CO entries in Job Work Scenario (Sales order is a cost object-Valuated Stock)

[former_member308499]

Dear Experts,

I want to know CO entries in subcontracting scenario (Job Work) when I am sending raw material(Material X) for jobwork/sub contracting and receiving SFG (SFG Y) when Sales order is a cost object with valuated stock and everything is plan order/purchaser requisition is generating with reference to sales order (MRP Run).

1st Case:- When price control in "S" in SFG material (SFG Y).

AT the time of MRP Run system will create Plan order, it will convert in PR and than to Subcontracting PO.

At the time of GR it will generate Accounting & CO entries.

Dr. Consumption of Raw Material account What is Cost Object) ?

Cr. Stock of Raw Material

Dr. Stock of SFG

Cr. COGM SFG (What is Cost Object) ?

Dr. Job work Charges (What is Cost Object) ?

Cr. GR/IR Clearing Account.

2nd Case:- Same scenario when price control in SFG Y is "v".

Guys your answers will help me to get more clarity in understanding the concept.

Regards,

Vasu

[ajaycwa1981 · Accepted solution]

Hi Vasu

1. Your accounting entries are perfect

2. Case A

You must create a cost center specific for Sub Con process

RM Consumption (Gbb-vbr), COGM SFG (BSV) and Jobwork charges (FRL) must all be assigned in Okb9 to this CC. Balance always would be zero
in this CC

You must specifically activate prie difference for subcontracting in MM. Else prd won't be posted. Assign prd gl to Psg in okb9

3. Case B

same set as explained above. Total value of rm consumption and job work charges will be the value of SFG
. No PRD will happen in this case

Ajay M

[former_member308499 · Accepted solution]

Dear Maheswari Ji,

Sorry for the delay in response.

1st of all Thanks for you response.

I created one cost center for Job work and did subcontracting process for a Material who's price control is "V". But below entries are posted at the time of GRN.

Dr. Stock (Sub contracted Material)

Cr. COGM (Cost of Sub Contracted Material)         Cr. Job work Cost Center (OKB9)

Dr. Consumption (Components sent to vendor)       Dr. Sale order item number

Cr. Stock (Components sent to vendor)

Dr. Job work Charges                                           Cr. Job work Cost Center (OKB9)

Cr. GR/IR Clearing Account

As per your early answer in case of Consumption of components sent to vendor need to charge to cost center if we make okb9 setting. I did this setting still it is taking sales order item as cost object and directly booking against sales order item.

Please guide me how to nullify the effect on sales order.

Regards,

Vasu

[ajaycwa1981 · Accepted solution]

Hi Vasu

Have you implemented settings as per Note 1054438? That could be the reason

Ajay M

[former_member308499 · Accepted solution]

Dear Ajay,

Thanks for the Note.

Heart fully I appreciate your guidance to resolve and better understanding of my issue.

Regards,

Vasu. B

[kamalkumar_biswas2]

Hi Vasu

These will be generated

Dr. Consumption of Raw Material account What is Cost Object) ?  ...CC  /  GBB a/c

Cr. Stock of Raw Material ..................................................................  BSX

Dr. Stock of SFG ............................................................................      BSX

Cr. COGM SFG (What is Cost Object) ? .......................................       BSV

Dr/CR  PRD (if pr control is S)........................................................      PRD

Dr. Job work Charges (What is Cost Object) ?...............................  CC  / FRL  a/c  

Cr. GR/IR Clearing Account............................................................  WRX

Kamal