When you use transfer prices in cross-plant manufacturing, a price is negotiated for goods delivered from one profit center to another. However, if the actual cost of goods manufactured differs from the planned cost, you need an additional account in which to post production variances. This account is necessary so that you can settle the difference to the sender profit center instead of the receiver.
In this step, you define the profit and loss account to which you want to post production variances. You can define this separately for each valuation class and valuation grouping code.
Preconditions
The necessary profit/loss account must already exist, and the "Automatic posting only" indicator must be selected in Financial Accounting
Activities
Specify the account for production variances for each valuation class and valuation grouping code.
Further notes
For more information, see "Transfer Pricing" in the online Documentation for Profit Center Accounting.