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 Example for Settlement of Scrap Locate this document in the navigation structure


If you are collecting costs on manufacturing orders, you can post the scrap costs to a cost center. You cannot settle scrap costs to a cost center if you are using a product cost collector.

Process Flow

The planned quantity of the order is 10 units. The yield is 8 pieces and the scrap quantity is 2 pieces.

  1. You change the settlement rule so that 80% of the costs can be settled to the material stock account for that material. You then create a new distribution rule in which the remaining 20% of the costs is settled to a cost center.

  2. The actual costs for the order are USD 2,800. When 8 pieces are delivered to stock, the system charges USD 2,000 to the order.

  3. 80% of the total cost is USD 2,240.

    20% of the total cost is USD 560.

  4. The order was already credited by USD 2,000 upon delivery. During settlement, the system then settled USD 240 to the material stock account of the material and USD 560 to the cost center.