Price Difference in Sub contracting

Hi all,
I have a question on price difference on sub-contracting. The issue is, there is a sub contracting PO for Rs.100 for 10 units. GR is done for 100 units. Before the IR is done, there is a change in the PO price to Rs.60. Further of the 10 units which was received, 6 units have been issued out. Now the stock in hand is only 4 units. As there is a price change, the difference in the price to the extent of the stock availability is posted to Stock account (40/10*4 = 16) and the balance of price difference (for non-availability of stock) *shoud be* posted to price difference account.
Wanted to confirm from where is the price difference account is picked up for sub contract? Whether it is the GL account given in PRD or FRL in OBYC settings.
Also please throw light on how to stop the changing the price after GR and before IR.
Thanks in Advance.
Narasimhan.J

Hi Kishore,
Thanks for replying. Yes, we use MAP only.
I created a test scenario and changed the GL accounts at Transaction FRL - External activitiy in OBYC settings and could see that the GL account specified in the FRL is picked up to post the price difference.
To the extent of stock availablility it is posted to the FG account and rest is posted to the GL account specified in Transaction FRL in OBYC setting.
Regards
Narasimhan.J

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Jorg,
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Hai,
I have created a Sub-Contract Order for Finished Product, with some Components(Semi-Finished Products) the same is send to the Vendor.
The vendor assembled Finished Product by Using free issue of Stock from my company and the same way he consumed his own Stock to assemble the Finished product.
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Regards
JC

Hi JC,
As you told you are supplying sub -components materials to vendor, the supplied material will be own by your company .Only the stock will updated as "stock provided to vendor".When you do the GRN against your subcon PO the components will be consumed will be consumed and what are all the value used for subcon process and material value will loaded to your FG account.
So as components are owned by you you should be only for processing charges which is negotiated between you and the supplier which you will putting while creating the subcon PO.
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Sub-contracting: difference in Accounting

Hi guys,
I am using release 4.7 and we are discussing about 2 different ways to proceed sub-contracting.
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2. Sub-contracting is handled as an external operation in routing:
Prod.Order>PR>PO>GR>Confirmation of Prod.Order
In particular we would like to understand the different impact these two ways of managing Sub-contracting have in accounting especially in Cost of production and in cost of goods sold.
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Hi Sunil,
there is a particular thing I forgot to say that is Material Ledger. In my company we implemented it and all stock materials are managed with standard control key.
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Sub contract

my client running fg sub contracting (electro plating )cycle through the MRP
after return from vendor with mvt type 105 (543) i check document list with MB51. i found following g/l account effects :
SFG consumption for sub contract account = 602026
Gr/IR Clearing Account = 164335
SFG-inventory account = 323055
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Inventory account = 320010
Costs of goods mfg = 602200
but if do whole sub contracting cycle without MRP i can see effect in following G/L a/C:
Manual Cycle .
Inventory account = 320010
Gr/IR Clearing Account = 164335
Price Differance Account = 602155
change in stock = 603010
Sub Contract expense = 603000
SFG-inventory account = 323055
SFG consumption for sub contract account = 602026
my question is why this differance comes ?
if i want gl accounts hit by manual process in MRP process what changes to be made ?

Hi,
Price diffrences arise during valuation @ GR if the material is managed at standard price in MMR.
Also there is one more setting in customizing that for a plant that price differences should or not be posted during GR.
spro-IMGMMInv MGmtGR--price differences for subcontracting at GR
Regards,
Deepak.

Sub Contracting Process

my client running fg sub contracting (electro plating )cycle through the MRP
after return from vendor with mvt type 105 (543) i check document list with MB51. i found following g/l account effects :
SFG consumption for sub contract account = 602026
Gr/IR Clearing Account = 164335
SFG-inventory account = 323055
for sub contract account = 602130
Inventory account = 320010
Costs of goods mfg = 602200
but if do whole sub contracting cycle without MRP i can see effect in following G/L a/C:
Manual Cycle .
Inventory account = 320010
Gr/IR Clearing Account = 164335
Price Differance Account = 602155
change in stock = 603010
Sub Contract expense = 603000
SFG-inventory account = 323055
SFG consumption for sub contract account = 602026
my question is why this differance comes ?
if i want gl accounts hit by manual process in MRP process what changes to be made ?

Hi
Kindly check with the following:
In customizing for that plant price differences should or not be posted during GR.
SPRO->IMG>MM>Inv MGmt>GR-->price differences for subcontracting at GR
Thanks

Issue Price Difference Acct. in JE of goods return

Dear all,
There is issue in price difference account(Defined as Material Purchase Gain A/c in warehouse)
in good return journal entry,
Eloborating problem : User booking subcontracting grpo for qty 1470.024 with price also for 1470.024,
JE for GRPO is Sub Contracting Charges A/c Dr to Sub Contracting Charges Clearing A/c Cr.
ie.,
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Sub Contracting Charges Clearing A/c Cr -11,92,189.46
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Why it is hitting Material purchase gains a/c ?
Pl clarify it.
Edited by: Jeyakanthan A on May 21, 2009 3:26 PM

Hai!
As per my understanding,
Stock Acc always in Asset Draw, Price Diff Acc in Expense Draw.
For Example..
1.I am purchasing a item of 10 qty each 1 rupee through GRPO.
2.It will post a JE like stock acc INR 10 Debit and GRNI Acc 10 Credit.
3.After that i have transfered my 5 qty to some other warehouse.
4.I am booking a AP invoice with that GRPO as base, now i have changed my price to 2 rupee.
5.It will post a JE like stock acc INR 5(51 which like in warehouse) debit, GRNI Acc INR 10 debit, price Diff Acc INR 5 Debit (51 go as expence) and Vendor INR 20 Credit.
Regards,
Thanga Raj.K

