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GR Cost from production for MTO

former_member218048
Active Participant
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Dears

We are into Make-to-Order scenario. Material with Price control 'S'.

Sales Order is created and cost marked. Production order created, costed and released.

Now the production is complete and the GR is to be done.

At what price, the GR from the production will be posted ?

Is it at Production Standard Cost or Sales Order Standard Cost ?

Accepted Solutions (1)

Accepted Solutions (1)

former_member198650
Active Contributor
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Hi Nikki,

If you have done costing at sale order level, then the GR should be valuated with sale order price not with standard price of the material.

Regards,

Mukthar

former_member218048
Active Participant
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Thank you.

So the GR will not consider the Production Order cost ?

former_member198650
Active Contributor
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Hi Nikki,

You mean to say the actual cost of the production order. If it is then yes it wont consider the cost.

Regards,

Mukthar

former_member218048
Active Participant
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Dear Mukthar'

I am not concerned about the actual cost.

When the GR from production is done, what will be the role of Plan cost of the Production Order ?

Since you are telling the GR will at the Sales Order Plan cost, what is the purpose of Production Order plan cost ?

former_member198650
Active Contributor
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Hi Nikki,

Plan costs for the production order will be based on your plan quantity.

Regards,

Mukthar

former_member218048
Active Participant
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Dear Mukthar

I don't understand the answer given by you.

I know the plan cost is for the plan quantity.

I am asking what is the purpose of Production Order Plan cost ?

You are telling the GR cost of the Production is based on the Sales Order Plan Cost.

Then there is no role for the Production order plan cost ?

rajneesh_saxena
Active Contributor
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Hi Nikki

Based on plan cost you may calculate variances in different version (other than version 0) and analyse them for control perposes, however FI entries will happen using only variance calculated in version 0.

Regards

Rajneesh

former_member218048
Active Participant
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Hi

So it is like this:

For Sales Order related production, the GR from the production order is calculated at the Sales Order Plan Cost. Production Plan cost is not considered for GR entry from the production.

Only for calculating the variance the Production Order Plan cost is used.

Correct ?

rajneesh_saxena
Active Contributor
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Hi Nikki

Yes, In case of SO related production usually GR happen on SO cost.

GR can never happen on plan cost of prod order.

Plan cost of prod order can be used to calculate planning variance in ver1 for analysis purpose.

Rajneesh

former_member218048
Active Participant
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Dear Rajneesh

If it is just for analysis purpose, what about the settlement of variance ?

When we settle the production order, the difference of plan and actual is settled as variance (when the price control of material is 'S'), right ?

So the point confusing to me is GR is done at Sales Order Plan Cost.

Variance is posted based on the Production Order Plan Cost.

Hoo.. it is too confusing..

rajneesh_saxena
Active Contributor
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Hi

Take a deep breath. Don't panic.

If you see the variance is being posted with a difference between GR credited to the order minus  GI and activity cost debited to the order.

Remember, I said that variance CAN be calculated based on planned cost of order in ver1 for analysis,but variance will always be posted to FI what ever is calculated in ver 0. And in ver 0 you take into consideration the actual GI/activity confirmations etc and compare these values with GR value (which is of course based on SO Cost estimate in your case).

Hope this is of little help to you.

For more clarification can you please post your screens where you are confused i.e cost analysis of prod order.

Rajneesh

Answers (1)

Answers (1)

kamalkumar_biswas2
Active Contributor
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Nikki

  The whole thing is little bit confusing to me...question is associated with goods movement ie GR...and it depends upon what is your cost object..is it prod order or SO..if it is prod ord then GR value will be at prod ord cost as per value posted at actual column of order (CR) and this happens when SO not a cost object. Cost showing at planning column has got no role in GR value..it is just a preliminary cost at the time of order released.

  2nd..if SO is a cost obj and prod order is created to capture manufacturing cost of SO specific where prod ord is not a cost object..where goods movement GR is valued at SO as per requirement class settings.

So..it is based of scenario of MTO

Kamal