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Difference in Moving Avg Price & Standard Cost

Hi Sapians,

Can you please guide me regarding difference between MAP & Standard Costing in relation to the working/process and accounting entries?



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  • author's profile photo Former Member
    Former Member
    Posted on Oct 10, 2010 at 12:25 AM

    The main difference with respect to accounting entries is that with Std price the variances are written off to P&L account; but with MAP it is absorbed into inventory.

    Std Price (on purchase)

    Dr Inventory 100

    Cr GRIR 120

    Cr Purchase Price Varianc e 20

    MAP (on purchase)

    Dr Inventory 120

    Cr GRIR 120

    On Goods Issue, there is not much of a difference in most scenarios - GI is done at price on MM master (100 for Std Price and 120 for MAV in above example).

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