Step 1
Define Results Analysis Key OKG1. Here you just give a name, four letter key with its description.
Step 2
Create cost elements of type 31 the following minimum
i. Valuated Actual cost, say for eg. 990001.
ii. Calculated Costs, say 990002.
iii. WIP account 990003
iv. WIP Reserve 990004
v. WIP Reserve 990005
Step 3
Define RA version, OKG9, Enable Transfer to Financial Accounting (checkbox)
Under extended control, you may enable checkboxes relating to
i. Generate line items
ii. Assignment/RAkey
iii. Update / RAkey
Enter the cutoff period for actual RA/WIP, the effective date before which any WIP data if existed, will not be altered.
Step 4
In OKGC, define the valuation method for WIP. Here, you specify that WIP calculation mode is one when the order has the staus REL and the calculated WIP shall be cancelled when the order status changes to DLV or TECO. You maintain this data for CO area, RA version and RA key combination.
Step 5
SPRO>Controlling>Product Cost Controlling>Cost Object Controlling>Product cost by order>Period End Closing>Work in process>Define Line IDs.
The line IDs are similar to cost component, that you create during cost estimates of products. This need not be as elaborate like cost component structure, but just minimal like a) 010 for Material b) 020 for Labor and c) 030 for Overhead to say the least. Besides these, create one more line ID say 999 for the Settled Cost, which appear as credit when you make a goods receipt.
Create additional WIP type 31 cost elements and their corresponding Reserve account for the above
vi. WIP Material 990006
vii. WIP Material Reserve 990007
viii. WIP Labor 990008
ix. WIP Labor Reserve 990009
x. WIP Overhead 990010
xi. WIP Overhead Reserve 990011
Step 6
Now you assign the source cost elements OKGB, that are expected in the production order to various line ID as created above.
You maintain this data for CO area, RA version and RA key combination.
You use masking when you mention which cost element to be assigned to various IDs. You can also direct various cost element, if it comes with a combination of particular cost center and activity type to a particular Line ID. If you need to keep it simple, just enter +++++++++ for cost centers, activity types and Business processes. Cost elements can be masked as follows; for eg. All cost primray cost elements for materials, if they start from 210001 to 219999, the you can mask them like 00021+++++.
Give the line ID in the column Required to Capitailze.
Step 7
Define the update. OKGA You maintain this data for CO area, RA version and RA key combination. Here you specify which line IDs are to be grouped under which cost elements and their reserve account. You connect the cost elements created in step 5 to the line IDs.
The category for the line IDs for material, labor and overhead shall be K, that stand for cost.
The line ID 999 settled cost shall be maintained as category A, (settled cost). When you assign A, you won’t have to maintain any cost elements for WIP and reserve creation.
Step 8
Define posting rules for WIP calculation OKG8
You do this for Controlling area, company code, RA version. Maintain this for RA category WIPR (WIP cost, Required to be capitalized) and RUCR (Reserve for unrealized cost)
You maintain the P& L account (changes to stock) and the balance sheet (WIP)account.These G/L accounts are posted in Financial Accounting.
Step 9
Ensure number range assignment for the WIP transactions under appropriate head OKG6:
KABG Automat. WIP/results analysis
KABM Manual WIP/results analysis
KSWP Prim. Target Cost Calc. (WIP)
KSWS Sec. Target Cost Calc. (WIP)
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