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QM PLant settings - Cost center

Former Member
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HI QM Gurus,

In the inspection lot completion tab for QM Plant settings in customization

we have two feilds

Cost Center - Scrap and Destruction

What is the significance of Cost center feilds in QM Plant settings?

What will happen if I do not use any of these feilds?

Are they only for reporting purpose?

I believe for each movement type we define one cost center.

What is the need to define a different cost center for QM.

Kindly give ur comments

Regards

JEEVAN

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
0 Kudos

Hi Jeevan,

You can post quantities of material from an inspection lot to the following destinations:

1. To unrestricted-use stock

2. To scrap

3. To sample usage

4. To blocked stock

5. To new material

6. To sample reserves

7. Return delivery

In system, Each and every movement will be monitored.

If you are collecting costs on manufacturing orders, you can post the scrap costs to a cost center. You cannot settle scrap costs to a cost center if you are using a product cost collector.

**Process Flow**

The planned quantity of the order is 10 units. The yield is 8 pieces and the scrap quantity is 2 pieces.

You change the settlement rule so that 80% of the costs can be settled to the material stock account for that material. You then create a new distribution rule in which the remaining 20% of the costs is settled to a cost center.

The actual costs for the order are USD 2,800. When 8 pieces are delivered to stock, the system charges USD 2,000 to the order.

80% of the total cost is USD 2,240.

20% of the total cost is USD 560.

The order was already credited by USD 2,000 upon delivery. During settlement, the system then settled USD 240 to the material stock account of the material and USD 560 to the cost center.

Thanks,

Rgds...