Example for Settlement Without Actual Cost Distribution
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.
More Information
For detailed information on the reports provided in the information system, see the document Product Cost Controlling Information System
.