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 Nonvaluated Sales Order Stock: Scenario Locate this document in the navigation structure

Prerequisites

You must decide on the following options by making the corresponding settings in Customizing for Product Cost by Sales Order :

  • Whether the materials are assigned to a sales order stock

You specify this in Customizing for Product Cost by Sales Order under   Control of Make-to-Order Production   Check Account Assignment Categories   .

  • Whether the sales order stock is valuated

You specify this in Customizing for Product Cost by Sales Order under   Control of Make-to-Order Production   Check Requirements Classes   .

  • Whether the sales order item carries costs and revenues

You specify whether you want to flag a sales order item as carrying costs and revenues in Customizing for Product Cost by Sales Order under   Control of Make-to-Order Production   Check Account Assignment Categories   .

  • Whether the dependent requirements are individual requirements or collective requirements

  • The Customizing settings for results analysis

Process Flow

  1. Creation of a sales order

  2. Product Cost by Sales Order is normally used with orders of the order type standard order (TA) . The material ordered or the combination of material and order type determines whether the Product Cost by Sales Order functionality is active for the order item or not.

  3. Calculation of planned costs for the sales order item

You can calculate the planned costs for the sales order item. You need planned costs if you want to create reserves for unrealized costs or reserves for imminent loss or complaints and commissions. You can use the following tools to plan the costs for your product before you start the manufacturing process:

Unit costing

Product costing

You can use unit costing to modify the results of product costing.

You can also do the following as an alternative:

In assembly processing, you can access the results of the preliminary cost estimate for the production order

You can access the results of the standard cost estimate for the material

You can access the standard price of the material

These planned costs can be included in results analysis for the following purposes:

– To create reserves

– To calculate the cost of sales

  1. Production

  2. In assembly processing, the system generates a production order directly from the sales order item, or you convert the planned orders generated by the system into production orders. The system creates a settlement rule for such production orders which settles the order costs to the sales order item.

    If the material being manufactured has a multilevel BOM, other materials may have to be manufactured if these material are controlled by individual requirements and consequently cannot be withdrawn from the make-to-stock inventory. Production orders are created for these dependent requirements. With a nonvaluated sales order stock, the production orders for semifinished products only deliver the quantities of the semifinished products to the nonvaluated sales order stock. The actual costs remain on the production order until the end of the period when they are allocated to the sales order items.

    If you have specified in the materials of the BOM that a collective order should be generated, final confirmation of the production order for the semifinished product debits the higher-level production order with the planned costs of the production order of the semifinished product and credits the lower-level order. There is no delivery to stock. Any differences are settled to the next-highest order at the end of the period. The leading order delivers the quantity to the nonvaluated sales order stock. At the end of the period, you settle the differences of the lower-level orders to the higher-level orders. You then settle the costs of the leading order to the sales order item.

  3. External procurement

  4. Planned orders can also be created in requirements planning from the sales order items. These planned orders are converted into purchase requisitions. The purchase requisitions are then assigned to the relevant sales order item. The purchasing department converts the purchase requisitions into purchase orders.

    With a nonvaluated sales order stock, you can post the costs for external procurement to sales order item either when the invoice is received or when the goods are received.

  5. Actual costs on the sales order item

  6. Actual costs are incurred on the production order during the manufacturing process, and are settled to the sales order item at the end of the period.

    For externally procured materials, the actual costs are collected when the goods are received (order value) or when the invoice is received, and assigned directly to the sales order item.

    Activities can also be assigned directly to the sales order item.

  7. Actual revenues on the sales order item

  8. The customer is billed for the deliveries made and activities performed for the sales order. The revenues are assigned directly to the sales order item.

  9. Period-end closing

You can perform the following steps for the dependent orders in the period-end closing activities in the Product Cost by Order component :

  • Dynamic process cost allocation

  • Revaluation of activities at actual prices

  • Overhead allocation (such as calculation of material overhead and production overhead to determine the cost of goods manufactured)

  • Settlement of the actual costs on the dependent orders to the sales order item

In the period-end closing activities for the Product Cost by Sales Order component , you perform the following activities for the sales order item:

  • Dynamic process cost allocation

  • Revaluation of activities at actual prices

  • Allocation of overhead (such as calculation of the sales overhead and the administrative overhead to calculate the cost of goods sold)

  • Results analysis on the sales order items (such as when you want to determine the value of the work in process)

  • Settlement of the sales order item to a profitability segment in Profitability Analysis (CO-PA)

If you have performed results analysis, you settle the results analysis data. Otherwise you settle the costs and revenues carried on the sales order item.

You can transfer a cost component split for planned costs to CO-PA if you have created a sales order cost estimate with product costing and have not modified it with unit costing.

  • Settlement of the work in process calculated in results analysis (inventories of unfinished products and finished products as capitalized costs or as revenue in excess of billings) to Financial Accounting and Profit Center Accounting

  • Settlement of the reserves calculated in results analysis to Financial Accounting and Profit Center Accounting (if applicable)

  1. Analysis

In the information system of Product Cost Controlling you analyze the costs and revenues that were incurred for the sales order and the dependent production orders.

See also:

For detailed information on the required Customizing settings for the Product Cost by Sales Order component, see the following section:

Checklist for Product Cost by Sales Order

For information on results analysis, refer to the following section:

Results Analysis ff.