| Difference between order costs, FTP, and standard cost price. |  |
| The calculation procedure of the estimated order costs is basically the same as the calculation of the standard cost price and the FTP inventory valuation-method price. This text only discusses the differences. The calculation of the estimated order costs uses other data sources. The estimated order costs are based on the: Ordered quantity in the production order Estimated materials Production planning The actual materials costs and the estimated material costs consist of aggregated cost components. This is in contrast with the cost-price calculation, which is based on detailed cost components. The cost price calculation does not include the calculation of phantom components. For estimated production order costs, the phantom items are included and calculated by detailed cost component. The planned quantity of the phantoms is determined by a lot-for-lot explosion. For the estimated order costs, only the item receipt surcharges (for end items) are calculated. The fixed costs are excluded from the estimated order costs, if one of the following check boxes is cleared: The Include Fixed Costs in Valuation Price check box in the Cost Price Calculation Parameters (ticpr0100m000) session. The Include Fixed Costs in Project Valuation check box in the Project Control Parameters (tipcs0100m000) session. The calculation is influenced by the Financial Transactions by Work Center check box in the Shop Floor Control Parameters (tisfc0100s000) session. If the Production Results on Work Center check box is selected, for every operation the estimated order cost is accumulated from this operation and from previous operations. The amount is stored on the WIP transfer cost component. Estimated order costs do not lead to financial transactions. The estimated order cost are used for: the determination of the production results WIP transfer prices preclosure posting of surcharges. Subcontracting is the process of outsourcing a part of the production process to a supplier. Two types occur: Unplanned subcontracting Planned subcontracting The order estimate always includes costs for subcontracting. Related topics Calculating the standard cost price Cost-price calculation for a manufactured item |