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Hi Gurus,

I am getting confused how WIP is calculated for a Product cost collector.

I have read through a lot of SCN issues and all says the same thing that PCC has WIP based on Target. But i do not understand what does it mean? In the system what i see is WIP = Actual Credit - Actual Debit. If necessary i can share the screen shot.

Can you please explain how this related to Target ?

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2 Answers

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    Former Member
    Jul 28, 2017 at 03:57 AM

    yes. WIP calculation is based on Target cost method. It is calculated @ operation level. Target cost is calculated based on valuation variant for WIP & scrap and Preliminary cost estimation(okkn) is used for calculation of Target cost. It will ignore Actual cost and consider the preliminary or std. cost estimate.

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    • Yes, I agree. Theoretically this should have happened. But this is not happening. What i see is WIP is coming from Actual Debit and Credit. Could you tell me how system determine the quantity of WIP in case of PCC?

      For example if my SFG (1 Unit) needs RAW1(5 unit) and RAW2 (10 units).

      One of my process order supposed to produce 10 units of SFG. Till end of month this process order has consumed RAW1 (2 units) and Raw2 (5 units) only. NO GR was done.

      Can you explain me, what quantity and rate will be taken for WIP by PCC?

      Thank you for you response so far.

  • Jul 31, 2017 at 04:47 PM

    And i thought this is a simple concept to understand. Can you please explain how PCC calculates WIP or Control Csot? I know it is from Preliminary cost estimate. But i just wonder how system determines the quantity. Below is simple example

    As per preliminary cost estimate "PREM" 1000 Liter of FG can be produces from 10.250 HL of RAW material which costs 73.49.

    If you see the example below, i understand 257.21 is exact WIP because of 3500 liter of FG must be in process. My only concern is how system get to know that exact 3500 Liter is in WIP and rest has been delivered? Is it based on process order status? How system deducted exact 257.21 to get control cost from actual?

    Cost Element Total Target Total Actual Total Control Variance Total Actual quantity Total target Qty Order settlement 0 360.52 0 0 Delta stock GR: Finished Goods -5,174.02 -5,172.39 -5,172.39 1.63 -71,500 -71,500 Delta stock cons.: Bulk beer 5,174.01 5,069.08 4,811.87 -362.14 718 732.875 WIP Primary CE 0 0 0 0 Wages & Salaries 0.01 0 0 -0.01 0 0.715 Sum 0 257.21 360.52- 360.52- 718 732.875 71,500- 71,500- 0 0.715

    Kind Regards


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