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Define Line IDs

Here you create line IDs . The line IDs serve to group the work in process and reserves for unrealized costs according to the requirements of Financial Accounting.

The work in process or reserves for unrealized costs are calculated as a total for each order and apportioned to the line IDs. You can define separately for each line ID whether the work in process for that line ID must be capitalized.

WIP calculation updates the work in process and reserves for unrealized costs on the order, grouped by line ID. To pass the data on to Financial Accounting, you must define posting rules that link this data to G/L accounts.

Also note the following:

The line IDs for WIP calculation are normally structured according to the same logic as the cost components in Product Cost Planning. For example, a line ID "raw materials" normally has the same cost element interval assigned to it that is assigned to the cost elemente "raw materials".
It would also be possible to structure the line IDs according to the value fields in Profitability Analysis. In this case you would create line IDs for the cost of goods manufactured (fixed and variable), sales and distribution costs, administration costs, and so on.

Example

Suppose you create the following line IDs for WIP calculation:

The system calculates the work in process for the period for a manufacturing order or product cost collector and distributes the calculated value to the line IDs in accordance with the cost element groups assigned to the line IDs. This allows it to calculate data such as:

Requirements

You must already have processed the following steps:

Standard Settings

The standard system contains a number of line IDs.

Activities

Create line IDs according to your requirements.

Further Notes

For more information, see the documentation Cost Object Controlling in the R/3 library.