Production variences

hello gurus,
can any one please explain the how we can calculate the production variences in product cost by period.
regards
rihana

Hi Ranjeet
In addition to the reports suggested - please have a look at the following report
For variance analysis you can use report S_ALR_87013127 - in Object list node in cost object controlling.
This is one of the best available reports u can use since it gives variances for all order types in all plants and company codes
Once u select the parameters, go to the layout and select all variances fields listed and save your layout so that u dont have to do it everytime.
The above report is used for analysis and corrections to orders etc.
Also, there are quite a few reports not only on variance analysis but on WIP but in most of these reports the selection parameter is a single order instead of all orders for a plant which limits the usage.
Let me know if you need any more clarifications
And please assign points as a way to say thanks

Similar Messages

Production Orders, Varience & costing

I have many customer that are using SAP production orders with either moving average of FIFO and are surprised by the varience that are created by SAP production orders. This is not typical of a 'actual' costing system.
When a production order is closed, it will create a Journal entry to a varience account is created for the cost of the material that is in excess of the standard BOM. Obviously, this can only be calculated when the M.O. is closed.
This method does not support an 'actual' cost company - this is a varience posting.
It would be better if the over or under cost could be handled in a manner similar to an AP invoice with a changed cost.
In other words.
Change to inventory gl account * (total on hand for this item / units for this production order OR 1 which ever is greater)
Charge to varience account
Change to inventory GL Account - ---The remander from the above calculation --- (Change to inventory gl account * (total on hand for this item / units for this production order OR 1 which ever is greater))
The variance would only be for items that are no longer in inventory.

Hi,
What I meant is,
Planned Start time : 8 AM on 10th Dec,2008
Planned End time : 2PM on the 10th Dec,2008
Actual Start time : 8 AM on 10th Dec,2008
Actual End time : 6 PM on 10th Dec,2008
Here how will we accout for the 4 hrs.? Client donot want this(due to reasons best known to the client, though this is not advisable).
Best regards,
K.Kumar.

Varience Key in production order

Dear All,
There is varience key field in the control data tab of production order header. Please let me know where to define in customization the default value for this field.
I am putting it manually in each order currently.
Thanking you in advance.
Sumeet

Dear Csaba,
Thanks for your reply.
I have set the varience key in plant through OKVW. I haven;t got what entries to be made in OMV1. Whn I created the order, the varience key was not coming automatically.
Please guide.
Sumeet

Production order varience analysis

Hi experts,
While doing the production order varience analysis, I was checking the cost analysis in some orders all the data is perfect i.e. material consumption and Machine hour rates but still that order is showing positive varience under *Reciept to orders* Can you please tell me from where this cost is getting captured.

Narayan,
It would be good if you can share the screen shot of the cost analysis of order for better understanding of the problem. You can post the screen shot in some of the websites and share that as a link here or else please send me to my mail Id which you can take it from my profile.
Regards,
Prasobh

Production order Target cost Zero - Varience calculation error KV151

Hi Experts,
I am having an issue on KKS2 variance calculation, system throwing error KV151 Target cost is 'Zero'
All pre-requisites are ok including BOM, Rates, Routings etc..
Process:
Production order with FERT - valuated material,
All BOM components in production order are Non valuated stock items, Non-stock items
Note: Cost Estimat e is for Labor and Overhead only.
After production order confirmation CO11N, production order Cost analysis displays - Target value ("Zero") and actual value.
Due to above reason in KSS2 we are unable to calculate variance, system displayed error KV151.
I cannot settle the production order, guide if I am missing some thing in config. ?
I appreciate you quick response.
Thanks,
RK

Thanks for your reply Swapvik & Takashi, I have no issues on configuration side very thing looks good.
Cost estimate - Good
Variance key - Good
Production order - FERT (Valuated) - good
BOM components - UNBW, NLGS only - Good
Labor rates - good
Periods - good
Production order confirmation - Good
Actual cost - Good
My Issue is Target cost is zero on cost analysis in CO03 but if I can see target cost in KKBC_ORD report.
I am unable to calculate variance and settlement.
I appreciate your response.
Thanks,
Raj

Alternate Bom for a finished product has huge varience in cost estimate

Hi all
I have created alternate BOMs for a finished material. One is local raw materials and another has imported raw materials. Goods are produced using both these boms but in one period i can release cost estimate of one BOM. Thats why there is a huge variance in cost estimate when alternate BOM is used for the material. kindly give me a solution as to how i can fix this issue.
regards,
shahzad

Dear,
Please refer this link for,
[Costing with alternative BOM |Re: Costing with alternative BOM]
One thing you can do it with split valuation with batch managment please take help from CO person.
Regards,
R.Brahmankar

Production order q's

Hi all ,
1) What should be the selection criteria in COOIS for open production order list for the one month frame ?
2) How can we know that for a production order Overhead , Varience, Settlement has been carried out if the production
if the order is not having the status CLSD ?
thanks in advance
Regards

Hi Venky,
specify production order status excluding DLV, CNF and period to get open production order in COOIS.
specify corresponding Production order statuses in selection screen of COOIS.
Regards,
Krishna Mohan

Moving average price in case of semifinished product.

