Revenues and Costs flow in Profitability Analysis

The Sales Revenue comes from the Condition Type in SD. We need to map the Condition Type in SD to the respective value fields in customizing to have the revenue flow into PA.
The Cost comes from Cost estimates which are transferred using the PA transfer structure which we have covered in the Product costing section. The various cost components of the cost component structure is assigned to the value field of PA module and this is how the costs come into PA. Once the actual revenue and the std cost defined above are captured in PA the variances are also  transferred into PA. This way the std cost variances equal the actual cost. So actual revenue- actual cost helps us determine the profit.