Hi,
I got the help from forum of the consumption.
To make it clearer, I will show by process/figure to get clearer understanding.
1) 2012-10-05
during goods issue to production order, debit consumption credit raw material stock.
say the price of the raw material is $1 and quantity is 1000, then the consumption is $1000.
2) at the same time, in MM03, the moving average of the raw material is $1.
3) in OKTZ raw material cost component, is referring to consumption account.
4) after some time, the moving average price has moved to $1.20
5) 2012-11-01 costing run
to determine the raw material cost, it is based on $1.20. say quantity issue is 100, then the raw material cost is $120
So my question now is, what is the purpose of consumption account which defined in raw material cost component? because the raw material cost should be $120 when it is used to cost FG standard cost.
thanks