Variance settlement

when doing the monthly close, we have some unclosed work order. The differences between input and output of this work order was left in the WIP and it doesn't matter, since no whether this differences lies in WIP account or Variance Account, the balance in the B/S is the same. But, this will be a problem when we sold some of the FG which was produced by these kind of unclosed work order because the system need to know the variance of the order and settle it between the inventory and the goods sold, otherwise, the cost of sale will not take the variance into consideration and the profit of the current period, therefore , will be affected.
how to deal with such situation?
Thank you!
Message was edited by:
otto shen

Hi
Thanks for reply. We are in QA and in OB52 we have period open from 8.
Only problem with MM side period it allows to post current i.e (10) and I run MMRV it allow to run for previous period i.e. (9) but we want to post in August 8 period.
I know MM we can have two active periods can we have for further (August). Also when i ran MMRV twice it shows only 10 and 9.
Regards,
Roberto

Similar Messages

How to see PO Variance settling in COPA

Hi All,
When did the Production order variances are settled and posted to COPA and How can I see the Variances settling to COPA ? Is there any report or it is posted to COPA when Billing document is generated ? I would appreciate a step by step explanation.
Thanks
MKR

Hi,
KKS1 and KKS2 for variance calculation
CO88 and KO88 is settlement variances
once you done with settlement
goto KE24.
enter Curreny Type : 10
Record type : "C"
Enter : product or material number
now you will see lis of documents and double click on your document. now goto Value field tab and you will see production variances are posted to respective value fields.
OR if you are created any Report painter report in COPA and you have mapped Production variance value fields you will in respective value feilds.
Thanks,
Rau

PA structure in Variance Settlement to COPA

Hi gurus,
When i'm doing the variance settlement from production orders to COPA the system ask me for a PA transfer strucutre 'Message KF018' , to update with the cost element from operation PRD.
In CO-PA I have the two scenarios active costing based and account based.
Anyone can help me ?
Thanks

Hi Diogo,
You have to complete the PA transfer structure that is mentioned in the order. In order to do that you need to:
1) Goto tcode KEI1
2) Create assignment lines that is in line with your variance categories. In order to do that you have to go to "Source" of the each assignment line and select radio button "Varance on PP Orders"
3) Select the "Variance Category" from the drop down menu
4) Goto Value Fields for each assignment and assign them to the Value Fields.
5) Assign this PA trf structure to the settlement profile, if you haven't done so yet
This is for costing based PA.
I hope it helps,
Dave

Process orders in joint production: variance settlement to CO-PA

Dear all,
During integration test for costing based CO-PA, I have a problem regarding production variance settlement to CO-PA. I am testing CO-PA actual flows for november 2011. When I try to settle process orders with co-products for previous month, the system asks for PA transfer structure. Because of customizing setting for settlement profile being transfered later, previously created process order need to have this info, and i assigned PA structure manually in settlement rule for each process order. When I repeat variance settlement, only for process orders with co-product, the system still asks for this information, although I already had assigned PA structure to this order.
please give some advice.
Thanks Dusko

Hi
You may have 2 settlement rules for CO Products... So ensure you enter PA Trf Str at all the places... This error is never thrown by SAP w/o valid reason
br, Ajay M

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 Variance Settlement.

Hello friends,
Hope you all are well!
Is there anyway that I can settle the production variances into different GL accounts at the same time? For example I have $1000 as the variances on my order. It is further divided into $200 for material another $800 for material overheads.
This $1000 is posted into a price difference gl a/c when settled. I would like to capture only the material cost i.e. $200 and post it into a different account. Is that possible? If so, how please explain.
Your help is much appreciated
Regards
Shiv

Hi Shiv
Try this if it helps u in addition to KOB3
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.
I have been providing this to clients and 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

Substitution to Variance settlement documnent

Hi All,
I have a situation in which I have to assess variance setlement amount in GL to COPA which is only possible if I have Cost center populated on the Variance Setllement accounting document. Is there any way I can define substitution for populating the Cost Center field on the accounting document for a particular GL account creating at the time of Variance setlement? I would appreciate a step by step explanation.
Thanks
MKR

