You can decide whether the costs related to a production order are collected in the production order or in a product cost collector.

You decide where the costs are to be collected by using the Cost Collector indicator in the order type-dependent parameters in Customizing for Shop Floor Control, by choosing Master Data -> Order -> Define Order Type-Dependent Parameters.

• If the indicator is set, the costs are collected in a product cost collector. In this case, you execute a periodic product costing. The preliminary, simultaneous and final costing occurs at product cost collector level. In this case, you determine periodically the work in process and variances.

• If the indicator is not set, the costs are collected directly in the production order. In this case, you execute an order-related product costing. The preliminary, simultaneous and final costing occurs at production order level. In this case, you usually determine work in process and variances with reference to the lot.