Production Order Variance settling to GL Account

Hi SAP Gurus,
when we settle the Production Order Varainces, system posts them to FI - Price Difference Account and also settle to COPA.
I could not find the settings that will prompt the variances to flow to FI-Price difference account
Could any one tell me where is the setting for this??
Points will be awarded suitably
Best Regards
Surya

Hi,
First of all you would have maintained the Cost Element for the same GL as Cost Element Category 1.
Now you can go to OBYC - Automatic Account Assignment.
In PRD Key - General Modification will PRA and this GL will be assigned to PRA key.
So Whenever price diff will occur, such GL will be reflected.
The main notable Point:
Now go to GBB Key. U will find the GL for variance against AUA Key. So whenever variance calculation will be done, such GL will be reflected.
This is all about the Fetching of GL Account as variance
Now we are coming to COPA Side
As we have created Cost Element for the same GL. Now we will assign this cost element in COPA Transfer Structure
T Code is KEI1. Now you will find the Transfer Structure. Now select the relevant and see the source fields and Value fields asssigned to Cost Element. So COPA will take the effect of Variance from here.
I hope you understood the flow.
Hope to be rewarded
Regards,
Jigar

Similar Messages

How to settle the production order variance to 3 GL account

dear all
i met a problem in the project ,the customer need see the production order variance category detail for (material,routine,overhead variance) in FI report ,so it need to settle the variance to at least 3 GL account
i don't know how to configure it ,i try to use result analyse like wip ,but go failed
do you have some suggestion
thank you

Hi ,
Through Standard SAP .. the same it not possible . Standard SAP will post the differences to one GL account ..The variance amount is not segregated..
The way out is to use report KKO0 .( Product Costing Drill Down Reports ) in CO . There are many reports available .. and you can compute the difference in CO Reports and manually make an entry in FI by manually reversing the original variance account and posting it to cost component wise variance accounts ..
To use the KKO0 report.. please perform the following tasks :-
1. Assign cost component structure in transaction OKN0 ( Date Extraction/Product Drill Down) tab.
2. Product Group Type = Material group..
3. Run KKRV after period end every month to collect the data for drill down reporting..
Please revert back for any further clarifications
Regards
Sarada
Sarada

Production order variance settlement to cost centers/internal order

Hi,
I am looking to configure the settlement of production order variances to cost centers/internal order. Is there a way to do this in the settlement profile. Would appreciate your help.
Thank you,
Ram

OKO7 will allow you to configure the Settlement Profile by selecting valid receivers.
This should be done with/or by FICO.
Then test, test, test
award points if helpful
Althea

CO Substituion for Production order variance settlement

Hi,
In make to order production, Our client requirement was not to settle variances to sales order but directly to COPA.
We cannot use variance categories in settlement profile/PA transfer structure as we have transfer pricing setup and direct settlement of variances categories to COPA updates only legal view of COPA and not profit center view of COPA.
Therefore variance GL account was created as cost element in our case.
Now that client wants to settle variances to sales order for certain plants and directly to COPA in certain plants.
Therefore i tried with a CO substitution to clear sales order assignment for the variance GL and then in OKB9 i have set up PSG as default account assignment.
Now when i run the settlement, in debug mode i am able to see that the substitution works and clears the sales order assignment, but when i see the FI document posted, it still has SO assignment. No COPA document is triggered and a controlling document on sales order is posted.
Why does substitution not work for variance settlement in case of MTO process.
Regards
Raghu

Hi Ajay,
I used user exit OKC9 as suggested in SAP note 183250 (last paragraph) and SAP note 105024.
With the user exit, we have cleared the Sales order information and also called OKB9 as per the note 105024.
Now the settlement document is generated without Sales order assignment. A PSG is generated but no cost based COPA document. We also use account based copa. In controlling document, i can see PSG is updated as cost object against the variance GL.
Why does not Cost based COPA automatically generated.
We have FI settlement profile properly maintained. With a manual posting to this GL, i can see cost based copa document.
Accounting document before changes to user exit has following object
Dt 40600 Change in Stock, Prd Order
Ct 44760 Production Variance, Sales Order
Accounting document after changes to user exit has following objects
Dt 40600 Change in Stock, Prd Order
Ct 44760 Production Variance, Material & PSG
In the user exit, i have cleared the material from COBL, still it appears in the posting
Regards
Raghu
Edited by: Raghu Ram Thatavarthy on Nov 25, 2011 1:19 PM

Production order variance settlement( Ko88)

Hi All
I belive, this will be the account entery when we do production order settlement
Dr :PRD a/c (production variance account)
Cr: GBB-AUA or AUF( Inventory a/c in)
We are not implementing material ledger.
My question is
what is the best practice "whether to use AUA or AUF" If we are not using materail ledger?
For me it makes sense to use AUF .
Please advise me
Thanks in advance

You don't have a choice.

