In The Bike Company, production has been completed on the ordered quantity of bikes. Therefore, in the next step, the final goods receipt for the produced bikes needs to be posted using the Post Goods Movement app. In doing so, all of the produced bikes will be delivered to the sales order stock. This is the eighth step in the MTO process.
Note
It is possible that a partial goods receipt has been posted before, and, with the final goods receipt, the remaining quantity will be posted.
However, in our scenario, a goods receipt is posted for all produced bikes at once.
Posting a (final) goods receipt has multiple cost effects that incur at once:
In general, target costs are calculated for the production order with each goods receipt posting. In addition, the production order is credited with the delivery value, which decreases the actual balance and the WIP.
With the final goods receipt, an event-based settlement is performed automatically. This settlement clears the actual balance and remaining WIP. Along with that, potential production variances are posted.
The corresponding postings occur simultaneously.
Posting the final goods receipt for a production order changes the production order’s status automatically to Finally Delivered (DLV).
Remember that in MTO production the produced quantities are delivered to the sales order stock, which is the individual customer segment assigned to a sales order. Materials in sales order stock cannot be used for other sales orders or anonymous stocks.
In The Bike Company, after posting the final goods receipt, the cost analysis of the production order may look like the following figure:
Note that in the cost example shown above, due to reasons of simplification, the actual costs are exactly as high as the calculated target costs. This means that production was exactly as expensive as planned. This is not usually the case in practice. Generally, actual costs and target costs differ, and production variances occur. These production variances are then settled to margin analysis, which fully credits the production order.
Note
If errors occur, an error handling process is available as a troubleshooting measure. However, this is not covered in this course.
The topics of production variances and related event-based posting are also not explained in detail in this course.
For more detailed information on these topics, see: Evaluating Production Accounting in Make-to-Stock Scenarios in SAP S/4HANA.
Valuation of the Goods Receipt to the Sales Order Stock
In sales-order-related production, there is a clear priority sequence used to calculate the standard price used for the valuation of in-house manufactured individual requirements material delivered to sales order stock.
The standard price is determined as follows:
From sales order cost estimate or order BOM cost estimate.
An order BOM cost estimate is used in complex MTO production when costs are calculated in sections. Due to less complex products in The Bike Company, BOM cost estimates are not used.
From production order cost estimate.
From the master record of the collective requirements material (such as standard price in the Accounting 1 view).
This is usually the case when you manufacture a material for both MTS inventory and valuated special stock.
Once the first goods receipt is made to the sales order stock, the standard price is determined as above, and the individual requirements stock segment is updated. For the subsequent goods receipts, the price is read from the stock segment. This means that standard price is directly determined by the valuation of goods receipts.
Note
If you cancel a goods receipt, the standard price updated by the first goods receipt continues to be valid. The cancellation therefore only cancels the goods movement, not the update of the standard price. A new goods receipt does not overwrite the existing standard price for the stock segment.
In the MTO scenario, target costs are also calculated using the priority sequence described above.
In The Bike Company, according to the priority sequence described above, the standard price of the produced biked is determined based on the costs of goods manufactured (COGM) in the sales order cost estimate.
