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1. Accounting Entries from Production to Finished Stock
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Hi Experts,
I am new in this forum.I have gone through many post on accounting entries from Production to Finished stock but
unable to get a clear view on detailed entries generated ateach level. Appreciate if anyone can put me the entries for
the following transactions and clarifyme wherever I am wrong.
1) BOM - Goods issued to production (I guess Iam clear and fine with this)
Raw Material Consumption A/c Dr
To Raw Material Inventory (Stock) A/c Cr
2) Routing - When operation in routing are carried out
What id Debitentry and which accountis credited?
3) Overheads - Production
Is there a relation of FI entries created at the time of recording indirectoverhead in accounting such as Lighting,
Rent, Electricity heating entries generated by an FI entry to productcosting?
Or the overhead line in product costing is justan information line in productcosting which does nothave any
corresponding accounting entries?
4) Production of Goods - Semi -Finished Goods Production
Semi Finished Goods Inventory (Stock) A/c Dr
Raw Material Consumption A/c Cr
(Please Clarifyif this is the correct entry)?
5) Further Processing of Semi Finished Goods
Consumption ofSemi Finished Goods A/c Dr

2. Semi Finished Goods Inventory (Stock) A/c Cr
(Please Clarifyif this is the correct entry)?
6) Finished Goods Produced:
Finished Goods Inventory (Stock) A/c Dr
Consumption ofSemi-Finished Goods A/c Cr
(Please Clarifyif this is the correct entry)?
7) I am also unclear ifCOGM (Costof Goods Manufactured / Produced) or COGS is a conceptarrived in Product
Costing /COPA or actually there is an accounting entry (BOM, Routing,Overhead etc) with a line item that represents
as COGS / COGM? If so when this entry appears in the production process?
Thanks in advance!
Correct Answer by Big Choi on Dec 25, 2013 12:51 AM
Hi...
2) Routing
FI document is not generated.
Only co document is generated.
Dr) secondary cost element connected to activity– production order or cost collector
Cr) secondary cost element connected to activity – cost center connected to work center
3) Overheads – Production
FI document is not generated.

3. Only co document is generated.
Dr) secondary cost element with category 41 - production order or cost collector
Cr) secondary cost element with category 41 – cost center orinternal order or business
process
4) Production of Goods - Semi -Finished Goods Production
Dr) Semi Finished Goods Inventory (Stock) A/c
Cr) for goods receipts for orders A/c – you check your account using t-code obyc (GBB-AUF)
6) Finished Goods Produced:
Dr) Finished Goods Inventory (Stock) A/c
Cr) for goods receipts for orders A/c – you check your account using t-code obyc (GBB-AUF)
7) Production order settlement
in case that variance is greater than 0
DR) production variance A/c
CR) for goods receipts for orders A/c
in case that variance is lessr than 0
DR) for goods receipts for orders A/c
CR) production variance A/c
8) Goods issue for sales

4. DR) COGS A/c - you check your account using t-code obyc (GBB-VAX/GBB-VAY)
CR) Finished Goods Inventory (Stock) A/c
If you execute actual costing using material ledger, you should understand material ledger’s closing FI
document.
To understand Product Costing, you should read the below sap help portal site.
Product Cost by Order - Cost Object Controlling (CO-PC-OBJ) - SAP Library
Product Cost by Period - Cost Object Controlling (CO-PC-OBJ) - SAP Library
I think that it is the best way you can study the concept for product costing through sap help portal
site.
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 Correct AnswerRe: Accounting Entries from Production to Finished Stock
Big Choi Dec 25, 2013 12:51 AM (in response to Raj Borah)
Hi...
2) Routing
FI document is not generated.
Only co document is generated.
Dr) secondary cost element connected to activity– production order or cost collector

5. Cr) secondary cost element connected to activity – cost center connected to work center
3) Overheads – Production
FI document is not generated.
Only co document is generated.
Dr) secondary cost element with category 41 - production order or cost collector
Cr) secondary cost element with category 41 – cost center orinternal order or business
process
4) Production of Goods - Semi -Finished Goods Production
Dr) Semi Finished Goods Inventory (Stock) A/c
Cr) for goods receipts for orders A/c – you check your account using t-code obyc (GBB-AUF)
6) Finished Goods Produced:
Dr) Finished Goods Inventory (Stock) A/c
Cr) for goods receipts for orders A/c – you check your account using t-code obyc (GBB-AUF)
7) Production order settlement
in case that variance is greater than 0
DR) production variance A/c
CR) for goods receipts for orders A/c

6. in case that variance is lessr than 0
DR) for goods receipts for orders A/c
CR) production variance A/c
8) Goods issue for sales
DR) COGS A/c - you check your account using t-code obyc (GBB-VAX/GBB-VAY)
CR) Finished Goods Inventory (Stock) A/c
If you execute actual costing using material ledger, you should understand material ledger’s closing FI
document.
To understand Product Costing, you should read the below sap help portal site.
Product Cost by Order - Cost Object Controlling (CO-PC-OBJ) - SAP Library
Product Cost by Period - Cost Object Controlling (CO-PC-OBJ) - SAP Library
I think that it is the best way you can study the concept for product costing through sap help portal
site.
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Raj Borah Dec 25, 2013 1:06 PM (in response to Big Choi)
Hi,

7. Thanks for clarifying on Routing & Overheads.I will look into productcosting in details.However this brings up further
two question.
1. Production of Goods – If Semi Finished Goods Stock A/c is debited,at some pointthis should be reversed against
Finished Goods A/c.Otherwise we will end up in Stock of Semi-Finished Goods which are actually finished
and should be “Finished Goods”
2. Secondly, there should be an entry in FI to show Costduring Routing & Overhead allocation.Else the only costSemi -
Finished Goods Inventory & Finished Goods Inventory will carry is Material Costwhich I believe is not correct.
Semi-Finished Goods or Finished Goods Inventory = Material Cost + Production Overhead + Sales
& Distribution Overheads (which I can't see happening in FI if Routing & Overheads are allocated in CO &
not FI)
If Overhead allocation and routing allocation is happening in CO& not FI, there will be mismatch in Semi -Finished
Goods or Finished Goods Inventory as per FI & CO
Will look forward to further help and advice!
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Big Choi Dec 26, 2013 1:02 AM (in response to Raj Borah)
Hi..
Production order or cost collector’s debt collects all material consumption and Overhead which is
allocated from cost center or internal order.
Production order or cost collector’s credit collector the amount which is valued with a standard price
when you post a goods receipt.

8. As a result, Production order or cost collector’s debt is actual for COGM and Credit is standard
for COGM.
The variance between the debit and credit is post on FI document through order Settlement.
Because of generating FI document for variance, there are match in Semi-Finished Goods or Finished
Goods Inventory as per FI & CO.
If you don’t use material ledger, the variance is recognized as COGS.
If you use material ledger, the variance is transferred into COGS and stock based on qty using
material ledger closing.
Sales & Distribution overheads should not be allocated into production order or cost
collector. Because this overheads are not for COGM.
This overheads should be allocated into co-pa using pa cycle.
Please refer to below site.
Product Cost by Order: Scenario - Cost Object Controlling (CO-PC-OBJ) - SAP Library