After production order settlement, where does the cost go?

Dear Experts,
I understand after we did the "order settlement" for production order, the cost will be settled to material manufactured from the said production order. Say, the total cost is $10,000 to produce 1000 units of finished goods (FG), then the cost settled to each individual FG at $10 each, am I right? Where can I see the settled cost in the material master?..
I checked in the cost center report, S_ALR_87013611, I can see the cost Credited from "production" cost center with a breakdown in settlement cost element such as machine hour, setup and personnel hour. I understand the other side of Debit was to the production order, and only after order settlement, I'm not sure which cost center will be Debited.
That would be the CO side, how about the FI, would there be any cost posted to the GL side after production order settlement to the material?
Please advise..
regards,
Abraham

Hi Abraham,
It's not the button i mentioned. I was just trying to take u to the accounting document from the settlement screen. well just drill down the settlement screen and u'll get it. No big deal.
But more important is the concept. I'll share my understanding here. (cost by production order)
Any value that flow into controlling module should have a cost object. Here production order is the cost object.
First u create a production order (cost object) for say 1 unit of X with a std price of Rs. 10
Std price comes frm material master as a result of std cost estimate
U start production - Raw materials are consumed - 2 qty x Rs.3.
Entry RM Consumption Dr Rs. 6    Inventory Cr Rs.6 (Prod order is debited with Rs.6)
Activity (Let's say machine hours - 3 Hrs x Rs.2) According to the routing it was 2 hrs but actual production took 3 hrs.
Entry - None - But production order is debited with Rs. 6.
When production is complete for 1 qty of X, entry flows
Finished Goods Dr Rs.10    Change in Stock Cr. Rs.10 (Production order is credited with Rs.100
Abraham, now visualise both sides of the production order. It will have debit of Rs.12 and credit of Rs.10.
Now accountant sees the production order and confirms the values are ok and puts the status of TECO to the order. which means the order is technically complete.
Now when u run the order settlement, this production order is picked up by the system (due to it's status). System sees difference between debit and credit of Rs 2.
So it cedits the production order with Rs. 2. Now both debit and credit of production order is equal (Rs.12)
Entry Price diff A/c Rs,2     Change is stock A/c Rs.2
Now this rs. 2 is settled to COPA. It does not flow to material.
Reason: in a std costing system materials are valued at standard cost and
Hope this helps. Do revert in case of doubts.
Best Regards
Vimal

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Hi,
Can u gibve some link what is production order settlement , and how the accounting entry is generated, our PP person have done the settlement in april 2010 but accounting entry are not updated in the corresponding g/l account how to check this.
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zafar

Production order settlement is just a process of closing the order after goods recipt (production) is being booked in system
Production order settle the costs to CCNs from the orders. It doesnt have any entry unless under / over absorption. In that case following entry will be generated (i.e. of difference amount)
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Production Order Settlement Process with respect to a Project

Hello All,
I know about normal Production Order Settlement Process in discrete industries.
Can anyone give me the steps for the Production Order Settlement Process if the Production Order is created with respect to a Project in SAP PP- PS Integration Scenario.
Thanks in advance for your support.

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Can anyone clarify my above queries.
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Error while doing production order settlement

Hi frds,
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Rajnish,
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Costing affect with MRP at planned order level and after production order

Dear all,
How the costing affect with MRP at planned order level and after production order completion?
Edited by: Maulik on Jun 24, 2009 1:59 PM

Dear Maulik,
check Mr. Vinod's inputs abt costing
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kumar

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Hi,
Explain the Production Order Settlement after the Process details.
Plz, Advise me.
Thanks,
Jeevan.S

Dear Jeyam Jevan,
1. After Final Confirmation of Order ( Status : CNF) make GR for for order using Tcode : MIGO / MB31
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ORDER SETTLEMENT
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Hello,
Is there any standard table available which carries the production order settlement cost?

Dear,
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Production Order Settlement Question

Hi all,
When I create a production order and look up the material costs associated with this order I see
Raw material 1          10.00
Raw material 2          15.00
Raw material 3            5.00
Finished product 1     27.00 -
                                     3.00
Proceeding further, I do GI to Order and finish the production and do GR to Order... now looking at the accounting documents, I can see the Accounting Doc for GI to Order showing 30.00 and Accounting Doc for GR to Order showing 27.00
Now what happens to the 3.00?
where does this amount get settled to?
If I want the finished product to be 30.00 (10.0015.005.00) and not 27.00 (moving average price from material master) what should I do?
Thanks,
Kanagaraj C S

Hi all,
Thanks for all your replies... I started looking into replies and did some analysis... changing the Moving Average Price (V) to Standard Price (V) will change the dynamics of the material cost attributes and may have impact on the earlier determined business needs. Hence I didn't want to experiment with it. Hence I procceded to the my 2nd part of the question -
If I want the finished product to be 30.00 (10.0015.005.00) and not 27.00 (moving average price from material master) what should I do?
Playing around with the system helped me to calculate the finished product price to 30.00 (10.0015.005.00) and not 27.00 (moving average price from material master) for the same finished product. Here are the steps -
Tcode - OKK4
Select "007" - Production order - actual and goto details of this Valuation Production order - actual. Then select "Valuation with Additive Component Split" as Priority 1. Also make sure in you production order (CO01) under "Control data" in CstgVariantActl to be PPP2.
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CO - Production order settlement(KO88)

Dear SAPns
1.Explain why the production order actual settlement have to do.
2. What is the financial impact (P&L and B/s) due to settlement of production order
3. Where/How the actual cost is calculated?
4.What is the benefit to do the settlement of production order.
Anybody have document regarding above pls send me.
My Id : [email protected]
Regds
Tamil

Hi,
Production order settlement is done to capture the variance and the WIP to the header material of production order. On execution of the settlement the entries for FI will be posted with respect to variance and WIP
Regards
Kaarthik.D
Assign points if useful

Production order settlement in case of non valuated material

Hello guys,
Our client wants some of the materials have to be non valuated. These materials are raw materials and SFG also. We can assign UNBW material types to those materials.
I have created one material for test purpose. It doesn't contain the accounting view so as no valuation class. BOM of it , doesn't contain any component as client doesn't want to show any consumption on production order.While creating the order for that material system asks for the settlement rule. I skip that step and create the order. I do GR for the same.
My question is, is production order settlement essential for these orders? What if we don't settle the order. No activity type has been assign to the work center.
Kindly give ur valuable inputs.

Hi,
No need to create material as UNBW type.
Normal ROH, HALB, FERT material type we can achieve this.
In the BOM of FG or SFG goto item detail screen there is a tick mark in costing.
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After production order settlement, where does the cost go?

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