Distribution of Price difference value to Other Cost Objects in Hierarchy

Hi,
I have a unique scenario for one of my client.
Here we are using Cost Object Hierarchy for Cost Object Controlling. We have Two COH for Billets and Wire Rods.
The Input for Billets production are Raw Materials and Input for Wire Rod Production are the Billets.
Each Billet grade is consumed for the Specific Wire Rod Grade.
At the end of the Month we do the settlement and we get the Price difference value of the Billets. We can also know the Per unit Price difference value.
Now we want to send this Price difference per unit value of the Billets to the Wire Rod Production orders according to the quanity of Billets consumed.
We are not using ML.
I am not getting any idea how to Proceed for thsi scenario.
Any suggestion please.
Regards
Kami

Hi
W/o ML, you cant achieve this...
if your Prod process is farily stable and qty variances are not much i.e. the only major reason for variances are the prices - Then you can adopt this workaround
Re: sfg and FG @ MAP
br, Ajay M

Similar Messages

Price differenc value in Actual cost of Production

Hi,
We are creating a production order for Billets that is our Semifinished goods. The material master is maintained at Std price.
Lets say that Std prce of the Billet is 100.
Lets say that after the production order is completed , the actual cost of Billet is comes out to be 125.
Now this billet is used for the production of the finished goods Wires. For the production order of wires, the price of the billet is taken as 100.
In this way the actual cost of the Wire will not come.
May be this is the standrad process. Let me know in any way can we use price difference of 125-100= 25 in the production cost of wires so that I can get the actual cost of the wire.
We are not using Material Ledger.
Any suggestion
regards

Thanks Ajay,
Even using ML we cannot get the actual price before the end of the period. And at the month end only we can valuate the inventory withe actual cost. I hope I am right till now.
Pl correct if I am wrong.
But in this case some wires rods are already out from the inventory for the sale that was valuated with the Std Price of the Billet.
Hence these invenories will not be available at the month end for the revaluation.
Pl. correct If my thought is OK.
ML can only be used where ther is lots of Raw Matl price variation..Hence I think I should go with the std price valuation itself.
regards
Kamlesh

Price difference account in case of FIFO method

Hi Experts,
One of client has pop up a question:
According the system behaviour the Price difference account is used when the price in the base document is different than the cost of the open layer linked to that base document, this price difference will be recorded in the Price Difference account. Which means if the price of A/P Invoince differs from the price in the Good Receipt PO then the difference will be posted to the price difference account. But how will the balance of the price difference account credited or debited? Should we make a general ledger postings?
At this moment the balance of the price difference account is 40.000 EUR, the balance of stock account is 320.000 EUR. If these items are sold then the cost is 320.000 not 360.000!
So the system collects these price differences but these refers a real FIFO value , so when the item is sold then the system should calculate these price difference values into the real FIFO value to get the real cost of the item.Is it right or not?

Hi Eszter,
Indeed, the Price Difference Account is a COGS (Expense) account.
In Continuous Stock the calculated Expense (cost of goods sold) is booked when the sale is done as we know.
So when a cost is known later then the actual sale was done this also needs to be booked to an expense account, that is what happens when the Price Difference account is used.
Example:
(Purchase) GRPO Qty 10, Price $15 ($150 debited to Stock)
(Sale) AR Inv Qty 10 ($150 debited to COGS, $150 credited Stock)
Now we have 0 Qty and 0 balance on Stock account.
So now you receive the AP Invoice based on the GRPO where the price in the AP Invoice is 17. this means that you have an additional cost of $20 (Qty 10 * (17-15)).
Why is it NOT debited to stock?
As the stock account should always reflect the value of your stock you cannot debit stock (there is no stock left), so in this scenario it is booked directly as an expense (COGS) instead of going the way -> Stock -> Expense.
That makes sense, right?
Hope it helps.
Jesper

MM Price Difference Account

Hi,
Can anyone tell me the treatement of MM price difference account in Controlling. According to me we need to create it as a cost element and capture to one cost center to track the price difference account and allocate it to production cost centers by way of assessment. Is it true.Please explain me in detail.

