Calculating Price Variance

Hi friends,
I have been asked to develop the report for finding price variance for a specific period say from 01/01/2006 to 01/02/2006. The price variance would be find out using system market price transaction MEKH. I have to compare price of the material against actual purchase order material price. I have to output following fields,
1)Material code            :komg-matnr
2)Material Description :marav-maktx
3)Market Price             :konp-kbeter
4)GR. Qty.                   :s012-wemng
5)GR. Value                 :s012-wewrt_b
6)period From              :s011-spmon
7)period to                    :s011-spmon.
Can you tell me how to do that or else if you have similar code for reference that will be really helpful to me.
Thanks and regards,
Pritesh

Hi Deepak,
For Finished Goods materials if you assigned Price control V (Moving Average) it is irrelevant to run the Standard Cost Estimation.
My earlier client we don't have variance because of the Moving Average Price for Finished Goods.
Please check, It is really required Variance?? If it is required check whether variance key is automatically assigned to Process order or not. (Control Tab)
Ravi Polampalli

Similar Messages

Output price variance calculation

Hello,
I have a question on output price variance calculation in SAP.
The help reads:
"Output price variances are reported in the following situations:
If the standard price has changed between the time point of delivery to stock and the time point when the variances are calculated "
I do not quite understand this as when I have a standard price change between the delivery to stock and the variance calculation, I will already have a CO-PA entry for the price change. So why do I need another CO-PA posting for the variance?
Looking at the simple example of having costs of 150 USD when producing a material of 150 USD. If nothing changes I have a variance of 0 USD.
However if I receive the finished product to stock with a value of 150 USD and then revaluate to 165 USD before the variance calculation happens, I understand SAP would post an output price variance of 15 USD? But I also get 15 USD price variance from the stock revaluation into my books, so isnt that a double count?
Thanks a lot for your help
Kai

Hi Kai Hoffmann ,
As the SAP Help says...
Output price variances are reported in the following situations:
If the standard price has changed between the time point of delivery to stock and the time point when the variances are calculated
With respect to the above point, pls follow the example and let me know if you agree or not...
Let us say, we have Standard Cost of Product X for the month of Feb as $100 per tonne.
One Production Order is created for 100 Tonnes and you made Goods Receipt for 50 tonnes during Febrauray. (50 Tonnes posted to Inventory a @$100). Now, at the month-end, you estimated the Standard Cost once again and the new Standard Cost effective for the month of March is $110 per tonne.
Revaluation of inventory is done for 50 tonnes (for GR posted alread and in stock) and $10 * 50 tonnes is posted to Price Difference Account.
Now, during the month of March, you made the GR for balance 50 Tonnes on the Production Order. Inventory is posted @ $110. Once you do TECO and do the variance calculation, the system will post $10 * 50 tonnes as output price variance, which will flow to COPA and Price Difference Account.
So, I dont feel there is a double count or duplication...
waiting for your comments
Srikanth Munnaluri

Purchase price variance

Hi
I want to to drill down the purchase price variance.Say I have PPV of 10K. I want to drill down to details of 10k.How to proceed.What is the transaction code for that?
Thanks in advance.
SN

Hi Satya,
Variances are based around the standard values that are set up in the Material Master file. These standard values represent what it "should" cost to produce (or purchase) a unit of the product. Variances are calculated automatically when settlement jobs are ran in SAP
purchase price variances are caused by a difference between the standard cost in the MM file and the actual price on the purchase order.
The entries will b something like this
Debit Inventory XXXXX
Credit Accounts Payable XXXXX
Credit Price Variance XXXXX
Regards
Genie

Purchase Price Variance Foreign Exchange difference

How Purchase Price Variance Foreign Exchange difference is calculated for material consumed in product costing / material ledger

You need to go to net price at purchase order in local currency. With quantity you'll get the purchase order total price in local currency.
Get the standard price of material master record (which is in purchase order) on MM03 transaction on costing 2 view.
Purchase price variance is the difference between purchase price order and material standard price.
To get this difference in foreing currency, you´ll need to get document date of purchase order, get exchange rate at OB08 and find both prices in foreign currency; after that get same way the variance.
Hope that helps,

PPV Purchase Price Variance - PeopleSoft

What is the minimum that a purchase price variance will update an item?
We have several items that are priced in the 10th and 100th of a penny for large volume items.

