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Consumption based product cost in batches

HI All...

I am a PP guy.. but have some doubt in product order costing..

We have std BOM where components have been given at the max usage, but normally at the time conusmption they use less(mostly) / more. In costing the difference amount is goin into variance, but client wants the actual consumption of RawactivitiesOH cost should flow to the order rather that std cost from mat master and difference to the variance(PD).

we are managing stock in Batches, so is there any way so that we can capture the actual consumption of mat+act in the order and value of the batch should be updated.

please share ur thoughts......

Edited by: srinivas rapelly on Dec 20, 2008 10:18 AM

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 20, 2008 at 05:45 AM

    Hi, Let me try to make things clear. Here, in Production Orders, the actual pricess of Materials consumped are being charged. You need not worry about it. In the case of Activity price and Overhead, first the Production Orders charged at Planned pricess. Then at month end closing activities, you can revalue the activity prices at actual and post the differences to the Production Orders. In the case of Overhead, through actual OH calculation, you can bring in actual overhead. As a whole, the actual cost of the production is being taken into consideration and it is compared against with the standard cost estimate and the differences which is called as Variances are posted for further analysis and control. Trust this helps much! Cheers!

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