Difference in Moving Avg Price & Standard Cost

Hi Sapians,
Can you please guide me regarding difference between MAP & Standard Costing in relation to the working/process and accounting entries?
Regards,
Volas

The main difference with respect to accounting entries is that with Std price the variances are written off to P&L account; but with MAP it is absorbed into inventory.
Std Price (on purchase)
Dr    Inventory   100
Cr    GRIR           120
Cr     Purchase Price Varianc e    20
MAP (on purchase)
Dr    Inventory   120
Cr    GRIR           120
On Goods Issue, there is not much of a difference in most scenarios - GI is done at price on MM master (100 for Std Price and 120 for MAV in above example).

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Moving Avg Price - Delivery costs

Hi,
   Will the moving average price be influenced by the delivery costs incurred. It will be helpful if anyone could explain me with an example.
Thanks
Aparna

Hi,
In standard SAP process of inward Cost will consist of the following posting:
1. GR posting
                  DR Inventory          $1000
                        CR GR/IR Inventory      $ 900
                        CR GR/IR Inward Cost $ 100
2. Goods Invoice
                   DR GR/IR Inventory   $ 900
                        CR Vendor AP            $900
3. Delivery Cost Invoice
                   DR GR/IR Inward Cost    $ 100
                        CR Transport Vendor      $ 100
From the above journal you can see the inward cost is incurred upon GR posting.
Cheers,
Girang
Edited by: girang irawan on Nov 30, 2009 9:53 PM

Standard or Moving avg price

Hi Experts,
What is the difference if price control of finished products in Standard or moving avg price ?
1. I know moving avg price is always change able but Standard price is also changeable if standard price is changable when it change ?
2. If price control is S for finished products then product costing is happened or what !!!
3. Price and qty of FG if it is moving avg price when changed (When GR is happened or when settlement is happened) ?
4. In finished products if price control S , when we run costing run (CK40N) i think price is changed,before it we settlement production order at that time price is also changed
Kindly clarify
Thanks & Regards,
Debashis
Moderator: Please, respect the rules; ask one question per thread and try not to ask 'quiz' questions

Hi,
Pl see the answers as below:
What is the difference if price control of finished products in Standard or moving avg price ?
1. I know moving avg price is always change able but Standard price is also changeable if standard price is changable when it change ?
*Ans:You are right on moving avg price that new avg price is calculated after every goods receipt, invoice receipt and order settlement. But in case of price determination "S", all the material movements got updated with standard price only. If Material Ledger is in Active, you can't change the standard price of the Material once you have the movements posted or the status of the Material in CKM3N shows " Quantities and Values Entered"*
2. If price control is S for finished products then product costing is happened or what !!!
Ans: No. This is one of the available valuation method in SAP.
3. Price and qty of FG if it is moving avg price when changed (When GR is happened or when settlement is happened) ?
*Ans: new avg price is calculated after every goods receipt, invoice receipt and order settlement*
4. In finished products if price control S , when we run costing run (CK40N) i think price is changed,before it we settlement production order at that time price is also changed
Ans: When you run CK40N standard price will get updated against the respective material and the same is used against all the material movements.
The main difference between the two valuation procedures is that the moving average price represents a current avg price while the standard price is based on planned values.
In case of Price Control "S" differences to a price difference account and however in case of moving average price, the material stock value in Financial Accounting will get updated.
Regards,
Pandu

Why negative stock is possible for Moving avg price & not standard price?

why negative stock is possible for Moving avg price & not standard price?

Hi,
Negative stock is available for both MAP as well as Std. price.
Eg.
MAP-->
1. Mtl with MAP 1 Rs/pc & stock of 10qty.
2. GI done for 15 pcs. Each pcs evaluated with 1Rs (MAP). Stock value reduce by 15Rs. Offsetting entry takes place in consumption account of 15Rs. The stock and stock value is -5 each.
3. Post GR of 10pcs with PO price 3Rs/pc.
Now GR/IR should credited with 30Rs.
Negative stock (which issued) with 1Rs. But incoming mtl. is of 3Rs/pc. So difference of 2Rs for Qty 5 (Neg. stk) of 10Rs. will posted to Price Difference account. And remaining 20Rs posted to stock account.
Std. price.--> step 1,2 remain same
3. Post GR of 10pcs with PO price 3Rs/pc.
Now GR/IR should credited with 30Rs.
Durin GR Stock account posting will be 10Rs but due to negative stk value the net stock value will be 5 Rs. Remaining 20Rs posted to price difference acct.
Regards,
Sandeep

Change price control indicator from standard price to moving avg price.

