Standard and Moving average Price

Hi,
    What is the Difference between Standard and Moving Avg Price, What are the Cases will we use Standard  Price ,and what are cases shall we use Mov.avg Price, Please Explain me with Example.

Hi Lakshmi,
Moving average price is maintained for all the outside procured materials and standard price is maintained for all inhouse manufactured materials...
We need to run standard cost estimate monthly to update the prices of all the materials with price control S... Prices of materials with price control V will get updated as soon as we do GRN for the materials on the weighted average method...
Regards
Raj

Similar Messages

  • Standard and Moving Average Price in Material Master

    Hello,
    Can any one please tell the basic difference between Standard and Moving Average price? both the cases how the Material Price is calculated?
    And please provide the accounting entry's also.
    Thanks

    Dear S McIntosh,
    You may check URL below that explain the difference between MAP and Standard price.
    http://help.sap.com/saphelp_47x200/helpdata/EN/47/60ff0749f011d1894c0000e829fbbd/frameset.htm
    Regards,
    ian Wong

  • Costing with Standard and Moving Average Price

    Hello All,
    I understand that SAP recommends Std Price for Semi Finished /Finished goods and MAP for trading goods and raw materials.
    How does costing takeplace when it includes both the materials - semi finished and trading goods.
    Is it possible at all?
    Any suggestions will be helpful.
    Thank You,
    Andy

    Hiya,
    You may want to frame your question differently.
    When what(?) contains SF and Trading Goods? BOM? Costing Run?
    The Std Price and MAP you mentioned are the Price Control Indicators. These dictate the price to use and the treatment required for the material (realtime stock value updation during the month with GR/GI for MAP and no value updates for SP).
    By itself, it does not affect the costing of (say) a BOM containing both these materials together... the system determines what price to use and costs the product accordingly.
    Cheers.

  • Difference between Standard Pricing and Moving Average Price

    Hi,
    Would like to seek some advises on the difference between standard price and Moving average price.
    also, how does it affect the account postings differently?
    Thanks

    Standard Price
    Materials whose price control indicator is set to S are valuated in Financial Accounting (FI) at standard price.
    This is recommended for semifinished products and finished products.
    The moving average price is shown as a statistical value in the material master record.
    The standard price is normally calculated using a standard cost estimate for the material. The standard price can also be calculated in a mixed cost estimate.
    Moving Average Price
    When materials whose price control indicator is set to V are received from in-house manufacturing processes, they are initially valuated with a value you defined (such as the standard price). When you settle, the material stock account is debited with the variances. This results in a new moving average price.
    Valuating semifinished products and finished products with the moving average price is not recommended.
    Regards,
    Indranil

  • Stock of material and moving average price for each valuation type

    Hi
    Is anybody aware of any standard report which will show the stock of material and moving average price of the material for each valuation type.
    M5BL is one report but would like to check if there is any other report.
    Regards
    Vaibhav Mahajan

    Hi,
    Check MB52, select 'Display batch stock' option.
    Batch is nothing but your valuation type.
    You can see those details there.
    Regards,
    Piyush

  • Changing of Inventory Valuation:  Standard to Moving Average Price

    I work at a service-based company and have also been asked to research the impact involved with switching our inventory from standard price to moving average price. 
    Scenario:  Change material type TRAD (trading goods) from standard price to MAP.
    Process:  Change settings in SPRO at the level of u201CDefine Attributes of Material Typesu201D.  Currently, this is set for u201CStandard priceu201D with the indicator u201CPrice ctrl mandatoryu201D set.  Upon change to u201CMoving average price/periodic unit priceu201D, Iu2019m thinking I need to de-activate the u201CPrice ctrl mandatoryu201D field so any current materials with an u201CSu201D in the Price control field on the Material Master Accounting 1 tab can be changed to u201CVu201D.  Is this correct?  Also, is there a program that already exists to mass update the Price control field on the Material Master?  If not, I was looking to create a CATT for this changeu2026.any other ideas?  In some of the forum posts it was mentioned to use t-code MR21 however, even with the u201CPrice ctrl mandatoryu201D field de-activated, the Price control column is grayed out.
    It was mentioned in a previous post that all open documents (PO to IR) need to be completed before changing the price control setting, at what point does this stop the process?  Does SAP generate a system error message?
    Also, any suggestions as to when this price switch is best to take place like after inventory?
    Are the above mentioned areas the only areas I should be concerned about or am I missing some areas that should be addressed?
    P.S. We do not use have our ML (material ledger) activated or use split valuation.
    Thanks~
    Dawn

