Standard price control
HI
i want to know
Standard price control updates
A)standard price
b)moving price
c)both
which is correct ?
Prashant
Hi Prashant
Generally all raw materials (ROH), spare parts (ERSA), traded goods (HAWA) etc. are assigned as moving average price (MAP) because of the accounting practice of accurately valuating the inventory of such materials. These materials are subject to the purchase price fluctuations on a regular basis.
Company generally use moving average on purchased materials with small cost fluctuations. It is most appropriate when the item is easily obtainable. The impact on margins are minimized which reduces the need for variance analysis. Furthermore, the administrative effort is low as there are no cost estimates to maintain. The cost reflects variances, which are closer to actual costs.
The semi-finished goods (HALB) and finished products (FERT) are valuated with standard price because of the product costing angle.
SAP recommends that standard price to be used for FERT and HALB.
How SAP calcualte the moving average price
Goods Receipt for Purchase Order
Balance on hand quantity + Goods Receipts quantity
Balance on hand value + Goods Receipts value
New Moving Average Price = Total Value / Total Quantity
Regarding Std price -
Std Price is maintained in accounting view. System doesn't post GR based on purchase order price. It posts GR taking into consideration the STd price from material master.
If Std price is 100 and PO price is 110
System will post the debit inventory account with 100 and post 10 to the price diffence account.
Regards
Rajesh
Do reward if useful....
Similar Messages
-
Hi,
Can anybody tell me what is reason for the SAP standard setting for GR of free material
if price control is moving average - only the stock quantity is updated.
if standard price control both stock and value of material is updated.
Regards,
SachinIn case of std price yr stock will get updated with this price whatever may be the case..
MAP--in this case whatever the current price of posting stock will be added to previous price with this current price..
This is the concept of MAP & STD price.. -
Hi All,
I am new to SAP MM,
What is the main difference between standard price and moving average price, And While I am creating the Material (Material Type is Drinks) it will take Moving Average Price(V) Only, We cant able to change this, Why?
Thanks in advance,
Sudheer.HI,
Use
In the SAP System, there are two types of price control:
Standard price
Moving average price
These two types of price control differ in how they handle price variances resulting from goods receipts or invoice receipts.
Integration
You determine the price control that should be used for a material when you create the material and enter the accounting data for it. You enter one of the following indicators in the Price control field to determine how the price is controlled:
S for standard price control
V for moving average price control
Standard Price
All inventory postings are carried out at the standard price
Variances are posted to price difference accounts
Variances are updated
Price changes can be monitored
If a material is assigned a standard price (S), the value of the material is always calculated at this price. If goods movements or invoice receipts contain a price that differs from the standard price, the differences are posted to a price difference account. The variance is not taken into account in valuation.
Moving Average Price
Goods receipts are posted at the goods receipt value.
The price in the material master is adjusted to the delivered price.
Price differences occur only in exceptional circumstances.
Manual price changes are usually unnecessary. However, they are possible.
If a material is assigned a moving average price (MAP), the price is automatically adjusted in the material master record when price variances occur. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account; as a result, the moving average price and the value of the stock change.
If drinks is your material type then what habe you defined price control in OMS2? from which material type did you copy to create drinks as your material type?
Thanks & Regards,
Kiran -
Changing price control indicator and posting difference to sperate account
Dear Guru's
Need your advice on how to handle the following scenario. Company wants to change the Price ontrol indicator in a material from V(moving price average) to S(Standard cost).However there is stock in the inventory for this item.Additionally they also want to change the price of the item with the difference posted to a seperate balence sheet account.Hello
While changing the price control, the moving average price becomes the standard price, which is then used for valuation.
You change the type of price control by overwriting the price control indicator in the material master record with the new indicator.
Changing the type of price control for a material does not change the value of the material stock, since in both cases the current price becomes the new price.
For changing the material price, use revaluation MR21.
At the time of price change, for a material subject to standard price control, the material debit or credit is posted to a price difference account. The offsetting entry is made to an income or expense account. Consequently, a material debit or credit for a material subject to standard price control does not lead to a revaluation.