Hi,
SAP best practice is settle production variance to COPA.Why do you wants to post variances to cost center?
you can set defualt cost element and cost center combination in OKB9.before this check this documentation.this might helps you.
Transferring Production Variances
Use
To run closed profitability analysis for periods, you need to transfer to CO-PA at the end of the period all the variances that have occurred in that period. Variances typically occur if you valuate your materials with standard prices. At the end of the period, these standard costs are then compared with the actual costs incurred, and this comparison forms the basis for a detailed variance analysis. The variances are finally transferred to CO-PA at the end of the period to produce a factually correct representation of the results.
The variances for cost objects are transferred to CO-PA when production orders, for example, are settled. For a description of how variances arise and what causes them, see the documentation on Cost Object Controlling.
The functions described below are relevant mainly for manufacturing enterprises.
Features
Three ways for transferring production variances are set out below. How you use them depends on your information requirements in CO-PA.
u2022     You might wish, for example, to display the individual variance categories for Cost Object Controlling (CO-PC-OBJ) in CO-PA. In that case, you would settle the variance categories to CO-PA.
u2022     You only need to display the production variances as a total in CO-PA, which is how they are posted to FI. You might not need to calculate cost object variances and only wish to assign the relevant FI posting to CO-PA. In that case, you would post the production variances in FI to CO-PA.
u2022     You implement the Material Ledger (CO-PC-ACT). For the closing operations in Material Ledger, you might not wish to replace just the posted standard prices with the actual costs incurred. At the same time, you might want to subsequently allocate (across multiple levels) production variances to finished products at the end of the period and then display the revised variances in CO-PA. In that case, you would allocate the production variances subsequently using the Material Ledger.
Settling Variance Categories to Profitability Analysis
For the settlement of production orders, you can transfer to CO-PA the variance categories calculated in Cost Object Controlling. The requirements for this are as follows:
u2022     You are working with standard prices for processed materials.
u2022     You have already performed variance calculation in Cost Object Controlling.
u2022     You have entered in the settlement profile for your production order that you wish to settle variances.
u2022     You have set up and assigned a PA transfer structure in Customizing for CO-PA to be used to direct the calculated variance categories into the desired value fields.
The variance categories are settled in a much the same way as that for Settling Orders and Projects. For more information on these requirements, choose Flows of Actual Values  Settling Production Variances in CO-PA Customizing.
When your cost object is settled, the information will be transferred to costing-based CO-PA if these requirements have been fulfilled. In this way, the production variances are shown at the level of the particular product currently being produced. It is only possible to allocate production variances subsequently as a total when the Material Ledger is involved (see below).
The variance categories can only be displayed in value fields. This function is therefore not available in account-based Profitability Analysis.
Assigning Production Variances from FI to CO-PA
If you only need to display production variances as a total as described above, you can alternatively assign the production variances from FI to CO-PA using account assignment.
Since the production variances are posted as a total in FI during settlement of the production order, you can also choose to assign this posting to CO-PA. The requirements for this are as follows:
u2022     You are working with standard prices for processed materials.
u2022     You have specified in CO-PA Customizing for the relevant production variance account (PRD account) that that account is automatically assigned to CO-PA. For more information, see the section Flow of Actual Values  Direct Posting from FI/MM  Automatic Account Assignment in Customizing.
u2022     You have specified in the appropriate PA transfer structure in FI which value field is the one to which the information is to be transferred.
Production variances are transferred in this case in much the same way as Direct Postings from FI to CO-PA.
When your production order is settled, the variance posting created in FI will be posted to CO-PA if these requirements have been fulfilled. In this way, the production variances are shown at the level of the particular product currently being produced.
This function is available in both costing-based and account-based Profitability Analysis.
Subsequent Allocation of Production Variances Using the Material Ledger
When you use the Material Ledger, you can allocate production variances subsequently across several levels. This means that you can use the quantity flows recorded in the Material Ledger to charge the production variances arising for semi-finished products proportionally to the finished products. During period-end closing in the Material Ledger, the production variances posted temporarily are corrected accordingly in FI and then reposted to the next manufacturing level upwards. Subsequent allocation can only occur for summaries. For more information, see Material Ledger.
To transfer this information to CO-PA, you need to assign the relevant FI postings as described above. It is also possible to transfer the variance categories in parallel. However, the transfer would not be affected by the subsequent allocation due to the summary correction postings.
The requirements for this parallel transfer are the same as those described in the above section entitled "Assigning Production Variances from FI to CO-PA".
This function can be used in both costing-based and account-based Profitability Analysis.
Thanks,
Rau

