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Former Member

std price and moving avg price

hii frends...in which scenario we hve to go for std price and moving avg price...

thnx in adv...

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5 Answers

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    Former Member
    Jun 23, 2009 at 03:48 AM

    Generally all raw materials (ROH), spare parts (ERSA), traded goods (HAWA) etc. are assigned as moving average price (MAP) because of the accounting practice of accurately valuating the inventory of such materials. These materials are subject to the purchase price fluctuations on a regular basis.

    Company generally uses moving average on purchased materials with small cost fluctuations. It is most appropriate when the item is easily obtainable. The impact on margins are minimized which reduces the need for variance analysis. Furthermore, the administrative effort is low as there are no cost estimates to maintain. The cost reflects variances, which are closer to actual costs.

    The semi-finished goods (HALB) and finished products (FERT) are valuated with standard price because of the product costing angle. If these were to be MAP controlled, then finished/semi-finished product valuation would fluctuate due to data entry errors during back flushing of material and labor, production inefficiencies (higher cost) or efficiencies (lower cost). This is not a standard accounting and costing practice.

    Hope this will help you.

    Cheers,

    Parag Mahajan

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  • Jun 22, 2009 at 06:03 PM

    SAP recommends the use of standard pricing for own manufactured goods, while the moving average shll be used for externally procured goods

    http://help.sap.com/erp2005_ehp_04/helpdata/EN/90/ba60c9446711d189420000e829fbbd/frameset.htm

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    Former Member
    Jun 23, 2009 at 03:52 AM

    Hi,

    Generally row materials and externally procured materials are valuated at MAP and finish products you can say inhouse products are valuated at std price.

    nitin

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  • Jun 23, 2009 at 04:43 AM

    Dear Suresh,

    SAP recommends Price control indicator V - moving average price for all the externally procured

    items and the sub-contracted products and price control indicator S - for the Inhouse manufactured

    products.

    But some clients in the nice versa way,S for the purchased items and V for the inhouse manfactured

    products.

    It depends on the client's business requirement,how to valuate the materials on what price it has to be

    made.

    Regards

    Mangalraj.S

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    Former Member
    Jun 23, 2009 at 01:23 PM

    Hi.

    These price settings is always depnds on your business scenarios.

    Like MTS( Make to stock) you will procure raw materials (direct materials) which are set to standard price, because definately you have contract with these materials with vendors.even as per SAP thumb rule you have choose S for raw materials.

    Others materials like HALB, Spares. depends on your process u can set price indicators,

    Regards

    S B H

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