The functions in the period-end closing process for product cost collectors are as follows:
- Template allocation for automatic allocation of process costs and activity types
- Revaluation at actual prices for activity types and business processes, which could debit or credit the cost object, based on the new price calculation
- Allocation of overhead surcharge
The components of final costing are as follows:
- Calculation of work in process (WIP) – in the Product Cost by Period component, WIP is calculated at target cost
- The variance calculation function examines the causes of the order balance, and also provides reasons explaining why the production process costs more than estimated
The characteristics of settlement are as follows:
- The system settles the WIP to Financial Accounting (FI) including Profit Center Accounting in FI.
- The system settles the order balance to FI and to the Material Ledger, which is active by default in SAP S/4HANA.
Note
In SAP S/4HANA, you can use the Customizing activity Define Accounts for Splitting Price Differences to refine the FI posting to show the different variance categories on different G/L accounts. This allows you to show in your income statement, the reasons for the production differences. - The system settles the variance categories to CO-PA, if implemented.