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Raw Material Inflation/deflation impact on Finished goods

How do we  link inflation/deflation of  raw materials purchased through procurement to Finished goods(products). There will be impact(inflation/deflation) of the products based on current material purchases. How do we account for the inflation/deflation of raw materials.Please suggest? 

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1 Answer

  • Dec 28, 2014 at 11:14 PM

    Hi Srihari,

    Do you mean to say your raw material has price control V (moving avg) assigned, which is causing the inflation/deflation? If so, you could use batch valuation. Every purchase receipts should be batch valuated and the same should reflect in FG

    Thanks

    Prem

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