Difference between WIP (work in progress) and Semi finished goods

Question

what is the difference between WIP (work in progress) and Semi finished goods
and how to handle their valuation seperately in SAP.
pls help with some specific important inform on both   WIP   and semi f

Answer 1

Hello Sanjeev,
The difference between SFG and WIP is that ,
1 ) Valuation Class  For SFG starts 7***   but WIP material stock starts with 3***
2 )  Stock / inventory of  SFG can be seen at point of time but WIP is an Order item
3 ) We can find the stock of SFG at any point of time say it is having specific storage location But WIP is calculated from
    Order for which items are drawn .
4 ) Example You have to manufacture Product AAA which contains SFG1 , 2 , 3  which is made up of some component items
    once SFG 's made the inventory is updated during GR but the components lying in the shop floor required to complete the order
   so we want to know at any point of time how many these materials are lying and the same was issued against Order
   reservation to finish the balance Order Quantity is called WIP.  You have confirmed only say 80 Pcs of FERT out of 100 Pcs
   remaining 20 Pcs needs to be confirmed and is being manufactured in the shop floor and the same is lying as WIP .
  Material Consumption to Production Order:
In FI:
ROH consumption Account       Dr (PROFIT & LOSS ACCOUNT)
To ROH Inventory Account       Cr (BALANCE SHEET)
Same in the case with HALB
In CO: Cost of Material is
In CO: Cost of Material is debited to Production Order
   For WIP :
  Calculation of WIP In FI:
      WIP Account                           Dr. (BALANCE SHEET)
To Change in WIP Account      Cr (PROFIT & LOSS ACCOUNT)
If the Order is completed:
In FI:
Change in WIP Account           Dr (PROFIT & LOSS ACCOUNT)
To WIP Account                
Pl come back if you have any doubt,
Regards,
Jaya Vimal
Edited by: jaya vimal on Aug 9, 2010 2:10 PM