Inventory Costing

Hi,
1. Only one item rate is stored in item master table. Which rate is this - Purchase rate/ Landed Rate/Selling Rate.
2. If we want to maintain more than one type of rate for an item, then how to do it?
3. Stock valuation is done on which rate basis?
4. On Costing existing item rate(which rate) is updated on which method?
5. What about Inventory Ledger Report (Date wise stock-in Stock-out with valuation).

Hello Sibasish,
Please see responses to your questions:
1. When you say 'rate' do you mean to say 'price'? They can be defined in the Item Master Data (Header) -> Price List field. The Price Lists you define are used for selling the item. You can have as many price lists as needed.
Purchase Price
This can be defined in the Last Purchase Price. The Last Purchase Price can only be updated by B1 functions as per Note 889702 (AP Invoice, Goods Receipt (Stock Module), Opening Balance, etc.)
Landed Price
The initial cost of the item is determined when the item is received into stock. If you need to post additional costs in relation to the purchased item, you can do so in the Landed Cost function. The initial cost is then updated which will include the additonal costs. Hence, your item cost is now your landed cost.
Or if you refer to Landed Price as a price list which is a fixed percentage of the Purchase Price, you may define this in the Price List function. Create a Price List called Landed Price then define the Factor.
2. To maintain several prices, you can access the price list function to add new price lists. Then, define the prices of the item per price list.
3. The Price List you have defined does not influence your stock valuation. The stocks are always valued based on the amounts or costs when you record their receipts. The valuation can be FIFO, Standard or Moving Average. This is set per item in the Item Master Data -> Stock Data -> Item Valuation.
4. Please refer to my response in #3.
5. Please clarify your question.
I hope the above helps.
Regards,
Lorna Real

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We have a few specific issues where we need to understand the options for applying costs -
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2) We have material on the production order bill of material that is called out by quantity and we are using discrete backflush, however we have found there are issues with the accuracy of the quantities. We want to have this product ordered using KANBAN (bin ordering) and have the value relieved from inventory when the bin is issued to production. The cost on the production order is envisioned to be an average amount for the product - or an average amount by model.
3) We want to have a portion of cost for production scrap included in the cost of each product produced. (similar to freight and duty).
In all cases- the amount can change depending on analysis from accounting regarding freight and duty costs (these fluctuate depending on the cost savings we achieve with combined loads and depending on the amount of out of country sourcing), the scrap amount may change periodically depending on the initiatives to reduce scrap on the production floor, etc.
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My questions are:
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As clarification- we are using standard costing for our raw material. We currently accumulate the incoming freight in a balance sheet account. This is treated as part of our inventory. We have considered using an activity type with a activity added to the BOM to apply the cost to the production order. Then we could use the secondarly cost element data to book an entry to relieve the freight account on the balance sheet.
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Hi
We are trying to Customize the 'Inventory Cost of Goods Sold Account Generator' workflow for our client in Oracle Applications 11.5.10 instance.
We have successfully uploaded the modified workflow and changed the GL Account Generator Process to point to the Custom Workflow.
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Hi,
You shouldn't need to bounce the database for any changes to take affect (although if you were experiencing the "existing state of the packages has been discarded" error then it would clear that).
Switch on debugging so that the workflow is persisted rather than being run in forced synchronous mode, and then see what route the process is taking. If you open the workflow from the database via workflow builder, are you seeing the correct version?
HTH,
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WorkflowFAQ.com - the ONLY independent resource for Oracle Workflow development
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Inventory Costing Vs Material Costing

Can someone explain the difference between inventory costing and material costing ?
Edited by: VamsiM on May 3, 2010 2:14 AM

Hey,
An inventory cost estimate is used to update tax and commercial price, or prices other than
standard. In other words, the costing type is not for the standard price.
Best Regards
Young

Suggestions for Inventory Costs Tables - Retail

Hello All,
I am trying to calculate the Econoimic order quantity. I am looking for SAP tables that contains Ordering costs, logistic costs and storage costs.
I did find the tables:
MARC - Item data
MARA - General material data
VFKP - Logistics
VFKK - Logistics
Are these the right tables? If not, are there any tables specifically for retail inventory costs?
Any suggestions would be highly appreciated.
Thanks

Dear Silvia,
Would you please tell us how you can adapt this requirement?
Appreciate your reply asap.
Thank you very much in advance!
Best Regards,
Duc Lam.

