use KSU2, KEU2, KSV2 


 

 I inform FRA/Controller that the cycles are updated in SAP