Additive Cost Functionality in SAP

What is the Additive Cost in SAP Product Cost Controlling (CO-PC)?

In SAP, additive costs are a feature within Product Cost Controlling (CO-PC) that allows users to manually add costs to a material’s cost estimate. These costs are not automatically derived from the standard quantity structure (e.g., Bills of Materials [BOMs] or Routings) but are necessary to accurately reflect the total cost of a material. Examples include freight, insurance, handling fees, or royalties—expenses that may vary or apply to specific scenarios.

Purpose: Ensure the material cost estimate includes all relevant expenses beyond what’s calculated automatically.

Transaction: Managed via CK74N (Create Additive Costs), with integration into the standard cost estimate (CK11N) when configured.

Outcome: These costs update the inventory valuation when the cost estimate is released (via CK24).

Additive costs provide flexibility for capturing one-off or external costs, making them valuable in industries where standard processes don’t cover all expenses.

How Additive Costs Work in SAP: Configuration and Process

Here’s a breakdown of how additive costs function in SAP, including configuration and execution steps.

1. Configuration Requirements

Costing Variant (Transaction OKKN):

Path: IMG > Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate with Quantity Structure > Define Costing Variants.

Enter transaction OKKN, select a costing variant (e.g., "PPC1" for standard cost estimates), and double-click to edit.

On the "Additive Costs" tab: Checkbox: "Include Additive Costs" → Check this to enable manual costs from CK74N in the cost estimate.

Optional: "Include Additive Costs with Stock Transfers" → Check if applicable for inter-plant movements.

Valuation Variant (Transaction OKK4):

Path: IMG > Controlling > Product Cost Controlling > Product Cost Planning > Define Valuation Variants.

Enter OKK4, select the valuation variant linked to your costing variant (e.g., "Z001"), and edit.

Under "Material Valuation, Field: "Additive Costs" → Set to "Include" to ensure additive costs are picked up during costing.

Cost Component Structure (Transaction OKTZ):

Path: IMG > Controlling > Product Cost Controlling > Product Cost Planning > Basic Settings for Material Costing > Define Cost Component Structure.

Enter OKTZ, select your cost component structure (e.g., "01"), and double-click "Cost Components".

Add a component (e.g., "Freight") and assign cost elements (e.g., 410000 for freight costs).

Note: Cost elements may not be required for some setups (like delta profit).

2. Process

Create Additive Costs (Transaction CK74N):

- Material: Enter the material number (e.g., "WIDGET-A").

- Plant: Specify the plant (e.g., "1000").

- Costing Variant: Select the configured variant (e.g., "PPC1").

- Costing Version: Default "01" (or as per your setup).

- Valid From/To: Enter dates (e.g., 03/01/2025 to 12/31/9999).

- Press Enter.

- Cost Entry Screen:

- Table with columns: Item, *Cost Element, Amount, Currency, **Unit*.

- Example Entry:

- Cost Element: 410000 (Freight).

- Amount: 20.00.

- Currency: USD.

- Unit: Leave blank or specify if per unit (e.g., EA).

- Save (Ctrl+S). The system confirms: "Additive costs saved."

Run Standard Cost Estimate (Transaction CK11N)

Release Cost Estimate (Transaction CK24):

Example Scenario: Freight Costs in Additive Costing

Let’s illustrate with a product, "Widget-A," manufactured in Plant 1000.

Business Context

- Standard Cost Components:

- Raw Material: $100.

- Labor: $50.

- Overhead: $30.

- Total Standard Cost (via CK11N): $180.

- Additional Freight Cost: $20 per unit (not in BOM or routing).

Steps in SAP

1. Configure Additive Costs:

- In OKKN, enable "Include Additive Costs" for costing variant PPC1.

- In OKK4, set "Additive Costs" to "Include" in valuation variant Z001.

2. Enter Additive Costs (CK74N):

- Material: WIDGET-A.

- Plant: 1000.

- Costing Variant: PPC1.

- Cost Element: 410000 (Freight).

- Amount: $20.

- Save.

3. Run Cost Estimate (CK11N):

- Material: WIDGET-A.

- Plant: 1000.

- Costing Date: 03/02/2025.

- Result:

- Raw Material: $100.

- Labor: $50.

- Overhead: $30.

- Additive Cost (Freight): $20.

- Total: $200.

- Save.

4. Release Cost Estimate (CK24):

- Plant: 1000.

- Marking: Select WIDGET-A → Execute.

- Release: Select WIDGET-A → Execute.

- Result: Standard price in material master (MM03, Accounting 1 view) updates to $200.

Result

The freight cost ($20) is seamlessly included in the total cost ($200) via additive costs, ensuring accurate inventory valuation.

Integration with Other SAP Modules

Material Master: The released cost ($200) updates the standard price, used for inventory valuation in *Materials Management (MM)*.

Material Ledger (Optional): If active, additive costs feed into actual costing processes, refining periodic valuations.

Financial Accounting (FI): Cost elements (e.g., 410000) ensure proper posting to the general ledger.

Conclusion:

Additive costs in SAP enhance cost estimates by allowing manual inclusion of expenses like freight or handling fees. Through transactions like CK74N, CK11N, and CK24, and proper configuration (OKKN, OKK4, OKTZ), you can ensure all costs are captured. The example of Widget-A shows how a $20 freight cost is added to a $180 standard cost, resulting in a $200 total, visible and actionable in SAP screens.

Key Takeaway: This functionality enhances cost management by bridging gaps in standard costing processes.

Note on SAP S/4HANA:?The additive cost functionality in SAP S/4HANA remains fundamentally the same as in earlier SAP systems. The core transactions (CK74N, CK11N, CK24) and logic are unchanged. However, S/4HANA leverages the HANA in-memory database for faster processing and offers an optional SAP Fiori interface alongside the SAP GUI, improving user experience and performance.