Variance Calculation

[Former Member]

Dear Controlling Gurus,

1. Pl update me why it is neccessary to Perform Variance Calculation(KKS1),Before Performing settlement Transaction(ko88),Once the Order is technically Completed.What implications will it have on Order Costing if I settle the Order Directly?

2.I know Target Costs will not get Populated until we run Variance Transaction.is it Compulsory to Know the Target Costs?

will the Balance in the Order will not get Settled if I dont get Target Costs.Pl throw some Light on this.

Regards

Varma

[Former Member]

Hi Gurus,

After Technical completion of the Order,system is allowing me to settle the Balance accrued in Cost Analysis in Process Order ,and the Balance is Zero after the Settlement Transaction.I have not Calculated any variances as i dont want to know any Target Costs.Pl update the Reason

Regards

sudhakar

[Former Member]

Dear Gurus,

Any answers please?

Regards

PSV

[Former Member]

Hi,

Target cost can be arrived at in the process order once GOODS RECEIPT is done. so without target cost, you will not be able to arrive at the variance.

so first do the Good receipt, calculate variance in KKS1 and then settle the order ko88 ( technically complete).

Regards

Prashanth

[Former Member]

Hi,

1. If the order is with status TECO, you cannot settle directly unless you calculate variances. system will give message that no amounts are accrued for the order. You need to first calculate the variances to settle the order.

2. Once you do Goods Receipt for the order, you can see the target costs being calculated (not until Variance calculation). These target costs are the basis for variance calculations and scrap calculations.

3. without Target costs being identifies, you cannot calculate the variances and will not be able to settle. At the time of variance calculation, system will through error that no target costs exists.

Best Regards

surya

[Former Member]

Hi Varma,

Variance Calculation is a mandatory step before Production Order Settlement. In Variance calculation you find the Variance (Planned Cost - Actual Cost) and this cost has to be settled to the Price Difference account.

Target Cost is also very important for the Variance Calculation.

Regards,

Rajeswari Shankar