Help with sql command for inventory cost change report

Inventory Cost Changes within date range.
Columns on report
Item LastDateChanged CurrentCost PriorCost
Source File-TransHst (Type 14 is inventory cost change)
example data
Type,Item,DtChg,Cost
14,15825,02/01/2014,357.00
14,45832,03/15/2014,95725.00
14,15825,10/01/2013,322.00
14,45832,06/22/2012,94632.00
example output needed
Item LastDateChanged CurrentCost PriorCost
15825 02/01/2014 357.00 322.00
Using Crystal Reports 2008 with Oracle Database
I cannot create sql to retrieve data to create report.
Need Item, Last Change Date, Current Cost and Prior Cost as output of sql
Thanks

HI Jerry,
I don't know real syntax of your database, try below SQL, you may have to modify the syntax wherever it is required.
Select t.Item, Max(t.DtChg),(case when year(t.dtchg) = Year(sysdate) then t.Cost else 0) as currentCost,
(case when year(t.dtchg) = Year(sysdate)-1 then t.Cost else 0) as PriorCost
From TransHst t
Where Type=14
Group by t.Item
Thanks,
Sastry

Can we split Inventory costs during FI postings.

Thank you in advance for your time.
Business is asking to split Fixed cost and variable costs (inventory costs) and post to different General ledger accounts when PGI is done. Is this possible to do?

Review if there is any userexit that can be used or a BTE (transaction FIBF).
Further, I would develop a Z transaction (ABAP) that would take the costs and the adjust the original FI entry and put into the final FI GL accounts.
Lastly, I have had a similar requirement for two previous US clients and this was because Oracle Hyperion was used as the enterprise financial reporting system.
Regards
Waza

Reversing A/P Invoice posted with wrong date and inventory cost adjustment

Here's the situation:
We had a PO dated 9/1/09 for items with a cost of $14.50, a Goods Receipt was entered 9/15/09 for the items with the same cost on the PO of $14.50. Somehow the order got lost in the mix and the AP invoice wasn't entered until today, with a posting date of 1/21/10 and the cost was corrected per the original vendor invoice to the right amount of $19.33. The invoice was actually dated 9/15/09. This resulted in hitting the vendor, purchases clearing and the inventory account (for the cost adjustment) in January 2010 when it should have occurred in September 2009.
The inventory itself has come and gone in the time between the GR and when the invoice was done with the incorrect date. Normally I would try to reverse the transaction with a Credit Memo and start over, however since the inventory side happened so long ago, I don't see any way of easily going backwards. I thought about doing service CM/invoice but what I am most concerned about is having the inventory valuation occur properly at the correct time. I'm not sure how to go about this.
Using SAP B1 2007A PL42 with moving average inventory.
Any thoughts would be appreciated.

Nicole,
I am afraid you may not have ability to do the adjustment based on historical date that long times ago. You know, the moving average has limited calculation based on current quantity and cost. There are no options to go backward especially new year is coming.
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Gordon

Stock Transport Price - Inventory Cost

Hi All,
I have 2 plants under the same company code
Company code: BP01
Plant 1: BP01
Plant 2: BP02
Material "A" is created in both the plants. BP01 creates a stock transport PO to BP02, BP02 creates the delivery against the PO & goods issue is done from plant BP02.
In transit some freight & transportation cost is incurred. Now when the GR is done in plant BP01, the requirement is to upload the costs incurred (while transit) on the inventory.
How can we do this? Can we create an invoice for the stock transport delivery but then since the transport is happening between 2 plants belonging to the same compnay code the invoice cannot be created.
Thanks & regards,
Allabaqsh

