Std price and moving avg price

hii frends...in which scenario we hve to go for std price and moving avg price...
thnx in adv...

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 uses 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. If these were to be MAP controlled, then finished/semi-finished product valuation would fluctuate due to data entry errors during back flushing of material and labor, production inefficiencies (higher cost) or efficiencies (lower cost). This is not a standard accounting and costing practice.
Hope this will help you.
Cheers,
Parag Mahajan

Similar Messages

  • Standarad price and moving average price

    What is the diff between Standarad price and moving average price ???
    Somasundaram

    Price Control V or S in material type
    When is it useful to use the price control V or S in Material Master ? 
    Do I have to follow the SAP standard setting in the material type for the following material types:
    - ROH(Raw materials) -> moving average price
    - HALB(Semifinished products) -> standard price
    - FERT(Finished products) -> standard price
    In which case and why is useful to change these standard setting in material type?
    What is difference between standard price and moving average price? 
    When and how to use it?
    Standard price are used for products that do not fluctuated frequently.  It is usually used for finished or semi finished products.
    Moving average price are used mainly for raw materials that are purchased externally.  The advantage of using moving average price for your raw materials is that your inventory costs will always reflect the current market cost.
    SAP strongly recommends that you do not select price control V for semi-finished products and finished products, because doing so will very easily cause the calculation of unrealistic valuation prices. SAP recommends: 
    Price control V for raw materials and trading goods; price control S for semi-finished products and products.
    If you nevertheless select price control V, take care in the following situations:
    1. Unrealistic prices occur if materials are produced and also retire during one period (that is, the inventory at the end of the period is smaller than the total of aquisitions from production orders) and if, in addition, several production orders belonging to a material were finished in this period, and the production order settlement calculates variances at the end of the period. Every single production order carries out an inventory coverage check and may therefore cause the moving average price to be changed. However, the individual production orders do not check whether the inventory available at the end of the period has already been debited by another production order. 
    Example: on 20 workdays in the period, 1 piece of material xyz was produced for each day and delivered to the warehouse at a price of USD 1000. At the end of the period there is 1 piece at the warehouse. Since an activity price of a participating cost center was higher than planned , every single production order calculates cost of goods manufactured of USD 1100 during the settlement. Every single one carries out a inventory coverage check and finds out that the variance can be posted completely to the inventory. That is, the ending inventory of one piece is debited with USD 20 x 100 and it consequently receives a price of USD 3000. 
    1. A settlement is carried out although not all costs have yet been posted to the order. This can even result in a price of 0 for the delivered product.
    2. No period check of the costs is carried out on the order, that is, costs from previous periods may be settled.
    3. Settling orders is already possible in the 'Delivery completed' status.
    Solution: Standard price for products together with possible manual price changes.
    If you are required to valuate semi-finished and finished products with actual prices that correspond to the costs of the actual production, SAP recommends you use the function of the material ledger for this. Here, a periodic actual price is created that is calculated on a much more reliable basis than the moving average price. A so-called price limiter quantity is used which makes sure that in the above example price differences are proportionally taken into account (95% of the total price differences) when valuating the 19 pieces withdrawn from material xyz which results in a periodic actual price of 1100 USD. In addition, it is possible as of Release 4.5 to even take into account the variances of the actual prices of the raw materials in the valuation of the semi-finished and finished products that are manufactured from it. 
    If we select std price for any type of material or mav and then make po, it will pick from material master or what?
    The Purchase Info Record have the FIRST priority.  When no po info record is found, the Purchase Order will pick the user LAST enter price.  The PO module do not pick up any price from material master.
    Regards,
    Ashok

  • 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,
    AK

    the 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)

  • Std price to Moving Avg Price & VICE VERSA

    Dear,
    Im MM01 - Trnx I maintained Moving Avg price ,  i want to convert to Std price  in the given scenorios
    1) Newly created MMR - P.O Created - Mtl not inwarded so far
    2) Mtl already transactions done , so many times.
    Also explain if its Std price to Moving avg what steps need to be done.
    Regards,
    Suresh.P

    Hi
    Under certain conditions, you can change the type of price control:
    From standard price to moving average price :-
    You can make this change at any time. The moving average price (which until now has been updated for informational purposes only) replaces the standard price and is used for valuation from now on.
    From moving average price to standard price:-
    You cannot make this change in the following two cases:
    1. If the material master record is set up as a valuation header record for a material subject to split valuation .
    2. If the standard price comes from costing and is not equal to the moving average price
    If the change is possible, 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.
    I hope it will solve your problem. Please revert back.
    Regards
    Raj.......

