What is 'revenue surplus' in SAP CO-PC - Product Cost Controlling?

revenue surplus - Overview

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: A value calculated in results analysis that is equal to the difference between the revenue posted to the order and the revenue calculated on the basis of the percentage of completion. A revenue surplus is calculated when the Percentage of Completion method is used. It is essentially a reserve.

revenue surplus - Details

• 
  Key Concepts: 
  Revenue surplus is a term used in SAP's CO-PC Product Cost Controlling component. It is the difference between the total revenue generated from a product and the total cost of producing it. This difference is known as the revenue surplus. 
  
  How to use it: 
  Revenue surplus can be used to measure the profitability of a product. It can also be used to compare the profitability of different products and identify areas where costs can be reduced or revenue increased. 
  
  Tips & Tricks: 
  When calculating revenue surplus, it is important to include all costs associated with producing a product, including labor, materials, overhead, and any other costs that may be incurred. 
  
  Related Information: 
  Revenue surplus is closely related to gross margin, which is the difference between the selling price of a product and its cost of production. Gross margin is often used as an indicator of profitability, while revenue surplus can provide more detailed information about how much money a company is making from each product.