Production Orders in Cost Object Controlling 
Manufacturing order used for discrete manufacturing.
Structure
A production order contains sequences of operations. An operation describes how to carry out a workstep. By combining operations into operation sequences, you can create parallel or alternative processes.
For more detailed descriptions, an operation can be divided into suboperations.
An operation or suboperation can refer to a work center at which it is to be performed. An operation or suboperation contains planned activities required to carry out the operation or suboperation. The activities are used to calculate the capacity requirements of an operation or suboperation for the quantity to be processed.
An operation can contain any number of material components, production resources, or tools.
It is also possible to assign trigger points to an operation in order to perform business transactions.
Note
If the Production Planning component is not installed, you can create production orders in the Controlling component (CO). CO production orders are Production Orders Without a Quantity Structure. Therefore they do not use the master data of Production Planning.
Production Orders in Cost Object Controlling
Production Order Linked to Product Cost Collector
If you want to collect the costs by product rather than by production order, you can specify in Customizing that you want to collect the costs on a product cost collector and not on the production order. In this case you use the functionality of Product Cost by Period. The production order is not a cost object in this case.
You define this in Customizing for Product Cost by Period under 
Product Cost Collectors 
Define Default Values for Order Types 
or in Customizing for Product Cost by Order under Manufacturing Orders Define Default Values for Order Types (PP and CO) .
If you have specified in the order type that you want to collect the costs on a product cost collector, the system creates a link to the product cost collector when you create a production order for the corresponding characteristic combination (such as material / plant / production version). The production order receives the status PCC (product cost collector). This status prevents costs from being assigned to the production order. The number of the production process is shown in the production order. You can edit the following fields in the product cost collector:
Costing variant actual
Variance key
Results analysis key
Profit center
Business area
Costing Sheet
Overhead key
These fields are not ready for input in the production order. The valuation variant specified in the costing variant actual of the product cost collector is used to valuate the data confirmed for the production order.
The costing variant planned is not transferred from the product cost collector but is defaulted from the order type of the production order. This costing variant creates a temporary preliminary order cost estimate which cannot be saved.
No settlement rule is generated for a production order that is linked to a product cost collector.
The link between the production order and the production process of the product cost collector can only be changed as long as no functions that result in costs have been performed for the production order. If no such functions have been performed, then for example if you change the production version or the BOM and routing, the production order can be assigned to a different product cost collector. If costs have already been incurred, the original assignment is retained even if you change the production version or the BOM and routing.
You can view the product cost collector from within the production order.
If no product cost collector has been created to which the production order can be linked, the system issues a message.
Production orders that specify a product cost collector are ignored during the processing of production orders in the period-end closing activities of Cost Object Controlling.
Production Orders as Cost Objects in Product Cost by Order
In Product Cost by Order, the production order itself is the cost object.
A production order can be created using the following methods:
On the basis of a planning order that was created during automatic requirements planning
As a self-contained order with no link to requirements planning
Production orders are preferred in order-related production environments. You can also use production orders in process manufacturing environments.
A production order contains all the information required for producing one lot of a material. A production order determines the following:
Which materials are used and when they are used
Which operations and suboperations are performed at which work centers
The dates these operations are carried out
Which stock materials are required to carry out the operations
Which materials and activities must be procured externally for the order
The receivers (such as stock or sales orders with nonvaluated sales order stocks) to which the actual costs can be settled
You can create a preliminary cost estimate for a production order after releasing it. In sales-order-related production, the preliminary cost estimate of the production order can be used to calculate the standard price if the sales order inventory is valuated.
Actual costs for the production order are collected during the production process, for example through goods issues and internal activity allocations. (See also: Actual Costs in Cost Object Controlling). You can view the actual costs and the planned costs for the production order at any time.
At the end of the period you perform period closing for the production order, in which you can calculate work in process, for example.
You can calculate the variances for the production order either cumulatively (lot-based) or by period.
Caution
Make sure that the routing of the production order is the same as the routing on which the calculation of scrap is based, because the system cannot calculate scrap variances if the routing is changed.
You can also use production orders in joint production (see also: Special Requirements in Joint Production).
You can summarize production orders and display the costs in the information system in various ways, such as by plant.
You can link production orders into Collective Orders.
A production order can be created without reference to a material in order to eliminate faults in products after completion of the production process.
Order Splits
For information on order splits, see Cost Distribution for Order Split.
Reorganization of Production Orders
Production orders that you no longer need can be deleted in a reorganization run. Read the following section:
More Information
For detailed information on Production Planning, see the document PP Production Planning.
For information on how to create a production order in Production Planning, see the documentation PP Production Orders.
You can also use production orders in conjunction with the Product Cost by Sales Order component. For more information, see Product Cost by Sales Order.
You can also use production orders in conjunction with cost object hierarchies, for example when you have costs that cannot be assigned direct to particular production orders.
You can also collect the costs for production orders on a product cost collector. In this case the production order is not debited with costs.
For more information, see the following sections: