Material ledger

[former_member1278276]

Hi,

I have following questions about material ledger; request your help to provide clarity on the same.

Thanks in advance for the help.

1. Revaluation of inventory is optional or mandatory through material ledger
2. If we opt for revaluation do we have option to choose which type of cost to be
   considered for revaluation like variances on account of fixed cost should not
   be taken to revaluation etc.
3. Will COGS revaluation is posted to COPA? We will be transferring standard estimate
   to COPA. 
4. If COGS variance is flowing to COPA, how production variances and COGS variances
   are differentiated in COPA.
5. If opening stock exists for the stock and revaluation through ML at month end
   happens, how system identifies the stock to be revalued is FIFO method for
   issues will be considered?
6. what are the disadvantages of using ML ? Like month end process delay , is this because user need to perform lot of activities or system takes time to

        Process CKMLCP - run time is more?

[Former Member · Accepted solution]

• Hi,

Pls find my answer below.

• Revaluation of inventory is optional or mandatory through material ledger

Activation of material ledger is seperate process and Actual costing is seperate.

Revaluation of Consumption will revaluate your consumption and ending inventory but this is only calculation.Financial entry will generate in post closing material ledger.

• If we opt for revaluation do we have option to choose which type of cost to be
  considered for revaluation like variances on account of fixed cost should not
  be taken to revaluation etc.

System will consider whole price variance(production variance+price variance) for revaluation.

• Will COGS revaluation is posted to COPA? We will be transferring standard estimate

to COPA

Execution of ckmlcp will have only FI entry.Need to execute KE27 in order to transfer variance to COPA in month-end

• If COGS variance is flowing to COPA, how production variances and COGS variances

are differentiated in COPA.

Complete variance will charge to consumption and ending inventory.There will be no diffrentiation.

• what are the disadvantages of using ML ? Like month end process delay , is this because user need to perform lot of activities or system takes time to

        Process CKMLCP - run time is more?

Material ledger/Actual costing is disciplined process.Once you activate material ledger .You need not to deactivate material ledger.

Process of ckmlcp is taking time but sap has issued some note in order to improve efficency.

regards

RK

[former_member1278276 · Accepted solution]

Dear RK,

Thanks for providing your valuable time for providing the above answers, can i request your help on the following also in ML scenario

1. Is raw material prices are to at Stadard cost or moving average, as i know it is advisable to maitain at standard price, if we have option to choose moving average , what's the impact ?

Is only material price variances are not considered in ML for roll up in actual costing structure or any other implications?

2. In our production scenario, some Utilities (part of BOM) are confirmed in production with planned quantity only , at the month end client wanted to apportion actual Cost (the difference between acutal quantity and confirmed quantity in PP) to all the prodution orders opened in the month. Is there any transaction in ML to take care of the actual amount billed without PP confirming the actuals? 

This cannot be part of activity.

3. Production variances transfer to COPA - requiremet is to show each type of variance as fixed and variable separately in COPA. Can we achieve this by providing different source GL accounts in PA transfer strucuture? I had doubt it cannot since variance category is only one and this groups both fixed and variable together. please clarify

[Former Member · Accepted solution]

HI Santsh,

1. Is raw material prices are to at Stadard cost or moving average, as i know it is advisable to maitain at standard price, if we have option to choose moving average , what's the impact ?

Is only material price variances are not considered in ML for roll up in actual costing structure or any other implications?

Answer- If material Master has price control 'S' and price determination '3' then only material considered for actual costing.

If you will select price control 'V' for RM/PM so only SFG/FG Production variance will be considered for actual costing because there are no variance at RM/PM Level.

I have desigend System Both ways for my client where RM/PM as 'S' and 'V'

In case of 'V''

Price are weighted moving average price and not considered for actual costing and there will be no roll up of Varaince from RM/PM to FG and Only Qty variance of FG rolled up to next level

In case of 'S''

All variance will be moved from lower level(RM) to higher Level(FG).