Hi Prasanth,
You can create Price Difference Account as a Cost Element and you must make a default Account Assignment in OKB9. You may need to create a Cost Center for this. So, whenever some amount gets posted to this GL, automatically same value will flow to that Cost Center and you can use any allocation method to transfer that value to different Production Cost Centers.
Pls revert back for futher explanation...
Srikanth Munnaluri

Logic of price difference posting

Hi Experts,
I want to understand a scenario where:
1. we have a price variance due to insufficient stock at IR for a PO related to Raw material. ( it hits the Price Difference(P/L) A/c (PRD))
2. The raw materiel has insufficient stock since it has been issued to production order and not sold as yet but we are booking a gain or loss in P/L.
Now the question is that is inline with correct accounting since we are realizing a gin or loss even though the item still lies in our books? Shouldn't this price difference value put an impact on production order instead so that the product cost is more accurate?
Please help me understand as this point has been raised by Finance Dept.
Thanks,
Safi

Hi,
1. When you issue material to production order, what entry gets posted? its Consumption A/c -- dr and Inventory a/c -- cr
now as far as inventory is concerned qty issued to production has lost its identity since it has been issued.. it need not be 'sold'.
In Inventory Valuation you can valuate only that inventory which is not issued and intact in Balance Sheet.
so, this perception is completely wrong that inventory is issued to production but still not sold so can be considered for other calculations.
2.
Lets look at the scenario why difference has occurred. let's take a example
1. PO -- Qty. 10 @ $ 100
2.GR -- Qty. 10 @ $ 100
with this entry Material MAP = $ 10.
3. Issued to production - Qty. 2 @ $ 10.
4. Stock available at this stage is Qty. 8 @ $ 10.
5. IR. -- Qty 10 @ 120 -- now system will post price difference of (qty 2 * diff $ 20).
Now, at stage 3 you have issued qty to production order so its been consumed, now at IR you realized a difference in PO price and IR price. (understand the time difference during all transactions) but this difference has occurred for Qty. 10 where as to cover that difference you have only Qty 8 left in your stock hence the price difference to the extent of qty 2.
Stock price will be very unrealistic if you load difference to the extent of Qty 2, on the Qty. in stock which is Qty. 8.
By far this is the correct way accounting..
In SAP terms this is called as "Material with MAP without Stock Coverage"
http://help.sap.com/saphelp_46c/helpdata/en/a8/b994d9452b11d189430000e829fbbd/content.htm
I hope it clarifies..
Regards,
Sayujya

Price difference between the requisition and the order

Hi All,
There is new functionality in ERP6 that checks the difference in price price between the requisition and the order. The configuration is under Purchase Requisition -> Tolerance Limits -> Define Tolerance Keys. This is very useful functionality when the requistion item is approved at an estimated price, but a purchasing group needs to change the $ value it will block the Purchase Order.
I have this configuration menu available in SPRO in one of my systems (IDES), however on a newly installed ERP6 system we are missing this menu path in SPRO.
Does anyone know why this menu path in SPRO is missing on some systems...

Thanks Henry,
I've done some digging and the tables that store these config settings are part of US Federal Governement addons.
Looks like all the (non government) sites that need it aren't able to have it. Great shame really as this would be very useful to communicate with the requestor whena price difference occurs.

Profit segment okb9 price difference

Dear Forum,
I have price difference account maintained in okb9 with a tick at profit segment.
I test to post this price difference account in FB01 and i can see it gets posted in COPA price difference value field.
My question is, how does the system know this account need to update in COPa price difference value field? Even with a tick at okb9 prfseg, still how can the system know which value field to post to in COPA?
Need forum help of which tcode i can see the mapping as besides price difference account, also got other account with a tick at prfseg in okb9.
Thank you.

