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SAP MM- Standard Price and Moving Average price

What is the Standard Price and Moving Average price, give one example when material movement.

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  • author's profile photo Former Member
    Former Member
    Posted on Nov 20, 2007 at 11:27 AM

    Hi

    In the SAP System, there are two types of price control:

    Standard price

    Moving average price

    These two types of price control differ in how they handle price variances resulting from goods receipts or invoice receipts.

    Valuation using a standard price has the following features:

    All inventory postings are carried out at the standard price

    Variances are posted to price difference accounts

    Variances are updated

    Price changes can be monitored

    If a material is assigned a standard price (S), the value of the material is always calculated at this price. If goods movements or invoice receipts contain a price that differs from the standard price, the differences are posted to a price difference account. The variance is not taken into account in valuation.

    Valuation using a moving average price results in the following:

    Goods receipts are posted at the goods receipt value.

    The price in the material master is adjusted to the delivered price.

    Price differences occur only in exceptional circumstances.

    Manual price changes are usually unnecessary. However, they are possible.

    If a material is assigned a moving average price (MAP), the price is automatically adjusted in the material master record when price variances occur. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account; as a result, the moving average price and the value of the stock change.

    Thanks & Regards

    Kishore

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  • author's profile photo Former Member
    Former Member
    Posted on Nov 20, 2007 at 10:59 AM

    Hi,

    Standard price

    Selling price is normally fixed and that is the reason it should be standard price(eg:FERT material).Your stock valuation is done at this price.

    Moving avg price.

    When prices are fluctuating (ie Eg during procurement) you need to have moving average price so that valuation happens at current price.

    Thanks

    suresh

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