Moving Average Costing

My clients business buys used equipment on the secondary market that they refurbish & sell. The prices fluctuate pretty dramatically based upon supply and demand; so it really isn't possible to set a standard cost that would be valid throughout the year. Using standard costs results in huge fluctuations in the inventory purchase price variances month over month and quarter of quarter. Therefore, we explored using moving average costing.
Could someone help me get the moving average to update using PM04, Does SAP actually recommend against using moving average costing?

Charlie,
Thanks for your response. If I understand you right, you are suggesting doing STD pricing every month or quarter instead of attempting MAP? Is that right?
Vishnu

Similar Messages

Movement types and effects on moving average cost

Hi all,
can anybody explain me what is moviment type n° 309 (transaction mb1b).
Before of this movement I had in the storage a stock of 15.000 KG and a moving average cost of 6,70 u20AC.
Then I did a movement 309 in MB1B for 4.050 kg.
After that I did a movement 261 (probably with transaction qa11) for 11850,300.
After these movements my moving average cost decreased to 1,29.
what kind of movement are 309 and 261?
Can they change my moving average cost?
thank you
C.

Hello Vallex,
Mvt type 309 is materia to material/batch to batch/valuation type to valuation type transfer. If you have different different price for both material then definately it will change your moving average price.
However, 261 is issue to production order and that will not change your moving average price. it will take material price from material master into the accouting document.
Hope this helps.
Regards,
Arif Mansuri

BAPI for Moving average cost

Dear Experts,
I need a bapi to get the moving average cost for a material. in addition i need another bapi to get the material availability in all plants something like mmbe.
please help me.

Hi Ebrahime,
You can have a look at MARA, MARC, MARD and MBEW..
MBEW-VERPR ==> Moving Average Price
MBEW-LBKUM ==> Total Stock
Hope it will solve your problem..
Thanks & Regards
ilesh 24x7
ilesh Nandaniya

Purchase Taxes Affects Moving Average Cost

Hello experts,
is it possible to have the sales tax paid on purchases affect the moving average cost of the item, in a simple manner?
Thanks,
Aaron

Hi,
From your explanation i came to understand that the tax amount has to be added to the inventory value.
You need to use the landed cost document.
For example,
incase if you are using EDCessHcess+Vat tax,choose only vat tax in purchase document.
and the EDCessHcess has to be added to inventory value.
Use ED,Cess,Hcess in the landed cost.
This would pass EDCessHcess amount to the inventory.
After booking the Goods Receipt PO,you need to immediately book the landed cost,Which will affect the moving average value.
Else the tax value will be added to price difference account-mapped in the warehouse and there would be much deviation in the moving average.
Hope this would help in solving the issue.
Edited by: M. Sundararaja Perumal on Dec 6, 2008 1:54 PM

Wrong cost allocated for the Moving Average item

Dear Experts,
Please see this inventory audit report.. Wrong cost allocated for the Moving Average item
[screenshot here|http://www.flickr.com/photos/45736280@N07/4347146537/sizes/o/]
Please help advice why.
Warmest Regards,
Chinho

Oh yes, István is totally correct. I realized I had gotten my definition of Moving Average calculation wrong.
The actual moving average cost price is actually calculated in the background after each purchase. The cost price shown on the screen for each purchase is simply the cost price in the purchase document.
At the point of each purchase, the Moving Average price is updated as:
Actual moving average price = (Last total cumulative value + current purchase trans value) / (Last Cumulative Qty + current purchase qty)
Hope it helps and Thanks guys for the advice!
Regards,
Chinho

Moving average price in case of goods receipt with free of charge

Hello everyone,
Need some inputs......
Sometimes we receive materials from suppliers free of charge (e.g. warranty replacement) u2013 moving average goes down u2013 worst case 0,01 EUR/piece. This causes problems in government reporting and export documentation EX1 and clearance/pro-forma invoice) for deliveries to field engineers (Order type ZIS1, ZIS3 u2013 item cat. ZICA), because moving average price is used for the values in government reporting and on the invoices. In government reporting and on invoices we need to state a true value of the part.On the other hand, the value warehouse stock is depending on the moving average cost as well.Could you please let me know, how to handle such receipts from the supplier to have a correct stock value and correct values on invoices and government reporting?
Thanks
Deepthi...

