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Former Member

Single level and multi level price determination

Hi :

Good day...In ML singlet level and multilevel price determination are confusing me..I have read the literature about them but i am unable to understand the core concept of two..Why and in which instances we make use of these two..Is there any difference between them..How these two helps in arriving at periodic unit cost of product..Please guide ..

Br.

Edited by: Farooq@CO on Dec 14, 2011 5:23 AM

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    author's profile photo Former Member
    Former Member
    Posted on Dec 14, 2011 at 07:39 AM

    Material whose price is caliculated through single

    level price determination, movements are always valuated

    at std price because the price control indiactor in the

    material master record is set to "S". Difference between

    the std price and actual price of a valuated transaction

    are updated in the material ledger.

    Multilevel price determination caliculates the periodic unit

    price for a material.The std price the single level difference

    cumulated in the period the difference between planned and

    actual price taken into account.

    Multiple level are the result of one material being

    used in another material.This effect the roll up of cost like Differences are

    rolled up from raw material through semi finished products

    to finished products.

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 14, 2011 at 07:51 AM

    Hi, Single level differences arise when the procurement prices varies with the Standard price of the raw materials. This differences captured seperately and at the month end, through actual costing run, this purchase price variances are averaged to the whole quantity. Thus we get one period unit price for all raw materials. In the case of SFG and FG, there shall be multi level differences due to variances against the standard and further, single level price diferences, as explained above, shall also be included due to consumption to roll up the cost so as to arrive at the actual cost of the product through actual costing run. Trust this helps much! Cheers!

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