What is lower-level costs in SAP PP - Production Planning and Control?

SAP Term: lower-level costs

• Component: PP

• Component Name: Production Planning and Control

• Description: The costs in a costing that, occurred in the previous levels of the production structure, from the viewpoint of the current level.

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• Key Concepts: 
  Lower-level costs are costs associated with the production of a product or service. In SAP Production Planning and Control (PP), lower-level costs are used to calculate the cost of a product or service. This includes the cost of raw materials, labor, overhead, and other related expenses. 
  
  How to use it: 
  In SAP PP, lower-level costs are used to calculate the cost of a product or service. This is done by entering the cost of each component into the system. The system then calculates the total cost of the product or service based on these inputs. 
  
  Tips & Tricks: 
  It is important to ensure that all lower-level costs are accurately entered into the system in order to get an accurate cost calculation. Additionally, it is important to keep track of any changes in lower-level costs in order to ensure that the cost calculation remains accurate. 
  
  Related Information: 
  Lower-level costs are also known as direct costs or variable costs. They are different from overhead costs, which are fixed costs that do not vary with production levels. Additionally, lower-level costs can be used to calculate other metrics such as profit margins and break-even points.