How Planning Cost Organizations, Planning Cost Components, and Cost Estimate Mappings Work Together

Standard cost planning refers to the process of estimating standard costs for use in the costing of inventory or manufacturing transactions. Planning cost organizations, planning cost components, and estimate mappings are the main elements used in the standard cost planning process.

This figure illustrates the relationship between the standard cost planning elements, and how they're used to generate standard cost estimates.

Planning Cost Organizations

Enabling a cost organization for cost planning helps to define and maintain costs across multiple locations and production facilities. One of the modeling options is to perform cost planning at the business unit level, by mapping all the inventory organizations belonging to the business unit to one cost organization.