WIP Batches: Inventory Valuation

Use

At the time of goods receipt, the stock of WIP batches is valuated on the basis of the planned costs per operation or phase.

You can create WIP batches for the header material of the production order or for a reference material. For the goods receipt of the WIP batches to be valuated, the material for which the WIP batch is created must be created as a valuated material type.

Integration

The WIP batches are integrated in the production orders and process orders. You create WIP batches when entering time tickets for an operation or phase.

Prerequisites

You have specified individual batch valuation for the material in the material master record (accounting data, Valuation Category indicator must be set to X (autom./batch)), enabling split valuation of the batches.

For more information on split valuation, refer to the SAP Library under Start of the navigation path Materials Management Next navigation step Material Price Change: End of the navigation path Split Valuation ).

In Customizing for Production under Start of the navigation path Shop Floor Control Next navigation step Master Data Order Define Order-Type-Dependent Parameters,you End of the navigation path have specified that the order type provides for the determination of planned costs.

In Customizing for Production, under Start of the navigation path Basic Data Next navigation step Operation Data Define Control Key End of the navigation path , you have specified that the operations of the order are relevant to costing.

You have specified that the components are relevant to costing on the detailed data screen of the bill of material.

Features

Note Note

The following descriptions apply to both the operations of a production order and the phases of a process order.

End of the note.

At the time of goods receipt, the WIP batches are valuated with the planned costs for the operation. The planned costs comprise the following:

Price of the component from the material master record (standard price, moving average price)
Operations (e.g. setup, machine hours, work, etc.)
Overhead costs
Process costs

In addition, the costs of the preceding operations are added to the value of WIP batches.

Goods Receipt of a WIP Batch for One Operation Only

You can post the goods receipt of a WIP batch with individual batch valuation to one particular operation only in each case. This means that the continuous use of a WIP batch across all operations of the production order is not possible.

You must create a separate WIP batch for each operation, as otherwise it is not possible to determine the costs correctly.

Example Example

You have posted a goods receipt for a WIP batch for operation 10. You can subsequently post a goods receipt for this WIP batch against operation 10 only and to no other. If you invoke the confirmation transaction for another operation, the fields for the goods movements are not ready to accept input.

End of the example.

Comparison of Planned Costs with Value of WIP Batches

In the production order:

You can display the costs of the production order under Goto Costs Detailed Statement. Under Settings Layout Choose,choose the layout Operations (Grouped) . The costs are listed by routing operations.
In the material master record:

The calculated and posted costs of a WIP batch can be checked in the master record for the header material of the order. Display the master record for the material and specify WIP batch as the valuation type. Call up the accounting data . The value of the WIP batch is displayed to you under standard price, total value, and total stock.
Evaluation structure of Inventory Controlling

A further cost analysis option is to carry out an evaluation using an evaluation structure of the Logistics Information System. To do so, choose Materials Management Inventory Management Environment Inventory Controlling Flexible Analyses Evaluation Execute. Use the evaluation structure S035 and the evaluation S035.

Activities

From the SAP menu, Production Shop Floor Control Confirmation Enter For OperationTime Ticket.
On the WIP Batch subscreen select the GR (Post Goods Receipt) indicator.
When the confirmation is saved, the valuation of the WIP batches is determined on the basis of the planned costs.
The confirmation of the WIP batch triggers the goods issue posting of the predecessor WIP batch. The goods issue data is determined and entered by the system (such as the movement type 522). The confirmed quantity (yield, scrap, and rework) of the subsequent WIP batch is suggested as the quantity of the goods issue for the predecessor WIP batch.

Example

This graphic is explained in the accompanying text.

Operation 10: Cutting

The production process starts with the stock batch R1111, which has a length of 6 meters. In operation 10, this component is cut into three pieces. This results in the WIP batches WIP_B1, WIP_B2 und WIP_B3, each of which has a length of 2 m.

A price of 50 USD per meter is specified for the operation. Hence each WIP batch has a value of 100 USD upon completion of the operation.

Operation 20: Shaping

The materials are shaped and the WIP batches WIP_B1 and WIP_B2 merged with the WIP batch WIP_C1 with the quality 'A'. The WIP batch WIP_B3 becomes WIP batch WIP_C2 with the quality 'B'.

After this operation, the WIP batch WIP_C1 has a value of 400 USD (100 USD/meter) and WIP batch WIP_C2 a value of 200 USD.

Operation 30: Heat treatment

WIP batch WIP_C1 is processed in furnace '1’ and becomes WIP batch WIP_D1 with a value of 800 USD (200 USD/meter). WIP batch WIP_C2 is processed in furnace '2’ and becomes WIP batch WIP_D2 with a value of 400 USD.

Goods receipt

Finally, the goods receipt of the finished product is posted and the WIP batch WIP_D1 stored as stock batch F333 and WIP batch WIP_D2 as stock batch F444.