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Former Member

Inventory Master Data

In the inventory master data the field Item cost is been displayed where we have given the Item price at unit price where we mention then my question is why it is been displaying the item cost in the Inventory where both the prices are different i.e unit price and the item cost

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3 Answers

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    Former Member
    Posted on Sep 28, 2007 at 03:01 PM

    Hi santhosh,

    Unit price is for the purpose of using in documents. If you are selling or purchasing the material, the unit price will be the default price.

    Item cost is for the purpose of stock valuation, which may be by FIFO or Moving avg., or standard cost. Item cost and unit price need not be a same one.

    For finished goods, my item cost (Cost of production) will be always lower than unit price, which is my selling price

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    Former Member
    Posted on Sep 28, 2007 at 10:35 PM

    Santosh,

    Dinessh is right in saying what the Item Price / Unit Price is for. The Unit Price is part of a Pricelist with which it is associated.

    This is mainly used in the marketing documents and can also be associated to a BP. Example: Purchase Price, List Price, etc. Once you associate a Pricelist to a BP then the price from this pricelist is used when creating marketing document for this BP.

    Item Cost that you see in the Inventory tab of the Item Master is calculated by the System when you do Stock Taking or Goods Receipt

    It can also be set manually when you have no inventory for that Item.

    Suda

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  • Posted on Sep 29, 2007 at 09:21 AM

    Basically in retail, distribution, wholesales business, they need item cost and item price (set in the price list from inventory). Item cost will be depended on inventory valuation method, meanwhile item price could be managed according to the company's need. But when you calculate gross profit, you could choose both item cost or price. That's SAP B1 characteristic. In the manufacturing area, you could also do like in the non-manufacturing area. Price list can be assigned to specific customer but item cost can be differentiate per warehouse, for example you have a warehouse in UK, in USA, etc and you can differentiate the item cost then adjust price list to obtain gross profit or margin. That's why the item cost is display per warehouse.

    Rgds,

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