Order Settlement document -

Question

Hello,
    I run CO88- settlement for orders, the accounting entries were as follows:
Cost price difference acct ( PRD) -   credit
SF DELIVERIED TO INVENTORY  - debit.
for one of the orders it did a reverse posting.
Please explain what this means exactly.
Both of these are P&L accounts.

Answer 1

Let's take a case of a production order to make 100 units of material FIN001, whose standard cost is $ 33 each.
The total cost of goods and labor issued to the order is $ 3,400. When the 100 units are ready they are taken out of the order by way of goods receipt. At this time the order gets a credit of 3,300 (being 100 times $33). When you take a look at the balance of the order, the debit was $ 3,400 and credit $ 3,300. This leaves a $ 100 which is in excess of target cost of $ 3,300. This will be debited to Variance account with an offset to another P& L account (may be named settled variance account, in your case it seems to be SF delivered to inventory)
If the cost of goods and labor issued to the order was only $,3,200, this would leave a favourable variance account, leading to a credit to the variance account.