Hello Deepthi,
It depends on your company policy. If you want to valuate the material along with the material purchased handled in moving average price, free consignment will bring down the MAP for the material.
In that case, you can revaluate the material to the original price in MR21 transaction.
If you are not going to handle the materials received free of charge along with the purchased material, you can go with another material code, with non valuated material type.
But i guess, no company will be asking for another material code. So go for revaluation after the receipt of free consignment.
Regards

Average cost of an Article(SKU)

In IS-Retail where can i see the moving average cost of an article. Is there any report or inquiry to view the same or is there a table which stores the value for each location.

Hi,
In Article Master MM42/43 in Logistics DC & in Logistics Stores Screen down underneath you will find Accounting Button.
If you click this you will get Moving average Price field.
MBEW is the table name for Material Valuation and VERPR is the field name for Moving Average Price.
Hope this helps you.
Regards,
ManiKumaar

Historical moving average price in material ledger

Hi SAPGURUS,
Every Month when doing the Month-end closing, system re-calculate the moving average cost in material ledger . Is there a way to get this information for all plant, all model and download to the EXCEL.
Could you please tell if we can the information from any database table.
Thanks and regards,
Priyajit

Hi,
Look at the following table data MLCRP for price changes. MLCR is the basic material ledger table. There are other ML tables that you may need to refer to: MLCRF and MLPPF.
Cheers.

Intercompany Sales Processing- Moving Average Price

Hi,
I have a special requirement in Intercompany process..
I want the Ordering company to be charged with Moving Average Price of the Material instead of the Normal Price.
Can some on help me out with this?
Thanks,
Challa.

Hello,
You can control it using formulas via VOFM ,for the conditions IV01, PI01 (statistical) but I would suggest a more standard solution using VPRS condition.
Condition Type VPRS in the intercompany-billing document indicates cost to the supplying company code and it's used to retrieve the cost of the material accessing the valuation segment of the material master for getting the standard cost or the moving average cost. Condition category G accesses the standard cost and condition category T always accesses the moving average price.
The use of two different condition types in Intercompany billing is necessary to ensure that data is transmitted correctly to the financial statement (Component CO-PA).
Having VPRS condition correctly determined You can use a formula to make Your PI01 condition equal to the VPRS.
Tell me if it helped you !
Thanks,
Alcides Fialho

Inventory Controlling - Get history moving average price function - Urgent

Dear Experts,
Currently I have an issue that I want to calculate material history value at storage location level for each month. I tried to get history stock quantity and value from table S031, stock quantity is correct. But stock value (goods receive value minus goods issue value in table S031) is not correct.
Client requests the resulet should be same as transaction code MC.9 (valuation selection - standard). But what the result I got from table S031 is the value that without disctribution. Currently I do not know how MC.9 calculate stock value.
Does any expert know if there is a funciton that can get history moving average price. I may use this price multiply history stock to get history value. Thanks
Best Regards
Angela

Hello,
Moving average cost history is available in MBEWH-VERPR.
Thanks,
Venu

Moving Averge Cost Method

Dears,
I would like to use the Moving Average Cost Method at OPM,
Moving Average Cost Method from Costing Point of View ,it Calculates the Average Cost for every transaction and Post the Transaction Journal with the new cost one by one at the average cost calculated due to every transaction.
Moving Average Cost Method from Oracle Point of View (PMAC),it Calculates the Average Cost for all transactions at the period , get one average cost and Post the all Transactions Journals with the only one cost (which calculated against all transactions).
How can i get the first way at Oracle
Regards
for more explanation please advise

OPM allows third cost method - Lot Costing. You have to figure out if this suites to your requirement.

