# Meaning of Calculation

Many calculations have to be made in a company, the costs of the products have to be determined and the prices formed. The calculation is used for calculation, it has to fulfill a variety of tasks. It is used to calculate costs, but also for pricing.

## Calculation – the definition

Any kind of calculation-related summary of costs is called a calculation. A calculation is an evaluation calculation and a sub-area of ​​cost accounting. Together with the operational accounting of a company, the calculation is part of the cost accounting. It evaluates the costs that have arisen in the operational performance process and processes them. The costs can be distributed and allocated to individual cost units. On the basis of the determined cost of goods, the calculation provides answers to questions as to whether an advance service should be provided by the customer or obtained from the market, whether the current price level contains sufficient profit margins or at what price a service should be offered.

The calculation is the cost unit accounting and is used to determine the costs of individual units of the cost units produced and sold. A unit is not always a piece; it can also be a batch, batch or order. Information from the calculation is primarily required for pricing. For various public contracts, cost prices are legally stipulated. If new or specific products are to be sold, the unit costs and demand-related information are relevant for pricing. In the case of already existing market prices, the calculation must check to what extent the prices of the products are adequate for the company. It is used to determine a pricing policy leeway and can determine cost lower price limits.

## Method of calculation

A distinction is made between different methods in the calculation, which method is used depends on the type of service provision. If homogeneous or only slightly deviating products are produced, the division calculation can be used. In the case of heterogeneous service structures, the surcharge calculation or the reference value calculation is used. In the case of economic ties in the form of co-production, costing procedures are used for co-products. Depending on the scope of the costs charged to the individual cost unit units, a distinction is made between the partial cost calculation and the full cost calculation. These methods can be used as a preliminary calculation and as a final calculation. In foreign trade, a distinction is made between import calculation and export calculation. The import calculation should be based on the price level of the domestic market. Foreign offers must be checked to determine whether taking into account the costs for

• transport
• inch
• taxes

there is still enough profit to be made. In the export calculation, additional surcharges for packaging, transport, fees and risks are added to the usual costs.

## Calculation process

The calculation process should be explained using the calculation with quantity structure. This calculation can determine the order-related manufacturing and cost costs of the products on the basis of parts lists and work plans. Modern systems are used today for the calculation, systems are available for the various calculation variants. The prerequisite for this is the checking of the settings in the costing variant. First a cost estimate is created for the material, a cost estimate run must be created for several materials. A quantity structure in the form of a bill of material or a routing is set up on the basis of the explosion control that is stored in the costing variant. A quantity structure based on the reference variant can also be adopted. The quantity structure is evaluated by the system or existing costing data is adopted. Any additive cost estimates that may exist are taken into account by the system if the costing variant is set accordingly in Customizing. The overhead costs are determined by the system, the costing results must be analyzed. The results can be updated in the material master record and then transferred to Profitability Analysis. The calculation provides information about the prime costs and the manufacturing costs for a product. Depending on the type of product or service, different calculation methods can be used for which appropriate systems are available; the calculation process is similar. 