You are on page 1of 6

Dear Abraham,

What i know is the step that you running in Product Costing is:
1. KSS !Actua" Sp"itting# $$% you sp"it the cost in Cost Center by Acti&ity 'ype
. KS(( !Actua" Price Ca"cu"ation# $$% you ca"cu"ate the acti&ity type price per Cost
Center, you can see the resu"t in KS)'
*. C+, !-e&a"uate Acti&ity Price# per P"ant $$% you a""ocate the e.pense in cost center
to process order
/. KKS1 !Ca"cu"ate 0ariance# per P"ant $$% you ca"cu"ate the &ariance between Actua"
Cost &s Standard Cost !Standard Cost is come 1rom SC2 !Standard Cost 2stimate#
3. C+44 !Process +rders Sett"ement# per P"ant $$% you sett"e the cost in Process +rder to
6rom step 1 to * there is no update in 6( 7ust in C+, when you e.ecute report
S8A9-84:;1*<11 you can 1ind the a""ocation resu"t and you can 1ind Actua" Acti&ity per
Acti&ity 'ype.
(n step /, KKS( you on"y can ca"cu"ate the &ariance between Actua" Cost &s Standard
Posting in 6( is happen in step 3, when you sett"e the cost in Process +rder to 5ateria"
=our >uestion is that do we need to run KS(( and C+, to get the actua" cost updated in
6( or 7ust KKS1 wi"" do?
5y answer is yes, and you a"so ha&e to run SC2 to get the Standard Cost 1irst.
1. Actaul Overhead Calculation - KGI2/CO43
2.WIP Calculation - KKAX/KKAO
3.Production technically co!letion - CO"2/CO#$
4.$ariance Calculation - KK%2/KK%1
&.Production order %ettleent - KO''/CO''.
We wi"" do our 1irst months ending with the materia" "edger but we are not 1;;A what
steps ha&e to be done there1ore. ,orma""y we are doing 1o""owing steps:
$ Posting indirect manu1acturing costs to the cost ob7ects
$ Sp"itting o1 actua" prices &ia KSS
$ Ca"cu"ation o1 actua" prices &ia KS((
$ Doing Actua" Costing &ia C+,
$ Distributing Cost +b7ects &ia KKP=
$ Ca"cu"ating &ariances in Cost +b7ect @ierarchy &ia KKP'
$ Sett"ement o1 &ariances 1rom the product cost co""ectores &ia KK4B
With the 5ateria" 9edgerC Actua" Costing the process changes in my eyes "ike 1o""owing:
$ Posting indirect manu1acturing costs to the cost ob7ects
$ Sp"itting o1 actua" prices &ia KSS
$ Ca"cu"ation o1 actua" prices &ia KS((
$ Doing Actua" Costing &ia C+,
$ Distributing Cost +b7ects &ia KKP=
$ Ca"cu"ating &ariances in Cost +b7ect @ierarchy &ia KKP'
$ Sett"ement o1 &ariances 1rom the product cost co""ectores &ia KK4B
$ Doing actua" costing &ia CK59CP
As 1ar as ( understand the t$codes KSS, KS(( and C+, are not necessary as the actua"
costing wi"" do the 1unctiona"ity. As we ha&e a cost ob7ect hierarchy in use, which gets
burdened with costs and this costs norma""y are distributed to the di11erent product cost
co""ectors (Dm not tota""y sure i1 this has to be done be1ore the actua" costing? !( assume
but (Dm not sure at a""#.
Any comment wi"" be high"y appreciated.
'hanks in ad&ance.
Assuming that you are in product cost by order scenario. +rder resu"ts are ca"cu"ated in
this scenario based on order status. (1 the order status is -29 or PD90 system wi""
consider ba"ance as W(P and i1 the order status is D90 or '2C+ the system considers the
same amount as &ariance.
So in your case donDt do '2C+ as there is sti"" <; >uantities pending.
Suppose in your case order ba"ance is 3;;;;. (1 you do '2C+ system wi"" treat it
&ariance and at the time o1 sett"ement accounting entries wi"" be posted 1or &ariance
A1ter doing KKAF you ha&e to sett"e the order through K+44 !sing"e# or C+44
!co""ecti&e#. =ou shou"d a"ways do sett"ement at the month end process.
(n the month end process you shou"dCcan do !apart 1rom other acti&ities as per your
re>uirement# :
Actua" acti&ity price ca"cu"ation !KS((#
-e&a"uation o1 orders at actua" acti&ity prices !56,1#
+&erhead ca"cu"ations on orders !KG(#
W(P Ca"cu"ation !KKAF#
0ariance Ca"cu"ation !KKS#
'hen 1ina""y sett"ement !K+44#
@i Hyosh,
A"so, p"s 1o""ow the be"ow se>uence 1or your C+ month end acti&ities!based on your
S". Period 2nd Acti&ity 'code
1 C"earance C+G( "ist C+G(
5arking Production +rders as '2C+
* 55 period end 55P0
/ 6( C"osing
3 Distribution Cyc"e KS03
< Assessment Cyc"e KSI3
4 (ndirect Acti&ity A""ocation Cyc"e KSC3
B Ca"cu"ate Actua" Acti&ity Price KS((
1; -e&a"uation o1 production order

