Product Costing with Moving Average Price

Dear Experts,
Please guide me solution of my below scenario :
- FG Material (500013) Process Order Created of 1000 units at 1st August.
- FG Material (500013) Process Order confirmed and GR posted at 3rd of August.
- All stock of FG Material (500013) sold at 25th of August <Stock Out>.
- Now at month end, when we execute actual activity price calculation, what would be the impact of revaluation of actual activity price where no material existed in stock ?
Please guide?
Regards.
Zain Bashir

Hi
Probably I am not getting your question exactly. Based on my understanding of query I would like to state as under. If I missed your concern, kindly revert.
Based on actual activity prices when you will revalue process order the activity cost on that order will come on actual prices and when you will calculate variance and settle it, the same will be settled to production variance account. Please check and verify in test system.
Regards
Rajneesh

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Product Cost under Moving Average Price

Hi Sapians,
Please guide me how to configure Product Costing & the users steps to test the same. Here client wants to work in Moving Average Price.
Regards,
Vikas

Hello Viki,
This question can not be answered in this forum simply because its not issue based and we can't help you with each step. Yes product costing can be done using moving average price and you can do so in the Valuation and Account Assignment section in materials management. However, moving average is not a recommended approach for internally manufactured goods and it may result in allocation of the previous period's variance on the valuation of the products in the next period. You can find more on this on SAP Library and you can download the SAP's best practices configuration guides from the SAP website for help on configuring.
Kind Regards // Shaubhik

Product Costing using Moving Average Price of FERT & HALB

Dear Experts,
My client wants to use Product Costing functionality by using Moving Average Price instead of Standard Price on Finished Goods & Semi Finished Goods and as per my understanding, SAP recommends to use Standard Price on FERT & HALB.
I know if we use moving average price instead of standard price than there will be no concept of variances. Can anyone tell me more about what are the pros and cons of using moving average price instead of standard price in Product Costing?
Thanks in advance.
Regards,
Zain Bashir

Hi Zain
Let's take an example
You have V for Mat A
You create 3 Prod orders in a month
Order 1 - Qty 10 - variance 100
Same for Order 2 and 3..
At month end, you sold 20 pieces and 10 is in stock..
When you settle order 1, system will compare order qty and stock.. It will match I.e. 10 = 10... Hence variance of 100 will be posted on stock
Same will happen for Order 2 and 3... Ideally, only 100 should have posted on stock... but in this case 300 of variance will be posted on stock...
This is what the note mentioned by Arturo tells, but not so clearly
Hope this helps
Br. Ajay M

Production Planning at Moving Average Price

We do very little manufacting, in fact, I would call it "re-packaging". All our compnay does is take products from one package size and convert them to another package size, for example, we take bulk gallons and repackage it to 5 gallon pails. The only materials involved is a 5 gallon pail and the 5 gallons of material that go into that pail. We want the finished products moving average price (MAP) to be equal to the MAP of the inputs. I know that finished products should not be carried at MAP, but we manufacture on such a small scale that I don't think we will have huge issues carrying finished goods at MAP. We are not interested in knowing what the product cost vs. what the product should have cost to produce, all we want to happen is have the finished product=cost of inputs.
Is there anyone that has done this? If so, what is the best way to configure our system.
Thanks in advance,
Scott

The basic issue with moving average price for manufactured items is getting all the costs on the production/process orders before the finished items is consumed out of stock. For example, make 10 items with costs of $100, so moving average price is $10 each. 9 of the finished items are then consumed leaving 1 in stock. An additional cost is incurred on the production/process order of $50 (i.e. missed goods issue, COGI error, etc.) the single item in stock will now have a moving average price of $60 ($10 + $50). If the finished item is fully consumed then the $50 goes to a production variance account.
With standard price you consume for the same price (subject to periodic recalcalution) and analyis your production variances.

MTS variances with moving average price

Hi expert,
Is it possible to satisfy this requirement for cost estimate and variances in make to stock scenario ?
-Actual cost at Moving average price for all article
-Calculate cost estimate for articles and write it on standard price field with strategy that read also standard price
-Calculate planning and production variances for all the Make to Stock PP order?but stock must be update with Moving average price.
My doubt is how can i have variances detailed if i manage article with Moving average price.
How can I have variances as "statistics" otherwise I would have double costs.
thanks

