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Raw material cost estimates

Former Member
0 Kudos

HI experts,

Currently we have the following scenario:

There are some raw materials which are procured externally, and these materials are maintained with price control S

Well, the problem is that the standard cost for the material consists of a few more components, for example:

The standard price for the material X is 20 USD which consists of:

- the price of the material itself : 15 USD

- the import duty : 5 USD

let's say if the actual import duty happened during IR is 6 USD, how can we get the variance from the difference between the import duty? I am unfamiliar with raw material cost estimate, but seeing that the import duty will be captured using condition type in PO, i assumed that we can use raw material cost estimates with this, and use the COPA report with record type B for this case.

Could anyone give any suggestions regarding this case? It is better if it comes with step to step guide.

Thank you very much in advance

Regards,

Erwin

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

hi Erwin & Ajay

Can we think of Additive cost (CK74N) to address this issue ? As client wants to know only diff of import duty.

There may be seperate GL for import duty and creat CE and creat additive cost to capture in standard cost in seperate element. You can update this cost as and when gets change.

kkumar

Former Member
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Hi Ajay and Kumar,

Thank you for both of your replies and i apologize for the late responds.

I managed to create the raw material cost estimate using the origin group.

Thanks to both of you

Answers (3)

Answers (3)

ajaycwa1981
Active Contributor
0 Kudos

Hi Erwin

1. The ideal design would have been Price Control V if the material is outright purchased... There by not leaving any scope for variances... You would agree that it is best to valuate inventory @ actuals as far as possible

2. If you want to retain S, then release your Std cost as many times as the Base Price of 15 or Import duty of 5 usd changes... This will also avoid variances during MIGO.. However, it will throw up inventory revaluation figure each time u release new cost estimate

Else, the variances will be updated to CO or COPA as per your choice in OKB9.... The record type will be B

Are you not able to update variance to COPA?

br, Ajay M

Former Member
0 Kudos

Hi Ajay,

Thank you for your input, but making it as price control V is not possible due to the client's company policy of maintaining a standard price for at least one year time. During "normal" circumstances, i believe that the COPA will be updated with record type B.

However, in this case, the client has a requirement to be able to know the variance from the import duty which as to my knowledge is not possible because price variance from PO can only be updated into one G/L Account.

ajaycwa1981
Active Contributor
0 Kudos

Hi

Yes you are right.. It can only be updated in one GL account and one Value Field.... WHatever be the reason for price difference, if it is different than 20 USD - It will always hit the PRD account and the same value field

br, Ajay M

ajaycwa1981
Active Contributor
0 Kudos

Hi Erwin

1. The ideal design would have been Price Control V if the material is outright purchased... There by not leaving any scope for variances... You would agree that it is best to valuate inventory @ actuals as far as possible

2. If you want to retain S, then release your Std cost as many times as the Base Price of 15 or Import duty of 5 usd changes... This will also avoid variances during MIGO.. However, it will throw up inventory revaluation figure each time u release new cost estimate

Else, the variances will be updated to CO or COPA as per your choice in OKB9.... The record type will be B

Are you not able to update variance to COPA?

br, Ajay M

ajaycwa1981
Active Contributor
0 Kudos

Hi Erwin

1. The ideal design would have been Price Control V if the material is outright purchased... There by not leaving any scope for variances... You would agree that it is best to valuate inventory @ actuals as far as possible

2. If you want to retain S, then release your Std cost as many times as the Base Price of 15 or Import duty of 5 usd changes... This will also avoid variances during MIGO.. However, it will throw up inventory revaluation figure each time u release new cost estimate

Else, the variances will be updated to CO or COPA as per your choice in OKB9.... The record type will be B

Are you not able to update variance to COPA?

br, Ajay M