production order settlement price difference

[Former Member]

Hi,

When the production order is settled via co88 or ko88, PA transfer structure is Settle production variances which is price difference account.

1) what is the reason there is a price difference posting? is it the result of KKS1 or KKS2?

2) after prod order is settled, the double entry for both account also change in stock account group.

why both also p&l account? The effect is netted off as both also p&l. so what is the reason both also p&l account?

thanks

[Former Member]

Hi,

> 1) what is the reason there is a price difference posting? is it the result of KKS1 or KKS2?

This is the difference between standart price of the finished good and actual cost accumulated on the production order. Stock account is debited with the standart price of the material at the time of goods receipt. But when the production order is to complete the actual costs have to be distributed. So the diffrence from what has been debited in stock account is reflected in price difference account.

This difference is called as total variance. KKS and KKS2 helps you to calculate and analyze several sorts of variances, production, planning etc. However only total variance is settled. KKS1 and KKS2 are not prerequisites for CO88, total variance will be calculated for order settlement either way.

Regards.

[Former Member]

Hi,

thanks.

I need advice on point 2.

2) after prod order is settled, the double entry for both account also change in stock account group.

why both also p&l account?

2.1) in FI, the effect is netted off as both also p&l. so what is the reason both also p&l account?

2.2) in CO, price difference updated in copa and production order set off. this is the reason both p&l?

cr production order finished goods (with PO as co object)

dr price difference finished goods (with profit segment which will flow to copa and value field is production variance)

thanks

[Former Member]

Hi,

check whether this may help you

When we settle a production order the expenses account will be debited and AUC(Assets under construction ) would be credited

Regards,

Raj