What is target costs in SAP CO-PC - Product Cost Controlling?

SAP Term: target costs

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: The costs expected to be incurred when a specific quantity is produced. In Cost Object Controlling, the target costs are calculated on the basis of the planned values of a service unit such as the planned cost of a production order and the control quantities such as the yield delivered to stock. Target costs can be used for purposes such as: To determine variances To valuate work in process To valuate unplanned scrap

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• Key Concepts: 
  Target costs are a type of cost planning in SAP's CO-PC Product Cost Controlling component. Target costs are used to plan the expected costs of a product or service, and can be used to compare actual costs against the planned target costs. Target costs are typically based on historical data, market trends, and other factors. 
  
  How to use it: 
  Target costs can be used to plan the expected costs of a product or service. This can be done by entering the target cost into the system and then comparing it against the actual cost. This comparison can help identify areas where cost savings can be made or where additional resources may be needed. 
  
  Tips & Tricks: 
  When setting target costs, it is important to consider all relevant factors such as historical data, market trends, and other factors. Additionally, it is important to regularly review and update target costs as needed in order to ensure accuracy and relevance. 
  
  Related Information: 
  For more information on target costs in SAP's CO-PC Product Cost Controlling component, please refer to the official SAP documentation here: https://help.sap.com/viewer/product/SAP_CO-PC/7.5/en-US