WIP Variance Calulation in SAP B1

Hi Experts
I need help in WIP variance calculation in SAP B1.
How system calculate FG cost in SAP B1?
As per my knowledge component cost is FG cost if we have not loaded any overheads.
But we are getting WIP variance in production orders.
Pls. help me out from this.
Regards
Kamlesh

Hello Kamlesh,
You can also refer to Note 1089549. I have copied the text here:
"In SAP Business One, a pre-defined standard is summarised in the form of a 'Bill of Materials' (BOM). The BOM holds all the raw materials, labour, and processes required for producing the finished product. The production variance is calculated as the difference between the quantities defined in the BOM and the actual quantities issued for production. The quantity difference is multiplied by the current item
cost to arrive at the total variance cost.
Once completion of the final product is posted, the variance is stored in the 'Total Variance', 'Variance Per Product', and 'Variance %' fields of the Production Order -> Summary tab.
This variance cost is posted to the corresponding 'WIP Stock Variance Account' when closing the Production Order. The 'WIP Stock Variance Account' is set up in the Item Group, Item Warehouse, or Item Level,
whichever is applicable."
I hope the above helps.
Regards,
Lorna Real

Similar Messages

Err: No WIP Variance Account exists for item, when closing Production Order

I'm sure the 'WIP Inventory Variance Account' property had been set for the Warehouse of the Production Order.
But I can not update this Production Order from 'Release' to 'Closed' status.
Pls help me out.
thanks.

Hi,
Can you confirm whether the,for the item involved, has checkbox 'Manage Inventory by Warehouse' marked or not under the Inventory tab of the item master data?
Check in COPY of the database, by defining the WIP Variance Account for all the Warehouses for the Item involved and check whether you can not set the status of the Production Order to Close.
Kind Regards,
Jitin
SAP Business One Forum Team

WIP / Variance / Settlement Performance issue

Dear All,
While doing WIP, Variance and Settlement calculation in Collective process (KKAO, KKS1 & CO88) for all the Production Order to each end of the month, it is taking too many times to calculate. Can anybody tell me how to reduce the calculation time?
Is it any OSS note available for avoiding this kind of issue?
Regards,
Mohan.

Hi Mohan,
Since your query is related to SAP PP and CO modules, please close this thread and post your query in SAP PP Forum.
You will get quicker answers.
regards
Datta

RA/WIP/VARIANCE for Prod Order

Hi,
Could any one please tell me How to see RA/WIP/VARIANCE on a Prodction order which is in TECO?
I mean to say when RA was carried out what was the amounts , when WIP was carried out like that.
on our Production order (which is DLV and TECO) Total Target costs are Zero, and Total Actual costs are showing in full amount, why we are not seeing any Target costs?
Please explain,
Regards,
Sandhya

Hi Sandhya,
When you carried out the WIP at the period-end (KKAX), you will be able to see the WIP Value. Once you settle that Order, WIP get posted to FI.
Pls check the GL Line Items report to see the Values. You can find the GL's used for WIP in configuration of WIP.
Target costs are nothing but Standard Cost of Actual Production taken place. Pls check if there is Goods Receipt done or not against that Production Order for which you found no Target Costs.
Pls check and revert back...
Srikanth Munnaluri

Where to Enable 6 Variance Types in SAP system?

Hi,
I need to enable variances types 6 in the sap system.I didnot fiind the path to activate the variancce types 6 in the system.
Kindly provide me the path,so that i can proceed.
points will be assigned.
Thanks in advance
Thanks
Sunitha

You need to configure Variance under SPRO->Controlling->Product Cost Controlling->Product Cost by order->Period end closing->Variance Calculation
Also you need to create a PA Settlement Structure in KEI1 for the various Variance Categories.

How to extract Production Order Variance details to SAP BW?

