Secondary cost element:issue

[Former Member]

Hi experts,

We have configured labour and it coming properly at the time of settlement of production order.It is observed that labour amount is not coming in FI but appear in CO area.We have assigned secondary cost element for labour.Since it is coming in CO ,how this labour amount will come in FI records.Shall user pass separate entry in FI for it.

Pl advise.

Regards,

Samar

[Former Member]

solved

[Former Member]

Hi,

The secondary cost element defined for the labour is only calculation of the activity rate of the labor & push to production for the product costing,there is no link between FI in this case.

The labor cost already captured in FI by the payroll run of the employee,the payment to the employee is paid on the payroll when it hit the primary costelement & costcenter.

No need of posting again in the FI seperately.

If there is over time also then also it will consider in the payroll run,

The secondary costelement is only for the calculation for the effort of the labour to prepare the product.

Regards,

Raj

[Former Member]

Hi,

I think you are not clear with the concept of Secondary cost elements. Secondary cost elements unlike primary cost elements will not affect FI. The labour charges being debited through the secondary cost element will only affect CO. No need to pass any seperate entry in FI. Actually the FI entry would be reflected when we are paying the wages to the Labourers.

Hope this clarifies to some extent

Regards

AKV