Hi All,
I am new to Product costing and I have some doubts on WIP calculation via Product cost by Order method. Below are the steps I have performed on the Production Order before calculating WIP.
1. Production Order created and released for order quantity 100.
2. After Release checked the Order detailed report KKBC_ORD by cost trend layout and got following values:
| Transaction | Material | Description | Total Plan Costs |
| Goods Issues | 1000/R-B201 | Fly wheel | 8,853.00 |
| 1000/R-B101 | Casing | 12,830.00 | |
| 1000/R-B301 | Hollow shaft | 17,015.00 | |
| 1000/R-B401 | Electronic TURBODRIVE | 4,683.00 | |
| Goods Issues | 43,381.00 | ||
| Confirmations | 4220/1421 | Pump Production / Wage Hours | 1,833.08 |
| 4230/1421 | Pump Assembly / Wage Hours | 4,382.92 | |
| 4280/1421 | Quality Control / Wage Hours | 233.32 | |
| 4220/1420 | Pump Production / Machine Hours | 1,67,662.32 | |
| 4230/1420 | Pump Assembly / Machine Hours | 783.89 | |
| 4220/1422 | Pump Production / Setup Hours | 7.12 | |
| 4230/1422 | Pump Assembly / Setup Hours | 38.5 | |
| Confirmations | 1,74,941.15 | ||
| Miscellaneous | 300900 | Work Scheduling | 12 |
| Miscellaneous | 12 | ||
| Goods Receipt | 1000/R-F101 | Pump | 53,183.00- |
| Goods Receipt | 53,183.00- |
After this followed below transactions:
1. Goods Issue to Production Order of complete 100 quantity.
2. Confirmation on Production Order of quantity 40
3. Template Allocation of Process Cost
After the above, KKBC_ORD looked as below:
| Transaction | Material | Description | Total Plan Costs | Total Actual Costs |
| Goods Issues | 1000/R-B201 | Fly wheel | 8,853.00 | 8,853.00 |
| 1000/R-B101 | Casing | 12,830.00 | 12,830.00 | |
| 1000/R-B301 | Hollow shaft | 17,015.00 | 17,015.00 | |
| 1000/R-B401 | Electronic TURBODRIVE | 4,683.00 | 4,683.00 | |
| Goods Issues | 43,381.00 | 43,381.00 | ||
| Confirmations | 4220/1421 | Pump Production / Wage Hours | 1,833.08 | 733.21 |
| 4230/1421 | Pump Assembly / Wage Hours | 4,382.92 | 1,753.21 | |
| 4280/1421 | Quality Control / Wage Hours | 233.32 | 102.65 | |
| 4220/1420 | Pump Production / Machine Hours | 1,67,662.32 | 67,063.32 | |
| 4230/1420 | Pump Assembly / Machine Hours | 783.89 | 313.57 | |
| 4220/1422 | Pump Production / Setup Hours | 7.12 | 7.12 | |
| 4230/1422 | Pump Assembly / Setup Hours | 38.5 | 38.5 | |
| Confirmations | 1,74,941.15 | 70,011.58 | ||
| Miscellaneous | 300900 | Work Scheduling | 12 | 12 |
| Miscellaneous | 12 | 12 | ||
| Goods Receipt | 1000/R-F101 | Pump | 53,183.00- | 0 |
| Goods Receipt | 53,183.00- | 0 |
Now when I calculate WIP using KKAX t-code, I get the WIP values as below:
| Order | Currency | WIP Cumulative | WIP Period | Material |
| ORD 60003305 | EUR | 43,393.00 | 43,393.00 | R-F101 |
So, if you see WIP = Good Issue (Actual Cost) + Work Scheduling Cost = 43381+12= 43393
My question is why confirmation cost which are also the actual costs not included in WIP calculation?
Please advise.