    Hi,
    If you want to change material from standard to moving average price, Follow the below process
    1)first the material quantity and value should be zero
    2)if you want to keep value and quantity and want to change price control in future you have to create new material with price control "V' and lock the previous material for posting.
    Regards,
    Sreekanth

  • Standarad price and moving average price

    What is the diff between Standarad price and moving average price ???
    Somasundaram

    Price Control V or S in material type
    When is it useful to use the price control V or S in Material Master ? 
    Do I have to follow the SAP standard setting in the material type for the following material types:
    - ROH(Raw materials) -> moving average price
    - HALB(Semifinished products) -> standard price
    - FERT(Finished products) -> standard price
    In which case and why is useful to change these standard setting in material type?
    What is difference between standard price and moving average price? 
    When and how to use it?
    Standard price are used for products that do not fluctuated frequently.  It is usually used for finished or semi finished products.
    Moving average price are used mainly for raw materials that are purchased externally.  The advantage of using moving average price for your raw materials is that your inventory costs will always reflect the current market cost.
    SAP strongly recommends that you do not select price control V for semi-finished products and finished products, because doing so will very easily cause the calculation of unrealistic valuation prices. SAP recommends: 
    Price control V for raw materials and trading goods; price control S for semi-finished products and products.
    If you nevertheless select price control V, take care in the following situations:
    1. Unrealistic prices occur if materials are produced and also retire during one period (that is, the inventory at the end of the period is smaller than the total of aquisitions from production orders) and if, in addition, several production orders belonging to a material were finished in this period, and the production order settlement calculates variances at the end of the period. Every single production order carries out an inventory coverage check and may therefore cause the moving average price to be changed. However, the individual production orders do not check whether the inventory available at the end of the period has already been debited by another production order. 
    Example: on 20 workdays in the period, 1 piece of material xyz was produced for each day and delivered to the warehouse at a price of USD 1000. At the end of the period there is 1 piece at the warehouse. Since an activity price of a participating cost center was higher than planned , every single production order calculates cost of goods manufactured of USD 1100 during the settlement. Every single one carries out a inventory coverage check and finds out that the variance can be posted completely to the inventory. That is, the ending inventory of one piece is debited with USD 20 x 100 and it consequently receives a price of USD 3000. 
    1. A settlement is carried out although not all costs have yet been posted to the order. This can even result in a price of 0 for the delivered product.
    2. No period check of the costs is carried out on the order, that is, costs from previous periods may be settled.
    3. Settling orders is already possible in the 'Delivery completed' status.
    Solution: Standard price for products together with possible manual price changes.
    If you are required to valuate semi-finished and finished products with actual prices that correspond to the costs of the actual production, SAP recommends you use the function of the material ledger for this. Here, a periodic actual price is created that is calculated on a much more reliable basis than the moving average price. A so-called price limiter quantity is used which makes sure that in the above example price differences are proportionally taken into account (95% of the total price differences) when valuating the 19 pieces withdrawn from material xyz which results in a periodic actual price of 1100 USD. In addition, it is possible as of Release 4.5 to even take into account the variances of the actual prices of the raw materials in the valuation of the semi-finished and finished products that are manufactured from it. 
    If we select std price for any type of material or mav and then make po, it will pick from material master or what?
    The Purchase Info Record have the FIRST priority.  When no po info record is found, the Purchase Order will pick the user LAST enter price.  The PO module do not pick up any price from material master.
    Regards,
    Ashok

