Plan cost & Actual cost in KKBC_ORD for CO Prdn Order

Question

Dear Experts,
We are not able to findout the why difference is appearing during T code KKBC_ORD order analyse for Raw materials, please suggest wht may be the wrong thing in the order?
Before this i would like to brief you on the process.
Raw matls are created with "V" as price control. & Finished Goods as "S" control.& we create one BOM. Say example
My finished Goods will be 500555 code & Raw matl code will say 1001010 & 1002020.
My BOM will contain these raw matls with qty of 1kg each.
FG code 500555 of 2kg Bag
Items are 1001010 & 1002020 of 1kg each.
Here my mvng price are 2 & 4Rs for raw mtls 1001010 & 1002020 respectively.
In Material master we define overhead key as 10% to a Finished goods (500555) in Costing view.
1) Now i create a Base planning object T code KKE1 & I update the 10% as overhead cost & raw matls qtys as per BOM.At the end you can see the overall manufacture cost of the FGs in this case you will get for
FG 500555 about 6.6Rs. then save it.here it is done for 1bag only.
2) Create a CO PRDOUCTION ORDER T code KKF1 system will generate one number & save it. Now go to KKF4 add the base planning object name & enter the required qty say 10 bags...
You can see the COGM will now 66Rs for 10 bags as per the planning.
3)Goods issued to Order 261 with refc to BOM & Order number entred qty as 10. Sytem will calculates the qtys of raw mtals based on 10bags & save it.
4)Goods  receipt done against CO PRDOUCTION ORDER (Finished  goods 500555).
*5)KKBC_ORD i hav updated the CO PRDOUCTION ORDER & choosen cost trend. Here i am seeing a diffc in actual cost column & variance of 26%.but how it is possible*
Regards
TG

Answer 1

I can think of a couple of areas where there may be differences.
First, your CO order is probably not getting any overhead costs.  Your base planning object had 10% overhead built into it, but that is only for developing the preliminary cost estimate for the order.  The allocation of actual overhead must occur through some other method (i.e. overhead costing sheet, activity allocation, or template allocation).
Second, the actual material costs assigned to the order will be based on the material's inventory valuation at the time they are issued to the order.  Since you said the materials are valuated at weighted average cost, it is possible that their inventory valuation changed between the time the base planning object was created and the time they were issued to the order.
thanks,