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# Variance Calculation Issue: Product cost by period

Hello All,

We are currently using product cost by period with manufacturing orders in SAP ECC without product cost collector.

The WIP is at target cost which is based on standard cost estimate. Based on operation confirmations the WIP is calculated.

If we do not do any goods receipt (delivery) no target costs are calculated and thus all the variances are collected on the remaining variance category. Standard SAP also suggests that variance calculation takes places with DLV or TECO status and/or when goods receipt takes place.

Now, what we observe is that if in period 1, if we book actual costs on the production order, but we have no delivery of the product we are producing, then everything gets collected in the remaining variance category. And say in period 2 if we complete the order with some more actual costs and delivery of the product we are producing, the variance gets calculated but it looks at only actual and target costs for the period and does a correct variance analysis for the period 2. The previous period variances that are collected on the remaining variance category are not corrected and still lie in the remaining variance category. So when we analyse the variance analysis for the order on a cumulative basis it doesn’t show a correct analysis since period 1 variances are not corrected.

Please provide any inputs regarding the issue and also let us know if this is SAP standard for product cost by period.

Thanks.

VS.

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### Related questions

• Posted on Apr 20, 2012 at 03:01 PM

Hello Vishnu

As per SAP standard..... Remaining Variances are reported in the following 2 situations: (Product Cost by Period)

1. When the system cannot calculate target costs, such as when no cost estimate for the material exists or because no goods receipt for the order has taken place in the Product Cost by Period component.﻿

2. When no variance categories have been defined in the variance variant in Customizing for Cost Object Controlling.﻿

Pls check the following points also with reference to Cumulative Variance Calculation :

Cumulative variance calculation compares the target costs with the cumulative control costs. Cumulative variance calculation is only possible if the following conditions are met:

• The order has the settlement type FUL (full settlement).
• The production order or process order has the status DLV (delivered) or TECO (technically completed).

Regards

Sa.Ramaswamy﻿

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• Posted on Apr 24, 2012 at 09:11 AM

Hello Vishnu

Kindly let me know if you need any more inputs or details

Regards

Sa.Ramaswamy

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• Posted on May 02, 2012 at 02:53 PM

Hello Vishnu

Hope you have sloved your issue; please award marks to me and close this question

Regards

Sa.Ramaswamy

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• Posted on May 02, 2012 at 05:23 PM

Hi,

The Target costs are calculated during variance run.

Please check whether you have done variance calculation and you will be able to see target costs getting computed in the Production Order.

also please check this note 78319 - Variances - No remaining variance in detail list.

Regards