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What
A contract is a pre-determined long term agreement to supply material or service for a certain
period of time. Specific delivery dates are not mentioned in the contracts. Contracts can be of
two types: Value Contract or Quantity contract
In Scheduling agreements, we can enter scheduling lines which gives details of quantity that
should be delivered on specific date. Plant must be entered in SA so that materials can be
delivered at plant. These are generally used for materials whose requirements are predictable.
7. What are release procedures with and without classification?
Release Strategy with Classification:
PR can be released at header level as well as item level.
Restricted Stock
Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production)
GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)
12. What is the use of Split Valuation?
Within a valuation area, sometimes, we need to valuate various stocks of a material separately.
It can be because of different origin, quality, status, etc. We use split valuation in such cases. In
this case, material is managed at several partial stocks which are sub-stocks of main material
stock. Any transaction, relevant for valuation, is carried at this partial stock level. In accounting
view, we define if we need split valuation for any material.
13. What is a Cost Center?
Cost Center accounting is used for controlling purposes. It is an organizational unit within a
controlling area which represents a defined location of cost incurrence. For example, any
department can be a cost center for recording all expenses incurred for that department.
14. What is a Profit Center?
Profit Center Accounting evaluates the profit or loss of individual, independent areas within an
organization. Profit center is an organizational unit in controlling to recognize your profit. Profit
center is attached to material master at plant level.
15. How to create Tax calculation procedure in MM?
Tax can be calculated for each line item of a PO separately based on the tax code. Earlier
TAXINJ, which is a formula based tax procedure, was used. Now, TAXINN, which is a condition
based tax procedure, is generally used. Tax procedure contains the condition type and
necessary specification for each condition type. Account keys are assigned to condition types
and these account keys determine the G/L to which the tax amount is to be posted(OB40).
These account keys are maintained using t-code OBCN. (All these transactions are under
Financial Accounting Global Settings >> Tax on Sales/Purchases >> Basic Settings). Tax codes
are assigned to country codes and country are linked with tax procedure. Thus, based on tax
code, corresponding tax procedure is determined and then calculation is done based on
condition types in that tax procedure.
16. What are the commonly used movement types in Sub-Contracting process?
541 - Issues of goods from warehouse to subcontractoru2019s stock
542 - Reversals of goods issues from warehouse to subcontractoru2019s stock
543 - Consumption from subcontracting stock (Automatic updating during GR)
544- Co-products receiving
545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
101 Finished good/ Sub-Contracted good received after processing