HI
If you manufacture some thing, its price control should never be V, else it ruins the inventory valuation forever
Consider the eg below if your price control is V
1. Your moving price in mat master is 100 USD
2. You Mfr on Jan 1 @ Actual cost = 110 in Prod order and Qty = 1.
Upon GR, GR will happen @ 100 and at period end if Qty is lying in stock, 10 variance will also be inventorized
BUT, now consider this
1. Your moving price in mat master is 100 USD
2. You Mfr on Jan 1 @ Actual cost = 110 in Prod order and Qty = 1.
Upon GR, GR will happen @ 100 and variance lying is 10 in prod order
3. You Mfr on Jan 10 @ Actual cost = 110 in Prod order and Qty = 1.
Upon GR, GR will happen @ 100 and variance lying is 10 in prod order
4. On jan 15, you consume Qty 1 and qty lying in stock is 1
5. In period end, when you do settlement, following will happen
a. For prod order 1: Qty Mfd 1 and Qty lying in stock 1 - Result: variance 10 will be inventorized.
Mvg Avg price will shoot upto 110
b. For prod order 2: Qty Mfd 1 and Qty lying in stock 1 - Result: variance 10 will be inventorized.
Mvg Avg price (MAP) will shoot upto 120
System wont check whether the qty lying in stock pertains to prod order 1 or 2... It will simply check if the Qty of prod order matches with qty lying in stock. hence, it will keep on inventorizing variance in this case.... and your MAP will touch the sky
Regards
Ajay M

GL to get updated with Moving average price

Hi Guru's
when we do PGI, currently the cost of goods issue value is updated from Moving average price into a GL account,
Now i have created a new GL account and also want this new GL to get updated with the Moving average Price.
Where can i make these settings. can u give step by step solution.
Regards
Abhijeet

First u pls check how its updating with moving average price and select in MMRecord valuation class and price options, then check settings for ur gl account go to fs00 display mode check settings in control data.
Compare ur gl account which u have created with standard Gl account.

With Moving Average Price"V" ,in import Process

Hi
All
With Moving Average Price"V" , I want to post the Exchange Rate Difference Between GRN And MIRO to seperate G/L Acc. not for Stock Acc. in Import Process.
Presently it is posting to Stock Acc.
Can any one tell me
Regards
Manju

Hi
In SPRO - SAP IMG- Material Management - Logistics invoice verification - Income invoice- Activate direct posting to G/L accounts and Material accounts
Then do the MIRO
And try it out.
REgards,
Raman

STO with moving average price & with out moving average price

Hi,
i have two questions.
1) I have created STO and issued the material with 351 movement type, after issuing material accounting documents will be with moving average price from issuing plant.
what is the other process to issue with out moving average price ,the price must take as per in PO(sto).
2) why we will use STO why cont we use 301 movement type with one step transfer.
Pls help
Regards
Sunil

Hi Sunil,
1) the 351 movement type uses always the price from the material master, you can't change it
2) I don't really understand your question. You need advise when using STO and when 301?
Attila

How to distribute exchange rate difference to material with moving average price?

Hi community,
Exchange rate differences are not distributed into the items based on the shipment (per article/material). Is there a workaround available based on the GR/IR exchange rate difference and the material that was purchased?
Thank you and best regards,
Barbara Dörr

Hi Lokesh,
thanks a lot for the quick answer, but I
had read this documentation and only found this documentation of exchange rate
difference posting:
GR/IR clearing uses the exchange rate of
the goods receipt. The GR/IR clearing run completely clears Unbilled Payables
and Purchases in Transit. The run calculates price differences of EUR 155 and exchange rate differences of EUR
135. The price differences are posted to the price difference account and the
exchange rate differences to the exchange rate difference account.
Therefore I guessed that the exchange
rate differences are NOT distributed to the material with moving average price.
Best Regards,
Barbara

SAP allows release of Standard Cost for Material with Moving Average Price

Hi
We set our Raw Material to use Moving Average Price (V) and price determination 2 (single level). And we activated material ledger.
During mass calculation of standard cost (CK40N), If user accidentally forgot to restrict the Raw Material for being included in calculation, the system calculate standard cost anyway, even though I set it as Moving Average Price. And user is able to release it too without any problem.
Why the system does not restrict it? By giving error maybe. Although as for now I can not find the wrong effect from releasing standard cost for MAP material, by your experience, is there any side effect that I should be aware of?
Thanks

CK40n is mass release of all materials. The release is not dependent on price indicator of the material in the master. It will calculate standard cost of all the materials.
Releasing standard cost estimate of raw materials does not have any side effect as long your calculation is based on moving average price.
Regards
Divraj

