31. How to create Tax calculation procedure in MM?
Tax can be calculated for each line item of a PO separately based on the tax code. Earlier TAXINJ, which is a formula based tax procedure, was used. Now, TAXINN, which is a condition based tax procedure, is generally used. Tax procedure contains the condition type and necessary specification for each condition type. Account keys are assigned to condition types and these account keys determine the G/L to which the tax amount is to be posted(OB40). These account keys are maintained using t-code OBCN. (All these transactions are under Financial Accounting Global Settings >> Tax on Sales/Purchases >> Basic Settings). Tax codes are assigned to country codes and country are linked with tax procedure. Thus, based on tax code, corresponding tax procedure is determined and then calculation is done based on condition types in that tax procedure.
32. How is scrap material taken care of in sub-contracting?
Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-Product. Common practice is to maintain scrap as by-product and receive it back along with processed material.
33. How are the by-products taken care of in sub-contracting?
When you create BOM using CS01, we can maintain main components with + ve quantities and By Products / Scraps with - ve quantities.
When you make Goods Receipt for Subcontracting Purchase Order with 101 movement type, components are automatically consumed with movement type 543 By Products / Scrap are updated as stock provided to vendor movement type 545. Now we can receive this scrap/ By product back in company’s inventory using movement type 542 (reversal of 541) with t-code MB1B.
34. What are the commonly used movement types in Sub-Contracting process?
541 - Issues of goods from warehouse to subcontractoru2019s stock
542 - Reversals of goods issues from warehouse to subcontractoru2019s stock
543 - Consumption from subcontracting stock (Automatic updating during GR)
544- Co-products receiving
545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
101 – Finished good/ Sub-Contracted good received after processing
35. What are accounting entries in standard sub-contracting process?
Accounting entries in standard sub-contracting process are as follows:
For finished goods received:
Debit stock account of assembly(FG) (BSX)
Credit Change in Stock (BSV)
For amount payable to vendor:
Debit SC/JW charges (FRL)
Credit GR/IR (WRX)
For material provided to vendor:
Debit Consumption Account of components (GBB-VBO)
Credit Stock account of components (BSX)
If there is a price difference and customization is done for accounting for price difference in subcontracting, PRD transaction key comes in picture.
36. What are the possible values of procurement type in Material Master?
Procurement type is maintained in MRP1 view of material master. This is a plant specific view as MRP is done at plant level. Various procurement types in material master are as follows:
In-house production (E)
External procurement (F)
No procurement
Both Procurement types (X)
37. What are the requirements for an ‘MRP Run’?
MRP should be activated in that plant
Master Data for MRP should be maintained (Planning Calendar etc.)
MRP data for material should be maintained
MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)
MRP2 view should be maintained (e.g.. Plan delivery time etc.)
MRP can be run using MD03
38. What is a MRP Area?
MRP Area is an organizational unit for which material requirement planning can be carried out independently. MRP Areas are of three types:
Plant MRP Area
MRP Areas for Storage Locations
MRP Areas for Subcontractors
After defining MRP areas, MRP area is assigned to material in material master.
39. What is MRP list?
The system creates MRP lists during the planning run. The MRP list always displays the future stock/requirements situation at the time of the last planning run. The MRP list is stored in the system until it is either deleted manually or replaced by a new list from a subsequent planning run.
40. What MRP procedures in Consumption Based Planning?
MRP procedures in CBP are as follows:
Reorder Point Procedure
Forecast based Planning
Time phased material planning
Tax can be calculated for each line item of a PO separately based on the tax code. Earlier TAXINJ, which is a formula based tax procedure, was used. Now, TAXINN, which is a condition based tax procedure, is generally used. Tax procedure contains the condition type and necessary specification for each condition type. Account keys are assigned to condition types and these account keys determine the G/L to which the tax amount is to be posted(OB40). These account keys are maintained using t-code OBCN. (All these transactions are under Financial Accounting Global Settings >> Tax on Sales/Purchases >> Basic Settings). Tax codes are assigned to country codes and country are linked with tax procedure. Thus, based on tax code, corresponding tax procedure is determined and then calculation is done based on condition types in that tax procedure.
32. How is scrap material taken care of in sub-contracting?
Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-Product. Common practice is to maintain scrap as by-product and receive it back along with processed material.
33. How are the by-products taken care of in sub-contracting?
When you create BOM using CS01, we can maintain main components with + ve quantities and By Products / Scraps with - ve quantities.
When you make Goods Receipt for Subcontracting Purchase Order with 101 movement type, components are automatically consumed with movement type 543 By Products / Scrap are updated as stock provided to vendor movement type 545. Now we can receive this scrap/ By product back in company’s inventory using movement type 542 (reversal of 541) with t-code MB1B.
34. What are the commonly used movement types in Sub-Contracting process?
541 - Issues of goods from warehouse to subcontractoru2019s stock
542 - Reversals of goods issues from warehouse to subcontractoru2019s stock
543 - Consumption from subcontracting stock (Automatic updating during GR)
544- Co-products receiving
545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
101 – Finished good/ Sub-Contracted good received after processing
35. What are accounting entries in standard sub-contracting process?
Accounting entries in standard sub-contracting process are as follows:
For finished goods received:
Debit stock account of assembly(FG) (BSX)
Credit Change in Stock (BSV)
For amount payable to vendor:
Debit SC/JW charges (FRL)
Credit GR/IR (WRX)
For material provided to vendor:
Debit Consumption Account of components (GBB-VBO)
Credit Stock account of components (BSX)
If there is a price difference and customization is done for accounting for price difference in subcontracting, PRD transaction key comes in picture.
36. What are the possible values of procurement type in Material Master?
Procurement type is maintained in MRP1 view of material master. This is a plant specific view as MRP is done at plant level. Various procurement types in material master are as follows:
In-house production (E)
External procurement (F)
No procurement
Both Procurement types (X)
37. What are the requirements for an ‘MRP Run’?
MRP should be activated in that plant
Master Data for MRP should be maintained (Planning Calendar etc.)
MRP data for material should be maintained
MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)
MRP2 view should be maintained (e.g.. Plan delivery time etc.)
MRP can be run using MD03
38. What is a MRP Area?
MRP Area is an organizational unit for which material requirement planning can be carried out independently. MRP Areas are of three types:
Plant MRP Area
MRP Areas for Storage Locations
MRP Areas for Subcontractors
After defining MRP areas, MRP area is assigned to material in material master.
39. What is MRP list?
The system creates MRP lists during the planning run. The MRP list always displays the future stock/requirements situation at the time of the last planning run. The MRP list is stored in the system until it is either deleted manually or replaced by a new list from a subsequent planning run.
40. What MRP procedures in Consumption Based Planning?
MRP procedures in CBP are as follows:
Reorder Point Procedure
Forecast based Planning
Time phased material planning
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