11 Actua" +@ ca"cu"ation KG(CC+/*

1 Change Wip Cut$o11 Period KKA;
1* W(P ca"cu"ation KKA;
1/ 0ariance Ca"cu"ation

13 Sett"ement
A"so, obser&e that at the time o1 ca"cu"ation o1 W(P no accounting entry generated and
7ust store the W(P &a"ue in -A key. At the time o1 sett"ement o1 order on"y W(P entry wi""
be generated.
'he be"ow are accounting entries in C+ month end acti&ity:
1. Actua" Acti&ity Price Ca"cu"ation $ KS(( ,o Accounting and C+ entry
. -e&a"uation o1 production order:
,o 6( entry
C+ 2ntry: !56,1CC+,#
DrCCr. Production +rder
CrCDr. Cost Center
*. Actua" +&erhead Ca"cu"ation:
,o 6( entry
C+ 2ntry: !KG(CC+/*#
Dr. Production +rder
Cr. Cost Center
/. W(P Ca"cu"ation: !KKAFCKKA+#
+n"y ca"cu"ate W(P and stores the &a"ue in -A key. ,o 6( and C+ entries.
3. 0ariance: !KKS1CKKS#
,o 6( and C+ entries
<. Sett"ement: !K+44CC+44#
@ere, entries wi"" be generated 1or W(P and 0ariance categories wi"" be trans1er to
Costing$based C+PA.
W(P entry:
DrCCr. W(P )CS ACc
CrCDr. W(P PJ9 ACc
0araince entry:
DrCCr. Production 0ariance ACc
CrCDr. C+G5
Srini&as Sa"pa"a
( was a"so using currency &a"ues.
C+44 wi"" not post the di11erence between p"an and actua" &a"ues, which are a measure o1
how we"" the order is p"anned $ a di11erence between p"an and actua", shows that )+5s
and rountings are wrong, or the estimate 1or the p"an is out o1 date $ these are
manu1acturing contro" issues not a postab"e 6( entry.
C+44 posts the actua" ba"ance o1 the order which is the di11erence between actua" debit
and credits to an order. (1 the tota" actua" cost is being posted as &ariance, then !one
reason is# no de"i&ery was made which wou"d post an actua" credit against the order and
the status is '2C+. 'his credit wou"d net the order down to your p"anned &ariance, or to
Kero. at "east the ba"ance on the order.
'o see what is happening on the order go to C+;*
2nter the order number
9ook at the order status. (1 the status has D90 or '2C+, the ba"ance on the order wi""
post to &ariance. i1 there is no D90 nor '2C+, then the ba"ance wi"" post to W(P.
,ow 1o""ow the menu path Go'o % Costs % Ana"ysis.
=ou shou"d now be ab"e to see what the Actua" debits and credits to the order are.
5y order "ooks "ike this:
Cost 2"ement..........P"an Cost..Actua" Cost.....0ariance
5achine Cost............14*.1:.......11<.;3.............<:.1$ G)P
9abor..........................<3./3.........*.<:............./1.:4$ G)P
+&erhead...................1B3.::.......1/.;*.............:1.:/$ G)P
5ateria"..................1,1/.4.....1,133.14.............3B.1;$ G)P
Lb%'ota" Debit to +rderLCb%..1,<34.<:.....1,/14.B*...........*B.:/$ G)P
2>uip receipt...........1,<<;.;;$............;.;;.......1,<<;.;; G)P
Lb%'ota" Credit to +rderLCb%..1,<<;.;;$...........;.;;......1,<<;.;; G)P
Lb%)a"ance on orderLCb%.............1.**$......1,/14.B*.......1,/;.< G)P
=ou can see that my p"anned &ariance is cr 1.** G)P
(1 the status on this order was '2C+ and 0ariance were posted, the &ariance wou"d be
1,/14.B* G)P. )ut you wi"" notice that there is Lb%,+ AC'IA9 2>uip -eceiptLCb% to
credit the order 1or 1,<<; G)P. When that transaction occurs and the order status is D90,
then the &ariance posted wi"" be cr 1.** G)P
( think you need to carry out KSS !cost sp"itting# and KS(( !actua" price ca"cu"ation#.
C+, cannot be carried out i1 you se"ected in 59$Actua" Costing M Acti&ity update
re"e&ant to price determinationM.
+thers seem ok.