Performing Production Processing for an Assembly

This figure shows an example of a cost element report for a production order.

The goods issue of materials P-FL3A00, P-FL3B00, and P-FL3C00 credits the balance sheet inventory accounts and debits the material consumption accounts in FI. In CO, the goods issue creates a statistical credit to the balance sheet inventory account for project stock and debits the production order. The project report reflects the production order actual costs.

Element 13300000 is a balance sheet account. All other elements are profit and loss accounts.

The production order is confirmed.

Variances amounting to an additional 2 hours of labor, which results in 80.20 additional cost, are entered when the order is confirmed. Confirmations increase the actual costs of the order by 287.45. The confirmations credit the cost center assigned to the work center.

The relevant postings are made in PP and CO. FI is not updated because this is a secondary cost allocation.

This figure shows an example of a cost element report for a production order.

The costs of the production order confirmation are debited to the production order.

Element 13300000 is a balance sheet account. All other elements are profit and loss accounts.

The final confirmation is entered for the production order and material P-FL300 is delivered to project stock.

This action increases the stock value for material P-FL300 in F-120## stock by the value of the prices from the material project stock segment.

If you select either valuated sales order or project stock, the value of the special stock inventory is determined using a predefined valuation strategy sequence.

This figure summarizes the postings that are created during the production of P-FL300.

During the goods receipt of the purchased materials, the stock account is debited for the inventory value (dynamic standard value for project stock) and the clearing account is credited for the purchase order value. Any variance is debited or credited to the price difference account. If further variances occur during the invoice receipt, they are also debited or credited to the price difference account.

Since the inventory is issued to the production order, the stock account is credited and a P&L account for material consumption is debited. In addition, the production order is debited for the inventory value.

Further debits to the production order occur during the production order confirmations.

During the goods receipt of the production material, the stock account is debited for the inventory value (dynamic standard value for project stock) and the P&L account for factory output is credited. In addition, the production order is credited for the inventory value.

During production order settlement, any variances that occurred during production are posted to the production variance account and the factory output account. In addition, the production order is debited or credited for the variance.

If you wish, you can establish the price variance accounts as primary cost elements. This action enables the variance postings for project stock to be reflected on the project. You may maintain a separate valuation class for project stock on the material master for this purpose. Variance postings for collective stock are not normally reflected in Controlling.

If you manage the materials using moving average price control, the full cost of the procurement transaction is assigned to the stock account. This assignment occurs during goods receipt, invoice receipt, and production order settlement.

This figure shows the following:

• The first goods receipt results in valuation on the basis of one of the subsequent strategies in the specified sequence. A standard price selected through one of the subsequent strategies is copied to strategy and serves as the valuation basis going forward.

• The system calculates the standard price on the basis of your customer exit, COPCP002, material valuation for valuated project stock.

• The system determines the standard price using the production order cost estimate. If there are multiple production orders for the same WBS element, the system uses the standard price that results from the production order delivered first.

• If you created the same material as a collective requirements material, the system reads the material master record of the collective requirements material. The standard price in the master record of the collective requirements material may have been calculated in various ways, such as standard cost estimate.

In the Valuation of Project and Sales Order Stock figure, stock is set up according to the amount of the target costs of the production order. The same amount is credited to the order.

Variances are calculated for the production order. The variances (differences between target costs and actual costs) are settled to materials according to the settlement rule for the production order. An FI document and a debit or credit posting to the price difference account are generated. If you set the Variance indicator in the settlement profile for the production order, the settlement also generates a CO line item posting to the profitability segment. You can also use account control to assign the variance as costs to the assigned WBS element. Settling the project sends the variances to profitability accounting.

This figure shows an example of a cost element report for a project.

The stock value of the project stock was determined by the planned costs of the production order. The project stock segment considers the stock value as the standard price.

The remaining variances in the production order can be settled directly to profitability analysis of the WBS element.

Element 13300000 is a balance sheet account. All of the other elements are profit and loss accounts.

This figure shows an example of a cost element report for a project.

The goods issue of the project stock to the network activity produces actual costs on the network activity.

Element 790000 is a balance sheet account. All other elements shown are profit and loss accounts.