Variances for the Previous Period- Production Order Variances

[Former Member]

Dear All

I am not able to settle the variances of Previous Period in Ko88.

The following steps I have done for the settling the variances

1. KKS2- Production Order

2. Ko88- Settlement of Variances

If i settle the variances production order variances it is increase the stock and in the increase in the profit and loss account

I need a suggestion there should not be any impact on the either in the profit and loss account and stock

Please advise me

Regards

Ramesh

[Former Member · Accepted solution]

Hi Sairamesh,

Assuming you are using standard cost for semi finished and finished goods, the entry for settlement of orders will be

Production Variances Dr (variances according to the variance key settings)

Change in Stock Cr

Both debit and credit is going to P/L only so there will not be any impact on profit or loss as such.

Best Regards

Vimal

[former_member39879]

variance settlement affects to posting period in sap

[former_member679035]

Try performing Full Settlement in KO88 Processing Type. Assuming you are configured to do so.

[Former Member]

Dear Vimal

I would like to explain further more on this area.

1. For V Material Item - When there is no stock it will be posted to Profit and Loss account

2. For V Material Item- When there is a stock it will be posted to Balance sheet acccount- My question whether it can be posted to Profit and Loss account. When there is a stock - What is the procedure to be followed.

In further to that Settlement can be done only if the order is completed. settlement cannot be done if the order is not completed.

I need to understand

1. Whether V Material item available stock can be posted to Profit and Loss account.

2. Whether this is based on Order completion.

Thanks for your reply.

Regards

Ramesh

[Former Member]

Hi Ramesh,

By V Material item, do you mean to say that you have kept your finished and semi finished goods price control as V (moving average price)? At the outset this is a risky proposition and material prices will vary dynamically. refer OSS note 81682.

To your questions, When even one quantity of stock is available, the entire production order variance will get settled to that material (balance sheet) if not stock is there, it will go to Price difference Account (P/L) . There is no way to change this in Std SAP.

If price control is V, Production order needs to have PDLV,DLV or TECO status for settlement.

Best Regards

Vimal

[Former Member]

Dear Vimal

Thanks for your reply, still I had a doubt.

Suppose If the V Material Item is not having the stock, but the order is not technically completed or delivered.

What will be the status of the variance settlement. Ko88.

Regards

Ramesh

[Former Member]

It will go to WIP.

WIP A/c Dr

WIP Change in Stock Cr

Best Regards

Vimal

[Former Member]

Dear Vimal

My questions is answered 80% but still there is a doubt.

If the V- Material item is not having stock "0" stock but the order is not technically completed, but your answer says that

Wip a/c

Change in WIP account.

What will be impact on the original entry for V- Effect in the Profit and loss account.

Regards

Ramesh

[Former Member]

Hi Ramesh,

I did not understand the question. What is the original entry?

Br

Vimal

[Former Member]

Hi vimal

Posted the Entry if the V Item stock is not there

Entry Change in stock- Finished Goods MM

To : Variance in Production Account

When there is a Stock in V item

Change in Stock Account A/c Dr

To Stock Finished product Item

My Doubt is *V item is not having the Stock but the Production order is not technically Completed.*

When we are making the settlement partially what will be entry System Post.

Regards

Ramesh

[Former Member]

Hi Ramesh,

There are two scenarios here

1. Production order is started, raw materials are consumed, activities are confirmed but no output is posted . In this case as i explained before it will go to WIP. In this case the status of PO will be REL/PCNF/CNF. In this case there is no previous document

2. Production order is started, raw materials are consumed, activities are confirmed , output is also posted but before doing the settlement, the output is consumed towards the next activity or sold out. In this case even if the order is not technically complete, the status will be DLV or PDLV. In this case, the variance will goto price difference account.

Hope you are clear.

Best Regards

Vimal

[Former Member]

Dear Vimal

Thanks For your Answer, Now I am Clear. Any way I posted one more questions

Regarding MRF1- Could you please help me.

Regards

Ramesh