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Diff between Production order and product cost collector

hi,

What is the difference between the production order and product cost collector.

in which cases we will use the production order and product cost collector.

Sateesh

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3 Answers

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    Former Member
    Feb 12, 2009 at 06:37 AM

    Hi Sathish,

    Product Cost (PC) by Order is used in Descrete Manufacturing scenario and Product Cost by Priod is used in Repetitive manufacturing scenario. All the products which are matured and whose market is very predictable and need to be manufactured continuously will be subjected to REM Scenario.

    In a single company we can have both Product Cost by period and Product Cost by Order. It is preferred to have one scenario (either By Order or By Period) per Plant for the sake of simplicity.

    The following are the salient differences between PC by order and PC by Period:

    1. Cost Object: In case of PC by Order, Production Order is the Cost Object. However, in case of Descrete with Product Cost collector scenario, we shoulad have Product Cost Collector as the Cost Object

    In case of PC by Period, It is mandotory to have Product Cost Collector as Cost Object.

    2. In case of PC by Order, WIP is calculated at actuals.

    where as in PCC, WIP is calculated at Target Costs. Target costs can be based on Standard Cost Estimate or Preliminary Cost Estimate

    3. In case of PC by Order, there will be timing difference in recognising the Variances as the WIP is valuated at actuals.

    But in case of Product Cost By Period, there will never by timing difference as the WIP is valuated at target costs.

    Understanding this concept might take some time as in case of PC by period WIP and Variances have direct impact

    4. From Reporting perspective, in PC by Order, the analysis is done by Order. There is a draw back on this front as we can never new the performance by material to identify or diagnose the true causes for any variances from the standards.

    PCC will give this view.

    5. System performance Less master data in PC by Period as compared to PC by Order. This is because we have just one Cost Object (PCC) per material. due to this the system performance would be really better during period end processing

    6. In case of PC by Order, Variances can be calculated only if the the Order is fully completed and Goods are delivered to Stores. Where as in PC by Period, with partial dilivery also we can calucalted Varainces and settle in the same period

    Please let me know if you need futher information

    Best Regards

    Surya

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    Former Member
    Feb 11, 2009 at 05:56 PM

    Dear Sateesh,

    Help SAP:

    Product Cost by Order(production order) in which you analyze costs by lot, in Product Cost by Period(Product cost collector) you analyze costs by period. This means that you collect the costs on a cost object over an extended period of time, and analyze the debits and credits in each period.

    Production order (Product Cost by Order)can be used in the scenery of Make-to-Order

    Product cost collector(Product Cost by Period) can be used in the scenery of Repetitive Manufacturing.

    Look the links

    https://www.sdn.sap.com/irj/scn/wiki?path=/display/erpfi/product+costing

    http://help.sap.com/saphelp_470/helpdata/en/1d/39d448cd3011d19eb3080009b0db33/frameset.htm

    http://help.sap.com/saphelp_470/helpdata/en/90/ba62d1446711d189420000e829fbbd/frameset.htm

    Regards

    Elza

    Edited by: Elza Aparecida da Silva on Feb 11, 2009 5:54 PM

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  • Feb 12, 2009 at 05:24 AM

    Dear Sateesh Kumar,

    Production Order:A production order defines which material is to be processed, at which location, at

    what time and how much work is required. It also defines which resources are to be used and how the

    order costs are to be settled.

    In order-related production that is, when you are using production orders you analyze the costs by

    orderwise.

    A Production Order is used in a Discrete scenario.In the same discrete scenario we can use product

    cost collector as the cost object instead of a production order when you want to analyze the costs by

    period rather than by lot

    Product cost Collector:

    1.Product Cost collector is one of the master data in REM scenario.

    2.Product Cost collector is used as a cost object in REM scenario,which means all the cost will be

    booked under this product cost collector for that material.

    3.Whatever the confirmations that are done in MFBF or MF41 or MF42N,the cost will get debited or

    credited accordingly for that material and the impact will be seen in the product cost collector.

    4.This product cost collector will be having an order number which will be used for order settlement and

    variance calculation.

    5.For creating a product cost collector you will require a production version.

    6.so whenever you do an assembly or activity or component backflush,the cost will be booked under

    this product cost collector.

    I hope this points will help you to some extent.

    Revert back with your further queries.

    Regards

    Mangalraj.S

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