Dear all,
I have a requirement to create SAP BW reports to show Production Order Variances in SAP BW.
Need to display Variances by Order, by Cost elements (components).
I am checking transaction KKS1 in SAP ECC 6.0, as the same data is required in BW. But I am trying to find out from where (what tables) can I pick this data, so I can load it to BW and use.
Any details will be very helpful.
regards,
Srikar

Hi,
You can check exsiting InfoCubes in the link here:
http://help.sap.com/saphelp_nw70/helpdata/en/81/d7153c4eb5d82ce10000000a114084/frameset.htm
Regards,
Eli

Accounting entry - WIP, Variance Calculation & Settlement of Production Orders

Hi All,
Please explain the process of WIP calculation, variance and settlement of production orders. At each stage will there be an accounting entry generated?
1. WIP calculation: All production orders for which the status is REL at the month end will be included in WIP calculation. How the amount of WIP is derived and what will be the accounting entry.
2. Variance calculation: Production order needs to have the status TECHO in order to do the variance settlement. Will there be an accounting action and how the amount will be calculated?
3. Settlement of Production Orders: Dr. WIP A/c (Balance Sheet a/c)
                                                    Cr. Volume Variance WIP a/c (P&L Account)
    Is this the correct accounting entry? If yes, please advice how the WIP a/c is showing balance on settlement of production order, how it will get nullified? If no, please advise on the correct process?
Regards

Dear Andy
In product cost by order scenario the WIP or Variance calculation is dependent on order status. If the Order has a status of REL or PDLV, the system will calculate WIP and if the order status is DLV or TECO the system will calculate variance on this order. At the time of calculation of WIP or Variance no accounting entry i generated but when you settle the order at that time FI documents are passed in the books.
Ans1- In product cost by order WIP or variance is calculated based on the actual cost debited to the order and value of GR made to the order. System does calculation by the formula GR value-(GI value+Activity value+ Overheads)
Ans2- As I said at the time of calculation no FI entries are passed but at the time of settlement FI entries are generated. The method of calculation is the same as described in Ans1.
Ans3- Entry at WIP settlement WIP (P&L) a/c Dr and WIP Offsetting(B/S a/c) Cr.
          Entry at variance settlement : Variance a/c dr/cr and COGM cr/dr.
          and if there is already a WIP posted for this order then at settlement WIP entry is reversed provided we have calculated WIP again the the month of settlement of variance
Note for Anand: Dear Anand we need to calculate WIP again in the period when the order status is changed to DLV or TECO otherwise system will not pass reversal entry of WIP. Kindly test it in your IDES and let me know if you find something on the contrary.
Regards
Rajneesh Saxena

Process order variance calculation

Hi All,
We have Sub- Assemblies which are currently set up in the system as purchased, sub-contracted sub-assemblies. this is how we will procure these the large majority of the time. There will be instances, however, where we will need to build them in house. but when we run cost estimate and mark and release sytem is using sub-contract Quantity structure in cost roll and when we producing we are using different Quantity structure like like BoM and Routing.at the time of variance calulation we are getting errors becuase of conflict in cost estimate Quantity structure and process order Quantity structure.
How can i solve this issue?any help is appreciated...
I'm getting the following error..
Message no. KV181
Diagnosis
This message tells you which quantity structure was used by the cost estimate that calculated the target costs, and which quantity structure was used in the actuals.
The cost estimate that calculated the target costs did not use the quantity structure used in the actuals.
This means that the cost estimate used a different combination of task list type, task list group, and group counter than in the order itself (such as the production order).
Example:
Suppose the target costs were calculated in the standard cost estimate for the material, and that the standard cost estimate for the material is based on the routing identified by task list type N, task list group 50000309, and group counter 1.
Now suppose the production order specifies a routing identified by task list type N, task list group 50000309, and group counter 2. This would lead to the error.
System Response
The system cannot calculate target costs for the valuation of work in process or scrap.
See also:
Routing/master recipe in actuals differs from qty structure for target
Thanks,
Anusha

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

What are the advantages of using SAP PP-REM?????

Hi,
Can anybody tell me the advantage of using Repetitive Manufacturing. How it will help a particular industry if implemented.
I want to know advantages involved in
Planning (MRP, Capacity), Product Cost Controlling,
WIP calculation, variance Calculation
if SAP PP-REM is implemented
Pavan

