What is mixed costing in SAP? Give an example to explain.

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What is mixed costing in SAP? Give an example to explain.

Post  michael_fico on Fri Mar 23, 2012 6:45 pm


Mixed costing is required when different processes are used to
manufacture the same material. Mixed costing is required when you have
different sources of supply for purchasing the material.

Let us take an example:-
There is a finished good Xylene which can be manufactured by 3
different processes.

The first process uses an old machine and labour. The processing time is
9 hrs to manufacture.

The second process uses a semi-automatic machine and labour. The
processing time is 7 hrs to manufacture.

The third process uses a fully automatic machine and the processing
time is 5 hrs.

Thus cost of manufacture for the 3 processes is different. By using Mixed
costing you can create a mixed price for the valuation of this finished
good.

michael_fico

Posts : 163
Join date : 2012-03-23

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