Problem in Variance Settlements

Hi Experts,
During the July Production Order settlements the production orders which are having statuses of REL and TECO both have been posted to Production variance account PRD-PRF account?What could be the reason?? In OKG8 with ref. to Co Code and CO area there are no assignments?Is this the reason the system could't able to found the WIP Stock account and hence posted all variances to Production variance account PRD-PRF?
Your inputs are highly appriciated.
Thanks in Advance
Mammu.

Hi,
WIP:
The WIP calculation process valuates the unfinished products (work in process).
In the Product Cost by Order component, the work in process is valuated at actual costs. Work in process is the difference between the debit and credit of an order that has not been completely delivered. This method determines the work in process for each production order by calculating the difference between the actual costs incurred and the actual costs settled (that is, the difference between the debits for goods issues, internal activity allocations, external activities, and overhead on the one hand, and the credits for goods receipts on the other). Once the last part of the order lot has been delivered to stock, any remaining work in process must be canceled so that the order costs can properly be settled to stock.
The status of the order determines whether WIP calculation creates or cancels the work in process.
u2022     If the order has the status REL (released), the system can calculate work in process.
u2022     Once the order receives the status DLV (Delivered) or TECO (Technically completed), the work in process calculated in a previous period is canceled.
Variances:
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.
The system compares the control costs with the target costs and assigns the variances to variance categories. The variances are assigned to variance categories in the following sequence:
u2022     Input price variance
u2022     Resource-usage variance
u2022     Input quantity variance
u2022     Remaining input variance
u2022     Mixed-price variance
u2022     Output price variance
u2022     Lot size variance
u2022     Remaining variance
Variance = 0 if only partial Goods Receipts has been performed.
Variance = amount if only complete Goods Receipts has been performed.
you have to assign GL accounts in OKG8 T.code to post WIP.this setting is Controlling area and by company code.
Thanks,
Rau

Proces order variance settlement posting to multiple accounts in FI

Dear,
Settlement of process order variance is controlled via GBB - AUA, where a different account can be used by valuation class. Our requirement is to post on a different account by variance category though. Any idea wheher this is possible / which user-exit?
txs, Koen De Groote

Hello
It is not possible to post the variances to different GL accounts. However for analysis you can take the different variances to different COPA value fields.
Sangram

Production Variance settlement to COPA

Hi Experts,
Here I have scenario regarding the production variance.
production requirement is 100 units
but the actual produced quantity is 110 units.
here we have a production variance of 10 units
Which is reflecting the report as following
My COGS is 10000 Rs
Split of the COGS
input material is 11000 Rs
labour is 200 Rs
machine is 300 Rs
Here my COGS posted to GL account is less than the actual production, which is posted as per the sales order
Here where do i get the production variance, how to find out the quantiy variance and price
Please help
Regards,
Ram

Hi
Execute KKS1 / 2.. After that settle the prod order to COPA from KO88....
you can see all the categories of variance in CO03...Menu Go to > Costs > Analysis and change the layout and include all the categories of variances
Br, Ajay M

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

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.

Order Variance Settlement to Multiple GL Accounts

Hello All,
I Have a Query and need your Expert Advice in the following issue
Scenario:
When we settle an Order (Production Order) the Variance between the Target Cost and Actual Cost will be the Variaacne (+/-) and it is posted to a P&L Account. This Variance Consists of (Material Variance + Activity Variance + Overhead Variance). My Business Requirement is to have the different Variances posted to different GL Accounts (Material Variance to One GL Account, Activity Variance to One GL Account and Overhead Variance to One GL Account).
I told my Other Team Members that it is not possible since the GL is coming from the Account determination between MM and FI and we cannot implement this Scenario.
Can any one tell me from your Experience if that is Possible and if Possible how are you handling this Scenario.
Thanks in Advance for your Replies
Best Regards,
Ravi Reddy

Dear Ravi,
As per my understanding the above scenario is not possible in Standard SAP. May be you can post this question in Controlling Forum.
Br, Vivek

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 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

Variance settlement

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