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<ManualTopic ID="/baanerp/ti/onlinemanual/000196" xml:lang="en">
   <Header>
      <Title>Production order postings</Title>
      <Keyword type="header" order="d1e2417030">
         <Level1>Production order</Level1>
         <Level2>postings</Level2>
      </Keyword>
      <Keyword type="header" order="d1e2417035">
         <Level1>Production order postings</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <ProcedureList>
         <ListIntro>ERP Enterprise posts
		  the following costs for a production order:</ListIntro>
         <ListItem>Materials costs</ListItem>
         <ListItem>Operation costs (hours
		  costs and subcontracting costs)</ListItem>
         <ListItem>WIP transfers (see <Link href="/baanerp/ti/onlinemanual/000065" role="manual">WIP transfer</Link>)</ListItem>
         <ListItem>Production surcharges</ListItem>
         <ListItem>Production completion
		  and receipt in inventory</ListItem>
         <ListItem>Price variances,
		  efficiency variances and calculation variances (only for FTP valued items)</ListItem>
      </ProcedureList>
      <GeneralSection>
         <SectionTitle>1. Material Costs</SectionTitle>
         <Paragraph>Materials are issued
		  against a <Link href="/baanerp/ti/onlinemanual/000024" role="manual">Valuation prices</Link>. The valuation price is
		  stored on the actual WIP value on the aggregated cost components. The costs are
		  labeled as non-added costs.</Paragraph>
         <Paragraph>When ERP Enterprise issues materials, a
		  MAUC price is booked. The MAUC price in the <GUIRef href="/baanerp/ti/cst/ticst0501m000" role="session">Estimated vs. Actual Material Costs (ticst0501m000)</GUIRef> session is the actual cost price
		  for the material line.</Paragraph>
         <Paragraph> 
            <Link href="/baanerp/tc/glossary/glossary#000073" role="glossary">JIT items</Link> are directly
		  received in WIP without passing a warehouse. Special financial transactions
		  exist for these items to enable direct receipt and billing on use. For these
		  type of transactions the purchase result (when FTP valued item) is also entered
		  into WIP.</Paragraph>
         <List>
            <ListIntro>The postings for materials costs are done for the following
			 origin/financial transactions:</ListIntro>
            <ListItem>Production. Issue</ListItem>
            <ListItem>Production. Issue
			 direct receipt</ListItem>
            <ListItem>Production. Purchase
			 result direct receipt</ListItem>
         </List>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>2. Operation costs</SectionTitle>
         <List>
            <ListIntro>Operations cost can be split up in two parts:</ListIntro>
            <ListItem>Hours costs</ListItem>
            <ListItem>Subcontracting costs</ListItem>
         </List>
         <Paragraph>
            <GUIRef href="" role="manual">Hours costs</GUIRef>
         </Paragraph>
         <Paragraph>In the <GUIRef href="/baanerp/ti/cst/ticst0502m000" role="session">Estimated vs. Actual Hours Costs (ticst0502m000)</GUIRef> session, the cost per operation are
		  displayed.</Paragraph>
         <Paragraph>The actual hour costs
		  are posted and processed from <GUIRef href="/baanerp/bp" role="package">People</GUIRef>. If the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000#tisfc000.aort" role="manual">Process Hours using</GUIRef> field in the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000" role="session">Shop Floor Control Parameters (tisfc0100s000)</GUIRef> session is Estimated rates, the hours cost
		  are calculated by using the <Link href="/baanerp/ti/glossary/glossary#OperRate_ti" role="glossary">operation rate</Link> and the <Link href="/baanerp/tc/glossary/glossary#CostCompon_tc" role="glossary">cost component</Link> from the <GUIRef href="/baanerp/ti/cpr" role="module">Cost Price Calculation</GUIRef> module.</Paragraph>
         <Paragraph>If the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000#tisfc000.aort" role="manual">Process Hours using</GUIRef> field in the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000" role="session">Shop Floor Control Parameters (tisfc0100s000)</GUIRef> session is man and machine rates, the hours
		  costs are calculated by using rates and cost components from the machine data
		  in the <GUIRef href="/baanerp/ti/rou/tirou0102m000" role="session">Machines (tirou0102m000)</GUIRef> session and the employee data in the <GUIRef href="/baanerp/tc/ibd/tcibd0501m000" role="session">Items - General (tcibd0501m000)</GUIRef> session.</Paragraph>
         <Paragraph>The hours costs are
		  disaggregated to labor costs, machine costs and overhead costs. For the posting
		  of the overhead, ERP Enterprise checks the <GUIRef href="/baanerp/bp/mdm/bpmdm0100m000#bpmdm000.oced" role="manual">Cover Overhead Costs in Employee Department</GUIRef> check box
		  in the <GUIRef href="/baanerp/bp/mdm/bpmdm0100m000" role="session">People Parameters (bpmdm0100m000)</GUIRef> session.</Paragraph>
         <List>
            <ListIntro>The postings are generated on the moment of process hours
			 accounting. The number of hours can be:</ListIntro>
            <ListItem>Entered manually</ListItem>
            <ListItem>Generated by
			 backflushing</ListItem>
         </List>
         <Paragraph>The operations costs
		  are posted to the <Link href="/baanerp/ti/glossary/glossary#000053" role="glossary">calculation office</Link> or to the <Link href="/baanerp/tc/glossary/glossary#000011" role="glossary">enterprise unit</Link> of the work
		  center. The postings for operations cost are done for the following transaction
		  origin/financial transactions:</Paragraph>
         <List>
            <ListItem>Production.</ListItem>
            <ListItem>Operation costs</ListItem>
         </List>
         <Paragraph>Hours are posted
		  against the detailed cost components that are defined in the operation rates.