Production order Variance Settlement

Hi,
Can anybody tell, what configuration settings will have to be made to settle variances in production order
to sales order in COPA?
Regards
Milind Nair

1. TA : OKOA.
2. CHOOSE : SETTLEMENT PROFILE
3. SELECT SETTLEMENT PROFILE,   "PP01" FOR EXAMPLE.
4. SET ON : VARIANCES TO COSTING BASED PA.
5. SELECT PA TRANSFER STRUCTURE (BEFORE THAT YOU MUST HAVE CREATED PA TRANSFER STRUCTURE)
YOU CAN CREATE PA TRASFER STREUCTURE BY TA : OKOA
A . CHOOSE: PA TRANSFER STRUCTURE .
B. CREATE PA TRANSFER STRUCTURE. FOR EXAMPLE :
    A1- Settle production variances
C. ENTER ASSIGNMENT LINES: FOR EXAMPLE :
10     Input price variance
20     Input quantity variance
30     Resource-usage variance
40     Remaining input variance
D. FOR EACH LINE ASSIGN SOCURCE (COST ELEMENT + VARIANCE CATEGORY , f.example.) AND VALUED FILEDS.

Production Order Variance Settlement to COPA

Hi gurus,
Do i have to create the cost element for the settlement of production orders to COPA ?
When i have a negative variance i can settle correct with the cost element created.
When i have a positive variance i can not settle with the cost element created. The system ask to update the PA transfer structure with the cost element.
What do i need to do, create or not the cost element ?
Regards

Hi,
Did you run KKS1/KKS2 before settlement? If you have only execute the settlement, variances will usually not calculated automatically.
regards,
Ronny

Settlement of Cost Center And Production Order Variance

Dear All
I have just started to learn SAP Controlling. I am able to get hold of some materials on Controlling. May I request the experenced forum memebers to please explain the following
1. How data flows from FI to CO and PA
2. When cost center and production orders are settled, how the variance are settled and which accounts/ modules get effected
and a source where I can get some material on this topic. Your immediate replies and valuable peice of advice will help me a lot
Thanks
Arvindh

Dear All
I have just started to learn SAP Controlling. I am able to get hold of some materials on Controlling. May I request the experenced forum memebers to please explain the following
1. How data flows from FI to CO and PA
2. When cost center and production orders are settled, how the variance are settled and which accounts/ modules get effected
and a source where I can get some material on this topic. Your immediate replies and valuable peice of advice will help me a lot
Thanks
Arvindh

Variance calculation for production order with settlement receiver as SDI

Hi...
I have one query reference to Variance calculation for production order with settlement receiver as SDI(Sales document item).
I am working on Varaint configuration with strategy 25(Make-to-order for configurable material) with requirement class 046.
I have created sales order ref. to configurable material,subsequently created planned order & then converted to production order.
In production order settlement receiver is SDI(Sales document item).
While doing production confirmation ,variance has been created.
Now during variance calculation KKS2, I have got error message as no suitable settlement rule found for object Order no.
Is there any way to come out of this?Or variance calculation KKS2 is not applicable with settlement receiver as SDI(Sales document item).
Pl. guide
Redards
Tushar

Hi
In case of non valuated material, concept of variance does not apply...
Variance is Actual Cost - Cost of Goods receipt posted in stock.. If the later value is zero, your entire actual cost is variance... That is one way of saying it
But, in SAP, var not calculated in case of non valuated material and that makes sense as well.. Since you are in MTO scenario, it would make sense to analyse costs vs revenues @ sale order level as each SO will be unique in itself
Regards
Ajay M

