Hi Ram
Its not a correct process as per me. Will highlight issues with it one by one
When you dont run variances and simply settle - variances are posted only in FI and not in copa
If you don't run wip, its wrong as per accounting principle. You incurred expenses in process order to build an asset I.e. inventory. Expenses posted in process order means it is charged to P/L. As per accounting principle, expenses incurred to build an asset can't be charged off to P/L like expense. Hence when you do wip, the accounting entries are Whip Dr and change in Wip Cr.
Whip being a balance sheet acct and change in wip a P/L account, the impact gets shifted from P/L to B/S. So running wip is very important
Hope you now understand why wip n variances should be run
Also you can think of running con to revalaute process order with actual activities prices
Ajay M