Concepts should know in PC

Settlement type

• In the plant settings for the order type, you need to select settlement type PP1.
• This means that all production orders for this order type and this plant have the settlement rule with the FUL settlement type.
• In the order, the settlement type determines in which of the following scenarios the production order is processed:
• Product Cost by Order (FUL) or in Product Cost by Period (PER).

Status control

• The status of the production order is very important in this scenario.
• The delivered (DEL) or technically completed (TECO) status control the WIP determination (creation or breakdown), the variance determination and the order settlement

Work in process (WIP)

• 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.
  

Variance determination

• 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.

Order settlement

• 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).

Lot-size-independent costs

• These are determined and calculated once (only) in this scenario.
• In Product Costing by Period it is not possible to allocate these costs.