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Former Member
Accounting Entries during Settlement / Variance calculation
Oct 21, 2013 at 06:01 AM | 415 Views
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Dear Experts

Pleae give some clarity on the Accounting entries posted during Process order settlement.
1. What are the Accounting entries posted and which Posting keys selected during Process order settlement?
2. What are the accounting / costing entries posted (with posting keys) during revaluation of activity Prices?

In our existing setup, The accounting document during settlement is posted with below entries:
"Manufacturing-Production Variances" account is getting Credited (H) - Posting Key 96

"Production Output-Variance" account is getting Debited (S) - Posting Key 81

Is the above mentioned entries are correct or any changes required?

Thanks in advance.

Regards

Bala

FIN Controlling (/tags/165905235116577077914579113243106) | SAP ERP (/tags/01200615320800000659) | FIN (Finance)

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1 Answer

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Former Member

Oct 21, 2013 at 06:22 AM

Hi
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2 Entries posted on process orders
questions%2F10372364%2Faccounting-entries-during-
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_data%3D10372441%26s_csrf%3D1571771250308.164)
1. If cost is re ecting on the process order and the status of the process order is REL Or REL and PDLV

During the period end closing system will pass the following entry.

Work In progress account Debit (Current Asset)

To Work in Progress O set account Credit (P & L account)

 2. If Cost is booked and material is also credited against process order and the status of the process order is TECO and DLV during the period
end clossing system will pass the following entry.

a. If the process order has WIP in period one than it will reverse the WIP once the order status change to TECO and DLV the entry will be:

1. Work in Progress O set account Debit (P & L account)

Work In progress account credit (Current Asset)

b. In case the actual cost is more than the cost at which the inventory booked at the time of GRN against process order then following entry is
get posted.

2. Material price variance account debit ( P & L account) cost object is process order

Cost of production account credit (P & L account)

c. In case the actual cost is less than the cost at which the inventory booked at the time of GRN against process order then following entry is
get posted.

3. Cost of production account Debit ( P & L account)

Material price variance credit (P & L account) cost object is process order

Hope this will clear your doubts.

Thanks & Regards

Mahesh

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2 Comments

Former Member  Former Member

Oct 21, 2013 at 11:02 AM (/comments/10373530/view.html)

Hi,

From your above entries it shows that for the production order the actual cost is more than the value at which GRN (101 movment ) takes place against the said order.
(Please check the production order if the above statement is correct.)
Hence the entry posted is correct as

it has debited to your pro t and loss account through gl account Production Output-Variance with the additional cost incurred on production order (i.e. Excess of Debit on
production order less credit due to GRN at production order) and credit given to GL account Manufacturing-Production Variances which is also a pro t and loss account.
Only The description of the account to whom the credit is given may be factory output account or cost of production account which is nothing but just theName of the account
used in every organization.

Hope it clear your doubts.

Thanks & Regards

Mahesh

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