Hi Satya,
Variances are based around the standard values that are set up in the Material Master file. These standard values represent what it "should" cost to produce (or purchase) a unit of the product. Variances are calculated automatically when settlement jobs are ran in SAP
purchase price variances are caused by a difference between the standard cost in the MM file and the actual price on the purchase order.
The entries will b something like this
Debit Inventory XXXXX
Credit Accounts Payable XXXXX
Credit Price Variance XXXXX
Regards
Genie

Price Variance Analysis

Hi,
Im developing the Price Variance Analysis. How ever im coming across a problem. In the report the client want Unit Price posted from PO and Invoices. On the PO the Unit Price is present. I can bring the unit price directly from the PO. But on the invoice the unit price is not calculated.
Where do i calculate that and how do i bring it in the report?
Also
The Client wants one column for PO/INVOICE, how can i bring both these fields in one column and is there a way we can put a condition such as:
If PO bring in Unit Price, and if Invoice calculate the price.
how can this be done? or is there another way of doing this?
Thanks
Edited by: DANIEL GREEN on Feb 27, 2008 10:38 PM

i found a InfoCube that might be able to help me:
Global Spend (Point-to-Point Connection)
Technical Name: 0BBP_C01
This cube does not have certain key figures such as:
0BBP_DS1_CK012: Net Invoice Price
0BBP_DS1_CK018: Net Price of Purchase Order
0BBP_DS1_CK014: Unit Price Variance
Can i add these key figures into that Cube?
would that affect anything, and would this cube be feasible for Price Variance Analysis?

Input Quantity Variance and Input Price Variance for Production Order

Dear All
I am running variance program KKS2 for calculating variance of production order. for Activity variances are coming under input price variance and input quantity varinace but for material the variances is now shown separately for quantity and price rather it is shown as variances total amount. Can someone help me in know why material quanitty variance and price variance not shown separately
Regards

How does input variance and output varia.nce will be calculated on the settlement of production order after TECO.
VARIANCE CALCULATION DEPENDS ON CONFIGURATION IN THE FOLLOWING AREAS,
1) VARIANCE VARIANT - DETERMINES WHAT VAREIANCE CATEGORIES ARE CALCULATED, E.G MATERIAL PRICE , USAGE, LABOUR RATE , USAGE VARIANCE ETC..
2) TARGET COST VERSIONS
3) VALUATION VARIANT FOR WIP AND SCRAP
Can we check in KOB3 or COOIS.
KOB3 - YES
COOIS - CHECK IN COST REPORT

Price Variance Moving Average

Can anyone explain to me the purpose of the GL account " Price Variance Moving Average " and how it works. What transaction triggers it and how it is calculated.
I am running 2007A with PL38
Thanks,
Peter To

Hi
Price variance account :
Used in purchasing transactions only. For certain scenarios, price differences between the base and target documents are recorded in this account.
Hope this helps to troubleshoot and figure out .
Thank you
Bishal
Edited by: Bishal Adhikari on Feb 18, 2009 4:51 PM

How to calculate moving average price(MAP) when price variance in IV

Hi All,
My current stock for a material is 39 and MAP is 0.8 GBP.
A purchase order is created for the material for a quantity of 1 at price of 0.8 GBP per unit.
Invoice is posted for the above PO at price of 1.74 GBP.
What will be the new MAP for the material now??How to calculate MAP when there is a price variance in Invoice?
Please suggest ASAP.

Hi,
The Procedure for calculating MAP is :-
Case 1 :- PO at different price
If in Material Master your MAP is 0.8GBP & closing stock of 30Nos, value is 24GBP
In PO if the price is 0.9GBP & qty is 10nos, then after Goods Receipt Total Value of the GR i.e. Qty * Price + any other delivery cost will be added to the material stock value. Qty is also updated. New Total Value / New Stock Qty will be MAP.
In this case Qty received 10 & price is 0.9 that means value would be 9GBP.
Total Value becomes 24GBP (Present Stock) + 9GBP (Goods Receipt) = 33GBP
Total Qty becomes 30Nos + 10Nos (Goods Receipt) = 40Nos
MAP becomes = 33GBP / 44Nos = 0.75
Case 2 : Invoice Posting (MIRO) at different price than PO
While doing MIRO is we post at different price system will check whether sufficient stock posted in GR is available. In the above case it is 10Nos,
If it is there, then the above logic as in case 1 will take place
If not available, to the extent of stock availability system will post the different value & adjust MAP & remaining is posted to Price Difference Account.
In your case it would be like this :
1. MAP 0.8 for 30Nos (Value would be 24GBP)
2. Invoice Posting 1.74GBP for 1No. That means value would be 24GBP + 1.74GBP = 25.74GBP
Qty would be 30+1 = 40
MAP = 25.74 / 40 = 0.64GBP
Hope this clarifies your doubt
regards,
JP

Co03 quantity and price variance

Hi in Co03,
give order number enter then goto->cost->analysis in the out put
i want to know how the quantity variance and price variance are being calculated please let me know

Hi Revanth
Please find the Help From SAP
[SAP HELP|http://help.sap.com/saphelp_dimp50/helpdata/EN/90/ba6228446711d189420000e829fbbd/content.htm]
[SAP HELP|http://help.sap.com/saphelp_dimp50/helpdata/en/90/ba6b15446711d189420000e829fbbd/content.htm]
Hope they are Useful
Thanks
Kalyan

Price Variance to COPA

Hi,
I need the price variances calculated during the Goods recipt to automatically flow to COPA . What are the configuration steps required to perform the above. your quick response would be much appreciated.
Best Regards,
Roville

