Routing different from Standard Cost: Scrap Variance Calculation

Hi,
We have issue with Scrap Variance Calculation/WIP calculation when the Routing in the production order is different from the routing in th standard cost. When we run varaince calculation we are getting an error message saying that variance can be calculated as quantity structre of the production order is different from quantity structure of the standard cost. I understand that this is standard SAP. But routing changes seems to be pretty common acorss the Industries espcially when the demand is high and the manufacturing happens in different machines.Do any of you had similar issues and can you share how this can be resolved.
Thanks,Sasi

Hi Sasi
Go to OPR4_KKS AND OPR4_KKS1 and see... I think you can convert this msg into warning message..
Regards
Ajay M

Similar Messages

Exclusion of target cost in Variance calculation

Hi,
While calculating variance in period end closing for a process order we are getting the errors.
1) No standard cost estimate for material 400000020 in plant TSIL on 26.12.2006 Target Costs: Determine Valuation Basis
2) Only remaining var. in version 0 - no target costs for 000001000109 Variances
We do not want to include the Target cost in variance calculation.
Please advise.
Regards
Aniruddha

Hello Anirudh,
If you choose costing version in variance calculation 0, then system calculates variance based on std. cost est. and actual cost. if you select 1, then system calculates variance based on planned cost and actual cost.
Go to customization settings in variance analysis calculation and change the costing version from 0 to 1.
Please let me know if you require any more clarifications.
Reward points if helpful.
Regards,
Santosh

What is the impact if we switch from standard costing to actual costing?

Hi all,
what is the impact if we switch from standard costing to actual costing?
what are the changes is needed in costing?
thanks.

Hello,
Its an nice idea to switch from standard to actual costing. It would be advisable to make this switch over happen in a new period praferably with a new year. You would need to carry out the settings for material ledger / actual costing and for the accounting settings you may refer to sap note 908737.
Not much costing changes would be necessary to the existing configuration but you would need to activate material ledger and allign your Inventory accordingly. The settings for ML would be relatively simple but the main problem would be handling the inventory that you already have in stock. You would also need to have a proper closing procedure followed by next month's planning approach which would actualise the inventory at the end of the month and decide the methodology for next month's plan valuation. It should be kept in mind for configuring ML.
The closing sequence would be as under:
1. Complete all Cost Center and production order postings.
2. Complete all Cost center Assessment / Distribution
3. Calculate Actual rate
4. Revaluate production orders
5. Calculate WIP
6. Settle Production Order
7. Run Costing Run (CKMLCP)
Material ledger is capable of actualising activity costs and WIP as well and you should configure it according to your need.
You can follow the standard SAP documentations for configurations + Note 908737 for configuring ML.
Kind Regards // Shaubhik

Changing from Standard cost to FIFO

Hi Experts,
One of my client want to change from standard cost to FIFO.
Can you please specify what precautions should I take before proceeding this change ?(system wise/accounting )
(I am aware of back up procedures,please donot specify that procedures)
What are the things I should be aware of ?(system wise )
Thank you
bishal

Hi,
Issue all the stock. After that you can change the valuation method.
This is a good time to see if everything is alright with the system.
When all the stock has been issued the following should be true:
- Inventory Audit Report for all items and all warehouses should be 0 (zero)
- The balance of all the stock accounts should at this time be 0 (zero)
If this is not the case. Contact support.
I take it for granted that you will do this in a testenvironment before doing it on the productive database.
Hope it helps.
Jesper

Cost Analysis result different from the cost estimate quantity structure re

Hi
Cost Analysis result different from the cost estimate quantity structure result in the same costing
run why this happen like this. ( in CK40N costing run result -- Cost analysis -- double click on costing result it shows cost estimate quantity structure result values different from cost analysis value )
Pls advice....
Regards
Kesharika

It depends on your costing variant. For sample, if you take the price in the 1° price estimated on the material view and this data has changed, you can have a difference between the first and the second estimate.
Perhaps also, it's just a definition of layout.
And 3rd hypothesis : you are looking on component in the ck40n and the variant don't take in account your cost component and just the material price.
Christophe

To zoom into labour hours from standard cost estimate

Hi,
Is there a way to zoom into the labour hours used for a standard cost estimate?

