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Former Member
Aug 13, 2013 at 01:15 PM

Interpretation of the value posted to a P&L account at production order settlement

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Dear Experts,

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