Hi,
Use transaction code OKB9 and enter the cost element for price variances and select the indicator for PA segment assignment.
In addition, use KEI2 to define a PA transfer structure for FI/MM direct postings and assign a value field to the cost element.
Sanjay

Mixed-price variance & Lot size variance

Dears Gurus,
Can anyone give a detail explanation & examples of Mixed-price variance & Lot size variance?
(After reading sap library, I still didn't get clear idea)
Thanks
Ellie

Mixed Price Variance :- This is the variance between a standard price that was calculated in a mixed calculation for more than one procurement alternative and the costing of a procurement alternative.
For Example : Standard Cost was made for a Raw Material A purchased from 2 sources ( X and Y ) with 50/50 ratio..
Actuals it was made of a Raw Material A purchased from X and Y ( in 25:75 ratio ).
The same can happen for production versions also . Standard May have version 1 and 2 (in 50:50 ratio).. actual have version 1 and 2 ( 40: 60) ratio .
Lot Size Variance : Variance due to effect of lot-size-independent costs when the lot size is changed .
For Example : we may have consumables cost per 10000 lot size . Original Lot size during creation of standard is 10000 .
Actually lot size was 150000 .. hence due to change the lot size.. the cost has increased and its lot size variance..
Hope it clarifies..
Regards
Sarada

Hard to believe: missing report on purchase order price variances ...

dear all-
Happy New Year to you all and all the best for this new 2008!
Traditionally the procurement to pay process is an area that really can benefit from automation. However more important than automation (efficiency), tools that support a process have to be effective first! And provide good understanding of business process at hand by providing information on essential key-figures of the process at hand.
That brings me to the topic of this post: purchase price variance. In my opinion the SAP functionality effectively handles PPV (purchase price variances): variance between purchase price and standard cost (let's call this one PPV1) and the variance between the invoice price and the purchase price (let's call this one PPV2). A good understanding of both PPV1 and PPV2 are useful for potential process improvements ... PPV1 relates more to the efforts of the purchasing deparment and/or determination of pricing in purchase orders while PPV2 brings in the efforts of the vendor.
Anyways, in order to obtain understanding of the variances mentioned, information is needed. E.g. a purchase price variance report or -analysis. I can't find such a report!
I did look on various forums and when I find something that relates to a PPV-report or -analysis, people are discussing ways to create an ABAP-report or query ... Much to my surprise: no clear answers. It looks that such a report even does not exist! That's what I find hard to believe!
Does anyone of you know about a report or analysis-tool on purchase price variances? Or is it really true that such a report is just not there!
thanks,
Ben

Hello Ben,
i have been checking the whole Forum and also asked around collegues and it seems that it is really still true there is no simple report that is showing PPV details (PO price, Invoice price, Standard price and the quantities and values)
I think the solution to get such a report is to programm it Starting point would be the line items on PPV account.
To get such a report with connection between Delivery and Invoice, GR based IV is helpful.
It is unbelivable that this never has been setup !
We are currently using FBL3N on the PPV accounts by current monthe with 2 variants subtotalling on matarial and sorting by high value
Let me know if anybody find a report
Cheers
Tim

Invoice price variance

Hi gurus,
Can anybody please let me know where to look for the settings for invoice price variance. The PO was created for material A for 26.01 USD for 1EA for 6EA. Therefore the GR amount is 156.06 USD (26.016). We received the invoice for 48.41 USD for 1 EA, therefore the total is 290.46 for 6EA (48.416). accounting have blocked the invoice. Where can we check in the system for the invoice tolerances so that it explains why the invoice is blocked. I also want to know whether the invoice was blocked manully or system atuomatically did it? Now how can accounting correct this anamoly?
Thanks
Anusha

I guess your invoice has automatically been blocked for payment because either the upper absolute or the percentage limit has been exceeded by the amount specified in customizing for key PP
Go to OMR6, key PP and check the settings
Accounting can release the invoice for payment through Tcode MRBR
See following wikis for some additional information:
http://wiki.sdn.sap.com/wiki/display/ERPSCM/MM-IV-LIV-CRESetTolerancesforIncoming+Invoice
http://wiki.sdn.sap.com/wiki/display/ERPSCM/MM-IV-LIV-MRBRInvoiceReleaseinLIVTransactionMRBR
Regards
Sidi

Invoice Price Variance Report

Hi,
When the IPV report is run for a particular month , I find a variance value of -759 against an account. But when I look in Payables entries for this account, I find an additional -1329 , in addition to -759 and when I drill down these are identified as Invoice Price Variance. Why isn't the report picking up this entry ? For these entry lines the source is "Cost Management". Please provide me with some pointers to this.
Thanks,
Meenakshi

hi
thanks for your reply. assume that PO total is 150. invoice is created of 100. in this case should i see an amount in Invoice Price Variance? im not seeing any change in Invoice Price Variance. for me what happens here is Transaction Amount - Accounted is shown -50 as its still to create an invoice of amount 50 which is in fact the accrual balance. pls give me a feedback on this. i want to produce a scenario which will make the invoice price variance more or less than 0.
thanks
Lisan

Calculating Price Variance

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