Under/over absorption

Dear experts,
We did cost center assessment and COPA assessment. But our financial profit is not matching with COPA profit. We considered all the cost elements except Increase/decrease of WIP, Inc/dec of FG and COGS. Actually the difference between Finacial profit and COPA profit should be under or over absorption. But that amount is not matching with under/over absorption in cost centers(diff between debits and credits in cost centers after excluding assessment cost elements and COGS elements). Vast difference it is showing. How to match this financial profit and COPA profit. Please help me.
Regards
Jay

Hi Piet,
I would need some inputs regarding matching of FI vs Costing Based COPA reports on the following issues:
1. Costing based COPA reports are normally build on Billing.
1.a How would production variances be mapped against qty billed.
1.b How would production variances related to SFG be mapped against FG qty billed.
1.c How would material purchase related price variances be mapped against FG qty billed.
1.d How would material valuation related price variances be mapped against FG qty billed.
2. There would be certain incomes or expenses which may not be allocable at all to the product for determining its contribution. I presume, here we can build some logic for allocation.
But the prime concern is issue no.1, for which, I have at least not been in a position to arrive at a logic.
Would appreciate, if you can suggest on the above issues.
Thanks in advance.

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Issue of under absorption and over absorption

Dear All,
Audit is going on in our client and auditor found that there is and over absorption of cost in cost center, which mean we are valuating our product at higher price and thus showing less profit in system.
They are referring the cost center report S_ALR_87013611 - Cost Centers: Actual/Plan/Variance.
Example
Labour cost in primary cost element against cost center 1210 is Rs 5000
Power cost in primary cost element against cost center 1210 is Rs 25000
And activity cost corresponding to that cost element is
Labour   7000 Rs
Power 35000 Rs
So system is showing over absorption of 12000 (5000+25000-7000-35000)
So please suggest as how to correct this as auditor saying that absorption should be equal to Zero Always, and hence want to correct the price of material also.
Kindly suggest the solution for that.
Bittu

Thanks a lot Santosh for your reply
from that many days i am working on your solution but not able to understand how system is calculating the Total Price it the time of KSII
I give an example kindly have a look at it.
In T-code S_ALR_87013611
Cost Elements                    Act. Costs
801000 Labour Charges 794,541.34
Debit                                 794,541.34
43001   SETUP                         1.02-
43002   MACHINE               1,535,432.85-
43003   LABOUR                1,023,218.50-
43004   ELECTRICITY             235,888.97-
Credit                              2,794,541.34-
Over/Underabsorption          2,000,000.00-
Activity Types                        Act. Acty
43001 Setup                              93.7 HR
43002 Machine                      10,236,219 S
43003 Labour                       20,464,370 S
43004 power                            62,076 KWH
In KP26
Activity Type     Plan             Capicity            UOM       Price (Fixed)
43001              200.0            20.0           HR          4.00
43002                400            30                  S         10.00
43003                500            40               S          8.00
43004                600            50                  KWH     8.00
Activity Type master is created as follows
ATyp categor     1
Price indicato     2
Act. price indicator     6
So when we do KSS2 System split Underabsorption value equally amount the cost element
Cost Center    Act Type    Control cost
1101100            43001     198,635.34
1101100        43002     198,635.34
1101100           43003     198,635.34
1101100           43004     198,635.32
                                  794,541.34
But when we do KSII
OTy Object                   AUn    Activity Quantity      Total price    Price (Fixed)
ATY 1101100/43001            HR               93.747         9,931.77         9,931.77
ATY 1101100/43002            S            10,236,219         6,621.18         6,621.18
ATY 1101100/43003            S            20,464,370         4,965.88         4,965.88
ATY 1101100/43004            KWH          62,076.029         3,972.71         3,972.71
                                                            25,491.54        25,491.54
How system is calculating total price value here kindly suggest
Regards
Bittu

Under/over payment

Hi Experts,
What are the configuration settings and entries for making under/over payment of vendor/customer Please give example.
Thanks and Regards
Balu

If the difference is immaterial, you usually clear the receivable and post the difference. You can define how payment differences should be posted. You have the following options:
· If the payment differences are within the tolerance limits, the system automatically adjusts the cash discount or posts the difference to a separate gain or loss account. You have defined the amount to which differences should be posted in this way. Specify tolerance amounts and percentage limits.
· If the payment difference exceeds the tolerance limits, you can process the payment as a partial payment or enter a residual item for the difference. When you enter a partial payment, the system does not clear the original receivable, but posts the payment with an invoice reference. When you create a residual item, the system clears the original receivable and posts the outstanding difference as residual item to the customer account.
for further details check:
http://help.sap.com/saphelp_47x200/helpdata/en/01/a9b999455711d182b40000e829fbfe/frameset.htm

Over Absorption in Production Cost Center.

