Moving average price as price control in material master: Erroneous entries

Question

Dear All,
Recently we did a price control change from standard price to moving average price for one of our clients and scenario testing was done. We came across the following issue at the IR point and this error occur  time to time ( not for all POs )Following steps were followed
Scenario
1. Create a PO for 1000 Kg of material A @ 1USD
2.GR the purchase order- at this point correct values are passed to stock account
3.consumed 250 Kg from the above material and from the same batch- correct values are passed to the accounts correctly
4.invoice verification is done for the above PO with a price variance of 100 USD. The error occur at this time ( some times )
Correct entry:
Dr GR/IR account 1000
Dr Stock account 75 (Price variance is charged proportionately charge to the balance stock)
Dr price variance 25 (Price variance is charged proportionately on the consumed stock)
Cr Vendor 1100
But sometimes the value does not pass accurately for the same PO. Accounting entries are as follows.
( this is same scenario with new purchase order with different master records )
Dr GR/IR account 1000
Dr Stock account 100 (Total price variance is charged to the stock account and its incorrect this should be only 75 as explain above )
Cr Vendor 1100
This error occurs sometimes even though the vendor master record and purchase orders are sand same as the time of pass correct entries  . All these time GR based invoice verification tick has activated in PO as well as vendor master .
Appreciate your advice.
Tks
Sandagomi
Edited by: Sandagomi Ranasinghe on May 9, 2010 9:25 AM

Answer 1

Thank you for the information. But this is not the  system behavior , system proportionately add the price variance to the stock qty which is remaining in the stock also it proportionately charge the price variance to the price variance account which is consumed before the invoice verification.But time to time it passes the incorrect entries.
eg , Create a PO for 100KG @ 1USD
       GR                     100KG
       Consumed           25
      IR , here we IR at higher value than the PO price
     PO value is USD 100
    IR    value    USD 100 + 12 = 112
Correct IR entry : Vendor              CR    112
                             GR/IR                 Dr    100
                             Stock                 DR      8 ( 75% of the stk is reaming in stk so relevant variance is USD 8 )  
                             Price variance   DR      4  ( 25% of the consumed , so relevant variance is USD 4 )
And this is accurate with accounting principles and standards .
Actually system correctly calculate the above entries  . but some times it pass the incorrect entry , this is my issue.
In the  erroneous entry it does not segregate the price variance , If we consider the same scenario as above at the time of erroneous entry the system pass entries as below:
                            Vendor              CR    112
                             GR/IR                 Dr    100
                             Stock                 DR     12 ( add 100% which is incorrect )
This is incorrect .