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Master the concepts of SAP Product Costing (CO-PC) such as Cost Component Structure, Costing Types, Cost Object Controlling
Updated on Sep, 2026
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A warm welcome to the SAP Product Costing (CO-PC) course by Uplatz.
SAP Product Costing (CO-PC) is a module provided by SAP and is used for planning costs and establishing material prices. It helps in estimating the cost of goods sold manufactured and COGS of each for each product unit.
SAP Product Costing has two different types of material costing processes viz.
1) Material cost estimate with quantity structure
2) Material cost estimate without quantity structure
Material cost estimate with quantity structure works in combination of BOM (Bill of Material) and Routing assigned to it.
SAP CO Product Costing module is used to find the value of internal cost of products. It is also used for profitability and management accounting for production.
While configuring Product Costing, it involves two areas for setting −
Product Cost Planning
Cost Object Controlling
The basics of Product Costing is Cost Center Planning. The goal of cost center planning is to plan total dollars and quantities in each Cost Center in a Plant.
SAP CO-PC is one of the most important SAP components for manufacturing companies. The main purpose of SAP CO Product Costing or CO-PC is to calculate and show costs appearing during the production process. When costing with quantity structure is performed, the system uses master data from Logistics. Product cost planning function costs individual products precisely and provides various, flexible, and quick analysis options.
In principle, the data for CO-PC are obtained from the PP module, through Bill of Materials and Master recipes.
There are three necessary preconditions for good and reliable operation of the CO-PC module:
Properly defined master data structure (BOMs, Resources and Master Recipes)
Correctly defined CO structure (Cost centers and Profit centers)
Correctly defined structural parameters related to the way of monitoring costs
The following PP master data is necessary for Product Costing:
PP parameters in Material Master Data
Master Recipes with Bill of Materials
The following FI-CO master data is necessary for Product Costing:
FI-CO parameters in Material Master Data
Primary Cost Elements
Secondary Cost Elements
Structural parameters required for Product Costing define a method of calculating and analyzing production costs. There are nine major structural parameters:
Cost Components Structure
Production Overhead Costing Sheet
Production Variances
Cost Categories (Plan, Actual, Target)
CO-PC module covers an area of management of production costs, which technically covers three areas of work:
CO-PC-PCP - Product Cost Planning
CO-PC-OBJ - Cost object Controlling
CO-PC-IS - Product Cost Info System
Estimated cost of production is done prior to the start of production and as a result is a cost of making products and semi-finished products. The price comes on the basis of product structure, price of materials, the cost of activities, and correct overhead keys, and cost analysis is done using the Cost components structure. The calculated price can be released to the material master once per month. The difference compared to the previous price is posted to the special FI account.
Cost of PP orders are displayed as planned, actual, and target costs:
Planned costs are calculated when a PP order is created
Actual costs are the result of the posting of materials and activities
Target costs are calculated as part of the period closing procedure and represent normative costs for the actual quantity produced.
Reconciliation and Reporting
During the period closing, the system calculates the Variances or WIP (Work in Progress), depending on whether the PP orders are completed or not. The Product Cost info system contains two types of production reports:
Reports on current costs of PP orders
Drill-down reports based on specific data collection processes after PP orders are completed
Reports on current costs include data on the basis of production posting
The value of the quantities produced
The value of the consumed materials
Drill-down reports are based on a hierarchical basis. For them, it is necessary to use specific tools for collecting data from PP orders after the completion of the closing period procedure. The collected data are analyzed on the basis of a pre-defined data hierarchy.
Integration of SAP Product Costing with other SAP modules
SAP Product Costing is integrated closely with various SAP modules:
Materials Management (MM) module for material master record/purchase info record
Production Planning (PP) module for Bill of material (BOM), routing and work center
Cost Center Accounting (CO) module as information on cost centers, its linkage of the work center, activity types, and activity wise cost centers helps in determining conversion costs associated with the manufacturing process
In a similar manner, the output and results obtained from Product Costing can also provide useful information for various SAP modules:
Material Management (MM) module for material and stock valuation
Sales and Distribution (SD) module
Cost object controlling for calculating variances and WIP
Uplatz provides this detailed level of training on the SAP Product Costing (CO-PC) module covering the concepts and their application in the SAP system including a comprehensive explanation of the necessary configuration and management steps.
SAP Product Costing - Course Syllabus
Cost Component Structure
Working with the Controlling Area
Defining Assignments
Working with the Settlement Profile
In-depth knowledge of the SAP CO Product Costing (CO-PC) module
Become an SAP Finance / FICO / CO Consultant
Prepare for the SAP FICO Certification Exam
Check out the detailed breakdown of what’s inside the course
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