Varience calculation

Question

hi everyone,
                   what proesses done when u do variance calculation for prod.order.thanks.

Answer 1

We calculate the variances for production order  using transaction KKS1 for collective processing and KKS2 for individual processing.
This is the process flow for variance calculation.
If the order has DLV or TECO status then variances are calculated.When we execute variance calculation the following things happen
1.Shows the variance between target costs and control costs (the control costs can be the net actual costs, for example)
2.Determines the difference between the actual costs debited to the object and the credit from goods receipts (total variance)
3.Valuates the unplanned scrap quantities with target costs to determine the scrap variances
4.Determines production variances and planning variances for informational purposes
Shows the causes of the variances and assigns the variances to different variance categories depending on the cause
We do not see target costs for goods receipt until variances are calculated in a production order.
This is the month end process flow
1. Calculation OF WIP (KKAO)
2. Caluclation Of overhead (CO43)
3. Calculation of variances(KKS1)
4. Actual Settlement (CO88)  After the settlement run the variances,WIP calculated are posted to their corresponding G/L accounts
The total variance is the only variance that is relevant to settlement. This means that only the variance categories of target cost version 0 can be transferred to Profitability Analysis (CO-PA).
TO sum it up variance calculation in general it is nothing but how actual costs are deviated from the target costs so that a better cost analysis is avialable