Internal-ordrs

Question

GOOD MORNING SIRS:-
experts:- which occation use the I.O and when will use the cost cneter and this one give example scnario

Answer 1

Hi ameer
The account assignement comes into picture when you order the material as Indirect. In case of direct it gets valuated under raw material, semi finished, finished etc (Valuation class).
In Account assignment you assign a specific G/L account to a cost center. In reality you can have different cost centers like Production, Maintenance, Quality etc and different G/L accounts like Raw material consumption , machine tools, computer software, buildings, machineries etc.
Suppose if a machine has been procured for production purposes it gets accounted in the machineries G/L account and the cost is accrued by production. Same case if a measuring instrument is procured by Quality department it gets accounted in machineries G/L account and the cost is accrued by Quality department.
It helps in analysing the spend of each department as per the allocate d budget and also helps in allocating budgets to respective departments for future purposes.
and purpose of IO is to book expence at minute level
Vishal...