Analyzing Costs from Final Confirmation and Final Goods Receipts to a Production Order

Now that the remaining goods have been finished, they need to be delivered to stock. Through this final goods receipt, multiple cost effects incur at once:

• In the first step, the final goods receipt updates the target costs due to additional quantities delivered to stock. The production order is credited with the delivery value, which decreases the actual balance and the WIP.
• In the second step, an event-based settlement is performed automatically. This settlement clears the actual balance and remaining WIP. Along with that, production variances are posted.

Both steps, along with their respective cost effects, occur simultaneously. To gain a better understanding of the processes, we will first focus on the cost effects of step 1. The event-based settlement (step 2) will be explained in the next lesson.

Cost Analysis

Through the final goods receipt the order status changes to Finally delivered (DLV). As indicated above, the following effects are displayed for the delivered production order:

1. Target costs were updated. The delivery value results from the remaining quantities valuated at standard price.
2. WIP was updated based on the new actual balance.
3. Actual costs decreased.

Note

In the following demo and exercise, only 4 out of 5 planned frame sets will be finally confirmed as yield quantity, while one item will be scrapped and will not be reworked. Therefore, this is not a final goods receipt in the strict sense, and the order status will remain Partially Delivered (PDLV). However, to ensure that the order status is updated to Finally Delivered (DLV) at the end, it will be manually changed later.