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Entire settlement goes to COGS

Hi,

In plant order settlement Entire settlement goes to COGS (Not inventory) as program reads cumulative production valume.

- material is assigned in settlement rule and only portion goes to inventory can you any tell me the reason

Regards,

John

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  • author's profile photo Former Member
    Former Member
    Posted on Sep 07, 2010 at 01:32 PM

    The order goes to inventory when you notificate the order (warehouse entry). If the material has been correcltly valuated (this means that the material has a price in its master data) the order cost will be to the inventory. When the order is totally notificated and technically closed (period closing), all the cost goes to the COGS.

    Best regards

    Jose

    Edited by: JosManuel Bas on Sep 7, 2010 3:32 PM

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    • Former Member John Pal

      Hi John:

      I am afraid I'm not completely sure if I am understanding the problem but I will try to help you.

      are they settling against a material with moving avegare price ('V') or standard price ('S')?

      If they settlling to a material with moving avegare price, all deviation will go to inventory (if there are enough stock). Otherwise, a part will go to COGS.

      If they settling to a material with standard price all deviation will go to COGS.

      Therefore, I understand they are settling against a material with moving avegare price. Is that right?

      I suppose that user understand how the process works. (In this point I have to say that I never recommend average price for production materials because so many problems come up).

      Then, Have you checked the settlement type? Is it a full o periodic type?

      If you give me some more information., I will try to find a solution.

      - Settlement type?

      - Material price control?

      - Transacction that they use to settle? (to ensure that we are discussing of the same process).

      - Basic dates of the order?

      - Period that the are settleling?

      - Have they settled this order in previous periods?

      Kind regards

      Jose

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