Sub contracting scrap

Hi,
for which T-codes am using for mvt 544 and 545 to get the scrap from sub-contracting vendor
rgds

hi,
its will be used in case of using special stocks...in tocde MIGO...545, 544- is used for offsetting entry for inventory posting and cost price differences...- its GI receipt sls. or st...with special stock E, O , Q...
554 - MIGO - For GR and GI - withdrawl for scrap from QI sc stock...
Regards,
Priyanka.P
AWARD IF HELPFULL
Edited by: Priyanka Paltanwale on Aug 1, 2008 9:29 AM

Mb1b (sub contract)

while doing MB1b ( for sub contract)
error is
G/L account 799999 does not exist in company code AAA
i tried
fs00
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" Account 799999 does not exist in company code AAA
and
Account 799999 blocked for creation in chart of accounts INT
what to do
ali

Hi,
For subcontracting process you need to set up following
If Material has Price Control as "V" (MAP)
(BSX) Stock A/c of Assembly - Dr
(BSV) Change in Subcon Stock - Cr
(FRL) Subcontracting Charges - Dr
(WRX) GR/IR Clearing A/c - Cr
(BSX) Stock A/c of Components - Cr
(GBB-VBO) Consumption A/c of Components - Dr
If Material has Price Control as "S" (Std. Price)
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Price Differences for Subcontract Orders at Goods Receipt
In this step, you configure for each valuation area whether price differences are generated for a Subcontract order at the time of a goods receipt if the manufactured material is managed at standard price and the standard price varies from the receipt value (externally performed service + value of components + delivery costs).
Example
Finished product: $400 (value at standard price)
Subcontract order:
o Ext. service : $250
o Components : $100
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Stock account FERT : 400 +
Stock change : 400 -
GR/IR clearing acct : 250 -
External service acct : 250 +
Compon. stock account : 100 -
Consumption account : 100 +
Posting schema with price differences:
Stock account FERT : 400 +
Stock change : 350 -
Price difference : 50 -
GR/IR clearing acct : 250 -
External service acct : 250 +
Compon. stock account : 100 -
Consumption account : 100 +
And cost center is mandatory for subcontracting process
the accounts for the BSX FRL and GBB-VOB needs the cost elements
Thanks
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Sub-contracting charges to be capitalised

Dear All,
Kindly give your input on the following,
One of my client who is manufacturing Circuit Board, this activity is done both in-house production as well as sub-contracting.
i. they are producing circuit board in In-house, as per the BOM component and costing CK11n, the price of the Circuit board will be updated in the Material master as standard price, but
some time they will give to sub-contract, (material + labour) and they want to capitalise the sub-contracting labourcharges (job work charges) to the cost of the material,
One material code with standard price and when i try to do MIGO from sub-contractor , i dont know how the system will behave
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Thanks and regards
Elan

Thanks for your input.
Correct me if am wrong
As per your input,
if the Material Master is Standard Price "S"
I created Sub-contracting PO and when I receive the goods against the PO (MIGO), system will check the price in the material master and price in the MIGO, if any difference it will post price difference account in FI , Material master price with "S" will be remain same.
In such case, am not capitalising the job work charges to the material is it?
Kindly clarify the same
Regards
Elan

541 & 543 Mvt for Sub Contract Process with Split Valuation

Hi all,
We have activated SPLIT VALUATION for sub contracting in ECC 6.0
We have clasified into 3 Valuation Catergories as New,Repaired & Faulty.
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New Material : C1
Repaired : C2
Faulty : C3
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PK      GL Code        Material     Value
99         117000         C3            10
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89         117000        Stock        100
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99         117000        Stock          100
81         600530        Sub Cont     100
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Can anyone please guide me and explain in detail how ,why andfrom where the system is calculating the entries.
Hope that you will help me in this regards
Take Care
God Bless
Regards
Praveen.
Edited by: Praveen Singh on Sep 16, 2008 8:07 PM

Go to OMWB and click on simulation and here enter you mateirla number, plant and Mtype 101
Then click on account assignment
you will see all the entries
Posting Lines Text              VlGCd AGC VCl   PK Acct D      PK Acct Cr
Gain/loss from revaluation      -e-   -e- -e-   83 440700      93 440700
Inventory posting               -e-   -e- TRA1 89 130000      99 130000
Incidental costs of external a -e-   -e- -e-   86 460820      96 460820
External activity               -e-   -e- TRA1 86 460960      96 460960
Change in stock account         -e-   -e- TRA1 81 460820      91 460820
Purchase offsetting account     -e-   -e- -e-   40 --Missing- 50 --Missing-
Purchase account                -e-   -e- -e-   40 --Missing- 50 --Missing-
Materials management exch.rate -e-   -e- -e-   40 440600      50 440600
Cost (price) differences        -e-        TRA1 83 440000      93 440005
GR/IR clearing account          -e-   -e- TRA1 86 210005      96 210005
Inventory posting               -e-   -e- TRA1 89 130000

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Dear Experts,
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Dear Umar,
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I went through this post before posting my question. I know SCN Rules not new to SCN . The solutions suggested in the post are not feasible for my problem. I already tested this. All Master Data exists in my case on CO PP and MM side.
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Hi All,
I am doing following scenario
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Hi,
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Craig...

Price Difference in Sub contracting

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