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Former Member

Accounting Entries in PP

Hi all

I need a/cing entries that get posted in Various stages in PP

Ur ans is helpful to me

Thanx

Srinivasa Rao

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2 Answers

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    Former Member
    Sep 01, 2008 at 07:26 AM

    hi

    intially u assign FERT valuation class as 7920 with standard Price.

    For raw material 3000 with Moving ave price.

    Thorugh valuation class it links with transaction key (ex. BSD). Transaction key links with movement type.

    Thorugh this it will link to G/L Account.

    While goods issue against production order

    1. Raw material stock Credited.

    2. Consumption of raw material debited.

    When doing confirmation.

    All processing cost will be updated in Controlling.

    While receiving the finished goods.

    1. Finished goods stock Debited.

    2. COGM Credited.

    Thanks & Regards

    phaneendra

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    Former Member
    Sep 01, 2008 at 10:54 AM

    Hi Srinivas, Following are the major stages and accounting entries. 1) Preliminery Costing Preliminery Costing automatically gets created. There is no accounting entries. 2) Simultaneous Costing: In this stage, the goods are issued to the Manufacturing Order. The Manufacturing Order is debited with the sum of prices and quantities and the respective inventory accounts are credited. The movement type 261 is being used. Through the confirmation of activities, the Manufacturing orders are debited with the sum of prices of activities and quantities and the Cost centers are credited. Here , there shall be no finance entries whereas controlling and profit center accounting shall be getting the entries. Goods receipt of the FG or SFG happens, by crediting the Manufacturing order and debiting the inventory accounts. 3) Final costing: At the end of the period this process shall be undertaken. Revaluatoin of Activity price If there is any need to revalue the activity price, it shall be done. This helps in absorbing the cost centers fully. Here, the accouting entries shall be, Manufacturing Orders shall either be debited or credited and the Cost Centers shall be credited or debited as the case be. Actual Overhead Calculation Then, actual overhead shall be done so as to bring in actual costs of overheads. WIP Calcualtion After this WIP is calculated. In this case, the costs incurred over and above the goods receipt shall be computed as the cost of WIP when the Manufacturing order is not fully delivered or the status of technically complete is not updated. Here, there is only computation and no accounting entries. Variance Calculation When we undertake this calculation, the system computes the difference between the debits and credits for the Manufacturing orders which are fully delivered or technically completed. Here also, there shall be no accounting entries. Settlement Here, accounting entries happens for both the WIP Calculation and variance calculation. In the case of WIP Change account is credited and WIP Inventory account is debited. For fully delivered or technically complete, Manufacturing Orders are credited or debited and Production variance account shall be debited or credited. Variance gets posted in Finance, Controlling, Profit Center Accounting and Profitability Analysis as well. In the case of Profitability Analysis, the variances are segreated into category wise. Here, I have used umbrella term 'Manufacturing Order' for Production order, Process Order and Product cost Collector. Trust this helps much! Cheers!

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