FIFO with moving average price

we are using for own produced goods "moving average price" and Material ledger. At month end we setlle production variance . The system also creates an entry for ML "price variance" (which is the percentage of the prodcution variance for the remained stock).
When we run the document extract (MRF3), with the option of "Order settlement", the costs include not only the production variance but also the ML line. That is too high.
When we run it without selecting "Order settlement" the adjustement is the reversal of the price variance (the ML line item). That is too low.
The total costs should be only the total production costs.
One cannot exlude it by the material movement as both "price variance" and "production variance" is not part of a material movement.
Edited by: Hendrik585 on May 27, 2011 2:16 PM
Edited by: Hendrik585 on Jun 5, 2011 11:36 PM

hi,
We need to follow the steps if we need to valuate our inventory by means of FIFO Scenario :
1. In T-code OMWE, activate the balance sheet valuation as LIFO Valuation not active & FIFO Valuation active.
2. In T-code MRLH, FIFO Maintained at company code or plant level.
3. In T-code OMWL, set mean receipt price at valuation ares level if Plant or at company code level if at company code level.
4. Configure FIFO Valuation ares for teh respective year.
5. In T-code OMWP, Configure FIFO Method.
6. In T-code OMW4, Movemnet type settings for FIFO maintained. Generally, no chnages made.
7. Select material for FIFO in Tcode MRF4.
8. Execute FIFO Valuation- Tcode MRF1.
Hope it helps..
Regards
Priyanka.P

PROBLEM WITH MOVING AVERAGE PRICE

Hi,
Correct me if Im wrong, but from what I know the moving average price should only change or be recalculated when purchases or goods_recipts are made, otherwise items should be consumed at a FIXED moving average price (cost).
I´ve noticed when looking into the Inventory Audit Report that the moving average price is changing in my installations and I see that SAP BO recalculates it every time an issue is made. This last thing only happens when the total amount of the transaction is rounded or left with 0 decimals and the other types such as prices, rates, quantities, percent, etc. are left with 2 or 3 decimals.
Because of my country settings, the total amount has to have 0 decimals (I live in Chile and we dont have cents in our currency) and the moving average price of an Item should not change when an issue is made, can you help me with this?
Thanks and best regards to you all.
Fernando

Hi Nagesh,
Thank you for your quick response.
I understand what you say, but moving average price should not change when an issue is made and that´s what is bothering us.
The difference between what it shoud be and what SAP BO is calculating is our concern, ie: let´s say the number of transactions is 100, would that difference be negligible?
Here is an example:
Goods issue:
SO 8     11     -10,49     166,67     -1.748     99,35     16.559
SO 9     11     -10,49     166,673     -1.748     88,86     14.811
SO 10     11     -10,49     166,678     -1.748     78,37     13.063
SO 11     11     -10,48     166,684     -1.747     67,89     11.316
SO 12     11     -10,56     166,681     -1.760     57,33     9.556
Note that coma (,) is decimal separation and period (.) is the mile separator.
Where the 3rd line is the quantity of the goods issue, the 4th is the moving average, and the 5th is the total quantity of the issue.
So you see 10,49 x 1748 = 1748,39977= 1748(SAP) and then SAP BO recalculates the AVG. Price.
The problem I was talking about was the difference of the stock AVG Price with one hundred transactions or so... now the difference seems negligible (166,7 - 166,681 = 0,011).
Can you see it changes?, is that a bug?
Thank you
Fernando

Copy Standard Cost to Moving Average Price

Dear All,
We are maintaining the materials with price control as Standard Price and moving average price is updated and used only for statistical purpose.
I have a requirement of copying the standard price to moving average price field just after the standard costs have been released.
We have used CK40N to complete the calculation and release of standard costs.
Please let me know which SAP standard transaction can be used for the purpose.
Regards,
Manish Gupta

Hi
Whats the need to copy std price to moving price?
I dont think there is any such t code to copy it.. But a weird work around is, if u r on ECC 6.0, you can change the price control from S to V and again V to S.. In this process, your price will get copied from S to V
However, not a recommended way of doing... If you do, you shud do this at a shot and blocking all others users
Regards
Ajay M

Materials with moving average price that have goods receipt without PO

We want to have materials on moving average price, but they are not purchased but are leftovers from production process that can be used again. As such we want to put them in inventory according to internally determined price but to use V price control in order to avoid reavluation of existing inventory when price changes. How this can be done as we don't have PO where to put the price. Maybe is possible to have dummy PO without vendor?

Hi there,
so there is never a "regular" GR or invoice? And the material will be put back to stock using movement Type 262, for example?
There is a way... Consider to activate the "External GA Amount" for the relevant movement type(s). You can do this by customizing the movement type's field selection, category "Materials management". Set this field to "optional". After this you can enter a value in the detail dynpro of the movement. Watch out, it is the value for the posted quantity, not a price... The valution price will be recalculated, the moving everage price will change, but there is no revaluation.
Does this help?
Kind regards from Germany,
Bernd

Batch Management with Moving Average Price

Hi all,
I got a question here. If we use batch management in SAP with our price control as 'V' (MAP for Moving Average Price), and we do good issue out by batch, will the system credit my stock based on MAP value or the actual value (actual PO price by batch)

Any kind soul can helps me??

Product Costing with Moving Average Price

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