Work in Process (WIP) Tcode KKAX
Work in process: this is done during Period end process, when you want to see P & L or balance sheet.
Say suppose you have some order on 31 March, you want to see the cost of pending orders, where you have not done GR,
Then you do WIP to see the total pending order cost.
This is calculated at actual costs.
WIP is only created for orders that have been released (REL).
If the order has been technically completed (TECO) or delivered (DEL), then WIP is not created, but is broken down if it exists. However, WIP is only posted to FI when the order is settled. WIP cannot be calculated at target costs.
It is only possible to calculate WIP in Product Cost by Period.
The WIP calculation function valuates the unfinished products (work in process). In the Product Cost by Period component, work in process is valuated at target costs. The operation quantities confirmed for the manufacturing orders or production versions (only in repetitive manufacturing) that are not scrap are valuated at target cost in accordance with the valuation variant for work in process and scrap.
You can calculate work in process at target costs for the following objects:
- Product cost collectors
- Production orders with quantity structure
- Process orders
Variance determination T code KKS2
Good issue + Confirmation + Overhead - GR of finished material is Variance.
Suppose Raw material price is 100, Conf is 50 ( labour, Power) , Ovhd 10 rs.
But when you do GR in SAP system do GR on Material current price in master, if it is say rs 150
Now variance is 10 rs. When you do Settlement the Order Update this variance to Material, Material value is update to 160.
Variances can only be determined once the order has been delivered (DEL) or technically completed (TECO), as the quantity actually delivered is fixed.
This quantity determines the target costs of the production order and thus the variances per piece.
This means that WIP and variances cannot be calculated at the same time.
WIP is only calculated for released orders (REL) and variances for orders that have been technically completed (TECO) or delivered (DEL)
If you are using Product Cost by Sales Order with the unvaluated sales order stock, you cannot reliably determine any variances for the assigned production orders and process orders.
Therefore, in this case, the system does not support the variance determination, and you need to use the valuated sales order stock instead.
Variance calculation provides you with detailed cost information on products or manufacturing orders. The variance calculation function does the following:
- Shows the variance between target costs and control costs (the control costs can be the net actual costs, for example)
- Determines the difference between the actual costs debited to the object and the credit from goods receipts (total variance)
- Valuates the unplanned scrap quantities with target costs to determine the scrap variances
- Determines production variances and planning variances for informational purposes
- Shows the causes of the variances and assigns the variances to different variance categories depending on the cause
Order settlement functionally T code KO88
To Settle the Variance onto material or other account (PRD) Settlement is done.
The status of a production order in this scenario determines whether that production order is settled and thus credited or not.
The actual costs of the production order are only settled if the order has been technically completed (TECO) or delivered (DEL).
For orders that have been released (REL), settlement only posts the WIP to FI (if any WIP was determined).
Each time goods are received into inventory, the system valuates the receipt and credits the product cost collector or manufacturing order accordingly. The actual costs posted to an order can be more or less than the value with which an order was credited when the goods receipt was posted. When you settle, this difference between the debit and credit of the order is transferred to Financial Accounting (FI). Settlement also feeds data from Cost Object Controlling to other components.