I'm not sure if this is what you mean, but you can see the quantity of each of the activity types in the itemization view of the cost estimate (CK13N or CK84_99). If the quantity is not visible in your default display layout, you can added from the dropdown.
thanks,

GR cost different from material cost

Hi,
I have few scenario below and hope to get clarification.
Below all correct?
Base on standard cost
1 MM03 $10 and purchase price is $8
   During GR it is debit stock $10 credit grc $8 and credit price diff of $2.
2 MM03 $10 and puchase price is $12
   During GR it is debit stock $10, debit price diff $2 credit grc $12
Base on MAP
3 MM03 $10 and purchase price is $8
   During GR it is debit stock $8 credit grc $8
4 MM03 $10 and puchase price is $12
   During GR it is debit stock $12 credit grc $12
Thanks

Hi,
I have few scenario below and hope to get clarification.
Below all correct?
Base on standard cost
1 MM03 $10 and purchase price is $8
During GR it is debit stock $10 credit grc $8 and credit price diff of $2.
2 MM03 $10 and puchase price is $12
During GR it is debit stock $10, debit price diff $2 credit grc $12
Base on MAP
3 MM03 $10 and purchase price is $8
During GR it is debit stock $8 credit grc $8
4 MM03 $10 and puchase price is $12
During GR it is debit stock $12 credit grc $12
very correct no issue
Regards
Kailas Ugale

Standard Cost and 'What if' cost

Hi
Standard Cost and 'What if' cost
Please explain what is the difference between Standard Cost and 'What if' cost estimate.
Does anybody has the idea about 'What If' cost estimate.
Raju

Hi Venkat,
First of all there is no concept called What if cost in SAP.
I feel you might be talking about the simulation cost.
Simulation cost is a cost estimate done based on certain different parameters which may be different from standard cost.
For example, we may do simulation costing using Plan Version 11. Normally we will be using Version 0 for standard cost.
Please let me know are you talking about the simulation costing or Cost Object planning.
Best Regards
Surya

Product costing - Variance calculation, Information system,

Hi,
I have an issue reconciling variances in product costing when I run S_ALR_87013139 - Cumulative. For instance I am getting results like below
Tgt (Dts) Actual (Dbts) Scrap Variance WIP Control Costs
33946 183020 0 27248 -95034 0
I was expecting
Variance = (Actual Debits - WIP credited) - Target Debits.
But it is not so. Am I missing something here
Would also appreciate if someone could tell
1. What does the target cost mean/how is it different from planned costs.
2. When is the target cost calculated? Is it only after the order is complete and variance calculation in KKS2. I also fing that whenever a production order is created I dont get target costs. Only planned costs are there.
Thanks for your help.
Ram

Hi Ram
Following are explanations for clarifications u asked for
1) Target costs = Actual qty delivered X standard costs ( as per standard cost estimate for the material). This means standard costs for actual goods delivered to stock. Planned costs means standard cost for planned qty of production order
2) Variances are calculated if the status of the order is either DLV or Teco and if material is issued and activities are confirmed. WIP is cancelled and variances are calculated
3) When u create production order - system only calculated planned costs of the order for planned quantities. Target costs are calculated only when goods are delivered to stock for the order either partially or full. Even if one qty is delivered to stock target costs gets calculated
Hope the above clarifies and do your checks with above
Pls assign points for the above clarifications provided

Process order variance calculation not taking the GI+Activity confirmation Cost

Hi,
Process oder was settled in the Month of June,2014. Accounting document was generated,but system only considered the GR cost. System was not considered the GI as well as activity cost on variance calculation. Variance posted GR= Variance.
22nd June,2014 Variance calculated, on 30th WIP entery also reversed with the same amount.
1st July,Order done untecho and no transactions are posted in the Month of July.
Now they would like to settle the Process in the Month of July. system is throwing the error " Status DLV/TECHO reversed after settlement period 006.2014"
Order status was TECO PRT CNF PRC CSER BASC BCRQ CRF No variance calculation status.
Any one faced any similar issue , please suggest me how to proceed.

Hi,
Please check SAP Note 386816 for error KV181.
In general it is recommended to use the Cost estimate of the Process Order (Planned Cost Estimate) for the WIP at target calculation. In additional please pay attention to SAP Note 386816 which explains this procedure and which prerequisites must be met to calculate WIP at targets or the scrap variance. Even if the group counter of the routing is different you can still calculate WIP at targets but only if the message type of message KV181 is set to SPACE by Customizing settings.
Hope this will a bit help to you.
Best regards, Takashi

Update of Price in Material Master when standard costing is released.

Hello SAP gurus,
When we created standard cost estimate, various cost estimate is created in various views Cost of good sold, cost of good manufactured and Inventory ( commercial ). Different view have different cost estimate.
But we I release costing , the material master is updated by cost estimate of Inventory ( commercial). The cost estimate from Cost of good manufactured should be update?
I am not able to solve the above issue , please help with customizing link
Regards,
Anand Agrawal