Dear,
Thanks. I found it in kei2.
In assignment lines, I can see a list of assignment with number. For price difference, it is assignment 287 But I would like to know how does the system know 287 is price difference? The system will go through each assignment lines and its source to check the account group, if gl account in the group then it will assign to value field? If this is the case, then assignment number 287 has no meaning to system?
Thanks

IPhone versus iPod Touch, price differences COMPLAINT

hello, I am from belgium, and I am starting to wonder why I bought a iPhone 4, while 3 months later, the new iPod Touch comes out, and basically can do everything a iPhone can?
Here in Belgium the iPhone costs 639€ wich is I guess more then 650$, while for the new ipod touch, the price has been set at about 230$ if I'm right?
Could someone tell me WHY we are forced to pay roughly 400$ more just to have 3G and GPS?????
how is this even possible? should I have to live in the US to get regular prices for apple products?!

Tamara; I know this, but I do not understand a price difference of over 400$ for a extra chipset that offers 3G/Edge/GPRS & GPS. I know the ipod does not have it, and I know I am not forced to buy one over the other or any of them at all.
I'm actually very pleased with my product, but I do not understand how the price difference can be that high? The ONLY difference, is the addition of the chipset for cellphone usage!
The ipod even has the camera now ! ( and without the simcard, I don't think the ipod makes the user pay the additional 0,20 c that iPhone 4 users pay for one time activation - each time the iPhone is restored though - for facetime... )
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MTO Sales order is NOT a COST OBJECT

Hi All,
I'm working on MTO process and i have some question.i would like to clarify MTO process.
If we are using Valuated MTO process and Sales order is NOT a COST OBJECT
1.Are we going to run material cost estimate for MTO materials?
2.How can i configure or make Sales order is NOT a Cost Object?
3.If Saleso order is not a cost object,how production order process will work from controlling point of you?are we going calculate WIP on production order and WIP is settled to sales order or FI/PCA?
4.Once production order is complete,Goods Receipt will post to Inventory or Sales order stock?
5.Once production order is complete,we are going to calculate variance on production orders?
Any help is appreciated...
Thanks,
Anusha

Hi,
When the MTO is created from sales end it will create the Planned order then it will convert to Production or Process order.
Once the production do GR or confirm Produced QTY the stock will go to Sales stock not to inventory stock.From there the sales can do PGI to customer.once PGI has done the account entry for the customer account will take place automatically.
Once the production completed the Production order need to calculate for the variance & the Settlement need to be done for the production order against the Material which you produced & sale to customer.The difference & variane amount will post to Price difference & moved to Product cost of the material automatically & COPA entry will be done automatically.
The MTO Material need to run for the Cost estimate also.
The WIP can be calculated & difference can be posted against the production order & the material which you produce.
The Process is same as the Make TO Stock scenario.Only the difference is the Production will get generate automatically when the MTO order get created & the stock will post to sales stock automatically.Rest the CO part is same as MTS scenario.
Regards,
Raj

Error in CO88 for SFG cost rollup to FG (MTO Sales Order is Cost Object)

Experts,
I am getting Error in CO08 as No price could be determined for material/batch 7000000001/ plant 1000Message no. CK465
Lower level materials (Semi finished goods) not costing, when I am creating production order against Sales Order for Finished Goods.
I have BOM & Routing for Both Materials as well as it is costing well at sales order level. When Material have Quantity Structure (PP Maters) why system searching for price in material master? Is it require do the any config for cost rollup.
Plz give me the your valuable solution for rectify the error.
Please do the needful.
Thanks & Regards
Bhagirath

Hi,
When the MTO is created from sales end it will create the Planned order then it will convert to Production or Process order.
Once the production do GR or confirm Produced QTY the stock will go to Sales stock not to inventory stock.From there the sales can do PGI to customer.once PGI has done the account entry for the customer account will take place automatically.
Once the production completed the Production order need to calculate for the variance & the Settlement need to be done for the production order against the Material which you produced & sale to customer.The difference & variane amount will post to Price difference & moved to Product cost of the material automatically & COPA entry will be done automatically.
The MTO Material need to run for the Cost estimate also.
The WIP can be calculated & difference can be posted against the production order & the material which you produce.
The Process is same as the Make TO Stock scenario.Only the difference is the Production will get generate automatically when the MTO order get created & the stock will post to sales stock automatically.Rest the CO part is same as MTS scenario.
Regards,
Raj

