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Understanding Results Analysis For WIP (Config)
Understanding Results Analysis For WIP (Config)
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Understanding Results Analysis Key for Calculating WIP
The guidance on measurement of cost of inventories is that, cost should include all:
a) costs of purchase (including taxes, transport, and handling) net of trade discounts received
b) costs of conversion (including fixed and variable manufacturing overheads) and
c) other costs incurred in bringing the inventories to their present location and condition
With SAP, the raw materials gets transferred to finished goods via production orders or process order. In this process, typically, the production order is
created to which raw materials are issued, all activities performed in the process are charged along with any overheads that is apporopriate the
production order. Production is ongoing, and it is quite natural that at month end, we end up with some open production orders. SAP in its product
costing functionality, provides the feature to calculate the value of WIP. This will be derived based on the careful definition of Line IDs in line with the
cost components. The WIP shall be the total debits cost in the order as reduced by the credits for goods receipt.
Here you just give a name, four letter key with its description.
1.
a.
i.
1. Valuated Actual cost, say for eg. 990001.
2. Calculated Costs, say 990002.
3. WIP account 990003
4. WIP Reserve 990004
5. WIP Reserve 990005
The calculated WIP shall be cancelled when the order status changes to DLV or TECO. You maintain this data for CO area, RA version and RA key
combination.
Besides these, create one more line ID say 999 for the Settled Cost, which appear as credit when you make a goods receipt.
Create additional WIP type 31 cost elements and their corresponding Reserve account for the above#### WIP Material 990006
1.
a.
i.
1. WIP Material Reserve 990007
2. WIP Labor 990008
3. WIP Labor Reserve 990009
4. WIP Overhead 990010
5. WIP Overhead Reserve 990011
Step 6 Now you assign the source cost elements OKGB, that are expected in the production order to various
line ID as created above.
You maintain this data for CO area, RA version and RA key combination. You use masking when you mention which cost element to be assigned to
various IDs. You can also direct various cost element, if it comes with a combination of particular cost center and activity type to a particular Line ID. If
you need to keep it simple, just enter +++++++ for cost centers, activity types and Business processes. Cost elements can be masked as follows; for
eg. All cost primray cost elements for materials, if they start from 210001 to 219999, the you can mask them like 00021+++++. Give the line ID in the
column Required to Capitailze.
Step 7 Define the update. OKGA You maintain this data for CO area, RA version and RA key combination.
Here you specify which line IDs are to be grouped under which cost elements and their reserve account. You connect the cost elements created in
step 5 to the line IDs. The category for the line IDs for material, labor and overhead shall be K, that stand for cost. The line ID 999 settled cost shall be
maintained as category A, (settled cost). When you assign A, you won't have to maintain any cost elements for WIP and reserve creation.
Step 9 Ensure number range assignment for the WIP transactions under appropriate head OKG6:
KABG Automat. WIP/results analysis
KABM Manual WIP/results analysis
KSWP Prim. Target Cost Calc. (WIP)
KSWS Sec. Target Cost Calc. (WIP)