Production order settlement occurs in 2 periods?

[Former Member]

Hello friends,

Kindly, can you please help me understand why a production order settlement would occur in 2 separate periods. For example, I have an order that was settled for April that resulted in over-absorption. When I settle production orders the next month in May, this same order number is setlled with a resulting under-absorption. So I realize that for this April order, the settlement should have taken the net of both of those absorption variances. Why is the settlement out of alignment?

Thank you!

Jonathan

[Former Member]

It is a normal process to settle production orders at period end, when orders span more than one period.

As regards to over / under absorption, I believe you're referring to financial terms, which your FI / Co person would be in a better position to explain.

From a PP point of view, just check the confirmations posted and / or the goods movement posted. It could be that there is a posting in-excess or deficit of what was planned leading to the over / under absorption respectively.