Hi Anand,
While you configure the Cost Componenet structure you define the attributes of cost Components in OKTZ.
When defining the cost components, you must specify whether the cost component plays a role in the creation of the different prices that are transferred into the material master record. You have the following options:
Standard price
Costs that are flagged as relevant for stock valuation form part of the standard price if the results of the standard cost estimate are marked and released. These costs also serve as a basis for the following:
The calculation of target costs in variance calculation
The valuation of scrap in variance calculation
The valuation of work in process for the confirmed yield for the operation (order-related production, process manufacturing) or at the reporting point (repetitive manufacturing)
Commercial price
Costs that are flagged as relevant for inventory valulation for the purposes of commercial law form part of the commercial price. This price is calculated in an inventory cost estimate and can be written to the material master record.
Tax price
Costs that are flagged as relevant for inventory valuation for the purposes of tax law form part of the tax price. This price is calculated in an inventory cost estimate and written to the material master record.
The above information will prove helpful.
Regards,
amol

Customer-specific variance calculation

Hello,
We use a Manufacturing Variance Calculation different from OPM. In our calculation, the theoretical production quantity is computed as follows:
Divide actual quantity by the standard quantity per costing formula. So, if the actual batch quantity is 300 and the formula weight per output is 1.2 (1200 lbs of ingredients to produce 1000 lbs of finished product per costing formula), then the theoretical quantity is 250 (300/1.2). Planned quantity per production formula is 400. The variance "per us" is favourable by 400 - 250 (Planned - Theoretical) = 150 instead of 400 - 300 (Planned - Actual) = 100.
Is there a way similar to Oracle GL's STAT accounts to use our calculation instead of standard Oracle. We are only looking at our options, not saying this calculation is correct.
Thanks,
Sanjib

Hi Meenakshi,
I dont want to post the entries automatically, i just want to see the interest calculation (at what rate and for which period)?
so, i dont think system will create any entries if we dont post the entries automatically.
Thank You

Product Variance Calculation

Gurus,
How do we calculate Product variance?
What is the procedure / process?
Where can the effect be seen?
Edited by: Bhatia on Oct 15, 2008 6:44 PM

Hi,
Variance Calculation
As long the production order is not fully delivered or flagged Technical Complete the remaining order balance is treated as WIP. Otherwise the order balance shows up in variance calculation.
If a lot-based product-controlling WIP, is valuated at actual costs. The WIP is calculated as the difference between the debit and credit of an order as long as the order does not have the status DLV (delivered).
In lot-based product controlling the variances are not calculated until the order has the status DLV (finally delivered) or TECO (technically completed). This means that at the time the order has reached this status, the system no longer interprets the difference between the debit and the credit as work in process but as a variance. In lot-based product controlling orders never have work in process and variances at the same time.
Variance calculation compares the actual costs incurred for the production/process order with the target costs according to the standard cost estimate for the finished material, and assigns the individual variances to variance categories. The target costs are calculated using the quantity delivered for the order.
In this way you can find out which variances occurred between the value of the delivery and the actual costs and you can find the reason for the posting to the price difference account for materials with standard price control.
Variances from production (target version 1)
Variance calculation compares the actual costs incurred for the production order with the target costs for the production order and assigns the individual variances to variance categories. The target costs are calculated using the quantity delivered for the order.
This enables variance calculation to find out which variances occurred between the time the production order was created and the end of the production process.
Variances from planning (target version 2):
Variance calculation compares the planned costs for the production order with the target costs according to the standard cost estimate for the finished material, and assigns the individual variances to variance categories. The target costs are calculated using the quantity delivered for the order.
This enables variance calculation to find out which variance occurred between the time the standard cost estimate was created and the time the production order was created.
Variance categories:
The system assigns every variance to a variance category. The variance category indicates the cause of the variance (such as price change, lot-size variance). Variances are updated to the information system and passed on to Profitability Analysis according to variance category.
You differentiate between variance categories on the input side and on the output side:
u2022     Variances that occur because of goods issues, internal activity allocations, overhead and G/L account postings are displayed on the input side. Price variances, quantity variances, resource-usage variances and input variances are displayed on the input side.
u2022     Variances that occur because too little or too much of the planned order quantity were delivered, or because the delivered quantity was valuated differently are displayed on the output side.
Variances on the output side occur when you deliver using a price that differs from that found by dividing the target costs and the delivered quantity. If you deliver using the standard price, a variance can occur when the order lot size differs from the costing lot size. This is displayed as a lot-size variance.
For config
3.1.4.2     Variances & Settlement
Variance Calculation determines differences between the actual costs incurred on a production order and the standard costs of the material produced. Variances are calculated not at once, but for different variance categories. The variances computed are then transferred to CO-PA.
3.1.4.2.1     Define Default Variance Keys for Plants
Use
The Variance Key is part of the order header and controls variance calculation. The system selects the value set by this step as default value when a material master is created. From the material master the variance key then is transferred to the order when an order for the material is created.
Procedure
1.     Access the activity using one of the following navigation options:
Transaction Code     OKVW
IMG Menu     Controlling  Product Cost Controlling  Cost Object Controlling  Product Cost by Order  Period End Closing  Variance Calculation -> Define Default Variance Keys for Plants
2.     Make the following entries:
Plant     Variance Key
BP01     000001
BP02     000001
BP03     000001
BP0X     000001
3.1.4.2.2     Define Target Cost Versions
Use
The target cost version controls various parameters related to calculation of target costs in variance calculation. In variance calculation, target costs are needed as a comparison to the actual costs incurred.
Procedure
1.     Access the activity using one of the following navigation options:
Transaction Code     OKV6
IMG Menu     Controlling Product Cost Controlling  Cost Object Controlling  Product Cost by Order  Period End Closing  Variance Calculation  Define Target Cost Versions
2.     Choose New entries and enter the following values or copy from default settings of CoArea 0001 to BP01:
CoArea     TgtCostVsn     Text     Variance Variant     Control Cost     Target Cost
BP01     0     Target Costs for Total Variances     001     Actual Costs     Current Std cost Est
BP01     1     Target costs for production variances     001     Actual Costs     Plan Costs / Preliminary Cost Estimate
BP01     2     Target costs for planning variances     001     Plan Costs     Current Std cost Est
3.1.4.2.3     Create Settlement Profile
Use
The settlement profile controls various parameters related to settlement.
Prerequisites
Allocation Structure
Procedure
1.     Access the activity using one of the following navigation options:
Transaction Code     SPRO
IMG Menu     Controlling  Product Cost Controlling  Cost Object Controlling  Product Cost by Order  Period-End Closing  Settlement  Create Settlement Profile
2.     Choose New Entries and enter header data. Then for each new entry choose Details and enter remaining data.
3.     Overview of data records:
Profile     Text
YGPI00      BP Process Order w/o CO-PA
YGPP00     BP Production Order w/o CO-PA
YGPI00     YGPP00
Actual costs/costs of sales
To be settled in full     X     X
Can be settled
Not for settlement
Default Values
Allocation Structure     A1     A1
Source Structure
PA Transfer Struct.
Default object Type
Indicators
100% Validation     X     X
%-Settlement     X     X
Equivalence Nou2019s     X     X
Amount Settlement
Var. to co. bsd. PA
Valid receivers
G/L account     N     N
Cost center     O     O
Order     O     O
WBS Element     O     O
Fixed asset     N     N
Material     O     O
Network     N     N
Profit. Segment     N     N
Sales order     O     O
Cost objects     O     O
Order item     O     O
Business proc.     N     N
Real est. object     N     N
Other parameters
Document type      SA     SA
Max.no.dist.rls     3     3
Residence time     3     3
You have to assign Variance Key in material master for semi-finished and Finished goods in costing 1 tab also.
To Execute
KKS1-Collective Variance calculation
KKS2-Individual Variance calculation
CO88-Collective settlement
KO88-Individual settlement
Thanks,
Rau

