In The Bike Company, after releasing the production order for the ordered bikes, you want to commence production. You need to pick the components necessary to assemble the bikes using the picking list in the Pick Components for Production Orders app. Picking components for a production order is the sixth step in the MTO process.
Picking the components leads to a goods issue from the inventory. The material consumption decreases inventory and triggers an expense posting in Financial Accounting, debiting the production order as a cost object. The withdrawn quantities are valuated at the material price selected by the valuation variant for actual costs assigned to the production order’s type.
In the event-based approach, overhead costs based on direct material costs are instantly calculated and posted to the production order. WIP (work in process), which refers to the value of goods currently under production, is posted immediately as well.
The actual costs posted to the production order can be analyzed using different reporting apps, such as the Analyze Production Costs – Event-Based app or the Order Cost Details – Event-Based app.
In the MTO scenario, the actual costs, overhead costs, and WIP are calculated in the same way as the MTS scenario, which you are already familiar with. The difference between the MTO scenario and the MTS scenario is that, in the MTO scenario, the actual costs posted to the production order are also visible on the sales document level. Therefore, in the apps used to analyze event-based production costs mentioned above, filtering for the sales document results in the display of the actual costs posted to the production order as well.
However, remember that the production order is the cost object in the MTO scenario. The assignment of the actual costs posted to the production order to the sales document comes from the attribution of the sales document from the respective production order. The actual costs are only posted to the production order and not to the sales document (neither real nor statistical).
For example, in The Bike Company, the sales order was created with reference to a sales quotation. Therefore, the attributed sales document is the sales quotation.
