MTO Settlement

Question

Pls help!
We use make-to-order scenario with both order and sales order as cost objects.
First question - the cost object is determined under cost object controlling by sales order > requirement class >  account assignment category.  If category is E, then sales order is the object, correct?  And the requirements type that the class is assigned to is included on sales order line item and appropriately assigned to the item category in configuration?  Please confirm understanding.
If we do not have requirements type defaulted in the sales order, then its assumed its make to order with production order as cost object?  Therefore, if we never wanted the sales order to be the cost object, we would not have to configure th area cost object controlling by sales order.  This point confuses me so please confirm.
When we settle the production orders or sales order, is the cost component split used to map the costs (cost element range) to the copa value fields?   I do see this configuration set up in the system under valuation in copa (KER4) and wondering if it comes into play during settlement of production (co88) and sales orders (va88)?
We have our allocation structure set up to settle costs to psg and we have the pa transfer structure set up as well. 
The pa transfer structure assigned in the production order type does include the cost element ranges for material, labor, overhead, but the value fields are mapped to the material variance, labor variance, overhead variance value fields, not the material, labor, overhead cost value fields. 
So if I don't see the material, labor, overhead cost value fields mapped in the pa transfer structure, how are costs actually flowing through to copa (material, labor, oh)?  are they missing from profitability transfer structure?  I do see them on the copa reports (ke24) so their must be config allowing this data to pass, which is why I think it might be the cost component structure.  Please confirm.
Thank you!!!!!

Answer 1

Hi,
1. If you dont want sales order as a cost object,
a. Either follow the steps I mentioned above, OR
b. Do Not assign any req type at all
2. There are 2 scenarios here,
a. SO is cost obj with non valuated stock (SAP recommends this)
b. SO is cost obj with valuated stock...
2.a -
Prod Order is settled upon sales order.. GR from prod order does not update any acc doc
Sales order is settled to COPA.. Here you can use a PA Trf Str where in you have replicated your Cost Comp Str... i.e. You can create as many assignment lines in KEI1 as your CCS in OKTZ and assign each one of them to a separtae value field
No question of variances in this case
2.b
Prod order is not settled upon sales order.... GR from Prod order updates acc doc.... However, variance from prod order can be settled to the sales order if you create variance account as a cost element... Else, it is settled to COPA
Upon PGI, the COGS is posted to Sales Order as a single line item
Here, in your PA Trf Str, you would create an Assignment line and tick "Qty Billed/Delivered".... This would update the Billing Qty to COPA upon settlement of Sales order
This Qty update will trigger KE4R.... i.e. You need to assign CCS to VF in KE4R for PV=01 and Rec Type = C.... This would update the CCS in COPA as per the Sales Order cost estimate
The Costing Key in KE40 should refer to "Sales order cost estimate" and not "Std Cost estimate"
Br, Ajay M
Hope, I have not confused you.. I am going to sleep as its 2 AM in India now.. Will reply tomorrow, if you need any assistance.. Byeeee.
Edited by: Ajay Maheshwari on Mar 19, 2011 1:40 AM