Conversion Cost Issue

[former_member613562]

Hi Experts,

In my current project i am having trouble with conversion cost.

It is a customer project where where material is procurred at PS through BOM Transfer and subsequent Purchase Requisition is raised to material procurement.. Post this event MRP run is happened in PP and Planned orders are created, which finally converted in Production Orders..

These orders are confirmed in PP as per the work centre assigned and Cost center and Activity Type (Inclusive of activity rate), but when i see the cost of producing a particular product, it shows the cost i.e hour * rate and also the conversion cost. My client has already defined the conversion cost within the hourly rate for both labour and machine and he need not require the conversion cost again.

I would seek your advice with this respect, on how to remove the conversion cost for the production order or activity per hour cost need to be re defined w.r.t conversion cost.. please also let me know the part played by conversion cost.

Regards

[former_member230675]

hope you are talking about transformation cost (labour, machinery and consumables). These are defined in the activity types..

please change the activity type rate to meet your requirements..

may be you can take the help of your CO consultant..

[former_member613562]

Hi

I am getting this cost against the SFG level goods in CO03, when i go to goto->Cost->Analysis

Under that i am getting negative cost as Cost of Goods Manufactured, when i double click on it will show the negative quantity and the negative value for COGM (which is a Conversion cost). I only want cost on the bais of amount work performed. i.e Per hour activity rate * No of Activity Hour performed. This i could get from activity type which is assigned to the cost center which is subsequently assiged to the Work Centre. My client required only this cost for the total activity. Please let me know why i am getting the COGM or Conversion Cost and also let me know the steps to remove the Conversion cost.

Any help will be highly appreciated.

Thanks and Regard