CO88 Production Order Settlement Log

[Former Member]

The variances reported on the above should represent the difference between the Plan costs and the Actual costs. However, the reported figures appear to represent the total actual costs!

Example:

Plan Costs: 1000

Actual Costs: 975

Variance reported & posted: 975

Variance I believe should have been reported and posted: 25 (1000-975)

Has anyone else experienced this? If so, is there a known fix?

Thanks

[Former Member]

The CO88 settles the actual variances on your order. it makes a financial posting. the difference between plan and actual is not a financial number, it is a control/analysis value.

Cost actually issued into order by Material issues, confirmation and overhead calculations = 975

Goods receipt of "produced material" = 1000 (material master determined value of the invnetory)

Variance to post will be cr 25

Based on how you configure your variance reporting, there are reports to analyze the variance.

Althea

[Former Member]

Hi, thanks for your reply.

However. in my example the figures were GBP not quantities.

My concern is that the incorrect values are being posted as variances in the P&L.

My example was saying the total plan costs were £1,000, the total actual costs were £975, therefore the variance should be £25, but the settlement log is reporting a £975 variance!

Can you assist?

[Former Member]

I was also using currency values.

CO88 will not post the difference between plan and actual values, which are a measure of how well the order is planned - a difference between plan and actual, shows that BOMs and rountings are wrong, or the estimate for the plan is out of date - these are manufacturing control issues not a postable FI entry.

CO88 posts the actual balance of the order which is the difference between actual debit and credits to an order. If the total actual cost is being posted as variance, then (one reason is) no delivery was made which would post an actual credit against the order and the status is TECO. This credit would net the order down to your planned variance, or to zero. at least the balance on the order.

To see what is happening on the order go to CO03

Enter the order number

Look at the order status. If the status has DLV or TECO, the balance on the order will post to variance. if there is no DLV nor TECO, then the balance will post to WIP.

Now follow the menu path GoTo > Costs > Analysis.

You should now be able to see what the Actual debits and credits to the order are.

My order looks like this:

Cost Element..........Plan Cost..Actual Cost.....Variance

Machine Cost............183.17.......116.05.............67.12- GBP

Labor..........................65.45.........23.67.............41.78- GBP

Overhead...................195.77.......124.03.............71.74- GBP

Material..................1,214.28.....1,155.18.............59.10- GBP

<b>Total Debit to Order</b>..1,658.67.....1,418.93...........239.74- GBP

Equip receipt...........1,660.00-............0.00.......1,660.00 GBP

<b>Total Credit to Order</b>..1,660.00-...........0.00......1,660.00 GBP

<b>Balance on order</b>.............1.33-......1,418.93.......1,420.26 GBP

You can see that my planned variance is cr 1.33 GBP

If the status on this order was TECO and Variance were posted, the variance would be 1,418.93 GBP. But you will notice that there is <b>NO ACTUAL Equip Receipt</b> to credit the order for 1,660 GBP. When that transaction occurs and the order status is DLV, then the variance posted will be cr 1.33 GBP