3. Production variances transfer to COPA - requiremet is to show each type of variance as fixed and variable separately in COPA. Can we achieve this by providing different source GL accounts in PA transfer strucuture? I had doubt it cannot since variance category is only one and this groups both fixed and variable together

Answer- You need to group your Consumption GL used in Production order in 2 cost element Group.

1)Fixed

2) Variable

Then create PA transfer structure

create two assignment

1)Fixed

2) Variable

Assign Fixed cost element group under Fixed Assignment with Fixed varaince value field.

Assign Variable cost element group under Variable Assignment with Variable variance Value field.

2. In our production scenario, some Utilities (part of BOM) are confirmed in production with planned quantity only , at the month end client wanted to apportion actual Cost (the difference between acutal quantity and confirmed quantity in PP) to all the prodution orders opened in the month. Is there any transaction in ML to take care of the actual amount billed without PP confirming the actuals? 

Answer - There are standard tcode in Actual costing 'CKMDUVREC'/CKMDUVACT

where you can enter actual qty of activity and system will distribute it to all confirmed production order activity qty based on standard.

this way you can actualize your activity qty in monthend and can do the splitting/actual activies price calculation/revaulation of activity based on actual price.

I hope -My answer will help you

regards

RK

[former_member1278276 · Accepted solution]

Thanks RK for prompt response,

3. Production variance- Fixed and variable , thanks for explaining how to source and value fields, which i was clear but i had a doubt whether system will calculate the variance as fixed and variable ?

2.  utilities are part of BOM - but CKMDUVREC'/CKMDUVACT is for Activities i think right, so how can we use this for BOM components?

I have few more questions , of course not related to ML

1. In Costing variant if we select Purchase info record, which purchase info record will be picked, since one material will have more than one info record and for vendor

2. COPA sales plan has to be transferred to FI , COPA value field for Revenue is one whereas Revenue GL accounts different, can we take charteristics also for mapping value fields  to GL accounts

[Former Member · Accepted solution]

Hi Santosh,

For material -

MM team will be doing tag count through MI01/MI04/MI07 IN MONTH END with 701 and 702

accounting entry-- Stock adjustment A/c DR

                                   To Inventory A/c

there are standard tcode in Actual costing Material Ledger- CKMDUVMAT.

It will reverse the accounting entry generated at Tag Count and charge it to production order where this material is consumed.

Let say this material consumed in FG1 with 10 qty and FG two 6 qty

Tcode -Ckmduvmat

Reverse Tag count entry posted at MI07

and charged to

Production order 1 dr = 10/16* Tag count value

Production order 2 dr = 6/16* Tag count value.

regards

RK

As per SCN POLICY.

Request you to open new thread for new question and close this thread.

[Former Member · Accepted solution]

Hi Santosh,

For material -

MM team will be doing tag count through MI01/MI04/MI07 IN MONTH END with 701 and 702

accounting entry-- Stock adjustment A/c DR

                                   To Inventory A/c

there are standard tcode in Actual costing Material Ledger- CKMDUVMAT.

It will reverse the accounting entry generated at Tag Count and charge it to production order where this material is consumed.

Let say this material consumed in FG1 with 10 qty and FG two 6 qty

Tcode -Ckmduvmat

Reverse Tag count entry posted at MI07

and charged to

Production order 1 dr = 10/16* Tag count value

Production order 2 dr = 6/16* Tag count value.

regards

RK

As per SCN POLICY.

Request you to open new thread for new question and close this thread.

[former_member1278276 · Accepted solution]

Hi RK,

The solution provided by you is for material for which inventory will be maintained, whereas i was discussing about Utilities (Electricity, nitrogen gas etc) which we are creating as pipe line material, but the same will not be tracked at order level, so some plan values will be confirmed by PP to order, at the month end actual billing happens the total amount will be different due to quantity or price difference (mostly quantity) and the same should be charged to all production orders.

There is no physical inventory count that is happening

[Former Member · Accepted solution]

Hi Santosh,

The only way to charge all non bom item to production order is

You need to define in BOM as plan qty and charge it off from order.

and actualization will happen as said above.

regards

RK