Balance of a General Cost Object

Hi All,
I need to know how to find out if the actual cost balance of the general cost object is zero? Also, if it is not zero - I would want to settle the costs to a profitability segment or a general ledger account before I can archive the general cost object.
Can someone help me with this requirement?
Thanks,
Janani

Hi,
Good evening and greetings,
There are reports to find out the actual values in the cost object...Depending on the object like Production Order, Product Cost Collector, Cost Centre etc there are settlement process in SAP to settle the variance.
Please reward points if found useful
Thanking you
With kindest regards
Ramesh Padmanabhan

Cost Object in FI document with WBS Settlement

Hi,
I'm testing WBS settlement to G/L account which is cost element. I made some substitution rules because I met an error message saying that "Cost Object is needed"
As a result I can settle WBS to cost elements such as COGS etc. I got a FI document, CO document and PCA document. Everything looked so nice.
Suddenly I noticed, however, that there is no such a thing like cost object on FI document. When I look up the FI document using FB03, I found that the PS-POSID was empty. Of course, CO documents have Cost Object.
What I wonder is as follows
1. Is this standard? Is it natural that FI document with CO doc has no cost object on it?
2. If I need to use FI document to determine WBS element, what is the best to way? Is it possible to enter Cost Object such as wbs element in FI document during settlement?
Thank you for your kind advice in advance.
Message was edited by:
Namseok Kang

Kang,
In the message which you got, the word 'Cost Object' refered to a cost center, or order, or any other cost object.
However, there is another account assignment object with the name 'Cost Object', which was not filled in the FI document. That is normal.
Right now I don't have much information in the a/c assignment object 'Cost Object'.
Regards,
Vishal.

Post to multiple cost object

hi,
if at the same time there is posting to more than 1 co object, for example to cost center and copa or other combination of cost object, how do i know to which co object is real posting and which co object is just statistical?
thanks

Hi,
When we post to Internal Orders and Cost Centers, then Cost Centers will be taken as statistical if Inter Order is a Real Order.
in the case where u mentioned Cost center and Profit Center, Profit center is always a statistical posting irrespective of the other cost objects.
So Not to compare PC with CC.
if simulteneous postings are made to Cost Center and either COPA or Internal Order (real), COPA Segment or Internal Order will have superceding effect than Cost Center
I hope you got the concept.
Please award points suitably if you are satisfied with the answer. else please let me know for further clarifications
Best Regards
Surya

Cost object derivation in MM invoice through CO substitution

Hi Gurus,
As per a new requirement default cost object (from PO line item) should not be derived at AP Invoice and instead cost object should be derived from Equipment record which is related to this PO line item. It can not be changed manually at invoice level as invoice will be generated automatically through T code MRIS.
I had tried to achieve the same through CO substitution (T code OKC9). But this is substituting the cost object at FI document level and not at MM document level. Means - Cost object is derived from equipment record and populated at FI invoice level. But cost object from PO line item is populated in MM invoice document.
How I can substitute cost object at MM invoice level.
Any response from your side will be highly appreciated at this end.

Kang,
In the message which you got, the word 'Cost Object' refered to a cost center, or order, or any other cost object.
However, there is another account assignment object with the name 'Cost Object', which was not filled in the FI document. That is normal.
Right now I don't have much information in the a/c assignment object 'Cost Object'.
Regards,
Vishal.

Cost price differences in subcontracting PO's invoicing

Hello,
Which transaction key (of automatic postings) will be used by the system if I create an invoice for a subcontacting PO for a bigger value (in price) than the receipted?
Is it allways the PRD (Cost (Price) differences)? If not, on what does it depend?
Thanks!

Hello,
Thanks for all your replies (even if they were not 100% helpfull).
My problem is exactly the following:
For subcontrating PO's we have a price condition which imputates a % of the total cost to an account which will be payed to the carrier (this works perfectly) for the freight.
The problem is that if we try to invoice this document (which is not against the vendor of the PO but against a vendor which is the carrier) for more value than the expected then the Price Difference is not charged against any account! (the warning of the price tollerance is showed but the system doesn't know were to charge this difference).
Please help!
Thanks!!

Distribution of Price difference value to Other Cost Objects in Hierarchy

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