Currently in SAP S/4 HANA Cloud, on-the-fly target cost calculation is enabled in new production cost Fiori reporting F1780 Production Cost Analysis, F3331 Analyze Costs by Work Center/Operation, F4059 Event-Based Production Costs and F4254 Event-Based Order Costs.

Within these reports, you can analyze target costs at time of each goods receipt for production orders and process orders instead of period-end closing activities. A new concept *Plan Category* is introduced as a filter to identify different target costs categories (which replaced the target cost version).

The following two target cost categories are supported:

- Manufacturing Order Plan Cost (PLANORD01) updates the order plan cost based on the production bill of material (BOM) and calculates the target cost based on the order plan cost, which is similar with Target Cost Version 1 or PV1 in the old solution.
- Manufacturing Order Standard Cost (PLANORD02) updates the order standard cost based on the material standard cost estimate or sales order cost estimate in order to calculate the target cost in reporting, which is similar to Target Cost Version 0 in the old solution.

**I. ****Target costs based on order standard costs**

Target cost is calculated according to the values of the order standard cost in ACDCOP adjusted to the actual quantity at the time of goods receipt.

Detailed logic is described as follows:

- Read order standard costs from ACDCOP
- Inventory valuation relevant overhead only
- Considered lot-size dependent:

Lot-size dependent item: Target Costs = Item Amount /Plan Output Qty. * Actual Output Qty.

Lot-size independent item: Target Costs = Item Amount

Calculate overhead at the time of order standard costs calculation

**II. ****Target costs based on order plan costs**** **

Target cost is calculated according to values of the order plan cost in ACDCOP adjusted to the actual quantity at the time of goods receipt.

Detailed logic is as follows:

- Read Plan Costs from ACDOCP
- Inventory valuation relevant overhead only
- Considered Lot-size dependent:

Lot-Size dependent item: Target Costs = Item Amount / Plan Output Qty.* Actual Output Qty.

Lot-Size independent item: Target Costs = Item Amount

Calculate Overhead at the time point of Plan Cost Calculation

**Additional Information:**

· For CO Production Order (order category 04) and Product Cost Collector (order category 05), target cost is calculated the same as the period-end target cost calculation solution.

· Target cost calculation on-the-fly in new Fiori reports will not be overwritten by the variance calculation results, so there may be differences between results of target costs and target costs calculated from variance calculation.

· For the MTO scenario, the on-the-fly target costs calculation in new Fiori reports supports only valuated sales order stock with three valuation strategies: values from Sales Order Cost Estimate (valuation strategy 1), Production Order Cost Estimate (valuation strategy 2) and order standard costs (valuation strategy 3).