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SAP B1 - Production Order Closing Entry

Dear

The production order has the following status.

Planning Quantity = 10

Completed Quanity = 4

Actual Item Component Cost : INR 99,797.50

Actual Product Cost : INR 39,508.59

Total Variance : INR -60,288.91

After closing the production order in SAP B1, we get the following JV posting.

1) WIP VARIANCE debit 60,288.91

2)WIP INVENTORY credit 60,288.91

3) WIP VARIANCE credit 60,288.91

4) Finish Good Inventory Debit 60,288.91

Why the wip varaince account is credited and Finish Good Inventory account is debited by variance amount 60288.91 (line 3 and 4)?

Regards

Narendra

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  • Posted on Nov 05, 2019 at 08:07 AM

    You have issued INR 99.797,50 worth of components and received only INR 39.508,59 worth of finished products. When closing production order the value of finished goods will be increased or decreased by variance amount so that it is equal to the value of issued components (assuming that valuation method for product is not Standard).

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