Regards -
Dear All,
Any possibility is there in SAP no inward can be made for the those item which are under standard price control in the material master incase if the value of standard price is Zero.
Regards,
MuthuYou can use Material status at the Plant level (purchasing view) , Material Blocked for Purch/warehouse or create your own Key such as "material blocked for goods movment" .
Ony after the standard Price is updated , this key should be removed from the master .
The above is a solution which can be used within the Standard SAP .
you can also Update the Plant-spec Material status field via MASS transaction. ( From MM60 or MBEW table you can get a List of materials for which Standard Price = 0) and that List of material -plant combo you cna updated in MASS .
You can also create a Z Program which does the same as above (i.e block all materials where std price = 0 and Unblock all materials where Standard price Not Equal to 0. )
If you need automation/validations in the Goods movement transacton only ,then you can go for the BADI in MIGO , MB_MIGO_ITEM_ BADI , and code you check here i.e. IF the MBEW-STPRS = 0 , Mov typ = 101 then Give ERROR Message -
Can we release the standard price for a material whose Price control is "V"
Hi experts,
Could you please clarify my doubt that can we release the standard cost of a material whose price control is "V".
Our user is trying to release the std price. But its not getting released. If the material is of ML relevant I could have checked in CKM3 for any actual data existancy. I am aware that if any actual data existing the price could not be released.
But here this material belongs to a Non Material ledger relevant plant. So I cheked the stock overview and for any material documents if any. But this material has no stock.
I m confused how to check the material's transactions with FI entries.
Please help in this regard.
Thanks,
Sarat.HI Sarat
1. You can release a std cost for material with V, but that wont serve any purpose.. The inventory valuation will happen at V alone
Either the material should have a BOM or Routing to release the std cost and MRP view shall have Proc Type as E / X
OR
You can have special proc in costing view as 20 and then execute CK11N for the material....
Some price must be there in material master which will get released as std cost (based on your valuation variant)
2. You can check material transaction using MB51
Regards
Ajay M -
Change price control indicator from standard price to moving avg price.
Hi All,
There is a material which has a negative stock for the previous period and the previous period is already closed.
When i want to change the price control indicator from S to V for that material in the current period, it shows an error that "negative stock is there, unable to change price indicator".
Kindly help me to solve this issue.
Thanks,
AKthe price control indicator can be changed from standard price to moving avg price at any time .......with some restrictions.
And one of these restriction is the one you see.
You must not have negative stock.
Hence you have to make the negative stock zero
Since your negative stock is in the previous period, you either have to allow posting into previous periods (trx MMRV , of course Finance has to allow this as well) first. Then you can post e.g. a 202 movement with previous period date which has a quantity that equals your negative quantity. then you change your price control, then you do a 201 movement (again with previous period date), finally you can restrict posting into previous periods again in MMRV.
or you just wait a few days, then with the month end closure your curent period becomes previous period and hopefully you will not have negative stocks again. then you can change the price control without any problem (I usually take care that moving average and standard price are equal befor I change the price control) -
Posting Taxes to Material cost - When price control is S - Standard Price
Hi Experts,
i have a material which is maintained with price control S. the material is having an info record with tax code I1 (5%), conditon type JP3E. when i am doing GR and IR, the tax amount is getting posted to a different G/L account. But not adding to material cost. Is it possible to add this tax amount to material cost, when price control is S.
Thanks & Regards,
RaviHi Poorna,
Check transaction event key,
if it is std key 'NVV' it shold post to material cost.
or check in OBCN ur transaction key showing posting indicatpor '3' Distribute to relevant expense/revenue items.
Hope this will solve your problem.
Thanks and regards
Gitesh -
STO picking standard price though the pirce control in Mat Master is V
Hi All,
I have for a certain material while creating STO, always the standard price is being picked up through pricing condition into STO though moving average price is defined in te materil master. Can somebody throw a light on the issue? Thanks
SravanHi,
please check the Condition in M/06 in that see the condition category what it is maintained.
