Process order_Target Cost_Resource usage variance

Hi All

Trying to figure out how Target cost variance & Cost element are derived for the attached Process order,

system calculated Target costs- Resource usage variance only.

As per my understanding when we run KKS1 / KKS2 variances will get calculated

• Pre-conditioned
  • Partial Goods receipt is done
  • Cost estimates exist.
• For the specific example i am looking at we have
  • Input Price Variance
  • Input Qty Variance
  • Output Price Variance  &

• Input Resource usage variance
• Lot size variance

• I am seeing an amount posted only in "Target costs" , and nothing in Actual costs
  • In variance fields its showing against "Resource usage variance".
    • Not sure if this helps, but the variance amount is equal to ( Lot size variance - Target cost balance)
  • The Variance amount is again getting split and getting posted against two Overhead rate cost element category : 41.

Below are the questions that i am trying to find answers for :

1. Whats the calculation that system is doing when its posting only in Target costs ?
2. How are "Overhead rate" cost elements derived from ?

FYI. The costing sheet assigned to the process order, does not have any rate or credit key defined.

We use Templates to allocate the costs from business process to Process orders.

Appreciate your insight into this.

Thanks & Regards,

Kalyan