Hi All,
There is a material which has a negative stock for the previous period and the previous period is already closed.
When i want to change the price control indicator from S to V for that material in the current period, it shows an error that "negative stock is there, unable to change price indicator".
Kindly help me to solve this issue.
Thanks,
AK

the price control indicator can be changed from standard price to moving avg price at any time .......with some restrictions.
And one of these restriction is the one you see.
You must not have negative stock.
Hence you have to make the negative stock zero
Since your negative stock is in the previous period, you either have to allow posting into previous periods (trx MMRV , of course Finance has to allow this as well) first. Then you can post e.g. a 202 movement with previous period date which has a quantity that equals your negative quantity. then you change your price control, then you do a 201 movement (again with previous period date), finally you can restrict posting into previous periods again in MMRV.
or you just wait a few days, then with the month end closure your curent period becomes previous period and hopefully you will not have negative stocks again. then you can change the price control without any problem (I usually take care that moving average and standard price are equal befor I change the price control)

Std price and moving avg price

hii frends...in which scenario we hve to go for std price and moving avg price...
thnx in adv...

Generally all raw materials (ROH), spare parts (ERSA), traded goods (HAWA) etc. are assigned as moving average price (MAP) because of the accounting practice of accurately valuating the inventory of such materials. These materials are subject to the purchase price fluctuations on a regular basis.
Company generally uses moving average on purchased materials with small cost fluctuations. It is most appropriate when the item is easily obtainable. The impact on margins are minimized which reduces the need for variance analysis. Furthermore, the administrative effort is low as there are no cost estimates to maintain. The cost reflects variances, which are closer to actual costs.
The semi-finished goods (HALB) and finished products (FERT) are valuated with standard price because of the product costing angle. If these were to be MAP controlled, then finished/semi-finished product valuation would fluctuate due to data entry errors during back flushing of material and labor, production inefficiencies (higher cost) or efficiencies (lower cost). This is not a standard accounting and costing practice.
Hope this will help you.
Cheers,
Parag Mahajan

Std price to Moving Avg Price & VICE VERSA

Dear,
Im MM01 - Trnx I maintained Moving Avg price , i want to convert to Std price in the given scenorios
1) Newly created MMR - P.O Created - Mtl not inwarded so far
2) Mtl already transactions done , so many times.
Also explain if its Std price to Moving avg what steps need to be done.
Regards,
Suresh.P

Hi
Under certain conditions, you can change the type of price control:
From standard price to moving average price :-
You can make this change at any time. The moving average price (which until now has been updated for informational purposes only) replaces the standard price and is used for valuation from now on.
From moving average price to standard price:-
You cannot make this change in the following two cases:
1. If the material master record is set up as a valuation header record for a material subject to split valuation .
2. If the standard price comes from costing and is not equal to the moving average price
If the change is possible, the moving average price becomes the standard price, which is then used for valuation.
You change the type of price control by overwriting the price control indicator in the material master record with the new indicator.
Changing the type of price control for a material does not change the value of the material stock, since in both cases the current price becomes the new price.
I hope it will solve your problem. Please revert back.
Regards
Raj.......

Change costing method from Moving Average to Standard costing

Hi Expert
I need to find out the prerequisites for changing the valuation method of an item from Moving average to Standard costing.
(In the forums i found a note which discusses the change of costing method from FIFO to Moving average.)
It would be greatly appreciated if i can get a reply ASAP
Thank you
Regards
Apsara

Hi Son
Let me rephrase my previous question as i have asked it incorrectly.
Step 1. Make all quantities of the stock zero and also close all Open PO, SO etc
Step 2. change the inventory valuation method
Step 3. Enter new stock prices for the standard cost through stock revaluation. My question is can this be (step 3) done through DTW
Thank you
Kind Regards
Apsara

Moving avg price is negative

Hi,
I am trying to post invoice for a material and PO but i am getting error message Moving avg price for the material is negative.
Please let me know your views on this.
Helpfull answers will be rewarded.
thanks
Suresh

Hi,
It doesn't mean that if you post higher value of difference then it will post MAP as -ve.
You might be posting higher value than the actual MAP of the material so it affects the MAP and if Difference amount is more than MAP value then this problem occurs.
And it also generates an additional accounting document of "PR" Document Type i.e. Price Change. But in your case, it will not allow to post you the MIRO Document.
If possible, better reverse the GR and change the PO value as per requirement and then do fresh GR and then MIRO.
Otherwise Try and change the material stock value in MR22 - Debit/Credit material stock value. It will not work by changing price in MR21.

At PGR moving avg price will be changed while pickup the goods from custome

Dear All,
I want clarification at moving avg price while retunrs from customer at consignment scenario.
scenario: goods deliverd with 633 movt type at moving avg price. while returns case with movt type 634 moving avg price was changed.
here user want moving avg price willl be requred same in return at what moving avg price taken in issue 633.
i concerned this with mm consultant , they told its not possible to take like this in returns with moving avg price
is there any possible to take mavg price like this..if possible how?
Regards,
Narendra

hi
this is to inform you that,
this is not possible because master data in the system might have got changed from MVP.
so then the system picks what ever the price stated there in MMR.
hope this clears your issue
balajia