Dears,
We are getting the over absorption in cost center after doing of actual price calculation settlement. we have done the following transactions at month end. eventhough we are getting over absorption (i.e., credits are more than debits) Credits are activity costs are transferred from production cost center to production/process orders or product collectors.
KO8G settlement of internal orders to cost centers.
KSV5 execution of distribution cycle.
KSII execution of actual price calculation.
CON2 revaluation at actual prices.
CO88 Settlement of Production/Process Orders.
Even after doing of the above trnasactions we are getting over absorption.
kindly advise me in order to resolve this issue.

Hi Divraj,
The same issue i am replicating in the development server i created one assessment cycle i gave one service cost center as sender and one cost element group, the group contains 10 primary cost elements(GL's), i done postings with 10 gl's respect to this service cost center, in my assessment cycle i gave one assessment cost element in segment header the sender rule is posted amounts, the receiver tracing factor contains variable portions, actual activity and no scaling, in receiver i gave cost center group contains 4 production cost centers, sender values is share in 100%, version is zero the receiver tracing factor tab contains variable portions as actual activity and one activity i maintained, the receiver weighting factor contains 4 production cost centers and factor percentage is 100%.
Now i execute the assessment cycle in KSU5 i am getting senders in cycle but receivers i am getting zero, when i took the actual activity, variable portions and no scaling i have to maintain activity price in KP26 and this cost center i have to maintain in process order that is fine please explain me how the cost will distributed to production cost center please explain the procedure in detailed.
Hopefully i will get clarity on the concept................

Profile in Fact sheet under over views

Hello gurus
how to indenfy the table fromwhere the profiles are created in the fact sheet (account view)under Over views work center
Work center: Over view -> Account view>Data Environment--->profile (say:Internal Profile for Budget Billing Amount Adjust,Internal Profile for bill correction,Std cic Data Environment for 4.64,waste mangement....)
the componet is IUICENV this is where we can see the profile field with Dril down.
Your inputs are highly appricated.

the details are coming from CS system
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Under & Over Delivery Tolerance.........

Hi there ,
I have maintained the Under & over delivery tolerance of the material in the work scheduling view....... but when I am creating the Process Order of the material...... in the goods recipt view in Process order it is still showing me zero percentage as Under & Over Delivery Tolerance
Do I have to mention the same tolerances some where else also ....... what can be the reason behind this abberation .......
Please help me .....
Thanks
Kaushik

Kaushik,
I dont think it is possibel to check all the persons who have changed. But if table logging is active in your system you could check the changes from transaction SCU3. In this transaction choose evaluate logs, choose Evaluate for tables, enter the table name AFPO. In output options choose Only actual changes and append table changes and Also evaluate check boxes. Enter the start and end date/ time. And then execute. You would get the user name, change date/ time, old and new values.
If table logging is not active in your system, for future you may ask your ababp/basis team to activate it for the important tables you require and create a report query to find the changes made.
Hope above is useful.
Regards
Ramanujan
Message was edited by:
Ramanujan Chitrakootam

Under /Over Delivery Tolerance with Sales Contract

Hello All,
Overview: In our current environment we are creating Sales Contracts, then a Subsequent order from the Sales contract. We change the Sales order quantity to desired amount for the time of delivery which the customer is requesting. Also in customer master (XD02) we have delivery tolerance setup for under and over.
Question: Since we have tolerance setup for the customer. At delivery time, we picked less from what the sales order originally had and complete the whole process to billing. Does the remaining quantity go back to the sales contract? Sales order is still showing "Being Processed" Or is not possible to do that with delivery tolerance setup and Sales Contracts?
Scenario 1: XD02 - Tol. Over/Under set as 5%. Unchecked box "Complete Delivery", "Partial del. Set to "Blank" and Max Partial to "9" for Customer
Created Sales Contract for quantity 500 Tons--> Created Subsequent Sales order for 25 Tons.
Delivery: Picked 22 Ton's. Recieved Message" Underdelivery tolerance of 5.0% has been exceeded".
Completed shipment and billing.
Sales order shows "being processed" and remaining qty did not go back to original Sales Contract.
Scenario 2: XD02 - Tol. Over/Under set as 5%. Checked box "Complete Delivery", "Partial del. Set to "B" and Max Partial to "1".
Created Sales Contract for quantity 500 Tons--> Created Subsequent Sales order for 25 Tons.
Delivery: Picked 22 Ton's. Recieved Message" Underdelivery tolerance of 5.0% has been exceeded". Acc. To the partial dlv. Agreement, no subsequent delivery can take place
Completed shipment and billing.
Sales order shows "Completed", but the remaining quantity did not go back to the original Sales Contract.
Is possible to have the remaining quantity to go back to the Sales Contract without going back to the Sales order and change the quantity to what was shipped. Can this be done via configuration?
Can anyone please shed some light on this.
Thank you all,
Nav