0 Charges - condition recor
1 Tax JurDic level 1 (with l
2 Tax JurDic level 2
3 Tax JurDic level 3
4 Tax JurDic level 4
5 Customer reserve 5
6 Customer reserve 6
7 Customer reserve 7
8 Customer reserve 8
9 Customer reserve 9
A Packaging
B Delivery costs
C Insurance
D Tax
E Cash discount
F Freight
G Internal price
H Basic price
I Price for intercompany bil
J Customer expected price /
K Base amount excluding tax
L Generally new when copying
M Sales tax w/license-checki
N Input Tax not Deductible
O Variants
P Base amount including tax
Q Costing
R Invoice list condition
S Standard cost
T Moving cost
So just check whether "S" indicator is there
Regards
Amey -
Report displaying Material Standard Price and PO Price
Hello Experts
We have materials which are purchased. Price control is maintained as standard price and standard price is maintained using T Code MR21 periodically.
Due to this when PO price is different from standard price maintained in material master (usually PO price is higher than standard price) all price difference are posted to price difference GL at the time of GR.
Now users want to check variations between standard price and PO price for the material receipts.
Can anyone suggest me any report which provides details of standard price and PO price for the material receipts?
Thanks in advance for your help.
Satya AlapatiNothing std I'm aware of either. You could consider using the messages 06 205/6/7 to get a warning at the time POs are created that price varies significantly from std.
Config help text below:
Set Tolerance Limits for Price Variance
In this step, you define the tolerance limits for price variances.
When processing a purchase order, the system checks whether the effective price of a PO item shows variances compared with the valuation price stored in the material master record. In addition, it checks whether the specified cash discount value is admissible.
Variances are allowed within the framework of tolerance limits. If a variance exceeds a tolerance limit, the system issues a warning or error message.
In the SAP System, the types of variance are represented by the tolerance keys. For each tolerance key, you can define percentage and value-dependent upper and lower limits per company code.
Standard settings
The standard SAP System supplied contains the following tolerance keys:
PE Price variance, Purchasing
Tolerance limit for system message no. 207. This message appears if the specified effective price exceeds the predefined tolerances when compared with the material price.
SE Maximum cash discount deduction, Purchasing
Tolerance limit for system message no. 231. This is a warning message, which appears when the specified cash discount percentage exceeds the predefined tolerances.
Note
You can specify whether the system message appears as a warning or error message using the menu options Environment -> Define Attributes of System Messages.
Activities
Maintain the tolerance limits for each tolerance key per company code.
Regards,
Nick -
Moving average price as price control in material master: Erroneous entries
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 AMThank 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 . -
Moving average price calculation logic of material with Price Control "S"
Dear Gurus,
As you know that there is a Moving price and standard price icon in the material master.
I want to understand the calculation logic of the moving average price of the materials having price control "S"
How the system calculates the MAP for standard price materials? The receipt from the process order I suppose is valuated at the process order cost after settlement, but if the issue has hapened for the material does the system recalculate the issue price also?
Below is the sample process order receipt and issue scenario:
Receipt from process order 161000000223
300 kg and GR at standard cost value is Rs 5892
Issue to process order 162000000294
250 kg and GI at standard cost value is Rs 4910.
Thus the balance at period end is 50 kg and balance at standard cost value is Rs 982.
Here in process order 161000000223 the actual cost is 10 Rs. Then how will the system calculate the MAP?
Thanking You,
Amit DhanurdhariHi
Try the following calculations,
One of them will work depending upon your version and support pack
Expected MAP calculation ( As with price control V)
= ((Qty before transaction*MAP + Transaction Qty * transaction
Price)) / quantity after transaction
New Method ( when price control is S)
= Old MAP + (Price Variance w.r.t Standard Price/Qty after transaction)
Also go through the following notes,
Note 1225167
1253944
518485 FAQ: Valuation of goods movements
212286 Overview note: Valuation during goods movements
209864 Moving average price is disproportionately large
202166 Collective note: Statistical moving average price
185961 Moving Average Price Calculation
I have done extensive research on this, let me know if you need to know something specific. -
Price valuation with standard price in case of external procurement
Dear All,
I have the following scenario with my client.
