Cost estimates in MTO scenarios

[Former Member]

Hi

I am new to MTO process hence I am giving below my understanding and questions in parallel and request an experts to correct me.

MTO scenario:

1) When a sales order is created I know we have a setting where we can get sales order estimate done automatically.This estimated cost is is settled to COPA periodically with record type C.

2.Based up on configuration settings a Production Order is created automatically when Sales Order is created.

My question here is

Do we need to do Production Order costing again separately? or cost estimates done on sales order(using cost variant&cost sheet/BOM/Routing) will automatically transfer to production Order?

If the cost estimates are automatically transferred from SO to Production order are they going to be planned costs on Production order?

If they are the planned costs then variances calculated later will be settled to COPA?

3. I am assuming the cost estimates calculated on Sales Order are going to be used only for COPA purpose i.e to know the profit margin calculated by comparing revenue(record type F) and cost estimated settled to COPA(using record type C). Is my understanding right?

4. In connection to my point#2 above,if cost estimates on Production order are going to be different than Sales Order then how does that workout if I settle variances from Production order to COPA? Because my cost estimates settled to COPA were from SO order cost estimates and settlements of variances from Production order are as per Production order cost estimates?

Does the above scenario exists?

Request experts to cover my process gaps please.

regards

hinfi

[kumar_semmalai]

Hello,

Please Go-through this link ..

https://wiki.scn.sap.com/wiki/pages/viewpage.action?pageId=40075655.

Based up on configuration settings a Production Order is created automatically when Sales Order is created.

As per std. SAP process, Above mentioned Requirement/ process comes under ATO (Assemble to Order) Scenario.

MTO: standard products not held in inventory and made after a committed order comes in

ATO: standard product where some components are held in stock and the finished product is finished after the order comes in

BR,

Kumar