What is POC method in SAP CO-PC - Product Cost Controlling?

SAP Term: POC method

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: A method of results analysis that valuates the revenue of an order in proportion to the Percentage of Completion POC. The calculated revenue for a long-term order is calculated by multiplying the planned revenue by the actual costs divided by the planned costs the POC. The calculated revenue is then compared to the actual revenue: If the actual revenue is less than the calculated revenue, inventory from which revenue can be generated is created. If the actual revenue is greater than the calculated revenue, a revenue surplus is created.

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• Key Concepts: 
  The POC (Price Overhead Cost) method is a cost calculation method used in SAP's CO-PC Product Cost Controlling component. It is used to calculate the cost of a product based on the price of the components used to make it, plus an overhead cost. The overhead cost is calculated as a percentage of the total price of the components. 
  
  How to use it: 
  To use the POC method, you must first enter the prices of all components used in the product. Then, you must enter an overhead cost percentage. This percentage will be applied to the total price of all components to calculate the total cost of the product. 
  
  Tips & Tricks: 
  When using the POC method, it is important to ensure that all components are accurately priced and that the overhead cost percentage is correctly entered. This will ensure that the total cost of the product is accurately calculated. 
  
  Related Information: 
  The POC method is one of several cost calculation methods available in SAP's CO-PC Product Cost Controlling component. Other methods include Activity-Based Costing (ABC) and Standard Costing (SC).