How is calculated the operation costs for a SFC order??

Why the operation cost in the report of actual costs for production order are different from the standard cost of the item??

how could the cost result be interpreted in the actual cost for production order??


Regards

Dear jpadilla

More information is required in order to answer your question.

Do you use hours accounting at all? What's the HRA parameter for actual operation rate (estimated rate/man and machine rate)? Do you backflush hours? Did any change in Operation Rates take place during production order processing?

Those are the questions that I can think of for the moment. Answer to above questions will help in finding a cue as to why they're different.

Rgds,
Paul

do you have routings on phantom items as had problem like this where operation costs where attached to phantom items and the costs rolled up in the standard cost of the finished item but do not show on the actual costs

Paul P is correct. Look at your HRA parameters - Actual Operation Rates.
- If Estimate the actual is calculated based on the Operation rates linked to your Work Center/Task. Operation rates are used to calculate the Std Cost price as well. In this case actual and estimate and actual should be the same if no difference were found in the hours booked.
- If Man and Machine rates the rates linked to the Employee and Machine are used to calc actual costs. This could be different from the operational rates used to calc. the std cost. In this case even if there where no difference in time booked there could be a difference between actual and estimated costs.

in HRA parameters , I have the actual operation rates, based on estimated rate...

The problem I have, is that my wip is always growing up, I checked the integration and it looks ok, so I don't know what is the cause of this??

any clue??

Dear jpadilla,

I assume you are now OK with the fact that the actual and estimated operation costs are different. Now with the WIP. There are 2 possibilities why WIP's going up that I can think of at the moment.

1. Some finished production orders are not closed yet. Until they're closed, variances won't be calculated. You see, if incoming WIP (raw materials and production hours used) is higher than outgoing WIP (finished product receipt) as is the case when company has production wastage, then net WIP is positive. Closing the orders absorbs the difference between incoming and outgoing WIP into variances, hence making the net WIP zero

2. You have integration from another kind of transaction mapped to your WIP ledger account. Check whether the mapping is appropriate

Hope this helps. Have a great day!

Rgds,
Paul