When Do You Use Product Cost by Order?

• Product Cost by Order enables you to analyze costs at production lot level. You can use it for make-to-stock production and sales order-related production.
• In sales order-related production, you can use Product Cost by Order for sales order-related mass production and as a supplement to Product Cost by Sales Order.
• In Product Cost by Sales Order, you use manufacturing orders (production orders or process orders) as cost objects.
• The costs that are updated on the manufacturing order are analyzed by lot and then settled.
• This means that variances of the cost analysis are only determined once the whole quantity that was planned for production has been delivered to the warehouse.

You can do the following with Product Cost by Sales Order:

• Determine and analyze plan, target and actual costs for production orders and process orders
• Update or determine the inventory of unfinished products (work in process) and finished products
• Determine and analyze variances
• Transfer work in process and production variances to Financial Accounting (FI)
• Transfer production variances to Profitability Analysis (CO-PA)
• Transfer work in process and production variances to Profit Center Accounting (EC-PCA)
• Transfer production variances to actual costing / Material Ledger (CO-PC-ACT)