4/10/2015

MaterialLedger+ActualCosting(PUP)|SCN

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AccountingandFinancialClose

MaterialLedger+ActualCosting(PUP)
PostedbyFernandoAlmeidainAccountingandFinancialCloseonJan7,20133:45:20PM
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1.MaterialLedger+ActualCosting(PUP)

1.1PeriodicUnitPriceDuringthePeriod

Duringtheperiodalltransactionsarevaluedatstandardcostasapreliminaryvaluation
SAPcollectsallvaluationrelevanttransactiondatainthematerialledgerforaperiod

PriceDifferences
Exchangeratedifferences
Productionvariances

Differencesfromthepreliminaryvaluationpricearepostedtopricedifferenceaccounts

1.2PeriodicUnitPriceMonthend:SinglelevelPricedetermination

SAPcalculatesthePUPbasedonthesumofthepricedifferences,exchangeratedifferencesandproduction
variancesinrelationtothecumulativeinventoryquantityandvalue
WeightedaveragecostisusedtodeterminePUP
PUPupdatedinMaterialMaster(statistical)
Novariancesarerolledtothenextproductionlevel

1.3PeriodicUnitPriceMonthend:SinglelevelPricedetermination

OnlymovementscollectedinthematerialLedgerforreceiptsandotherinward/outwardmovementswilleffectthe
PUP
Consumptionhasnoeffectontheprice

1.4PeriodicUnitPriceMonthend:MultilevelPricedetermination

Anactualquantitystructure(BOM)iscreatedforallmaterialswithinaplantbasedongoodsmovements
Variancesassociatedwithconsumptionoflowerlevelmaterialsarerolleduptothehigherlevelsofthisactual
structure

2.Scenario
2.1Receiptandinvoicingofrawmaterial
FinishedProductFP01createdfromsingleRawMaterialRM01.
PricevariancesonreceiptofinvoiceforRM01.
ProductionOrderutiliseshalfofRM01stockandincurslotsizevariances.
AllFP01soldinperiod.

RM01Std@$10/ton

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MaterialLedger+ActualCosting(PUP)|SCN

FP01Std@$20/ton

2.2ProductionOrdercostingandsettlement

RM01Std@$10/ton
FP01Std@$20/ton

2.3Saleoffinishedmaterial

RM01Std@$10/ton
FP01Std@$20/ton

2.4PuPcalculationandposting

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2.5PeriodicValuation

RM01Std@$10/tonPUP@$15/ton
FP01Std@$20/tonPUP@$30/tonSales@$40/ton

3.Analysis

StandardPrice

Features

Pros

MovingAverage

Allinventorypostingsare

Goodsreceiptsarepostedat

carriedoutatthestandardprice

thegoodsreceiptvalue.

Variancesarepostedtoprice
differenceaccounts

Materialpricereflecttheactual
priceincurred

Pricechangescanbe
monitored

Pricedifferencesdonotoccur
exceptinrarecircumstances

Ensuresconsistentcost
managementoftheproduction
processandmakesvariances
withinproductiontransparent

Variancesoccurringbothfor
materialsproducedinhouseas
wellasmaterialsprocured
externallycauseanupdatein
thematerialpriceandthe

Canbeusedasbenchmarkto
comparethecontribution
marginsofamaterialindifferent
marketsegmentsinProfitability

materialstockvalue

Analysis
Cons

Doesnotreflecttheactualcosts
incurredduringtheperiod.This

Priceusedtovaluateamaterial
consumptionisalmost

canleadtoinexactvaluation
pricesformaterialswhose
procurementpriceschangea
greatdealoveraperiod,or

completelydependentonthe
timeatwhichthegoodsissueis
postedinthesystem

whosemethodofproduction
changeswithinaperiod.

Thisproblemincreasesin
multilevelproductionwitheach
newproductionstep.This
meansthatthecostsforthe

Noconsistentcost
managementofproduction
process.Theeffectofchanges
intheproductionprocess,for
example,arenotrecognizable
inthefinishedproduct,and
comparingresultsfromdifferent
areasinProfitabilityAnalysisis

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MaterialLedger+ActualCosting(PUP)|SCN
notreallymeaningfuldueto
lackofabenchmark

finishedproductmaynotreflect
themostrecentdata.
Thematerialstockvaluedoes

notreflectthecurrent
procurementcosts,asvariances
fromthestandardpriceare
collectedinapricedifference
accountinFinancialAccounting
anddonotleadtoacorrection
ofthematerialstockaccount.
Thevariancescollectedinthe

Anymistakeenteringdatacan
causeimmediateand
unwantedchangesinthe
materialprice.Anygoods
issuespostedfollowingthis
errorwillbevaluated
immediatelywiththisincorrect
materialprice

pricedifferenceaccountcanno
longerbeassignedtothe
individualmaterial.

6699Views

Tags:material,cost,ledger,ml

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7Comments
ThummalapentaSudhakarraoJan24,20134:47PM

Verygoodexplanationregardingpricingofmaterials
Like(1)

VenkatEmaniMay6,20133:23AM

Excellentexplanation!!
Like(0)

DevendraMohanMay6,20137:31AM

Wonderfulexplanationofpricingofmaterialsinfulllengthandaveryappropriateexplanation
Like(0)

TrinathGujariJan13,20142:26PM

greatjobinformativedocument
Like(0)

SadeghEbnoddinOct23,20143:01PM

thankyoudear Fernando
thisisaveryclearandinformativedocument.
ireallyenjoyed.

goodlockinyourjob
Like(0)

IralaDamodarareddyDec3,20148:48AM

Greatprovidedwithclearsteps.
Like(0)

Julie(PHANTHITHUHUONG)Apr6,20158:30AM

Nicedocument...
Like(0)

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