Please what is the implication or interpretation of the value posted to a particular P&L account when production order settlement is carried out?
I mean when i execute production order settlement, the difference between the total order debits(material + machine + personnel) and credit is posted to a P&L account.
What does this value imply or represent? Does it represent the cost of my output material, or the cost of the value added to the output material, or the COGM , because the value of the output material sits in the stock account (GL) assigned to the valuation class of the output material already.
Thanks in anticipation of your detailed responses