Hi
Can this be done via configuration?
To my knowledge...definitely NO. It is not possible through configurations.
Regarding the two scenarios...you are delivering quantity less than the lower tollerance. It should not happen and if your business process demands it....there is no meaning of maintaining the tollerance limits for the customer. Since the message is a warning message, you are ignoring it and proceeding with the delivery. This message should be an error message and delivery should not be allowed when the tollerance limits are crossed.
Thanks,
Ravi

Under/over payments

Hi
I have an issue with under and over payments and writing off dased on a reason code and gl account., I have configured a reason code and defined the relevant gl's, however when I try and post a payment, it will only allow me to put the differance as a residual item. Does anyone know what I have missed. This difference is within the relevant tolerance's setup for the customer and the tolerance group is assigned to the customer. I am also assigned as a user to the employee tolerance group. I have seen other posts regarding this but cannot see a resolution.
thanks

yes it is defined as P&L account.it is posting now to gl account for over payment only. when i do an underpayment like $99 and invocie amount is $100, it gives message "difference is too large for clearing". I have configured tolerances, still it throws this message for Under Payments only. Is there any separate place where we configure the under payments for customers. we have only one gl account to whcih we want to post both over payments and under payments

System did not post Under/Over payment entries

Hi,
I have setup for the Over/Under payment Amount allowed in Document Settings --> Incoming Payment / Outgoing Payment and I have also setup for the Overpayment and Underpayment GL Accounts to be posted in the GL Determination Sales / Purchasing tab.
When I run testing, for example I have an Sales Invoice for 350.08 and my payment amount is 350.00 (I've set the allowed underpayment amount to 0.10), I did not see the journal posted for the Underpayment, though the system prompted a message indicating the amount does not match upon posting. I might have done the payment incorrectly. Can anyone advice me what is the correct way of making the payment so the journal will post the 0.08 as underpayment?
Thanks in advance,
Ching Sean

Hi Suda,
Sorry for the late respond. What I have done is:
Highlight the Invoice - 350.08
Go to the Payment Means
Manually type the Actual amount Paid - 350.00
Click Ok
Click Add
I have just run the testing again and now it works! I do not know what happened last week that causes the system to not allowing the posting. Anyway, since now that it is working, I will do a few tests more, just in case.
Thank you so much for your help.

Hard Drive that fits under (over?) AEBSn

Since the AEBS now supports USB Drives, has anyone heard of an external drive (or drive enclosure) that fits under the AEBSn?
The follow-on question is: would that have much effect on signal quality to clients on a floor below?
Finally, what about placing a hard drive on top of the AEBS? Would that be a problem? I have a small Western Digital Passport that I could use but I'm just not sure.
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According to an ad in MacWorld or MacLife, G-Technology also has a drive of that form factor. I bought the NewTechnology drive from MacSales and it arrived yesterday. I just wish it was fanless like the other devices on my desk. It did come with some nice software installed and 1 license for ProSoft's DataBackup.
Chip

Over/under absorption of overheads

Hi SAP Gurus,
Request for your help to resolve my following queries.
We calculate plan activity rates & execute a costing run. Also we calculate the overhead in costing sheet with plan rates. I would like to know, what happens for the actual costs booked? How the under/over absorption is handeled in SAP?How this is settled? How this is charged to production? Is there any accounting entry passed at the time of adjusting under/over absorption?
(Points will be assigned )
Regards,
makrand

