ETO Production order settlement

[Former Member]

Hi,

When we settle production order to project, actual costs settle to project with semi finished or finished material or actual costs will settle as raw material costs and labor and other costs?

What is SAP standard process ?

Thanks,

Rau

[Former Member · Accepted solution]

This depends on how the settlement profile is set up.

In case, the settlement is supposed to take place cost element wise then the costs that are accumulated on the production order will get settled as they have been collected on the production order. That means, raw material costs and labour cots are settled as they are.

In case you have set up the settlement profile in such a way that the costs need to be settled as Finished product or Semi Finished product then the costs will settle in that way. This means, in settlement profile settings you should ensure that, settlement does not happen cost element wise but through a single cost element and that could be cost element for Finished product or Semi Finished product.

I do not think there is any standard process prescribed by SAP for this. This depends on what a company policy says or what an finance/ controlling auditor say.

[Former Member]

Answered