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# Purchase Price Variances Sub Contracting

Oct 03, 2017 at 07:26 PM

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Former Member

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

Holger Homann Oct 04, 2017 at 07:11 AM
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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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Former Member

Holger

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

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.

Former Member Oct 05, 2017 at 10:37 AM
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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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Former Member Oct 06, 2017 at 02:33 AM
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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
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Hi KK Lam

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
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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
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Hi Gurus

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

Kumar

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