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What is Product Cost Planning?

Product Cost Planning is an area within Product Cost Controlling where you can plan costs for materials without reference to orders, and set prices for materials and other cost accounting objects. You can use Product Cost Planning to analyze your product costs, such as for Manufactured materials and Services.

You use Product Cost Planning to: calculate the non-order-related cost of goods manufactured (COGM) and cost of goods sold (COGS) for each product unit, establish how the costs are broken down for each product, and to calculate the value added for each step of the production process (cost rollup). In addition you can optimize the cost of goods manufactured through comparison costing with the Product Cost Controlling Information System, support make-or-buy decisions and provide information for other SAP applications, such as: Standards with which to assess production efficiency in Cost Object Controlling (CO-PC-OBJ),  Price Update and Profitability Analysis (CO-PA) and Sales Pricing (SD).

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