Change in FG/SFG valuation system from STD cost MAP

Question

As of now we use Std cost for valuation of FG/SFG and we would like to switchover to MAP for following reasons:
1.We donu2019t see any significant benefit  from present costing system. Std costing updation, monthly CO closing, periodical revision of STD cost is not really justifying any benefits compared to the overall efforts put in for above activities.
2.KE 30 reports fail to give correct productwise  contribution status as system loads all variance to quantity sold during the PERIOD( e.g If production is 1000 qty, sales 200 qty- , then system  will load the variance of entire 1000 qty to sales qty of 200). This is misleading. It is not possible to sale all produced qty in same period in our case.
3.SFGs being produced in one plant trfd to another for FG production. To produce final product X, SFG A is needed, to produce A, SFG B required, to produce B, SFG C required.  This is discrete mfg process and and SFG are produced in different plants under same co code. So, we are not able get contribution report of product X  as component SFG A it self contains OH/activity cost.( We want to calculate contribution company as a whole i.e Selling price minus material cost( actually bought out materials and not SFG).
We donu2019t want to go for material ledger, considering the manufacturing complexity. Now, we want to change price control of all FG/SFGs fromu201DSu201D to u201CVu201D on cut-off date after making stock NIL
Kindly  give us your expert advise on this approach. What are the challenges we will face by doing so.? Is there any company done this type of changes?
MBS

Answer 1

Hi MBS
1. ML is the right and only solution for your expectations
2. Whether you adopt V or S - CO CLosing is what you cant avoid... You will still need to do the whole CO cycle whether you have V or S
3. Having price control V for In House Mfd materials will damage the inventory valuation forever... Refer Note 81682 - Pr.contr.V for semi-finished and finished, which explains this in detail
What you want is Actual Costing, which can only be delivered by ML
What you want to avoid is monthly CO Closing - Which you really cant avoid
If you still go with V - May be in future you would realise that S was better as suggested by SAP in the above note...
You can take up an enhancement with your ABAP team to develop the kind of reports you want... however, thats not going to be easy... Its gonna take very long to stabilize, even if achieved
br, Ajay M