Moving average price of subcontracted material not picked for Cost estimation

Hi Experts
I have the below scenario:
Finshed Product A has components B, C.
C is a subcontacted material and it has its own BOM with components D & E.
We are maintaining moving average price for the subcontracted material C, (because the subcontracter is adding X & Y in addtion to the components D and E, which are sent from us).
In the mateial maste of C, Procurement type is F and Spl. procurement type 30 are maintained.
When i do costing for the Finished product A, moving average price of C is not picked up (where as system calculates the std cost for C by adding the values of D & E and purchase info record price).
Is there any way to Calculate Price of A by using the mvg avg price of C.
I maintained the below valuation variant settings.
If i remove the spl. procurement type 30 in the material master of C, it picks up the mvg. avg price. but it affects the MRP planning of items D & E.
Please advice.
Thanks in advance.
Regards
Bala

Hi Big choi
Thanks for your response.
I understand.
1. if we maintain spl. procureent key 30, system calculates standard cost based on raw material and service charges.
2. If we don't maintain spl. proc key, it considers the material as purchased and picks the mvg avg price from material.
But, is there any way to pick the moving avg price from material master eventhough i maintained the spl. procurement type 30?
Thanks
Bala

Product Costing using Moving Average Price of FERT & HALB

Dear Experts,
My client wants to use Product Costing functionality by using Moving Average Price instead of Standard Price on Finished Goods & Semi Finished Goods and as per my understanding, SAP recommends to use Standard Price on FERT & HALB.
I know if we use moving average price instead of standard price than there will be no concept of variances. Can anyone tell me more about what are the pros and cons of using moving average price instead of standard price in Product Costing?
Thanks in advance.
Regards,
Zain Bashir

Hi Zain
Let's take an example
You have V for Mat A
You create 3 Prod orders in a month
Order 1 - Qty 10 - variance 100
Same for Order 2 and 3..
At month end, you sold 20 pieces and 10 is in stock..
When you settle order 1, system will compare order qty and stock.. It will match I.e. 10 = 10... Hence variance of 100 will be posted on stock
Same will happen for Order 2 and 3... Ideally, only 100 should have posted on stock... but in this case 300 of variance will be posted on stock...
This is what the note mentioned by Arturo tells, but not so clearly
Hope this helps
Br. Ajay M

SAP allows release of Standard Cost for Material with Moving Average Price

Hi
We set our Raw Material to use Moving Average Price (V) and price determination 2 (single level). And we activated material ledger.
During mass calculation of standard cost (CK40N), If user accidentally forgot to restrict the Raw Material for being included in calculation, the system calculate standard cost anyway, even though I set it as Moving Average Price. And user is able to release it too without any problem.
Why the system does not restrict it? By giving error maybe. Although as for now I can not find the wrong effect from releasing standard cost for MAP material, by your experience, is there any side effect that I should be aware of?
Thanks

CK40n is mass release of all materials. The release is not dependent on price indicator of the material in the master. It will calculate standard cost of all the materials.
Releasing standard cost estimate of raw materials does not have any side effect as long your calculation is based on moving average price.
Regards
Divraj

Standard or Moving Average Material Cost

If we have PO price / costs plus shipping costs....can we use these to calculate the product cost whether standard or moving average?
Thanks in advance
Message was edited by:
Satish A Kumar

The Moving Average Price (MAP value) = Total Valuated Stock value / Total stock quantity.
At any point of time, If you do a Goods receipt for a Purchase Order, the MAP value is re-calculated at the price at which the goods are inwarded.Thus the MAP value is subject to changes from time to time.
The standard price is however unaffected by this.
The Product costing,therefore, for materials with price type "V" is linked to the MAP value of material. Where as for materials with Price type "S" - i.e standard price, the product costing is not affected.

Moving Average Costing

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