PUP price of a material

[former_member216878]

Dear Guru`s ,

When I looked at the production order against which FG material was produced , I saw that

1. NO raw material was consumed against this production order . In nut shell , the FG was produced , without consuming any SFG / Raw material and no Activity confirmation has been done . In short Actual cost of the material should have been ZERO .

2. Planned qty of production order was 1000 but what is produced is only 40 .

But material is having PUP price..how is this possible.???

Regards'

Nitisha

[Former Member]

Hi..

If you use “product cost by order” method to calculate COGM, you should understand how to calculate WIP.

WIP amount = Input amount(Debit amount) – standard cost for FG.

So, PUP price for 40 qty is calculated by standard cost for FG.

For example FI document.

Input amount is 0.   Standard price for qty 40 is 40.

DR) FG 40         CR) clearing account 40 => Material ledger’s PUP.

  DR) clearing 40  CR) WIP 40

[former_member216878]

Hi Big Choi,

What I have understood is this that for 40 material PUP has come and for 960 wip value should come..

If I`m wrong then please correct me...

Regards

Nitisha

[Former Member]

Hi..

Which of production order or cost collector do you use for COGM ?

If you calculate COGM using cost collector(“product cost by period”), your situation is occurred.

Because wip amount is valuated using target cost.

Variance = Input amount(Debit amount) – standard cost for FG -  Traget cost WIP.

For example FI document .

Input amount is 0.   Standard price for qty 40 is 40.  Traget cost wip 60.

DR)  FG 40                     CR) clearing account 40 => Material ledger’s PUP.

  DR) WIP 60                   CR) clearing account 60

  DR) clearing account 100  CR)production variance 100.

=> PUP -60 = 40(Std cost) - 100(variance)

   Because pup have a negative value, PUP will be set by current standard cost or pervious month’s pup using Fallback strategy(note 579216).

Refer to sap help site:

http://help.sap.com/erp2005_ehp_07/helpdata/en/90/ba6609446711d189420000e829fbbd/content.htm?framese...

Work in Process in Product Cost by Order - Cost Object Controlling (CO-PC-OBJ) - SAP Library

[former_member216878]

Hi Big Choi,

We are using Production orders for COGM, and now I got the point that why my Std=PUP because system has not calculated the PUP for nov month and has updated Std price instead of it.....

Now what process should I follow to correct it???

Regards

Nitisha

[Former Member]

Hi..

Because of using “product cost by order”, if you don’t have initial stock and you
have WIP for 960 and the BOM of FG don't have SFG,  your FG for 40 material will be valuated by standard cost(=PUP).