Dear Gurus,
I'm currently exploring the possibilities of activating actual costing for my client. Currently material ledger functionality has been activated without actual costing.
I would like to ask whether actual costing can revaluate WIP with variance from previous orders. Below is the scenario to explain the situation.
1. Standard Price of SFG1 = USD 10/ Kg, Price Determination 3
a. Period 1:
- Order 1 ( to produce SFG1)
- Target Qty = 100 Kg material SFG1
- GR Qty = 80 Kg material SFG1
- Total Cost (material cost, etc..) = USD 1.200
- GR Value = USD 800
- WIP = USD 400
During Period 1, 10 Kg of SFG1 is issued to Order 2.
- Order 2 ( to produce SFG2) Price Determination 3
- Target Qty = 100 Kg material SFG2
- GR Qty = 0 Kg material SFG2
- GI SFG1 to Order 2 = 10 Kg, with value = USD 100
- GR Value = USD 0
- WIP = USD 100
Closing entries run for Period 1.
b. Period 2:
- Order 1 is closed with variance = USD 400, thus actual price per unit should be USD 15/ Kg
- No movement for Order 2 (to simplify the scenario)
Question: Can we allocate the variance of USD 400 from Order 1 to WIP Order 2, instead of allocating them to inventories via CKMVFM? In other words, can we revaluate WIP of Order 2 to include variance from Order 1 so that the material cost would be USD 150 instead of USD 100? I have run WIP Revaluation in CKMLCP, activated WIP Revaluation in configuration, yet, the variance seems to only able to revaluate to inventory.
Thanks in advance for sharing your thoughts on this matter.
Regards,
CW