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difference between production order cost and standdard cost

Hello Experts,

Could you please explain the difference between the cost that comes in ck11n and the cost that come while creating production order.

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2 Answers

  • Best Answer
    Jul 30, 2017 at 08:12 AM

    Hi Rahul,

    They are slightly different for their purpose but interlinked

    Standard cost estimates (CK11N) are the estimation/prediction of how much cost is incurred in producing a finished good within CO-PC Product cost planning at material x plant level. When marked + released, this stand cost estimates become the standard price in Material master )accounting view) to valuate the inventory at that price.

    Planned costs for production orders (CO03) are the estimation of how much it costs to produce the production order and generated within PP for each order and are normally used for planned/target/actual cost analysis within PP and not used to valuate any inventory or movement. For planned costs the Debit values such as ingredient materials, are calculated according to the standard price for the produced material. If there is no available standard price , the values will be calculated according to the Planned Costing Variant which is in the master data – Control data tab. The Credit value is according to the standard price of the produced material.

    Hope this clarifies.

    Cheers

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  • Aug 02, 2017 at 09:14 AM

    Hi Rahul,

    Taro's reply is 100% correct. In simple words standard cost is based on BOM and Recipe defined at product level. For production order cost is called preliminary cost, it is based on BOM and recipe selected for particular period.

    Standard cost will remain constant for fiscal period on other hand preliminary cost can be revised (optional) when we save production order

    Regards,
    Malay

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