Hi,
The requirement is standard MM functionality.Pls check the STO pricing schema in your system.
The cost incurred between two plants could be categorised in two ways:
1.Delivery cost (Planned cost)
2.Other costs (Unplanned cost)
The delievry cost will be inventroized (i.e. added to material cost) at the time of GR at receiving plant.You can use standard condition type FRB1 (Freight (Value)) or FRC1(Freight/Quantity).
The unplanned cost (like toll changes) etc can be paid while doing MIRO for the Planned cost and do not get inventorized.
Pls revert if any other clarification is required
Regards
Sanjay

Standard v/s inventory cost estimate

Hi
In Indian context, which type of cost estimate should be used?
Regards
Samir

Samir,
Material Valuation determines or records the stock value of a material. The stock value is calculated using the formula:
Stock value = stock quantity x material price
Thus, if the stock quantity or the material price changes, the stock value changes.
Implementation Considerations
Material Valuation is not an independent application area, since most Material Valuation functions take place automatically in the SAP System. Depending on how a company is structured, tasks that have to be carried out manually belong to either Inventory Management or Invoice Verification. In Indian context also it will depend on these factors.
Integration: Material Valuation represents a link between Materials Management (MM) and Financial Accounting (FI), since it updates the G/L accounts in Financial Accounting.
Material Valuation serves the following purposes:
Adjusting material prices to market prices
Performing revaluations
Executing balance sheet valuation
Material Valuation is basically controlled by two factors:
System settings
Material master record
System Settings: By customizing the SAP System, you adapt Material Valuation to the requirements of your company. Below are some of the questions you answer when you configure the system:
At which level are materials valuated?
Which types of goods movements are relevant for valuation?
Which accounts must be posted to during a transaction?
Material Master Record: As a rule, a material master record is created for every material. The information contained in this record includes valuation data for the material. When maintaining the material master record, you must decide the following:
Whether a particular material should be valuated at all
Whether different sub-stocks of a material should be valuated differently
Whether the stock of a material should be valuated at a constant price (standard price) or whether the price should change in accordance with the delivered price (moving average price)
Which G/L account the stock value of a material should be managed in
The stock quantity and value of a material and the material price are also recorded in the material master record.
Hope this clarifies. let me know if you need anyother information.
Rgds
manish

Report which can give Inventory cost & Cost of Goods sold

We need to track below information for each material
- Previous Month Inventory
-Current Month's Cost of Goods sold
Then we calculate
Financial Days on Hand = Previous Month Inventory / Current Month's Cost of Goods sold / Working Days
Any SAP Reports which can give this information

Hi,
I m not sure whether single report could suffice your requirement.
this is just a suggestion.
please run the MC.9 report and switch it into the monthwise.
you will get the inventory monthwise but this could mean you have to run it multiple times if you need for each material monthwise. but at least try this for one material and check.
for the COGS for this month you need to know how many deliveries are made and then sum up those materialwise. you can check sales reports on this and you might get the details. then you can apply your formula.
in case you dont want to do this then you need to create Z/Y report with the help of ABAPer. here i will suggest you to call the std reports and then display them into a ALV grid with your layout.
regards,
Adwait Bachuwar

Decimal inconsistency in calculated inventory cost

Hi,
Material Std price is 26.77
while issuing (261) the quantity 11.500 the system is calculating the cost 26.77 * 11.500 = 307.85 (rounding 307.855 to 307.85)
and while reversing (262) this transaction, the system is calculating the cost 307.86 (rounding 307.855 to 307.86)
0.01cost difference is coming.
is there any solution or SAP Note to change cost calculation?

Hi
One possible solution, which I always prefer is, to have the price unit of 1000 instead of 1...Even SAP recommends this... You can avoid a huge chunk of rounding errors with this
You can change price unit anytime using T code MASS or MM17....
regards
Ajay M

How to cost intercompany in-transit inventory

Hi-
I am not very famaliar with MM, I usually am FI. I have a question about doing an intercompany transfer of inventory from one company code to another - US to Canada. We are doing a STO that moves it. When the transfer happens, I can see in my accounting documents that it is coming out of the US inventory.
It is going to a In Transit inventory location. I was expecting to see the value of the inventory also being recorded on the receiving company but I don't see it until the receipt is made in Canada.
Have I missed something, why don't I see this inventory cost being picked up in the receiving company. Thanks.

