Standard price & moving average price?

[Former Member]

What is the difference between Standard price & moving average price? How it works?

[Ramkumarreddy]

Gross value means standard price

[karen_tosat · Accepted solution]

Hi, please refer to

http://help.sap.com/erp2005_ehp_06/helpdata/EN/47/60ff4849f011d1894c0000e829fbbd/frameset.htm

STANDARD PRICE

Valuation using a standard price has the following features:

• All inventory postings are carried out at the standard price 
• Variances are posted to price difference accounts 
• Variances are updated 
• Price changes can be monitored

If a material is assigned a standard price (S), the value of the material is always calculated at this price. If goods movements or invoice receipts contain a price that differs from the standard price, the differences are posted to a price difference account. The variance is not taken into account in valuation.

MOVING AVERAGE PRICE 

Valuation using a moving average price results in the following:

• Goods receipts are posted at the goods receipt value. 
• The price in the material master is adjusted to the delivered price. 
• Price differences occur only in exceptional circumstances. 
• Manual price changes are usually unnecessary. However, they are possible.

If a material is assigned a moving average price (MAP), the price is automatically adjusted in the material master record when price variances occur. If goods movements or invoice receipts are posted using a price that differs from the moving average price, the differences are posted to the stock account; as a result, the moving average price and the value of the stock change.

Hope this helps!

[former_member797895]

The moving average is used for raw material as we need to procure material from external vendors and price is not same for material from all vendors, recommendation to use moving average price for Raw materials.

The standard price is used for semi finished and finished goods as we have control on the pricing for the finished material hence standard price is used for semi and finished goods.

[Former Member]

As i understood that moving average price is assigned with that kind of materials which procure externally. Because material price can be changed frequently. Moving average price keep on changing on purchase.

Ex. ROH material A

In 1st quarter purchase on 100 rs per tn (2 tn= 200 rs)

in 2nd quarter purchase on 200rs  per tn (2 tn = 400 rs)

in 3rd quarter purchase on 300 rs per tn (2 tn = 600 rs)

Total quantity = 6 tn

Total stock value = 1200 rs

Moving average price = Total Stock value/Total quantity

                               = 1200/6

                              =200 rs

Moving average price = 200 rs

Standard price is fixed & update by standard costing as per BOM. It is assigned with FG & SFG. These are used for products that do not fluctuated frequently.

Total value = standard price * Total stock

                = 100 * 6

                = 600 rs

[former_member189938]

This message was moderated.

[former_member797895]

The moving average price is recommended to use for raw materials as we have to procure materials from external vendors and price for material is not same from all vendors it will always fluctuate hence moving average price is used for raw material.

The standard price is for semi finished or finished products as we are producing the the material hence we have control on the price hence we use standard price for semi finished and finished goods.

[Former Member]

Hello,

The price control procedure set in the material master record determines the value used to valuate the goods receipt of a material. Material valuation can be carried out according to the standard price (S price) or the moving average price (V price).

Standard price

 
During the valuation using the standard price (price control .S.), there are many stock postings to a price determined in the material master record, the standard price. Variances to this standard price are posted to the price differences accounts.

For statistical purposes, the system also calculates the moving average price for materials that are valuated at standard price in the material master record.

The system calculates the total stock value for materials with standard price control as follows:
Total value = standard price (per base unit of measure) * total stock

Moving average price

In valuation using the moving average price (price control “V”), the system valuates goods receipts with the purchase order price and goods issues with the current moving average price.

The system automatically calculates the moving average price for every goods movement as follows:
Moving average price = total stock value / total stock quantity.

Any differences from the purchase order price that occur during the invoice receipt are posted directly to the stock account during stock coverage, and the system determines a new moving average price.

Regards,

Deepak

[Former Member]

On which activity Moving average price is updated? Goods Receipt or invoice?

[former_member183818]

go through this link

http://scn.sap.com/thread/1510469

IN both the case MAP of material will be updated.

Check the blog http://scn.sap.com/community/erp/logistics-mm/blog/2012/03/08/impact-of-mr11-execution

Regards

[Former Member]

Thanks a lot..ranjit

[Former Member]

Hello Kapil

The difference beween MAP & STD Priceis

In case of MAP any difference in price will goto stock account but incase of STD price difference in price will got PRD (Price difference account) account.

MAP is calculated buy Total Stock value/ Total stock quantity & STD price is fixed price.

When you select STD price control MAP will get updated in MMR. If u select MAP STD price will not gets updated in MMR

Regards

Avinash

[shinas_rh]

This message was moderated.

[kailas_ugale]

HI,

SAP  Note

Note 81682 - Pr.contr.V for semi-finished and finished products

<Content removed by Moderator, as copied from SAP Note>

Kailas Ugale

[Former Member]

hi,

please refer the below links. please revert if any specific doubts.

http://scn.sap.com/thread/1510469

http://scn.sap.com/thread/1375446

Regards.