  • Standard  vs  Moving Average Price

    Dear SAP Gurus
    Can anybody pls explain the significance of Moving avg and Standard price of Material.
    Thanks & Regards
    Shalini

    The standard price or moving average price in material master is used to  determine the value of the inventory.
    Standard price are used for products that do not fluctuate frequently.  It is mainly used for FG or semi finished products.
    Moving average price are used mainly for raw materials that are purchased externally.  The advantage of using moving average price for raw materials is that the inventory costs will always reflect the current market price.
    If the material is valued at a standard price,
    the difference between the purchase order price and the standard price will go to a price difference account.
    If the material is valued at a moving average price, the difference between the purchase order price and
    the moving average price will NOT go to a price difference account. The moving average price will simply be adjusted.

  • VMI and moving average price

    Dear all
    Please help us.
    We will use moving average price as stock evaluation.
    Also, we manage all inventory is VMI stock.
    Our business process is the following procedure.
    1. We will increase consignment stock (VMI) without reference to purchase order.
    2. We will input sales order and allocate it to VMI stock.
    3. We will post goods issue, movement type 601-K.
    As you know, accounting documents post GR/IR at this time. Unfortunately, SAP does not calculate moving average price (MAP) in material master. ie. moving average price is zero.
    We would like to calculate moving average price because almost stock is VMI.
    How do you customize SAP?
    Best regards.

    You have to add one more step to handle this scenario as per my knowledge
    which is before you issue the stock using 601 K you have to take the stock in you own inventory and than issue using movement type 601 not 601 k.
    As per the std SAP the 601 K M type will never update the value  because that's not are stock
    you can see the setting below
    601     K     L                   2             VAX
    601     K     L          WA03     2     GBB     VAX
    601     K     L     E              2             VKA
    601     K     L     E     WA03     2     GBB     VKA
    601     K     L     P              2             VKA
    601     K     L     P     WA03     2     GBB     VKA
    601     K     L     V              2             VAY

  • REM wip and moving average price

    Hi,
    I am working in REM scenario. my fert item is having moving average price say Rs 2.Currently zero stock of finished item. I am having a planned orderA quantity 10  from Oct 1st to nov 30th. when i do backflush at nov 30 , i do assembly backflush and post auto GR of 10 quantity. after doing settlement, i got my moving average price as Rs12.
    I have another planned order B for quantity 20, same finished item from oct 15th to dec15th. On nov 30th when i am doing component backflush or activity backflush of second planned order( i am not doing assembly backflush on nov 30 because this order is not yet completed, it will complete on 15th December), system is posting all cost on my existing stock of finished item and increasing the moving average price of finished item from Rs 12 to Rs 17.
    But this is wrong because cost should not exceed for existing stock, cost should be posted for WIP..
    Please tell me how to correct this?
    how to calculate WIP in REM? is it mandatory to go for reporting backflush? i have only one operation in my rate routing i.e labor hours is my only operation  in 0010.
    Regards.

    Hi,
    Thanks for ur help.
    But my doubt is something different!
    If i have a planned order' A'( qty 10)which is completed in Novemeber month and another planned order 'B' ( qty 20) which is still in WIP on November end, and at this stage if I do backflush for planned order A, cost flows properly and finished item is put in stock with some moving average price.But when i book labor hours again for planned order B, it books cost. But this time i do not do assembly backflush because production is not yet finsihed.so stock quantity is still the old one i.e 10 qty.So second cost booking goes to the stock item of 10 qty and increases the moving average price. system dfoesnt understand that second labor hours is booked for second planned order . this is happening because both planned orders are of same finished item.
    please reply.
    please tell me what is the way to do reporting backflush. what settign we need to do? can it solve my issue?? because my target is to book cost in case of second planned order as WIP and do NOT effect the moving average price of existing stock.
    Regards.