Hello Friend ,
PP REM has advantages following advantages-
Purpose
This component can be used for production planning and control in a repetitive manufacturing environment- ie the same product is manufactured repeatedly on the same production line.
You can use repetitive manufacturing as either make-to-stock REM or make-to-order REM such as in the automotive industry, for example.
The goals of repetitive manufacturing are the following:
Creation and revision of production quantities on a period and quantity basis (reduction in individual lot and order-specific processing).
Reduction in the production control effort and simpler backflushing tools(with the option of using the full scope of the PP functionality).
Implementation considerations
You can implement Repetitive Manufacturing if the following is true of your production process:
You produce the same or similar products over a lengthy period of time.
You do not manufacture in individually defined lots. Instead, a total quantity is produced over a certain period at a certain rate per part-period.
Your products always follow the same sequence through the machines and work centers in production.
Routings tend to be simple and do not vary much.
Hope this info helps u. Award points if benefitted.
Hemant

WIP process doubt

Hi Experts,
I have a problem in wip process, the scenario as follows
Sales order quantity is 10(say example), we raised po for 10 qty. to vendor, but vendor is not ready to send all the quantity, vendor will send based on the agreement like 1st month 2, 2nd month 5 remaining in 3rd month. Now our client is following the process is when we receive the 1 st month quantity client issuing to customer and customer is sending the amount for that 2 qty. now client is booking directly sales invoice, now they are transfering the sales amount in wip account through manually. becasue in client view actual order quantity is 10, but we are isseud to customer is 2 so they are treating as a wip. Once the final i.e third month billing they are reversing the total amount (which is transfred to wip account) from wip to sales and cost of sales a/c.
1. My doubt is once we book the invoice can we transfer to wip a/c in sap.
2. Please give some suggestions for the above process.
regards,
Gopi.P

Hi,
It seems that your client is manually posting to WIP A/c. Normally WIP are those which captures unfinished goods
in the Production Order during the periodic processing. You process through KKAX every month how many
production orders are still pending to be converted into Finished Goods, calculate the variance and settle
the production orders which reverses the previous period pending value in WIP which is done automatically
in SAP. If you have not received raw material goods from the vendor for delivering finished goods to customer
and without passing the difference qty. in production order, it is not correct to treat it as Work in Progress.
Regards,
Sadashivan

Material ledger:'not allocated' variance

Dear all,
For raw material A, it issued to certain production order(say FG is B) in Apr. at the month end, I found that there are some variance(not distributed) in material A due to there is no goods receipt for production order. in May. I performed GR for B, then calculate WIP/variance and perform settlement. after that, I run CKMLCP for ML closing.
However, system can not distribute the variance which occurred in the previous month to B, this means this variance will keep in the variance account forever, and the actual cost of B is wrong.
I do not know whether this is standard SAP, our version is ECC6.0.
Is there anyone know why and how it come and settle it ?
thanks very much

Dear Jin Ming Zhang,
Please, check the note 908776 which explains the possible reasons for 'not distributed' and 'not allocated' price differences.
There is no automatic procedure, but CKMVFM is a valuable tool to analyse the reason for the differences and distribute/include them.
Best regards,
Antje

Material ledger:not distributed variance-URGENT

Dear all,
For raw material A, it issued to certain production order(say FG is B) in Apr. at the month end, I found that there are some variance(not distributed) in material A due to there is no goods receipt for production order. in May. I performed GR for B, then calculate WIP/variance and perform settlement. after that, I run CKMLCP for ML closing.
However, system can not distribute the variance which occurred in the previous month to B, this means this variance will keep in the variance account forever, and the actual cost of B is wrong.
I do not know whether this is standard SAP, our version is ECC6.0.
thanks,
Ben

