Introduction on FTP and actual costing

After items are produced in Manufacturing, they are transferred to inventory, where receipt posting takes place. You can use the following costing methods to determine the price against which the end item is received in the warehouse:

  • FTP
  • Actual costing
FTP

If you use Fixed Transfer Price (FTP) for receipt postings, the item's inventory valuation method defined in the Warehouse - Item (whwmd2510m000) details session must be Fixed Transfer Price (FTP). For more information on FTP for receipt posting, refer to FTP for receipt postings in manufacturing.

Actual costing

If you use actual costs to determine the price for receipt postings in LN, the item's inventory valuation method must be LIFO, FIFO, MAUC, or Lot control.

The actual amounts for materials, hours, and subcontracting are used to determine the price of the end item. The amounts reported during the receipt postings are used to calculate the value of the end item in inventory, according to the chosen valuation method.

In Manufacturing, actual costing is used for a production order if the following conditions are met:

If actual costing applies to the production order, the End Item Receipt Posting check box in the Production Orders (tisfc0101s000) session is selected. End items are received in inventory at their actual costs, and valued according to the defined actual valuation method.

No variances are possible when using actual costing, the only exception are additional calculation office variances, these may occur if costs are booked after the receipt of the end item in inventory. The variances are copied to the Inventory Variances (whina1516m000) session. The variances can be used to correct the value of the items in inventory by means of the Process Inventory Variances (whina1200m000) session.

If you use actual costing, costs are booked accurately and in time. When a certain item quantity is received in the warehouse all production costs must be booked. For more information on actual costing, refer to Actual costing for receipt postings in manufacturing.

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