Dear All,
Our client wants to go for moving average price in case of semifinished material, which is supposed to be normally standard price against our advice. The problem is that MAP is not getting updated after the GR against the production order. What settings I need to check in cusomization from PP point of view to solve this problem. Ideally the summation of cost of raw materials has to be the cost of semifinished material.
I did the settlement and the MAP got updated. There are few questions I want to ask u are?
1. What MAP should I keep when I create the semifinished material for the first time?
2. What the base to calculate the target cost in production order? Currently the target cost is zero for that the varience is huge which will be going to affect the MAP in a big manner after setllement? What should I do in that case?
Ur valuable inputs are awaited at the earliest. It's very very urgent.

Hi
There will not any big problem if your client insists upon MAP for the material instead of your suggestio for having S as per std. SAP suggestions. There will not be any change in material price during confirmation if you have V indicator but if you have S as indicator there will be change in price due to costing and settlement. It is not that system will not do anything for the materials having V indicator, check the field value for Standard price , it gets updated. Your costing calculation completely depends uopn the settings that has been customised in OPN2 i.e the settings available for valuation. You cancompletely control all these.
Pirce for your semifinished should include the inputs to it and any other parameters which you would like to add. You can always change the price manually with MR21 if you have Zero stock.
Best Regards

Control of price varience in MIRO.

Hi All,
I have a problem in setting the tolerance limit for Price varience in MIRO.
The requirement is,
The client wants to activate this tolerance limit for 1% price varience of PO value.
But, this tolerance limit should be checked for the Planned delivery costs.
How can i achieve that...
Because once i activae the tolerance limit, i know that is apllicable for all types of cost (It be delivery cost or material cost) but in this case i should restrict it to only material cost.
Pls help...
Regards,
Puneeth

Hi,
You can use below telerance key to meet your requirement
KW: Variance from condition value
The system calculates the amount by which each delivery costs item varies from the product of quantity invoiced * planned delivery costs/ planned quantity. It compares the variance with the upper and lower limits defined (absolute limits and percentage limits).
Thanks & Regards,
Sridhar.G

Production Order GR with Planned Price

Dear All,
We are using following steps for production order=
1) Create BOM, for Semifinished material with Price control = "S"
2) Create Roting, with all Keys PP01, PP02 and PP03 with Material allocation to respective steps
3) Standard Cost Estimation using CK11N and CK24
4) Create Production order using CO10 with Material and WBS Element.
5) Material issue against Reservation. But the material may be changed after releasing prodction order first time. And Actual issue for the BOM material may be more or less in qty.
6) Final confirmation with completion of last phase confirmation of production order.
7) Production Order TECO
8) Prodction Order Settlement using KO88
Now my problem is while I am doing final confirmation the GR done is with Planned price (Based on BOM) + Subcontracting charges which it is set with production order while releasing it for the first time.
Kindly tell me is the system behaviour is correct or wrong?
We are expecting that GR should happen with the actual material issue price + Subcontracting charges only.
Please reply.
Thanks & Regards,
Vishal Kadia

Vishal,
This is for your information.
If you have production order of 1 EA- Starnadar Price =10 rs
Raw material cost=5
Activity Cost=2
Overhead Cost=2
So COM=9 rs
Suppose after production order creation plan cost is 9 rs, hence after confirmation there is no varience (plan vs actual) so actual cost is also the same 9 rs.
Now as you said if system will go for GR against actual cost, that will post in cost of good mfg account at the time of GR.
As per std SAP after GR also you can issue the material to that order, hence if you will go for more goods issue of new material against that order (unplanned issue) of rs 5 for the same order then the actual cost will again change (recalculated), but for that oredr material is allready GR with actual cost, then you will not able settle the cost of newwly issued material on that order.
So whatever the plan and acual cost GR will be done against std price maintioned in material master ( 10 rs)
This is my understanding.
Hopes that will clear your dought.
Tara

Varience in data

Dear All,
i have a query in Production planing reports
we have one report which we run on daily basis
the issue here as below
For sale date 10.01.2009, the SKU 5433 has been converted to Material 543301 (variant) for the depot 500 (Plant 1530). We have checked the Material on the ECC side and the material 543300 does not have a variant maintained for plant 1530. Effectively, the conversion for this SKU 5433 should have been 543300, as the variant is not maintained for this depot. But the report shows that the SKU got converted to 543301
because of this we have varience, how to rectify this
Txs

