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 WP1 or provided by SU MAC (e.g. extract of the cycle structure for PF1). 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