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author's profile photo Former Member
Former Member

Costing and Production order

Hi,

Please give me clear idea on Production order , order settlement and variance.

When we settle the production order and this is mandatory to settle the order?

What entries posted in system while order settlement.

What is the difference between production and variance.

Please ............

Sateesh Kumar V

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    author's profile photo Former Member
    Former Member
    Posted on Nov 30, 2007 at 11:19 AM

    Hi Sateesh

    Production Order after completion of the finished product is to be settled to Inventory in case of Make to Stock order. When you transfer to Inventory, the a/c entry will be Inventory Dr and Cr to Inventory change a/c(Prodn order). This transfer normally happens at Standard Cost because you'd given Price Control indicator S in the Inventory (Material) master.

    Variances arise because prodn order would have received various costs based on Allocations, etc and it transfers out at Std cost. Entry will be Dr Price difference a/c and Credit Inventory change a/c (prodn order). Now you can see that Prodn Order is fully settled.

    S Jayaram

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  • author's profile photo Former Member
    Former Member
    Posted on Nov 30, 2007 at 10:51 AM

    hello,

    if ur BOM is active then u need to run production order through the actual costing of mateerial comes in MRP run so that it will helpful to monthly costing run.

    hope this could be helpful

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