		  Price and <Link href="/baanerp/ti/glossary/glossary#EfficiVarian_ti" role="glossary">efficiency variances</Link> are
		  calculated based upon these detailed cost components.</Paragraph>
         <Paragraph>
            <GUIRef href="" role="manual">Subcontracting costs</GUIRef>
         </Paragraph>
         <Paragraph> ERP Enterprise considers
		  subcontracting as the purchasing of a subcontracting item. The purchase order
		  price of the subcontracting item is calculated by using the subcontracting
		  calculation method and the rate factor in the <GUIRef href="/baanerp/ti/cpr" role="module">Cost Price Calculation</GUIRef> module.</Paragraph>
         <Paragraph>The postings are
		  generated the moment when you receive the subcontracted intermediates and are
		  posted to the SFC calculation office or to the enterprise unit.</Paragraph>
         <Paragraph>The subcontracting
		  result is determined by comparing the estimated and the subcontract price. So
		  the purchase order price and the actual amount on the purchase invoice are
		  compared. Before you close the production order the purchase orders, generated
		  for subcontracting operations must have been processed. If the order estimate
		  does not contain any costs for subcontracting, you cannot determine
		  subcontracting results.</Paragraph>
         <Paragraph>Both operation hours
		  and subcontracting costs are regarded as operations costs.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>WIP transfers</SectionTitle>
         <Paragraph>See <Link href="/baanerp/ti/onlinemanual/000065" role="manual">WIP transfer</Link>
         </Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>4. Production surcharges</SectionTitle>
         <Paragraph>The surcharges related
		  to the production orders are the item receipt surcharges. Surcharges are always
		  posted to the <Link href="/baanerp/ti/glossary/glossary#000053" role="glossary">calculation office</Link> and are
		  considered as production WIP. The surcharges are posted when the order is
		  completed. Surcharges are based upon the estimated order costs. Upon order
		  closing, the actual order costs, the actual surcharges are calculated.
		  Surcharges are always calculated and posted on the production order level by
		  means of detailed cost components.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>5. Production completion and receipt in
		  inventory</SectionTitle>
         <List>
            <ListIntro>The following phases can be distinguished:</ListIntro>
            <ListItem>Report a quantity
			 completed</ListItem>
            <ListItem>Report the order
			 completed</ListItem>
            <ListItem>Receive the items in
			 the warehouse</ListItem>
         </List>
         <Paragraph>If the items are
		  reported completed, ERP Enterprise activates a warehouse order. A warehouse order can have a certain inbound
		  procedure. As a result there can be a time lag between the moment reporting
		  completed and the moment the items are posted to the warehouse. This time lag
		  reflects the WIP values.</Paragraph>
         <Paragraph>If a quantity of items
		  are reported completed, these items are posted to the calculation office. A WIP
		  transfer is carried out from the last operation/work center to the calculation
		  office. The reported quantity stay on the calculation office until they are
		  received in the warehouse. Upon receipt in the warehouse the WIP on the
		  calculation office is decreased with the FTP value (minus warehouse receipt
		  surcharges). Both postings are based upon the three aggregated cost components
		  of the end item. The postings are carried out for the following transaction
		  origin/financial transactions: Production. Completion Production. Receipt</Paragraph>
         <Paragraph>First the item is
		  posted to stock with the FTP value. Because you do not know the actual
		  production order cost the actual item (unit) costs cannot be calculated. The
		  actual order costs are determined upon order closure.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>6. Price, efficiency, and calculation variances</SectionTitle>
         <Paragraph>See point 5 of the <Link href="/baanerp/ti/onlinemanual/000194" role="manual">Production order costing in SFC</Link> online
		  manual topic</Paragraph>
      </GeneralSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/wh/onlinemanual/000004" role="manual">Inventory valuation</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000090" role="manual">Added costs</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000080" role="manual">Cost components in Manufacturing</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000083" role="manual">Surcharges</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/integrations/400000" role="manual">Financial integrations - overview</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000144" role="manual">Hours accounting procedure</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000335" role="manual">Introduction on FTP and actual costing</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>