subcontractring-variance calculation

[Former Member]

Hi guru's

this is my burnning issue

my client is subcontracting the packing activity.SFG is issued along with packing material to vendor. After completion of packing activity FG return to plant.for FG we can create std. cost estimate and add sub contracting charges through additive cost estimate.here there is no production order.How can i value the FG and get variance analysis with out order.

thank in advance

Regards

SPSankaram

[Former Member · Accepted solution]

This is standart MM purchasing sub contractins scenerio.

Creat BOM for procuct. D not forget to specify F in special procurement which means subcontracting.

Durin standart cost estiamate the system uses the cost of raw material and search subcontracting purchasing ifo record for subcontracting cost.

[Former Member]

Hi SAP Gurus,

We are having the same issue with variance analysis. We use the subcontract PO to receive the finished goods from our vendors. However the system does not post any variances at the material, service and overhead level. What we wanted to have is to be able to compare the actual service price with standard price and post any variance to an cost variance account. We don't have any production costing and production planning module turned on. What would be the best way to get the variance? Do we need to turn on product costing and use production order instead? If we don't turn on these modules, are there any other ways to accomplish our objective? Any input and past experience will be greatly appreciated.

Ken

[Former Member]

hi

thanks to ramesh & Umut

Regards

sankaram

[Former Member]

Hi,

Good evening and greetings,

How are you consuming the SFG issued to Vendor without creating a Production Order?

The standard business process is to have the SFG as REM profile (Product Cost Collector - Made to Stock Scenario) with order type RM01.

Create a BOM for the FG with SFG as one of the component and the additional packing item.

Create a production order for FG and at the time of goods receipt of FG through movement type 101, in the background SFG is consumed using MT261 and as the production order for FG is available now, you can get the variance easily.

Alternatively, in your case, you can book the MIRO of subcontractor as below

Dr. Expense Account

Cr. Vendor Account

Maintain the agreed price for the vendor in Info Record and any difference in the price, take it to a variance account to get the difference in value.

Please reward points if found useful.

Thanking you,

With kindest regards

Ramesh Padmanabhan