  • Where to find costing history- standard price or moving avg price.

    Dear All:
    We are updating standard price with costing module.
    i want to know standard price monthwise history.
    if some 1 know table for same or any other way please help.
    Vijay

    Here are th some of th tables relevant for CO.
    TKA01 Controlling areas
    TKA02 Controlling area assignment
    KEKO Product-costing header
    KEPH Cost components for cost of goods manuf.
    KALO Costing objects
    KANZ Sales order items - costing objects
    Cost center master data
    CSKS Cost Center Master Data
    CSKT Cost center texts
    CRCO Assignment of Work Center to Cost Center
    Cost center accounting
    COSP CO Object: Cost Totals for External Postings
    COEP CO Object: Line Items (by Period)
    . COBK CO Object: Document header
    COST CO Object: Price Totals

  • What is the differents bet ween standard price and moving average price

    hi

    Hi,
    Check the below link....
    http://help.sap.com/saphelp_47x200/helpdata/en/53/5df779aa3011d295a200a0c930328a/frameset.htm
    Regards,
    Putty

  • Standard and Moving average Price

    Hi,
        What is the Difference between Standard and Moving Avg Price, What are the Cases will we use Standard  Price ,and what are cases shall we use Mov.avg Price, Please Explain me with Example.

    Hi Lakshmi,
    Moving average price is maintained for all the outside procured materials and standard price is maintained for all inhouse manufactured materials...
    We need to run standard cost estimate monthly to update the prices of all the materials with price control S... Prices of materials with price control V will get updated as soon as we do GRN for the materials on the weighted average method...
    Regards
    Raj

  • Difference between Standard Pricing and Moving Average Price

    Hi,
    Would like to seek some advises on the difference between standard price and Moving average price.
    also, how does it affect the account postings differently?
    Thanks

    Standard Price
    Materials whose price control indicator is set to S are valuated in Financial Accounting (FI) at standard price.
    This is recommended for semifinished products and finished products.
    The moving average price is shown as a statistical value in the material master record.
    The standard price is normally calculated using a standard cost estimate for the material. The standard price can also be calculated in a mixed cost estimate.
    Moving Average Price
    When materials whose price control indicator is set to V are received from in-house manufacturing processes, they are initially valuated with a value you defined (such as the standard price). When you settle, the material stock account is debited with the variances. This results in a new moving average price.
    Valuating semifinished products and finished products with the moving average price is not recommended.
    Regards,
    Indranil

  • Std price to Moving avg - Vice versa

    Dear,
    Can we change the price from S to V  or Vice versa - ( The scenorio is Mtl already avl at stores, Production shop , some nos yet to be supplied from Vendor)-
    HOW to do ,plz explain.
    Regards,
    Suresh.P

    hi
    Under certain conditions, you can change the type of price control:
    From standard price to moving average price :-
    You can make this change at any time. The moving average price (which until now has been updated for informational purposes only) replaces the standard price and is used for valuation from now on.
    From moving average price to standard price:-
    You cannot make this change in the following two cases:
    1. If the material master record is set up as a valuation header record for a material subject to split valuation .
    2. If the standard price comes from costing and is not equal to the moving average price
    If the change is possible, 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.
    I hope it will solve your problem. Please revert back.
    Regards
    Jay

  • Why negative stock is possible for Moving avg price & not standard price?

    why negative stock is possible for Moving avg price & not standard price?

    Hi,
    Negative stock is available for both MAP as well as Std. price.
    Eg.
    MAP-->
    1. Mtl with MAP 1 Rs/pc & stock of 10qty.
    2. GI done for 15 pcs. Each pcs evaluated with 1Rs (MAP). Stock value reduce by 15Rs. Offsetting entry takes place in consumption account of 15Rs. The stock and stock value is -5 each.
    3. Post GR of 10pcs with PO price 3Rs/pc.
    Now GR/IR should credited with 30Rs.
    Negative stock (which issued) with 1Rs. But incoming mtl. is of 3Rs/pc. So difference of 2Rs for Qty 5 (Neg. stk) of 10Rs. will posted to Price Difference account. And remaining 20Rs posted to stock account.
    Std. price.--> step 1,2 remain same
    3. Post GR of 10pcs with PO price 3Rs/pc.
    Now GR/IR should credited with 30Rs.
    Durin GR Stock account posting will be 10Rs but due to negative stk value the net stock value will be 5 Rs. Remaining 20Rs posted to price difference acct.
    Regards,
    Sandeep

