Testing cost estimates

A cost estimate is a calculation, and calculations can be tested against an independent expectation. The risk in product costing is rarely a crash; it is a plausible-looking number that is wrong because one ingredient was missing or stale. Testing has to catch those numbers before they are released, because release revalues inventory.

Build independent expectations

Pick a sample of materials that covers the variety: a simple purchased-component product, a multilevel product, a product made in both plants, a new product, and one with an alternative production version. For each, work out the expected cost outside SAP from the BOM, routing, activity prices and overhead rates, using the same structure as the itemization. For CMC-ALT-100 in Detroit, the expectation is USD 150.00 with the split shown in lesson 4; in Chicago, USD 156.00.

Test the whole run, not just samples

Samples prove the logic. The costing run proves the coverage. For the full run, the test evidence is:

• A costing log with no errors, and every warning either fixed or explained.
• The analysis against the current standard, with a threshold, for example any change above 5% listed and explained by its owner.
• A check that the sum of cost components equals the total for every material.
• For a conversion program like Contoso's, a comparison with the ECC costing run for the same year in the rehearsal client.

Test marking, release and revaluation

Marking and release are tested in a client where stock exists. Before release, record stock quantity and value of a few materials. After release, the current price should equal the marked future price, the previous price should hold the old standard, and the revaluation document should equal quantity times the price difference. For 100 alternators in Detroit and a price change from USD 150 to USD 152, the expected revaluation is USD 200. Also test the negative case: a second release in the same period should not be possible.

Who owns the differences

Most findings in a costing test are not controlling defects. A changed component price belongs to purchasing, a changed routing time to production engineering, a changed activity price to the cost center owner, a changed BOM to engineering. Route each finding to its owner with the material, the itemization line and the expected versus actual value. Priya tracks them in the program's defect list in SAP Cloud ALM like any other test finding, so the release decision can see which ones are fixed, accepted or still open. A finding that is "accepted" needs the owner's name and reason, because the accepted value will drive inventory valuation for a year.