Single level and multi level price determination

[Former Member]

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

[Former Member · Accepted solution]

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.

[Former Member]

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!