Basic question on settlment of production order variance to FI

Hi Experts,
I know im asking a dumb question. I really understood the concept of variance generated in production order, to say it in simple words the difference between debits and credits. But when it comes back to FI im confused and lost, when we settle the production order variance, the following entry is posted.
Production variance a/c 100
COGM var a/c or Mfg ouput var a/c 100
Now my question here is, there is a debit and credit of variance for 100, which is equal to zero, so there is no net impact of variance in my P&L, the variance is not accounted in FI at all. How is the production order variance accounted in FI?
Could somebody please answer my question or provide me with some clarification. I know either i would have misunderstood the concept or something is wrong or may be i need to look over the entire postings.
appreciate for your time spent.
Thanks in advance,
Best Regards,
sk

Hi SK,
The net impact of settlement of production order on P & L is zero. The reason is actual consumption to that particular production order is booked to P & L at the moment the activities are confirmed over that order.
Variance is difference between Std cost of Goods recepit and actual consumption. Suppose actual material consumption is 100 Rs and your std cost of goods with which production order is credited is Rs 90. The diff is Rs 10. Now if you again book this 10 Rs to P & L as negative being excess and giving second effect NOT to P & L, you will not come to know what is actual consumption and the picture will be wrong. There will be mismatch between Actual physical consumption and what is booked to P & L.Hence the debit and credit is given to P & L to nullify the effect of variance.
Truely speaking, the variance account is to be observed to verify the actual consumption against standards and to correct BOM and Routing and/or to take necessary action for excess or less consumption.
Hope the matter is clear.
Makrand

Production order variance in PCA

Hi All,
Production order variances In PCA both entries are posted PRD and AUA, it is netting off and Profit center balance is zero.
when i analyze PCA,my product line profit center is showing 0(Zero) balance for production order variance entry.
we want to upload PCA balances to consolidation systems(Hyperion)by profit center totals.in this case all my variances are zero.how can i analyze this entries in PCA and Hyperion.?please help me.
Thanks,
Anusha

Dear Anusha,
Both the accounts in the accounting document for settlement of variances, nullify each other in Finance. The variances are only for information and analysis for controlling variances. Hence, you need to take both the accounts in your consolidation.
Trust this helps much and if so, pl assign rewards!
Regards,
Ashok SINGH

Production Order Variance Configuration

Hi Gurus,
Would you please help me with configuring the Production order variances in product costing. I would really aapreciate if you can send me some documentation. My scenario is to configure the automatic calculation of production order variance and its settlement to Copa. I would really appreciate an early response. If you have any documentations please send it to kamkhan.sap at gmail.
Thanks

Hi MKR,
You can calculate the following variances in the R/3 system:
Planning variances
Production variances
Production variance of the period
Total variance
You control the variance calculation process by specifying a particular target cost version.
In make-to-stock production, standard cost is calculated in the standard cost estimate for the material. In sales-order-related production with a valuated sales order stock, standard cost is determined using a predefined valuation strategy.
During production, actual costs are collected on the order (product cost collector or manufacturing order). The actual costs that are compared with the target costs are reduced by the work in process and scrap variances (the result is called the net actual cost).
You can determine the production variances of the period by comparing an alternative material cost estimate with the (net) actual costs. This alternative material cost estimate can be the modified standard cost estimate or the current cost estimate, for example.
Total Variance
The total variance is the only variance that is relevant to settlement. This means that only the variance categories of target cost version 0 can be transferred to Profitability Analysis (CO-PA).
The total variance is the difference between the actual costs debited to the order and the costs credited to the order due to deliveries to stock. The difference between the debit and credit of the order is passed to Financial Accounting (FI) and Profit Center Accounting (EC-PCA) when the order is settled.
The target costs for the total variance are calculated as follows:
In make-to-stock production, the target costs are calculated using the standard cost estimate for the material and the quantity delivered to stock.
In sales-order-related production with a valuated sales order stock, the target costs are calculated using the cost estimate relevant to the valuation of the sales order stock (such as a sales order cost estimate or a standard cost estimate for the manufacturing order) and the quantity delivered to stock.
For the total variance, the control costs are equivalent to the following:
In Product Cost by Order, the control costs are the actual costs less the scrap variances.
In Product Cost by Period, the control costs are the actual costs less the work in process and scrap variances.
The variance calculation process compares the itemization of the cost estimate on which the calculation of target costs is based with the line items in your actuals.
The itemization contains detailed information based on the costing lot size, such as the materials to be used and the activities to be performed.
When you release a standard cost estimate for a material, the price calculated therein becomes the standard price in the material master record of the material being manufactured. In the standard system, an itemization is always created for standard cost estimates for materials.
The following variance categories can be reported for the total variance:
Input price variance
Resource-usage variance
Input quantity variance
Remaining input variance
Scrap variance
Mixed-price variance
Output price variance
Lot size variance
Remaining variance
When you settle, you can transfer the total variance to Profitability Analysis (CO-PA) broken down into variance categories.
In CO-PA, the standard cost of goods manufactured for the product is compared with the revenues to calculate an initial contribution margin for the period. The variances between actual cost and standard cost of goods manufactured can be used to calculate a second contribution margin for the period.
When you calculate the variances, you can transfer the difference between the debit and credit to CO-PA only as a total.
You calculate the total variance with target cost version 0.
Hope this helps. Please assign points and let me know if you need more information.
Rgds
Manish

