Transferring Production Variances (SAP Library - Profitability Analysis (COPA))

Transferring Production Variances

Use

To run closed profitability analysis for periods, you need to transfer to CO-PA at the end of the period all the variances that have occurred in that period. Variances typically occur if you valuate your materials with standard prices. At the end of the period, these standard costs are then compared with the actual costs incurred, and this comparison forms the basis for a detailed variance analysis. The variances are finally transferred to CO-PA at the end of the period to produce a factually correct representation of the results.

While the variances for production cost centers flow into CO-PA during cost center assessment, the variances for cost objects are transferred to CO-PA when production orders, for example, are settled. For a description of how variances arise and what causes them, see the documentation on Cost Object Controlling.

The functions described below are relevant mainly for manufacturing enterprises.

Features

Three ways for transferring production variances are set out below. How you use them depends on your information requirements in CO-PA.

You might wish, for example, to display the individual variance categories for Cost Object Controlling (CO-PC-OBJ) in CO-PA. In that case, you would settle the variance categories to CO-PA.
You only need to display the production variances as a total in CO-PA, which is how they are posted to FI. You might not need to calculate cost object variances and only wish to assign the relevant FI posting to CO-PA. In that case, you would post the production variances in FI to CO-PA.
You implement the Material Ledger (CO-PC-ACT). For the closing operations in Material Ledger, you might not wish to replace just the posted standard prices with the actual costs incurred. At the same time, you might want to subsequently allocate (across multiple levels) production variances to finished products at the end of the period and then display the revised variances in CO-PA. In that case, you would allocate the production variances subsequently using the Material Ledger.

Settling Variance Categories to Profitability Analysis

For the settlement of production orders, you can transfer to CO-PA the variance categories calculated in Cost Object Controlling. The requirements for this are as follows:

You are working with standard prices for processed materials.
You have already performed variance calculation in Cost Object Controlling.
You have entered in the settlement profile for your production order that you wish to settle variances.
You have set up and assigned a PA transfer structure in Customizing for CO-PA to be used to direct the calculated variance categories into the desired value fields.

The variance categories are settled in a much the same way as that for Settling Orders and Projects. For more information on these requirements, choose Flows of Actual Values ® Settling Production Variances in CO-PA Customizing.

When your cost object is settled, the information will be transferred to costing-based CO-PA if these requirements have been fulfilled. In this way, the production variances are shown at the level of the particular product currently being produced. It is only possible to allocate production variances subsequently as a total when the Material Ledger is involved (see below).

The variance categories can only be displayed in value fields. This function is therefore not available in account-based Profitability Analysis.

Assigning Production Variances from FI to CO-PA

If you only need to display production variances as a total as described above, you can alternatively assign the production variances from FI to CO-PA using account assignment.

Since the production variances are posted as a total in FI during settlement of the production order, you can also choose to assign this posting to CO-PA. The requirements for this are as follows:

You are working with standard prices for processed materials.

You have specified in CO-PA Customizing for the relevant production variance account (PRD account) that that account is automatically assigned to CO-PA. For more information, see the section Flow of Actual Values ® Direct Posting from FI/MM ® Automatic Account Assignment in Customizing.

You have specified in the appropriate PA transfer structure in FI which value field is the one to which the information is to be transferred.

Production variances are transferred in this case in much the same way as Direct Postings from FI to CO-PA.

When your production order is settled, the variance posting created in FI will be posted to CO-PA if these requirements have been fulfilled. In this way, the production variances are shown at the level of the particular product currently being produced.

This function is available in both costing-based and account-based Profitability Analysis.

Subsequent Allocation of Production Variances Using the Material Ledger

When you use the Material Ledger, you can allocate production variances subsequently across several levels. This means that you can use the quantity flows recorded in the Material Ledger to charge the production variances arising for semi-finished products proportionally to the finished products. During period-end closing in the Material Ledger, the production variances posted temporarily are corrected accordingly in FI and then reposted to the next manufacturing level upwards. Subsequent allocation can only occur for summaries. For more information, see Material Ledger.

To transfer this information to CO-PA, you need to assign the relevant FI postings as described above. It is also possible to transfer the variance categories in parallel. However, the transfer would not be affected by the subsequent allocation due to the summary correction postings.

The requirements for this parallel transfer are the same as those described in the above section entitled "Assigning Production Variances from FI to CO-PA".

This function can be used in both costing-based and account-based Profitability Analysis.