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Former Member
May 08, 2012 at 09:10 AM

MTO Process issue


Dear All,

Please clear my doubt

I refer below link and many other links but not able to clear my issue


In house Production in MTO Process

In Requirement class, Valuation is M

Kindly let me know process is correct or not in relation to

1.Sales order is created for Material X

2 We created PO based on Sales order from

RM A Rs 100

RM B Rs 50

3 Issue RM to Production order created with ref to Sales

Con of RM A&B 150

To Inv of RM A&B 150

4 Production of Material X

Inv of Mat X 150

To Change in Stock 150

So it mean there is no STD. Cost of Material X in material master as it is based on sales order and price will be determine based on Good
Received cost. (We done CK51N of Material X )

So if we create other sales order of Same material X after 15 days in which RM cost increased to Rs
250 so at the time of Production of Material X entry will be

Inv of Mat X 250

To Change in stock 250.



When we do sub contracting for our customer and they supply 90% RM to us and 10% we add.

In this case entry will be

  1. When we received RM from Customer – NO FI entery
  2. When we issue RM 90%(Customer Stock) and 10% our material to Production order entry will be

Consumption Ac Dr 10 Rs ( our Material cost only)

To inv of RM Cr 10Rs

  1. At the time of production of FG – NO FI entry
  2. At the time of PGI no FI entry
  3. At the time of Billing

Customer 30

To sale 30 ( Revenue Amount)

Please let me konw above entries and my concept is correct