FICO Material Ledger Part 2: The Actual Costing Run Step by Step

📌 KEY POINTS
✅ The actual costing run is managed in the costing cockpit (CKMLCP) for a set of plants and a period.
✅ Single-level determination assigns each material's own price differences; multi-level rolls them up to finished goods.
✅ The periodic unit price (PUP) is calculated per material and period.
✅ Post closing revalues ending inventory and distributes differences to consumption and COGS.
⚠️ Running post closing before reviewing errors locks in wrong prices for the period.

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▶ WHERE WE ARE
Part 1 explained the concepts. Part 2 executes the run.

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▶ 1. PREPARATION
Before the run, the period's logistics and invoice postings must be complete, open purchase orders with goods receipts understood, and production orders technically completed or settled as required. Actual costing reflects posted data only, so a late invoice will move into the next period.

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▶ 2. SELECTION AND SEQUENCE
In the costing cockpit, a costing run covers selected plants and a period. Selection collects materials; determining the sequence builds the order of processing from raw materials up through semi-finished and finished goods, including cyclic relationships where materials consume each other.

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▶ 3. PRICE DETERMINATION
Single-level price determination calculates a periodic unit price from each material's own receipts and differences. Multi-level price determination then passes differences from consumed materials to the materials and orders that consumed them, so finished goods carry the actual cost of their components.

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▶ 4. POST CLOSING
Post closing revalues the ending inventory at the actual price — either through price differences remaining on inventory or by changing the price for the next period, depending on settings — and posts the differences on consumption to COGS or other consuming objects. Closing postings can be reversed if the run must be repeated.

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▶ 5. REVIEW AND SIGN-OFF
Review the run's materials with errors or unusual price changes, the not-distributed and not-allocated differences, and the effect on COGS by product line. Controlling signs off before the period is closed in the Material Ledger.

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▶ STEP BY STEP

1. Create a costing run for one plant and period in CKMLCP.
2. Execute selection, sequence and single-level determination.
3. Execute multi-level determination and review errors.
4. Run post closing in test and review postings.

✅ CHECKPOINT: the run completes with errors reviewed and closing postings explained.

A company ran post closing on day three of the close without reviewing the cockpit's error list. Several materials with missing invoices got distorted periodic prices, and COGS for one product line jumped. The run was reversed, invoices posted and the run repeated; the checklist now requires error review before post closing.

• Running post closing without reviewing errors.
• Late invoices and unsettled orders before the run.
• Ignoring not-distributed differences.
• No controlling sign-off.

• Pre-run checklist for postings and settlements.
• Error review before post closing.
• Analyse not-distributed differences.
• Sign-off before closing the period.

Interviewers ask for the steps of the actual costing run in the costing cockpit and what single-level, multi-level price determination and post closing each do.