Thanks Markand. I am quite a beginner in SAP COPA. I have this question, may be not exactly the one you asked but somewhat related.
I am a bit confused by seeing the difference in total overhead spent as shown to me by cost center (Z3611, Z3612, Z3614) and the gross profit & income statement in COPA (via KE30).
When I ran the cost center transaction, it shows me that my company has spent 900k$ for the month of November for production expenses (pdex) (Not including the line "Under/over absorption). Now, when I see the income statement coming from COPA, it shows me that we had standard overheads of 800k$ + Spending variance of 100k$ and then 150k$ of other overhead variances (volume ovhd variance & Production ovhd variance). (I do understand the significance of volume & production ovhd variance)
The standard overhead+ spending variance gives me 900k$ which is the total actual money spent on overheads. But what is confusing to me is the rest of 150k$. I was of the view that this 150k is that part of 900k$ which was not productive or not capitilizable to inventory. In other words, volume & efficiency variance. I was of the view that the total overhead variances when added to standard overheads should give me the total overhead spending of the month; which means 800+100+150 but it gives me the total of 1050k$.
I am worrying that the income statement is taking 150k$ twice as cost. First in standard+spending variance and then as volume/production variance.
why does my (Standard overhead+ Total ovhd Variance) does not match 900k$ (the actual money which left the hand) shown in cost center.
May be the better way to ask this question is why COGS in COPA income statement is like
COGS = Standard Overhead + Spending OVHD Variance + Volume OVHD Variance + Production OVHD Variance + (all other non-ovhd costs)
Why is it not
COGS = Standard Overhead + Spending OVHD Variance + (all other non-ovhd costs) because for me Volume OVHD variance & Production OVHD variance are just the part of total ovhd spending i.e they are already in the addition of (Standard OVHD + Spending OVHD Variance).
I am told that 150k$ is charged additionally to COPA due to high activity rate. But I did not really understand. For me, the actual money which left the hand was 900k$ (variances or no variances). Then why the income statement shows 1050k$.
I hope you will be able to help me as I have not received a simple answer from anyone yet. Thanks alot in advance!!

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

Cost Center cost allocate to CO-PA

Hi Guys,
My issue is have 5 cost centers departments,(EX FI,SALES , LOGIST & Others),5 products each product have profit center, as per requirement product wise cost center master created each department .
based on above information cost center cost allocate to CO-PA Through co-pa assessment cycles. but without creation of assessment cycles cost directly cost allocate to co-pa through value fields. mean template allocation is it possible.
how to map this scenario. pls give me solution.
Regards
SIVAJI

Remaining balances (under/over absorption) in cost centers can be assessed to respective profit centers/CO-PA using profit center grouping in the cycle segments (KEU1) or using characteristic derivation (KEDR) configuration.
Hope that helps

Revaluation of actual activity rates

<MODERATOR: please post in the appropriate forum.>
Dear all,
My client is having make to order scenario in which at the time of production order confirmation (co14) actual activity is confirmned and loaded to production order as per planned acticity rates maintained in kp26
i.e actual activity * planned rate , but when actual costs of activities are debited to cost center for these activities there is under/over absorption in cost centers .So i want to know what is to be done for these absorptions .Through sap help i came to know about revaluation tool at actuals ,but how it is done kindly provide some suggestions or any other method of knocking off over /under absorption so that cost of product should be according to actual activity*actual rate.
Thanks and regards
vijay

Hi Vijay,
I do not have any documentation but I can you the splitting concept one more time. It is more important to understand the concept.
Suppose you have a cost center 1000 that produces 3 activities in a month. You incur lot of expenses in the cost center, say $10,000, out of which $4,000 are fixed costs, which means these costs can not be identified to one particular activity. There are 10 cost elements which contribute to these costs.
The other $6,000 are incurred due to activity 1, 2 and 3. There are 5 cost elements which cause these costs.
Using KP06, you need pair the activity dependent cost elements to the respective activity types and plan the costs.
This way you can separate variable costs from the fixed costs.
Splitting job splits the acitivity independent (fixed) costs to 3 activities in the ratio that you set in KP26. You need to assign equivalence numbers in KP26 for each activity type. Let us say you assigned 1, 3 and 5.
Once you make the above settings, the splitting job will split $4,000 into the 3 activity types into the ratio of 1, 3 and 5.
When you run KSII, activity price is calculated for each activity, which will be the total costs per activity divided by the actual activity output. So, the KP06 costs will be added to the split costs to determine the activity price.
Please try the above concept and the t-codes and settings I mentioned yourself and let me know if you face any problems.
Regards
Sharabh

Production order settlement accounting entry

Hi,
Can u gibve some link what is production order settlement , and how the accounting entry is generated, our PP person have done the settlement in april 2010 but accounting entry are not updated in the corresponding g/l account how to check this.
regards,
zafar

Production order settlement is just a process of closing the order after goods recipt (production) is being booked in system
Production order settle the costs to CCNs from the orders. It doesnt have any entry unless under / over absorption. In that case following entry will be generated (i.e. of difference amount)
Inventory Change Dr. To Inventory & vice a versa as the case may be of under/over absorption.
If you go thru MB5B for the material, you will find the same without any Mvt. type.
Hope it is clear.
R/s

Under/over absorption

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