CO88 – Settlement product cost collector collective

During Product Cost Collectors settlement, either WIP (at target cost) or Variance or both are posted. Through the production process, Product Cost Collectors are debited with actual costs. The actual costs posted to a product cost collector can be more or less than the value with which a product cost collector was credited when the goods receipt was posted. When you settle, this difference between the debit and credit of the product cost collector is transferred to Financial Accounting (FI). Settlement also feeds data from Cost Object Controlling to other components.

The following can happen during the settlement process:

·         The order balance can be reduced to zero by transferring to Financial Accounting (FI) the difference between the preliminary inventory valuation (goods receipt) and the actual costs incurred. The price difference can also be transferred to Profit Center Accounting (EC-PCA).

·         The total variance can be transferred to profitability segments in Profitability Analysis (CO-PA). This enables you to see an additional contribution margin in CO-PA. You can transfer the individual variance categories of the total variance to value fields in CO-PA in combination with certain cost elements or cost element groups.