Dear Csaba,
Thanks for your reply.
I have set the varience key in plant through OKVW. I haven;t got what entries to be made in OMV1. Whn I created the order, the varience key was not coming automatically.
Please guide.
Sumeet

Varience Report

Dear Friends
My client needs to run a report with following information.
Production Order, Material, Standard Price, Actual Cost, Total Varience.
Please provide me answer for this. For right answer full points will be given. This will be one way of thanking you.
Thank you
KP

Hi,
Comparing the company's book keeping quntity of material with sap material quantity and if any differencesbetween book keeping quantity and sap quantity used to post them in sap.
Steps in Physical inventory;
Create the Physical inventory document(MI01)
Enter the count (MI04)
Post the difference(MI07)
The inventory procedures are...
ANNUAL INVENTORY, CYCLE COUNTING, CONTINUOUS INVENTORY, ZERO STOCK CHECK, SAMPLE BASED PHYSICAL INVENTORE.
THEVariance report:
The variance needs to be analyzed for the difference in the qty at book and physical level. Once it is analyzed the changes can be done in the count sheet for Qty and UoM.
The Finance department to check and reconcile the difference between the physical and book count runs this report.
If required based on the variance, recount is initiated and the physical count checked before investigating and clearing the difference.
To run the variance report in WM level : Logistics-Logistics execution-Information system--warehousePhysical InventoryWith Bin Inventory Management-Different list of open Inventory Documents
Transaction Code LX17
The Finance department to check and reconcile the difference between the physical and book count runs this report.
If required based on the variance, recount is initiated and the physical count checked before investigating and clearing the difference.
To execute LX17, Enter
Warehouse number and Inventory record.
I hope this will give more clarity to you. Thanking you.

Varience in prod order

Dear All ,
pl refer the following
total tgt cost     total act cost    tgt/act varience     component
239,943.56     262,573.01      22,629.45              R M Consumed
0.00                  362,340.00-      362,340.00-          COGM
1,254.00       1,237.50          16.50-                    Labour Hours
1,650.00       1,650.00          0.00                       Machine Hours
33.00                 24.75              8.25-                     Set Up
26,081.86      0.00                    26,081.86-            Production OH
93,386.03      0.00                    93,386.03-            Admin OH
here the varienec is 96845.74 Inr . How ?
Here Prod & admin overhead is to be caluculated that is why it is shown in total act cost is zero .
Pl guide
Regards

You are trying to ask some information but your question itself not clear. Always try to express more elaborate, so that your problem will be solved easily.
In general your variance is calculated in this way.
Material Cost :- Actual Quantity Consumption * Moving Average Price / Standard Cost as per the price control in the material master
Activity Cost = actual time / units recorded during production process * Planned activity rate maintained through KP26
Overhead Cost = as per the assigned cost sheet
variance = Actual (Goods Issue Cost + Activity Cost + Overhead Cost - Goods Receipt Value)
Explain your question in detail so that we can help you more.
Regards
ganesh
Edited by: Ganesh Kumar Parthasarathy on Oct 14, 2009 3:09 PM

Product Costing and COPA

Hi Friends,
Could any one tell me the basic settlements done to COPA from Product Costing point of view and which tables will be updated at the periodic settlemnet of variences to COPA?
Thank you ,
Parthu

Hi
During settlement, variances are posted to CO-PA from the Production/Process Order/Production Cost Collecter at the same time that they are posted to the G/L. The fixed and variable portions of the variance are carried over into CO-PA with the same breakdown as the cost component layout that comprises the standard cost. Any characteristics that have been configured in CO-PA that are related to the product number are carried over for analysis, such as product number, product line, plant, and so on. This access allows the matching of variances with the products cost of sales.
The variances are posted to CO-PA in the period when they are incurred, not the period when the product is sold.
If you are using costing based CO-PA, the tables updated are:
CExYYYY, where yyyy = the operating concern/
Hope this helps.

Material Cost Not Shown in Production Order if planned with MD50

Hi,
We have run MRP MD50 for a sale order item ie FERT material which has BOM Items. All the stock of the BOM items is tranfered from Unrestricted Stock to Sales order stock. FERT ITEM planned order is converted to Production Order and all the BOM items sales order stock is issued against PO & Sales order no with Movement Type 261E.
After confirmation and goods receipt stock of FERT is shown under sales order Stock of Fert Material.
We can see the cost of operations but cost of materials consumed against the Production order is not displayed in Production order Cost analysis..How material cost can be displayed????
If i create PO with out refering the sale order that is normal process i can see the cost of materials triggering in Production Order.
Can we settle the varience when we are planning against sale order???
Some one Pl help us.
John

Dear,
Check your variant which showes the cost. See the following report
KKAC - For Sales Order with Assigned Orders or
KKBC_KUN - For Sales Order or
KOB1 - Actual Costs

Production variences

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