Work in Process in Industry Business Solution Discrete Industries
Use
You can valuate your unfinished products by calculating the work in process (WIP). This enables you to determine which costs on product cost collectors are for products that have not yet been transferred into finished goods inventory.
Prerequisites
If you want to include activities in backflushes and costing , you must first establish a link in iPPE between the iPPE resource (or the mode) and Overhead Cost Controlling.
If you want to settle WIP in Financial Accounting, you must do the following in Customizing for Controlling under
Product Cost Controlling
Cost Object Controlling
Product Cost by Period
Period-End Closing
Work in Process
:
Define posting rules for settling the work in process.
Under
Define Results Analysis Versions
, selectTransfer to Financial Accounting
in results analysis version 0 (WIP/Results Analysis (Standard)
).
You must have assigned a results analysis key to the product cost collector. SAP recommends that you use results analysis key 000005
(Quantity-based valuation)
. You cannot change the assignment once you have calculated WIP the first time.
Features
Work in process is valuated on a quantity basis. With every confirmation, the quantity of input components withdrawn and activities used that was not confirmed as scrap is recorded as work in process. This work in process is reduced by the quantities and activities used for the goods receipt that was posted to the product cost collector. The work in process is determined on the basis of the quantities confirmed at the reporting points. The work in process is calculated using the target quantities for components and activities corresponding to the confirmed assembly quantities. These quantities are valuated during the WIP calculation process. The component and activity quantities are valuated in accordance with the valuation variant specified in the planned costing variant of the corresponding product cost collector (WIP at target costs). The target quantities for components and activities are determined from the quantities specified in the product view of iPPE. Work in process is only calculated if a results analysis key has been entered in the affected product cost collector. In the present scenario, the results analysis key merely switches on the WIP calculation function. The Customizing settings for the results analysis key are not evaluated. Only the Customizing settings for the results analysis version are evaluated.
Activities
For the results analysis version, always select version 0 (
WIP/Results Analysis (Standard)
).
You run the WIP calculation process just like in the standard system.
See also:
For an overview of the entire process from confirmation to period-end closing, refer to the section Product Cost Controlling with Sales-Order-Related and Make-to-Stock Production with Reporting Points .