Production Order is more a logistics function. Whenever there is a requirement for a product to be produced an order is created to facilitate capturing the actual materials and labor issued to the order. Order creation could happen throughout the year.
The standards are generally set at the begining of the year, in some cases even monthly during the budgeting process. This sets up the standard cost which will serve as a standard for production orders wherein the variances are calculated against this standard and monitored.
Standard costs can be set only once for a period. Hence, standard costs are not set during production order entry.
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