  • Affect of discount on COGS and moving average prices

    Hi experts,
    I want your suggestion to build following scenario in SAP;
    Case: During purchase order, vendor has given special discount for a material when purchased for a specific customer.
    Requirement: I need to know following;
    1. How are those specific prices could be reflected in COGS?
    2. How do those specific prices affect the moving average price? is there any way to avoid this effect in the COGS?
    Thanks

    Hi Pirzada
    Considering that you are working with material ledger system will calculate moving average price doesn´t matter the discounts conditions you had during month.
    System will revaluate all consumption considering this moving average price.
    Maybe you could think about Splliting Valuation feature ou  Make to Sales Order scenario.
    These are ways to have a specific cost using the same part number.
    Regards
    Fred

  • What is the differents bet ween standard price and moving average price

    hi

    Hi,
    Check the below link....
    http://help.sap.com/saphelp_47x200/helpdata/en/53/5df779aa3011d295a200a0c930328a/frameset.htm
    Regards,
    Putty

  • 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

  • Moving average price  has become Zero in Material Master

    Hi,
    Can you please help us , if you have any ...this kind of situation in your projects.
    Scenerio:
    We are using Workflow mechanism for creation material in Master data client
    01. After creation of Material, it will go for approval (to six departments in SAP Itself ) and after their approvals,it will be moved to "Book of Records"( to Transactional client)
    02.If the requester is submit the Material for approvals, it will create IDOC and will be moved to "Book of Records"( to Transactional client).
    03.If any error is there in the Material views, IDOC will be failed in Outbond system( Transactional client)
    in this case.We use BD10 to move the changes manually.
    Problem is,
    01.We moved manually 10 materials on 29/10/2008 through BD10 to Transactional client .in this case, we observed that, the moving average price(VERPR) ,Commercial price 2 (BWPH1),and Moving average price (if the price control is S) (SALKV) has become Zero.
    Why ?
    Why this 3 fields become Zero ?
    Is there any link between these fields and How ?
    Note: Price control "S" is maintained to the above all the materials.
    Can any body help us to find out the reason ?
    *What is the solution to find the Moving average price now and to update as on date ?
    Is there any field , we can see the Moving average price in backend ?*
    Your help will be highly appreciated.

    Normally when you create a new material, you need to provide the price manually for the first time. Now since you said your price control is "S". Otherwise your IDoc should have a price for the Standard price when it is "S" and Moving Average price when it is "V".
    It can be ZERO if you intend to create and release a std cost esatimte (For internally produced materials).

  • System posts to PRD account for moving average price material.

    Hi,
    We are procuring spare parts (ERSA) externally, which is having price control as MAP.  While doing GR, system shows message "Account 602042 required an assignment to a CO object."  Here the problem is account 602042 is a price difference (PRD) account.  Why should system ask for a G/L, which is mentioned in PRD in this case. 
    Please note that this is first movement for the material and stock is zero in plant.  There are no  material documents for this material.
    Please suggest.
    Regards
    Alex

    If ML is active, then this can happen.  Please see note  532932  FAQ: Valuation logic with active material ledger.
    material is valuated by the inventory management similarly to the posting logic of a material managed by a standard price. The accounting document generated by the inventory management shows this posting logic; the amount posted in the material document corresponds to the product from quantity and moving average price and not to the externally assigned value.
    Generated accounting lines of the material ledger (depending on the material ledger settlement control) then valuate the stock.
    Example:
    Material: Testmat 1
    Price control: V
    Moving average price: 10 EUR/PC
    Purchase Order: 10 PCS for 150 EUR
      > goods receipt for the purchase order for 10 PCS
    Acctg documents:
    1) GR document:
       BSX 100 EUR D
       WRX 150 EUR C
       PRD 50 EUR D
    2) ML document:
       BSX 50 EUR D
       PRY 50 EUR C

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