Multilevel Price Determination 

Use

Multilevel price determination calculates the periodic unit price for a material. The standard price, the single-level differences cumulated in the period, the differences between planned and actual prices, as well as input material differences (multilevel differences) are all taken into account. The material price calculated in multilevel price determination can be used for inventory valuation.
For more information on the process flow, see: Periodic Actual Costing.

A level is identified by a material and its associated procurement process. Multiple levels are the result of one material being used in another material. These multiple levels are reflected in the actual BOM that is created in the costing run in the step Determine Sequence.

In multilevel production, both single-level and multilevel price differences exist. If one material is used in another material, and single-level price differences exist for the input material, this results in multilevel price differences. In this way, differences are rolled up from raw materials through semifinished products to finished products. This solves the problem of follow-up costs.

The price calculated through price determination is updated as a periodic unit price (V price) in the Accounting 1 view of the material master record The price control indicator remains set to S. The standard price does not change.

Periodic Actual Costing

Transaction-Based Material Valuation