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Former Member

Purchase Price Variances Sub Contracting

Hi Gurus

I activated Purchase Accounting. I also enabled the PPV for subcontracting.

I have PIR with PB00 as the condition type say 100$.

I created the standard cost estimate for MAT X which also has Mat Y as Raw Material with 100$ with Additional cost of Raw Material with 5$ so total cost of Mat X is

Subcontracting charges 100$

RM con 5 lbs X 1$ 5$

Now in My Purchase Order for SC I enter say 100$. So there will be a PPV of 5$.This is fine.

But when we have actual RM consumption we get 6 lbs. then PPV also becomes 5$ plus 1$ totalling to 6$ and We do not want 1$ to be captured at the same PPV account instead can we get 1$ to a different account. Pure PPV should only be captured in the PPV and not consumption difference of Raw Material. Please let me know if we can achieve this

Kumar

But

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6 Answers

  • Oct 04, 2017 at 07:11 AM

    Sorry Kumar but the PPV always includes the real PPV which could be also a difference in consumption not only in prices.

    If you want more Details about your PPV on SC you have to Combine the SC with a production order then you can use the production variance calculation to explain the values of the PPV.

    These are pp orders with a simple Routing which only contains one step "external manufacturing w/ Sub contracting".

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    • If you do not want to use the Loop way via production order incl. SC i think the only way to post the consumption difference to another account is to post the difference via a dedicated material document where you can provide another Gl account e.g. movement type 291.

      I do not know any other option here.

      If I would have to solve it now I think i would prefer a Workflow which is triggered by the Business Object Type BKPF and its Event CREATED. I would use an Event-Check-Function Module to prevent creating useless workitems for documents which are definitely no SC related ones.

      The Workflow would then recalculate the values and post a correction on specific sub accounts.

  • Oct 05, 2017 at 10:37 AM

    Hi Kumar,

    This is standard sap behavior when you are using raw material with moving average price. If you want RM cost 5 then you have to use standard price 5 for RM. With this, when you purchase RM with different price let say 6, system will post PPV 1 during GR. Your PPV in subcon during GR remain 5 as long as there is no price change to processing fee and MAT X standard price.

    Dr MAT X 100

    Cr Subcon output 105

    Dr RM Y consumption 5

    Cr Change in inventory 5

    Dr PPV 5

    Dr processing fee 100

    Cr GR/IR subcon 100

    If you want the PPV 1 post to different PPV account. You need to assign different PPV account in OBYC-PRD for to RM's valuation class.

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  • Oct 06, 2017 at 02:33 AM

    Hi Kumar,

    Question:

    1. When you perform GR for SC material X on 30th Aug, the RM quantity = 5 right?

    2. Later on, you know the actual RM consumption quantity actually = 6. You reverse step 1, update the bom in PO and GR again?

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    Former Member
    Oct 05, 2017 at 02:49 PM

    Hi KK Lam

    Thanks for your response.

    I have the following conditions in the Purchase Info Record. This is the source from which I create my cost estimate for subcontracting material.

    PB00 say 100$

    zboo say -100$

    ZB01 say 100$

    Now when I create the cost estimate Mat X system picks up 100$ from PIR and then Mat Y is also used as compo whose price is 5% (5 lb @1$ =5$) then total standard cost estimate is 105$

    Now the actual PB00 in the Purchase Order is 120$. ( Purchase accounting is active already.)

    Now system compares between 120 and 100 and the PPV goes to 100$. GR for SC happens on 30st Aug and 1st Sep only we come to know actual RM consumption so we book actual RM consumption of 6 LB which is more than BOM qty of 5 LB. Now the difference 1 LB X 1$ = 1$ should be to a different account.

    PRD PRA or PRU did not work as well

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    Former Member
    Oct 05, 2017 at 02:51 PM

    KK Lan

    The standard cost estimate for Price control for RM is S and then we did maintain a different valuation class. then it did not work

    Kumar

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    Former Member
    Oct 10, 2017 at 05:56 PM

    Hi Gurus

    Please respond by email if I can use any user exits or enhacements

    Kumar

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