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Moving average prices and std prices

-0001-11-30   Views:1

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hi friends, i have a doubt abt prices... which will b assigned for raw materials-standard price? or avg moving price? and why? if possible explain clearly about avg.moving price and std.price for spit valuation what price we will use?? help me out..

hi friends,
i have a doubt abt prices...
which will b assigned for raw materials-standard price? or avg moving price? and why?
if possible explain clearly about avg.moving price and std.price
for spit valuation what price we will use??
help me out..
thanks in advance...
venkat

The replay answer
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Standard price are used for products that do not fluctuated frequently.  It is usually used for finished or semi finished products.
Moving average price are used mainly for raw materials that are purchased externally.  The advantage of using moving average price for your raw materials is that your inventory costs will always reflect the current market cost.
SAP strongly recommends that you do not select price control V for semi-finished products and finished products, because doing so will very easily cause the calculation of unrealistic valuation prices. SAP recommends: 
Price control V for raw materials and trading goods; price control S for semi-finished products and products
We recommend that you only use price control V for materials procured                          
externally. Materials produced in-house should be subject to a                                 
standard price control.                                                                        
Generally all raw materials (ROH), spare parts (ERSA), traded goods (HAWA) etc. are assigned as moving average price (MAP)  because of the accounting practice of accurately valuating the inventory of such materials. These materials are subject to the purchase price fluctuations on a regular basis.
The semi-finished goods (HALB) and finished products (FERT) are valuated with standard price because of the product costing angle. If these were to be MAP controlled, then finished/semi-finished product valuation would fluctuate due to data entry errors during backflushing of material and labour, production inefficiencies (higher cost) or efficiencies (lower cost). This is not a standard accounting and costing practice
For Split valuated material it is recommended to use Moving average price

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