What is Reference and Simulation Costing in SAP CO-PC - Product Cost Controlling?

SAP Term: Reference and Simulation Costing

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: Tool for planning costs and setting prices in which items are entered manually in the form of a unit cost estimate. This cost estimate can be used as a building block in other cost estimates and as a basis for planning other objects.

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• Key Concepts: 
  Reference and Simulation Costing is a feature of SAP's Product Cost Controlling (CO-PC) component. It allows users to simulate the cost of a product or service before it is actually produced. This helps to ensure that the cost of production is accurately estimated and that the product or service will be profitable. 
  
  How to use it: 
  Reference and Simulation Costing can be used to simulate the cost of a product or service before it is actually produced. This can be done by entering the expected costs for each component of the product or service into the system. The system will then calculate the total cost of production and provide an estimate of the expected profit or loss. 
  
  Tips & Tricks: 
  When using Reference and Simulation Costing, it is important to ensure that all costs are accurately entered into the system. This includes not only the cost of materials, but also labor, overhead, and other costs associated with production. Additionally, it is important to consider any potential changes in market conditions that could affect the cost of production. 
  
  Related Information: 
  Reference and Simulation Costing is just one feature of SAP's Product Cost Controlling (CO-PC) component. Other features include Activity-Based Costing, Standard Cost Estimation, and Material Ledger. Additionally, SAP also offers a variety of other software solutions for managing product costs, such as SAP Business One and SAP ERP.