| Production order postingsDuring manufacture various costs are incurred that are posted to
the production order. Different parts of production generate different
costs. Material Costs Materials are issued
against Valuation Prices. The valuation price is
stored on the actual WIP value on the aggregated cost components. The costs are
labeled as non-added costs. When LN issues materials, a moving-average unit cost (MAUC) price is booked. The
MAUC price in the Estimated vs. Actual Material Costs (ticst0501m000) session is the actual standard cost for the material
line. JIT items are directly
received in WIP without passing a warehouse. Special financial transactions
exist for these items to enable direct receipt and billing on use. For these
type of transactions the purchase result (when FTP valued item) is also entered
into WIP. The postings for materials costs are done for the
following origin/financial transactions: - Production/Issue
- Production/Issue
direct receipt
- Production/Purchase
result direct receipt
Operation costs Operations cost can be split up in two parts: Hours costs In the Estimated vs. Actual Hours Costs (ticst0502m000) session, the cost per operation are
displayed. The actual hour
costs are posted and processed from People. If the Process Hours using field in the Production Order Parameters (tisfc0100s000) session is Estimated rates, the hours cost
are calculated by using the operation rate and the cost component from the Standard Cost Calculation module. If the Process Hours using field in the Production Order Parameters (tisfc0100s000) session is man and machine rates, the hours
costs are calculated by using rates and cost components from the machine data
in the Machines (tirou0102m000) session and the employee data in the Items (tcibd0501m000) session. The hours costs
are disaggregated to labor costs, machine costs and overhead costs. For the
posting of the overhead, LN checks the Cover Labor Overhead Costs in Employee Department check box
in the People Parameters (bpmdm0100m000) session. The postings are generated on the moment of process
hours accounting. The number of hours can be: - Entered
manually
- Generated by
backflushing
The operations
costs are posted to the calculation office or to the enterprise unit of the work
center. The postings for operations cost are done for the following transaction
origin/financial transactions: - Production
- Operation
costs
Hours are posted
against the detailed cost components that are defined in the operation rates.
Price and efficiency variances are
calculated based upon these detailed cost components. Subcontracting costs LN considers
subcontracting as the purchasing of a subcontracting item. The purchase order
price of the subcontracting item is calculated by using the subcontracting
calculation method and the rate factor in the Standard Cost Calculation module. The postings are
generated the moment when you receive the subcontracted intermediates and are
posted to the JSC calculation office or to the enterprise unit. The
subcontracting result is determined by comparing the estimated and the
subcontract price. So the purchase order price and the actual amount on the
purchase invoice are compared. Before you close the production order the
purchase orders, generated for subcontracting operations must have been
processed. If the order estimate does not contain any costs for subcontracting,
you cannot determine subcontracting results. Both operation
hours and subcontracting costs are regarded as operations costs.
WIP transfers Work in process of a production order must be recorded at the
work center where the actual work for the order took place. WIP transfers allow
costs to be assigned to the right work centers. Production surcharges The surcharges
related to the production orders are the item receipt surcharges. Surcharges
are always posted to the calculation office and are
considered as production WIP. The surcharges are posted when the order is
completed. Surcharges are based upon the estimated order costs. Upon order
closing, the actual order costs, the actual surcharges are calculated.
Surcharges are always calculated and posted on the production order level by
means of detailed cost components. Production completion and receipt in
inventory The following phases can be distinguished: - Report a quantity
completed
- Report the order
completed
- Receive the items in
the warehouse
If the items are
reported completed, LN activates a warehouse order. A warehouse order can have a certain inbound
procedure. As a result there can be a time lag between the moment reporting
completed and the moment the items are posted to the warehouse. This time lag
reflects the WIP values. If a quantity of
items are reported completed, these items are posted to the calculation office.
A WIP transfer is carried out from the last operation/work center to the
calculation office. The reported quantity stay on the calculation office until
they are received in the warehouse. Upon receipt in the warehouse the WIP on
the calculation office is decreased with the FTP value (minus warehouse receipt
surcharges). Both postings are based upon the three aggregated cost components
of the end item. The postings are carried out for the following transaction
origin/financial transactions: Production. Completion Production. Receipt First the item is
posted to stock with the FTP value. Because you do not know the actual
production order cost the actual item (unit) costs cannot be calculated. The
actual order costs are determined upon order closure. Price, efficiency, and calculation variances LN calculates a price variance, an efficiency variances and a calculation variances during
the: - Closing of an
operation
- Intermediate
calculation of production results
- Closing of a
production order
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