  • Standard or Moving avg price

    Hi Experts,
             What is the difference if price control of finished products in Standard or moving avg price ?
    1. I  know moving avg price is always change able but Standard price is also changeable if standard price is changable when it change ?
    2. If price control is S for finished products then product costing is happened or what !!!
    3. Price and qty of FG if it is moving avg price when changed (When GR is happened or when settlement is happened) ?
    4. In finished products if  price control S , when we run costing run (CK40N) i think price is changed,before it we settlement production order at that time price is also changed
    Kindly clarify
    Thanks & Regards,
    Debashis
    Moderator: Please, respect the rules; ask one question per thread and try not to ask 'quiz' questions

    Hi,
    Pl see the answers as below:
    What is the difference if price control of finished products in Standard or moving avg price ?
    1. I know moving avg price is always change able but Standard price is also changeable if standard price is changable when it change ?
    *Ans:You are right on moving avg price that new avg price  is calculated after every goods receipt, invoice receipt and order settlement. But in case of price determination "S", all the material movements got updated with standard price only. If Material Ledger is in Active, you can't change the standard price of the Material once you have the movements posted or the status of the Material in CKM3N shows " Quantities and Values Entered"*
    2. If price control is S for finished products then product costing is happened or what !!!
    Ans: No. This is one of the available valuation method in SAP.
    3. Price and qty of FG if it is moving avg price when changed (When GR is happened or when settlement is happened) ?
    *Ans: new avg price  is calculated after every goods receipt, invoice receipt and order settlement*
    4. In finished products if price control S , when we run costing run (CK40N) i think price is changed,before it we settlement production order at that time price is also changed
    Ans: When you run CK40N standard price will get updated against the respective material and the same is used against all the material movements.
    The main difference between the two valuation procedures is that the moving average price represents a current avg price while the standard price is based on planned values.
    In case of Price Control "S" differences to a price difference account and however in case of  moving average price,  the material stock value in Financial Accounting will get updated.
    Regards,
    Pandu

  • Moving avg price is negative

    Hi,
    I am trying to post invoice for a material and PO but i am getting error message Moving avg price for the material is negative.
    Please let me know your views on this.
    Helpfull answers will be rewarded.
    thanks
    Suresh

    Hi,
    It doesn't mean that if you post higher value of difference then it will post MAP as -ve.
    You might be posting higher value than the actual MAP of the material so it affects the MAP and if Difference amount is more than MAP value then this problem occurs.
    And it also generates an additional accounting document of "PR" Document Type i.e. Price Change. But in your case, it will not allow to post you the MIRO Document.
    If possible, better reverse the GR and change the PO value as per requirement and then do fresh GR and then MIRO.
    Otherwise Try and change the material stock value in MR22 - Debit/Credit material stock value. It will not work by changing price in MR21.

  • Change in Moving Avg.Price after GI

    Hi All,
    We need your advise to find the root cause of sudden change in the Moving Avg.Price from US $100 to US $10,000 during GI (202 MvT - GI to Costcenter)
    Further we observed that within 15 days the MAP has came down to US $132.
    Could you please let us know the possible causes of this...
    Regards,
    Kiran

    Hello,
    Please use MB51 to analyse all the movements of the material. Also, look at PO history of the Materials for any possible GR/IR maintenance and Invoices for any possibles price adjustments. Other possible reasons are fractional stock quantities, reversal of a transaction that took place in the past and rounding off issues.
    Thanks,
    Venu

  • Standard and Moving Average Price in Material Master

    Hello,
    Can any one please tell the basic difference between Standard and Moving Average price? both the cases how the Material Price is calculated?
    And please provide the accounting entry's also.
    Thanks

    Dear S McIntosh,
    You may check URL below that explain the difference between MAP and Standard price.
    http://help.sap.com/saphelp_47x200/helpdata/EN/47/60ff0749f011d1894c0000e829fbbd/frameset.htm
    Regards,
    ian Wong

  • Stock of material and moving average price for each valuation type

    Hi
    Is anybody aware of any standard report which will show the stock of material and moving average price of the material for each valuation type.
    M5BL is one report but would like to check if there is any other report.
    Regards
    Vaibhav Mahajan

    Hi,
    Check MB52, select 'Display batch stock' option.
    Batch is nothing but your valuation type.
    You can see those details there.
    Regards,
    Piyush

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