Interaction Between Settlement and Material Master 
The following tables show the effects on the master record of the material being produced when a product cost collector or manufacturing order (production order or process order) transfers the material to inventory and the actual costs for the order are settled to inventory.
The postings on the product cost collectors or manufacturing orders are the same in each case. The only difference is the setting of the price control indicator of the material being produced.
Material Master Record with Price Control Indicator Set to S
Fields in Material Master |
Before Production |
After Delivery |
After Settlement |
Moving average price |
USD 10.00 |
USD 10.00 |
USD 10.25 |
Standard price |
USD 10.00 |
USD 10.00 |
USD 10.00 |
Total stock |
10 units |
20 units |
20 units |
Total value |
USD 100.00 |
USD 200.00 |
USD 200.00 |
The goods receipt is valuated at standard price (USD 10). The settlement process passes on the remaining USD 5 to a price difference account and updates the moving average price for statistical purposes.
Material Master Record with Price Control Indicator Set to V
Fields in Material Master |
Before Production |
After Delivery |
After Settlement |
Moving average price |
USD 10.00 |
USD 10.00 |
USD 10.25 |
Standard price |
USD 0.00 |
USD 0.00 |
USD 0.00 |
Total stock |
10 units |
20 units |
20 units |
Total value |
USD 100.00 |
USD 200.00 |
USD 205.00 |
The goods receipt is valuated at the moving average price (USD 10). Settlement transfers the remaining USD 5 to the inventory account for the material produced, and changes the moving average price and the total value of the inventory.
Report for Order
Debits |
Credits |
Raw materials: USD 50 |
Inventory change*: USD 100 |
Internal activities: USD 55 |
Inventory change*: USD 5 |
* USD 100 due to delivery to inventory, and USD 5 due to settlement to inventory.