How To Fix KJ806 - WIP explanation only available for valuation at target costs

SAP Error Message - Details

• Message type: E = Error

• Message class: KJ - Cost Object Controlling for Make-to-Order Production

• Message number: 806

• Message text: WIP explanation only available for valuation at target costs

What causes this issue?

You have selected the function <LS>Explanation</>. This function
displays detailed information on how <DS:GLOS.work_in_process>work in
process</> was calculated for the selected cost object.
This requires that the work in process for the cost object be valuated
at <LS>target cost</>. However, the cost object you selected (&V1&
) was valuated at actual cost.

System Response

The selected function is not performed.

How to fix this error?

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message KJ806 - WIP explanation only available for valuation at target costs ?

  The SAP error message KJ806, which states "WIP explanation only available for valuation at target costs," typically occurs in the context of Work in Progress (WIP) accounting in SAP. This error indicates that the system is attempting to provide a WIP explanation for a valuation method that is not supported, specifically when the valuation is not based on target costs.
  Cause:
  
  Valuation Method: The error arises when the system is configured to use a valuation method other than target costing (e.g., actual costing or standard costing) for WIP calculations.
  WIP Calculation Settings: The settings in the controlling area or the specific cost object may not be aligned with the requirements for generating WIP explanations.
  Costing Variants: The costing variant used may not be set up to allow for WIP explanations under the current valuation method.
  
  Solution:
  
  Check Valuation Method: Ensure that the valuation method for the relevant cost object is set to target costing. If it is not, consider changing the valuation method if appropriate for your business processes.
  Adjust WIP Settings: Review the WIP calculation settings in the controlling area and ensure they are configured to support the desired valuation method.
  Costing Variant Configuration: Verify the configuration of the costing variant being used. Ensure that it is set up to allow for WIP explanations and is compatible with target costing.
  Consult Documentation: Refer to SAP documentation or consult with your SAP support team for specific configuration steps related to WIP and costing methods.
  
  Related Information:
  
  WIP Accounting: Work in Progress accounting is crucial for manufacturing and project-based industries, as it helps track costs associated with incomplete products or projects.
  Target Costing: This is a pricing strategy in which a company determines the desired profit margin and then works backward to establish a target cost for a product.
  SAP Modules: This error is typically encountered in the Controlling (CO) module of SAP, particularly in the areas related to Product Costing and WIP management.
  Transaction Codes: Familiarize yourself with relevant transaction codes such as CJI3 (Project Actual Cost Line Items) or KKS1 (WIP Calculation) for further analysis and troubleshooting.
  
  By addressing the configuration and ensuring alignment with target costing principles, you can resolve the KJ806 error and enable WIP explanations as needed.