Standard Costing Re org- Mid month

Experts ,
We rolled annual cost and 10 days after we realized our annual cost roll is wrong which has wrong OH and LAB cost.
Now we have already thousands of production orders and most of them settled and variance calculated
what is the impact if I re org and roll the cost again?
what is the impact to COGS account
What if I wait 2 days and roll the cost in next period?
Please suggest some best practices
Thanks
Prasad

Hi Prasad
If the variance is settled for the production orders, you can't do anything
For production orders which are yet to be settled, the new cost WL be taken into consideration to calculate target costs during variance calculations
If any GR from production is posted after you reverse the std cost and before releasing new cost, variances won't be calculated. So ensure that before the cost is re-released no GR is posted
Also ensure no billing doc is released if you have copa active, before the std cost is released again
Also in copa costing key, choose period indicator as 4
Br. Ajay M

Cost center variances

Hi All,
Could you please help me in finding out
- below problem is for settling cost center variances (KSS1) and not regarding production order variance.
1) Where is target cost version (used for cost center variances) assigned in the controlling version '0'.
I could not find any option for mentioning target cost version in controlling version '0'.
2) How are cost center variances allocated to CO-PA.
If they are done through assessment, where is the settings for assigning value fields for each variance category.
3) Is there any CO posting done by system during cost center variance calculation (or) is it just classification of cost center balance into variances and no postings in CO?
Thanks in advance for the time and help.
Regards,
DSK

Hello DSK
1) There is no target cost version for cost center. The amount left in cost center is not called as variances but as under/over absorption. This is the difference between actual costs posted in the cost center and the costs actually charged to production orders.
2) The variances can be taken to COPA through COPA assessment cycle where you enter the cost center as sender and the respective value fields as receiver. The variance category refers to production variance categories and to cost center.
3) There is no such thing as cost center variance calculation and no entry for this as such.
Refer help.sap for more details.
Sangram

Routing different from Standard Cost: Scrap Variance Calculation

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