The following tables show the effects of certain business transactions on a cost object hierarchy:
Delivery of product cost collectors or manufacturing orders to stock
Settlement of the cost object hierarchy at the end of the period
The cost object hierarchy consisted of a cost object node to which two materials were assigned. A product cost collector was created for each material.
Note
This procedure should only be used for materials for which the price control indicator is set to S (standard price). The costs for materials for which the price control indicator is V (moving average price) should be distributed to the orders and settled to stock when the orders are settled.
The following report shows the first product cost collector:
Costs | After goods receipt | After settlement | See |
---|---|---|---|
Debits (material, activities) | 50 + | 50 + | |
Credits (confirmed quantity x standard price) | 100 - | 100 - | Delivery of first product cost collector (in hierarchy) to inventory |
50 + (settlement of balance) | Settlement of product cost collector | ||
Balance (actual costs minus target costs) | 50 - | 0 |
The following report shows the second product cost collector:
Costs | After goods receipt | After settlement | See |
---|---|---|---|
Debits (material, activities) | 75 + | 75 + | |
Credits (confirmed quantity x standard price) | 150 - | 150 - | Delivery of second product cost collector (in hierarchy) to inventory |
75 + (settlement of balance) | Settlement of product cost collector | ||
Balance (actual costs minus target costs) | 75 - | 0 |
The following report shows the data entry object (that is, the cost object node itself):
Costs | After goods receipt | After settlement | See |
---|---|---|---|
Debits (material, activities) | 75 + | 75 + | |
Credits | 0 | 75 - | Settlement of the cost object node |
Balance | 75 + | 0 |
The following report shows the summarization object (the cost object hierarchy after summarization in the Product Cost Controlling Information System):
Costs | After goods receipt | After settlement | See |
---|---|---|---|
Debits | 200 + | 200 + | |
Credits | 250 - | 250 - | Delivery of product cost collector in the hierarchy to stock (cumulative) |
125 + | Settlement of product cost collector | ||
75 - | Settlement of cost object node | ||
Balance | 50 -* | 0 |
Settlement resulted in the following postings:
For the first product cost collector, the shortage of USD -50 was posted to the price difference account.
For the second product cost collector, the shortage of USD -75 was posted to the price difference account.
For the cost object nodes, an excess of USD +75 was posted to the price difference account.
* For the cost object hierarchy as a whole, a balance of USD 50 was posted to the price difference account.
For detailed information on the reports provided in the information system, see the document Product Cost Controlling Information System.