Hello,
From what i see you are using a 2 step STO process and hence its normal to see the inventory in trasit till the receiving plant does a GR.
However if your requirement is to see a accounting document immediately you should use a 1 step STO process where the GI from the sending plant will create a GR in the receiving plant. This is recommended only if the plants are located close to each other. In your case as the transfer is across 2 countries, it is bes that you use the 2 step process.
Hope this clarifies.
Regards,
Jimmy Ambooken

Problem regarding Purchase Order with Free of Cost Material

Dear Xperts,
I am facing problems while doing Goods Receipt of a Purchase Order having all the materials we are going to receive Free of Cost from the Vendor.
This case is happening with Doemstic and as well as Importer Vendors also.
Problems to be solved:
1. If we are using Tax Code(with excise conditions) ,excise duty calculation does not take pace automatically at Goods Receipt as the Material Value is Zero on which the duties will be calculated for a Manufactuing Plant.
2. This case seems very problammatic if that Purchase Order is having almost thousand line items.The user has to enter all the Excise duties manually for each & every line item during Goods receipt in a manufacturing Plant.
3. In case of Importer Purchase Order also, the CVD portion & CESS on CVD portion user has to enter manually.
4. To solve this problem we are not using Free Goods Indicator in PO, we are entering 0.01 paisa , but during the MIRO of Planned Delivery Costs , the system is not showing or providing POP-ups of those relevant condition types to the user to enter the actual amount.
Please advice, how can we proceed in this case.
Regards,
Soumick

First you are putting 0.01 value . So the planned delivery cost is not showing coz if say tax is 8% then 0.01 x 0.08 will be 0.0008. It will take first two digit after decimal and hence its 0.00 and hence plannded delivery cost is not showing.
If you put 0.5 you will be able to put planned delivery cost in MIRO
Now regarding value is zero and how will the import duty be calculated. May be make a pricing routine where in the custom duty is not calculated on this base price 0.5 or 0.01 but on the actual value if it was not free of cost and that value you can maintain through MEK1 transaction code.
And while posting MIRO or MIGO you need to identify that these are free of cost material and use BADI fi_ac_document
and may be replace the actual GL with some other GL so that 0.5 or 0.01 does not add to your inventory cost and you could knock off later.
Regards
Sangeeta
Edited by: Sangeeta Khurana on Feb 6, 2012 1:37 PM

Inventory Audit Report and Inventory G/L Account discrepancy

Good Day!
Hi Everybody. I had experienced a discrepancy between the Inventory Audit Report and Inventory G/L Account.
Before everything else, our client does not have any PO, GRPO. Only A/P Invoice and A/P Credit Memos so there are no difference being posted.
There were also no transactions posted directly in Inventory G/L Account but from observation, there is a minor difference. This only happened with two transactions in AP Invoice with Negative Quantity.
The AP Invoice is composed of a single item, the unit price is 180.00 x -58 pcs quantity. Total amount is -10,440.00.
G/L Account posting is
Inventory 10,440.00
A/P 10,440.00
In the FIFO layering, the item cost is 200.00 (based on the current stock value) and the current stock quantity before posting is 80 pcs . Since this is a negative quantity A/P Invoice, it seems that the cost of the item when the transaction will be posted is 200 (based on the current stock value) so when I view the Inventory Audit Report amount, it says the inventory cost/posting is -11,600 (200 x -58).
But on actual G/L Account, the posting is -10,440.00 from A/P Invoice, that's why the inventory discrepancy occurs. It seems that SAP B1's Inventory Audit Report confuses the FIFO cost posted versus G/L Account's posted based on the document. Since the document is A/P Invoice, SAP B1 assumes that the transaction will post the amount as the additional inventory cost and posting the inventory cost into Inventory G/L Account. However, since this is a negative document, the system is releasing the items, thus, FIFO kicks in. The Inventory Audit Report catches the amount based on FIFO costing. The problem is that the Inventory Audit Report is more accurate than the Inventory G/L Balance.
Any suggestion to fix this guys?

HI,
i'my afraid you're in the wrong place. This is the Chinese forum. Please go to SAP Business One Application for help.
Best

Inventory Costing

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