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SAP Standard Cost Estimate BOM Rollup Calculator: Material, Scrap, Labor, Setup and Overhead

A standard cost estimate adds material, activities and overhead for a costing lot size. This calculator rebuilds that arithmetic for a single level so you can check a result from CK11N, test a lot size change, or explain to a planner why a small lot costs so much more.

Your numbers

$
3 %

Component scrap from the BOM item or material master.

h
$/h
h
units
%
%

Your results

Standard cost per unit
$71
Standard cost of one lot
$3,570
Material cost with scrap
$44
Divides by yield, a common way to cover component scrap.
Run labor per unit
$17
Setup per unit
$1
Material overhead
$3
Production overhead
$6

Simplified model of a standard cost estimate. Real costing uses your costing sheet, activity prices, alternative BOM and routing selection and valuation variant.

Save results:

Standard cost per unit vs costing lot size

Sweeps Costing lot size from 1 to 200, holding your other inputs fixed.

Costing run outlier review

Optional review of cost estimate results against BOM and routing data.

Optional. The tool and every export work without this. No spam.

How to use it

Enter purchased material per unit and the component scrap percentage. Then enter the run time per unit and the setup per lot from the routing, the labor activity price from the cost center, and the costing lot size. Finally enter your overhead percentages from the costing sheet. The calculator returns the unit and lot cost and a chart across lot sizes.

  • Take run time from the routing operation, not from standards in a spreadsheet
  • Use the activity price planned in the cost center, not payroll rate
  • Check the costing lot size on the material master

The formulas

Material with scrap equals purchased material divided by one minus the scrap fraction. Labor is run time times the activity rate, and setup per unit is setup time times rate divided by lot size. Material overhead is a percentage of material and production overhead is a percentage of labor and setup. The sum is the standard cost per unit. Multi-level products repeat this at each level of the BOM, with lower level cost entering as material.

Reading the lot size curve

Setup is divided over the lot, so unit cost falls steeply at small lots and flattens as lot size grows. At the default values, a lot of 1 carries a setup of more than 70 dollars, while at 50 it is about 1.44 dollars. Use the chart to see whether raising a costing lot size would hide an inefficient setup or truly represent how you produce.

Common mistakes

A costing lot size that differs from the real production lot size misrepresents margin. Others add scrap twice, once in the BOM and again in an operation yield, or forget that overhead may apply to a different base than you assume.

  • Double counting scrap
  • Using a lot size of 1 for products always made in batches
  • Mixing planned and actual activity prices

Frequently Asked Questions

Does SAP divide material by yield for scrap?

Component scrap in the BOM increases the required quantity, and operation scrap increases the quantity of the upstream components. Dividing by yield is the common equivalent, but check how your configuration handles each type.

What is the costing lot size?

It is the quantity over which setup and other fixed costs are spread in the cost estimate. It is set on the costing view of the material master and can differ from the lot size used in planning.

Why does a small lot look so expensive?

Because the full setup time is divided by only a few units. That is a true effect if you build in small lots, so it can justify batching or a setup reduction project.

Does this handle multi level BOMs?

Run it once per level from the bottom up, and enter the lower level result as the purchased material at the next level.

If cost estimates across thousands of materials look inconsistent, Netray can help analyse costing run results against BOM and routing data and flag outliers.

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