Change in Moving Avg.Price after GI

Hi All,
We need your advise to find the root cause of sudden change in the Moving Avg.Price from US $100 to US $10,000 during GI (202 MvT - GI to Costcenter)
Further we observed that within 15 days the MAP has came down to US $132.
Could you please let us know the possible causes of this...
Regards,
Kiran

Hello,
Please use MB51 to analyse all the movements of the material. Also, look at PO history of the Materials for any possible GR/IR maintenance and Invoices for any possibles price adjustments. Other possible reasons are fractional stock quantities, reversal of a transaction that took place in the past and rounding off issues.
Thanks,
Venu

Reg:alv for checking the moving average price, standard price andpurchasing

Hi.
How to create ALVReport display for checking the moving average price, standard price and purchasing frequency of purchased materials. And for revise the ordering frequency of materials.
please let me know the logic n program
Thanks

Please try yourself first...If you got any problem you can come back...Don't expect us to do your work.
Greetings,
Blag.

Where to find costing history- standard price or moving avg price.

Dear All:
We are updating standard price with costing module.
i want to know standard price monthwise history.
if some 1 know table for same or any other way please help.
Vijay

Here are th some of th tables relevant for CO.
TKA01 Controlling areas
TKA02 Controlling area assignment
KEKO Product-costing header
KEPH Cost components for cost of goods manuf.
KALO Costing objects
KANZ Sales order items - costing objects
Cost center master data
CSKS Cost Center Master Data
CSKT Cost center texts
CRCO Assignment of Work Center to Cost Center
Cost center accounting
COSP CO Object: Cost Totals for External Postings
COEP CO Object: Line Items (by Period)
. COBK CO Object: Document header
COST CO Object: Price Totals

Accounting view:Moving avg price and standard price

Dear Friends,
Can anyone explain what for these two fiels are maintained?.....also what difference it makes with the price we maintain thru pricing procedure(considering only PR00)?......can both the prices be at the same value?......Thanks in advance

hi
The system calculates the moving average price automatically by dividing
the material value in the stock account by the total of all storage
location stocks in the plant concerned. It changes the price with each
valuation-relevant movement.
The system changes the periodic unit price if you settle the material
ledger and then save the data.
The valuation of stocks at moving average price or periodic unit price
means that the price of the material is adapted to the continual
fluctuations in the procurement price.
Standard price
     Standard price of the material
Use
     The valuation of material stocks at standard prices means that all goods
     movements are valuated at the same price over an extended period.
Procedure
     Price variances (for example, purchase price higher than standard price)
     upon goods receipt or invoice receipt are posted by the system to price
     difference accounts. This does not affect the standard price.

Moving average and standard cost

Hi All,
I purchase raw material and trading item. assuming that my raw material is based on standard cost and trading item based on moving average.
1) if both item have no more inventory, the difference price between migo and miro will charge to price difference?
2) if raw material which base on standard cost still have inventory, may i know if there is a variance for migo and miro, the difference will go to where? if inventorise then what would happen to the standard cost.
3) if trading item which base on moving average still have inventory, the variance (between migo and miro) will be added to moving average. right?
4) for raw material which base on standard cost, may i know if freight cost, custom duty and some other miscellaneous cost need to add in, how possible it can add to the standard cost?
5) for trading item which base on moving average, may i know if freight cost, custom duty and some other miscellaneous cost also will be added in moving average price?
thanks

Hi,
1) if both item have no more inventory, the difference price between migo and miro will charge to price difference?
Yes, this is correct as per Accounting Standards
2) if raw material which base on standard cost still have inventory, may i know if there is a variance for migo and miro, the difference will go to where? if inventorise then what would happen to the standard cost.
Any difference between the Standard Price in Material Master and Purchase Value (PO Price) will debit or credit the Price Difference A/c no matter whether stock exits or not.
If Material Standard Price = 100 INR
And PO Price is = 120 INR
During MIGO;
Stock Account - Dr - 100 INR
Price Difference A/c - Dr - 20 INR
GR/IR Clearing A/c - Cr - 120 INR
3) if trading item which base on moving average still have inventory, the variance (between migo and miro) will be added to moving average. right?
Yes, it will debit or credit Stock Account and will update MAP of Material accordingly if enough Stock coverage is there.
4) for raw material which base on standard cost, may i know if freight cost, custom duty and some other miscellaneous cost need to add in, how possible it can add to the standard cost?
No, all will get posted to Price Difference Account as following;
If Material Standard Price = 100 INR
And PO Price is = 120 INR and Freight = 10 INR
During MIGO;
Stock Account - Dr - 100 INR
Price Difference A/c - Dr - 20 INR
GR/IR Clearing A/c - Cr - 120 INR
Price Difference A/c - Dr - 10 INR
Freight Clearing A/c - Cr - 10 INR
5) for trading item which base on moving average, may i know if freight cost, custom duty and some other miscellaneous cost also will be added in moving average price?
Yes, it will get added to stock and will update MAP accordingly if enough Stock coverage is there.

Difference in Moving Avg Price & Standard Cost

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