Hi Ben,
If you don't find the reason for 'not allocated', you should open a message in the system for SAP to check.
Check note 908776. Here you will find all possible reasons:
**'Not included' or 'Not allocated' price differences:
A) The material has multilevel consumption alternatives (processes).
Possible causes:
- Multilevel price determination was not carried out yet.
- Not all subsequent materials were processed by multilevel price
determination. If multilevel step has not been carried out (or
resulted in an error etc.) the price differences remain on the
input material in the 'not allocated' line.
You can verify the Actual BOM for all consumption processes to find
all output materials. You should check the status for multilevel in
all output materials
- the multi level document of one subsequent material is obsolet,
because it is older than the single level or multi level document of
the input material.
You can check this by comparing the time stamps in the documents'
header data.
This situation occurs when the input material was reprocessed by
single level and/or multi level price determination, but not all
depending subsequent materials were reprocessed.
To avoid such error SAP recommends to run multi level price
determination generally with the option:
'materials already processed: process again'.
- For some consumption processes there was no goods receipt of the
output material in the period. In this case the price differences
can not be rolled up by multi level price determination. They
remain as 'not included' ('not allocated') at the input material.
- For some consumption processes, that have different output
materials (joint production) for one of the joint products (the
materials that receive costs according to the apportionment
structure) the goods receipt has not been posted yet. In this case
the differences to be allocated to this joint product remain as
'not included' ('not allocated') at the input material
- One output was calculated with reduced BOM. Typically this happens
if input and output material are part of a cycle, and this cycle
was cut off because it didn't converge. In this case the price
differences of the input were not rolled-up along the cycle
connections and therefore remain on the input material. To verify
if this case applies check the multi level document of the output
material. There must be a red light in the item line of the input
material to indicate that no price differences have been rolled up.
In the header data of the multi level document you can see the
cycle number. Furthermore in the log of multi-level price
determination there may be a message 'Cycle * cut off after *
iterations'.
B) Material has Single level consumption alternatives
- For release 4.7 or higher, the step 'Revaluation of consumption'
was not carried out. (This step is only available with Financials
Extensions).
Regards,
BC

Query regarding the variance calculation

Hi all,
Hope all are doing well. i have an query regarding the VARIANCE CALCULATION IN Production planning module.
here i could see KKS1,KKS2,KKA1 etc,. codes they are using in sap. can any one kindly clarify these codes and uses. pls
regs,
siva-v

Hi Siva,
To understand the basics of variance calculation in SAP, read below threads which will provide detail information on the same,
Basics of variance calculation-Understanding Period End activities, WIP and Variances
Variance Calculation -KKS1
How production order variance get calculated
Regards,
Narresh

WIP Account on BS $0 value

Why are entries to my WIP account being debited and credited as zero when production orders are raised and closed, resulting in no value physically being transferred from inventory into WIP and vice versa on completion. However there is a WIP variance amount resulting.

Hi Gordon
Its 8.82 (8.82.071) PL08
It was backflush but now on manual/issue.
When I trace the journal entries I see the following is currently occurring in SAP and was wondering if this is correct:
1. Raise production order and released:
DR    WIP                   $0
CR    SOH                                  $0
2. Production order is receipted/ (same as closed?):
DR WIP               $0
CR COS                              $0
3. DR (BS) WIP                3,406
     CR    (BS) SOH                                   $3,406
   DR     (BS) SOH                $3,406
   CR     (BS) WIP                                   $3,406
If any variance will go to WIP variance account on the P & L.
It appears WIP is in and out in the same transaction so currently on the BS you can't trace how much WIP is at a point in time as it goes in and out in the one transaction - is that correct?
Thanks ]
Lisa

WIP Calcultion not updated in GL

Hi,
Could someone answer the issue that one of our users are facing.
We have an order where the WIP calculation is shown in KKAX but have not updated GL. is there anyway i could check whether the WIP has been posted to GL (i know it is through settlement but anyway to verify it). any suggestion to this would be greatly appreciated.
Regards,
Roville

"Please suggest a document that would be useful for an user to perform an accurate month end run(Overhead,WIP, Variance & Settlement):"
There is no SAP Standard specific document.
I have done the month-end configuration and training with my company for 10 years, so I wrote the list accounting's use.
You need to know your orders [we do discrete production, Service and Sales orders] and know the configuration.
The "list" is :Overhead, WIP/RA, Variance and settlement as required. [We do NOT run overhead on Sales Orders because of the configuration we have]
I do not know how accounting does the reconciliation to the GL,
However, I did have a report spec'd using table: GLPCA, EC-PCA: Actual Line Items" which, for specified parameters, uses all the accounts and cost elements used in Orders (consumption, labor, overhead, settlement, etc) and it nets the $ values per order for the period. If there is a balance, it is output to the report. A balance on an order after settlement, indicates that there was some kind of issue with the order and it's settlement. Accounting calls this the "Order Balance Report" it has become a standard part of the settlement process.
Once you know what steps need to be done, the way to insure that they are "always" done is to create selection variants and have the jobs scheduled to run in sequence automatically. then Monitor them with SCMO

WIP Variance Calulation in SAP B1

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