hi guru ,
i have bit dout. in refurbishment process..related to price
in my screen shot.
A:- price is 1959(issue to work shop) before that it's price is 1900 so my dout the price will rise when i am sending this into work shop.?
B:-1976 this price rise again...??
C:-1934(this time reduce).???
D:-2384 subtract (reduce)??
Hi Ronak,
A:- price is 1959(issue to work shop) before that it's price is 1900 so my dout the price will rise when i am sending this into work shop.?
The price you mentioned is a moving average price in the material master. which is calculated as
((Price of C1 X Qty C1)+(Price C2 X Qty C2)+(Price C3 X Qty C3)) / (Total QTY C1 + C2 +C3)
In this case you are issuing material to workshop, so total Qty is reducing, hence as per formula, increase in the moving average price.
B:-1976 this price rise again...??
When you return the material to the store after refurbishment, Qty of C2 material gets increase which has higher price than C3 (i.e. 2500 in this case). So as per above formula, moving average price of material gets increase.
D:-2384 subtract (reduce)??
Now when you settle the refurbishment order, as explained by Mihir, actual cost to refurbish the material was less than the unit price of C2 (lets say its approx around 1224), which should get settled on the C2 material itself ? So again by using same logic as above, moving average price of C2 will be calculated as,
((C2 price before return X C2 Qty before return) + (Actual cost of refurbish order X Qty of C2 returned)) / (Total C2 qty)
C:-1934(this time reduce).???
As explained earlier, as price of C2 gets reduced due to settlement, moving price of the material gets reduce.
Hitesh
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