Variances for the Previous Period- Production Order Variances

Dear All
I am not able to settle the variances of Previous Period in Ko88.
The following steps I have done for the settling the variances
1. KKS2- Production Order
2. Ko88- Settlement of Variances
If i settle the variances production order variances it is increase the stock and in the increase in the profit and loss account
I need a suggestion there should not be any impact on the either in the profit and loss account and stock
Please advise me
Regards
Ramesh

Dear Vimal
I would like to explain further more on this area.
1. For V Material Item - When there is no stock it will be posted to Profit and Loss account
2. For V Material Item- When there is a stock it will be posted to Balance sheet acccount- My question whether it can be posted to Profit and Loss account. When there is a stock - What is the procedure to be followed.
In further to that Settlement can be done only if the order is completed. settlement cannot be done if the order is not completed.
I need to understand
1. Whether V Material item available stock can be posted to Profit and Loss account.
2. Whether this is based on Order completion.
Thanks for your reply.
Regards
Ramesh

Production Order Variance not posting to COPA

Hi,
I am hoping someone can help.
We settle our production order variances to COPA. - usually without any problem. The production orders settle to both Material (Mat) and PSG
However this month we had a situation where for 2 order there was no settlement to COPA for the variance.
For these 2 production orders there was no settlement rule to PSG in the master data so this obviously explains why it didnt create a settlement document but my dilemma is understanding why there is no PSG settlement rule.
Through testing it appears that the PSG settlement rule is not created at the time of production order creation at all but seems to be automatically created after the execution of KKS2 and CO88.
The 2 orders that I had issue with this month were for a new material and I am able to recreate this probelm for any new Production order against this new material. So I suspect that there is something specific to this material that is prveventing the PSG settlement rule from being created.
But this is where I am stuck! I can't find any setting in material master or other area that would seem to impact this.
Any help appreciated,
Thanks,
Tracee

Hi,
First you can settle these 2 orders individually with using KO88 Transaction code and see if there is any error. Also check the settlement profile of these 2 production orders.there you can check the " variances to costing-based PA" tick is there or not.If tick is not selected there,you can select the check box and run variance calculation (KKS2) and do the settlement for these 2 production orders (KO88).
I hope this wil help you and let me know if you have any queries.
Regards,
Puri.

Production order variance and purchase variance go to one business area.

Hi Experts,
I have a issue while Purchase order we have ordered 3000 qty and while goods receipt we posted 300000 qty and same was issed for prodction order instead of 3000 and got variance. Then afterward purchase order qty was rectified with correct qty then purchase variance happed. The production order variance is getting offsetting by purchase order variance and no effect on gross profit.
Now my question is production variance is going one business area and purchase variance is going another business area. It should not be like that. Both should be showed only one business area. Please provide solution.
Thanks in advance.
Balu

Dear Balu,
You can try OKB9 wherein you need to select the indicator 'BAlrn' against the cost elements of Purchase price difference account. Then select the line item and click the folder 'Detail for business area/valuation area' and input your business area. Thereby you can capture this variance in same business area, even if any other business area is entered or derived differently.
Further, if your production variance account is also a cost element, you can direct the postings to the same business area, we can do the same as explained above. If not, we have to think of another configuration or work around. Pl let me know.
Trust this helps much!
Regards,
Ashok SINGH

Production Order Variance settling to GL Account

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