Performing Simultaneous Costing for Process Orders

Objective

After completing this lesson, you will be able to perform simultaneous costing for a process order

Simultaneous Costing for Process Orders

Process flow diagram showing steps from Creating a Process Order through to Goods Receipt and material withdrawal for production. Includes Scheduling, Costing, Order Release, and more.

The process chain of a process order with co-products from its creation to archiving or deleting.

Process Order – Simultaneous Costing

Diagram showing manufacturing workflow from cost center to warehouse, with master recipe and materials list. Co-Product A order header shows planned vs actual quantities and costs.

Process orders are usually charged with actual costs through confirmations in logistics.

Cost objects are charged with the following:

  • A cost object can be charged by internal activity allocations. This occurs automatically in confirmations. The cost objects are charged with secondary cost elements.
  • A cost object can be charged through material withdrawals. When the confirmation is entered, the cost objects are charged automatically (material backflushes, goods issues) with primary costs, and can be posted automatically when the confirmation is entered.
  • Actual costs are charged to the order header as they are incurred. When a goods receipt for a co-product is posted, the order item is credited accordingly. To see the actual costs for each co-product, you must perform the function "Preliminary Settlement for Co-products, Rework" in the period-end closing process.

Note on logistical processing: If you are using milestone confirmations, you must confirm the milestones in the specified sequence. Operations that are not milestones are automatically confirmed when the milestone is confirmed. You specify the operations that are milestones in the routing with the control key of the operation.

Perform Simultaneous Costing for a Process Order

Summary

  • Simultaneous costing posts actual costs to a process order's header.
  • Actual costs result from confirmations, material withdrawals, and activity allocations.
  • In joint production, process orders are credited with goods receipts for co-products.