Understanding Target Cost Version Differences for 0 and 1 for process order

Our client need to understand the differences between our target cost versions that are utilized in calculating the process order CO03 cost analysis.  When should each target version be used and why do the variances change?  See example below.
Target Version = 1       Target Cost Prelim Order Cost Estimate
Version = 0          Target Cost for Prod Variances
Can you please provide analysis and help me on this.
I higly appreciate for your help.
Thanks in advance.
Seshadri

I recommend that you post this in CO forum.

Similar Messages

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    First check this...
    1.Go to t.code OKEV.Select Controlling Area 2222 and create Plan / Target version.
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    For this version you choose actual costs as the control costs and planned costs as the target costs.
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    With target cost version 2, the costs from the preliminary order cost estimate are interpreted as control costs. For this version, select planned costs as the control costs and current cost estimate as the target costs. You cannot calculate planning variances for the product cost collector.
    Target cost version 3 (production variance of the period)
    You compare the planned costs of the period calculated on the basis of an alternative material cost estimate (such as a modified standard cost estimate) with the actual costs of the period on the basis of the yield delivered to stock in the period.
    2.Also try In CO02 goto cunctions...cost...
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    Target cost version 0 ( total variance)
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    Target cost version 1 ( production variance)
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    Hi,
    currently we are using target cost version 0 to calculate production variance. But to get correct production variance in relevant variance category it is needed to have current standard cost updated in material master. 
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    Hi,
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    http://help.sap.com/saphelp_erp60_sp/helpdata/en/90/ba6242446711d189420000e829fbbd/content.htm
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