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Product Costing - Process Order Confirmation

Dear Experts,

We are facing a situation with our Product Costing Scenario :

Under SFG Process Order Confirmation, there are Ten Phases to finally confirm the order. First Phase is for Raw Material Issuance. From Second Phase to Ninth Phase are relevant to Activity Types. Tenth Phase which is final phase, in this point Goods Receipt posting is generated.

At first phase, system posts Raw Materials Goods Issue (Movt Type 261) to Process Order:

Entry : RM (Cr), Consumption (Dr).

Client needs the system to post one more entry at the same time by : WIP (Dr), Inv Change (Cr).

Reason:

According to client, they have made consumption entry in finance but what if all raw materials are not consumed as yet and factory comes under fire, then how can they claim insurance on those Raw Materials which are not consumed and are still in the IN PROCESSING Stage?

My Answer was:

- They can find all material costs in Process Order as Debit Item.

- They can also calculate WIP but cannot post WIP in Finance unless the order is settled.

Ultimately, as per my knowledge client cannot check the unprocessed Raw Materials report in FI but they can check in CO. And this is the point of reservation from client.

They need an entry in Finance for WIP to claim insurance in case of fire and therefore they need a posting of  WIP entry immediately after Goods Issue of Raw Materials to Order.

Can anyone please guide me further regarding this scenario and if any one can suggest any work around then it would be highly appreciated!

Regards,

Zain Bashir 

Former Member
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