All the materials will be valuated with price control S, whether procurement type is E or F. We don't have any problem if procurement type is E. But where as if procurement type is F and price control indicator is S, the system calculating the moving average price and as well as standard price is also updating for some materials. For some materials there are not moving average prices.
1. Can any one tell me when SAP calculates both moving average price and standard price? is there any setting to be done.(procurement type F and price control S)
2. there are differences between moving average price and standard price, ofcourse there may be a difference, but in some cases the difference is more and higher than the standard price, this may cause financial loss to the company. How can solve this.
full marks will be awarded.
thanks & regards,
Ramesh BalivadaHi
Moving average is updated for External purchases although price control is standard price in all cases where there are movements in materials i.e., when they are purchases...
Check for the materials where there are no updation of moving average and externally procured materials, there might not be any purchases..
There would be no losses as even though it is calculating mov avg price, the stock, consumption is calculated with std price only.
Check both the cases where there are std prices and check for cases where there are both prices getting updated.
Regards,
Suraj -
Actual Cost of Product with Price control "S"
Dear Gurus,
Is there any report available where we can know the Actual Costs of Materials with Price Control "S".
In the material master field the actual cost in the "Moving Price Tab" of the material with Price Control "S" is available, but is there any report available for plant level?
Thanks & Regards,
Amit Dhanurdhari.Hi Amit,
-- Under Standard Costing, you value your inventory at Standard Costs and any variances in Production Process will be settled to Price Difference Account. You will not be able to find out actual cost per unit. In Multi-level BOM scenario under Standard Costing (CO-PC), variances don't get rolled-up to the next level, only costs get rolled-up.
-- Under Actual Costing - Material Ledger, You will be able to find out the Actual Cost per Unit. Variances get rolled-up to the next level.
To explain difference between Standard Costing in CO-PC and Material Ledger briefly....
You have given Price Indicator as "S" in the material master of "X" material (semi finisher or finished) and you are doing Standard Cost Estimate for arriving at Standard Cost per tonne. Let's say, the Standard Cost per tonne is Rs.1000/-
Now, when you created production order for 10 tonnes and received output of 10 tonnes (GR). But the total cost incurred on that production order is Rs.1100/-. In this situation, actual cost per tonne is Rs.110.
But, because you are following Standard Costing, When you post GR against this Production Order, inventory will be posted at Standard cost only, i.e., Rs.1000/-. and the balance of Rs.100 will be posted to Price Difference Account. (and parallally the variance of Rs.100/-) will flow to COPA.
So, it is clear that, though, at Production Order level you can see the actual cost, at "material" level, you will not be able to see the actual cost per tonne.(as long as you are using only Product Costing and Standard Costing)
Alternatively, if you maintain Price Indicator as "V", you will able to get the Actual Cost per tonne at material level, but there will be no scope for establishing standard cost and comparison with actual thereof.
But, the same is possible if you are using Material Ledger (CO-ML). If Material Ledger is active, you will be maintaining "S" in the material master, still, the variances will be settled inventory and you will be able to get the actual cost per tonne. (bothe Standard cost estimate, actual cost per tonne will be possible).
Pls revert back for further explanation
Srikanth Munnaluri -
Change of price control in material master
Hi, SAP experts,
We have business scenario where the procurement type in MRP-2 view of material master gets changed from F to E that is an externally procured item will be manufactured inhouse.
In such case in costing view the price control needs to be changed from V to S. If both MAP & std. price are not identical, system is not allowing to change. Secondly since the item will be manufactured inhouse from now onwards, I have to run the cost estimate & update the master.
How do I deal with the situation.
Valuable advice is awaited.
Regds
T.S.ShankarHi Shankar,
When the price control indicator is "V", system will allow changing the Standard price manually through Transaction code MM02.
Similarly when the price control indicator is "M", system will allow changing the Moving average price manually through Transaction code MM02.
Hope this clarifies
Regards,
Som
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