Answer / ravi bhatia

Settlement of Production Variances
When you valuate products with the standard price of
production, so-called "production variances" can result on
the production orders (actual cost of goods manufactured -
(produced quantity * standard price)).

These production variances are determined in Product Cost
Planning (CO-PC) and broken down there according to variance
categories. When you settle the production order, you can
transfer these variance categories to separate value fields
in Profitability Analysis.

Prerequisites
1. The production variances first need to be calculated in
CO-PC.
2. Your PA transfer structure must contain assignments of
variance categories to value fields.
3. In the settlement profile, you defined that variances are
to be settled.
4. The settlement rule to profitability segments is created
automatically based on the information available in the
production order (product, product group, plant and so on).
5. You must have maintained number ranges for record type "C".
6. The desired form of Profitability Analysis must be active
in the relevant controlling area.

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