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Procedure documentationReplacement Prices for Finished Goods

Procedure

You calculate replacement prices for finished goods using inventory cost estimates or single-/multilevel actual costing. Results are stored in price fields in the material master or in valuation alternatives. Finished goods are to be valuated for inflation accounting purposes only based on the direct costs. These include raw materials and direct labor. The raw material portion in the finished goods has to be valuated at the inflation price of the period to be reported. The labor has to be valuated at a special rate that will differ from the rate used for standard cost estimate and actual costing purposes.

You calculate replacement prices for finished goods using one of the following:

  • Inventory Cost Estimates (CO-PC-PCP)

    To calculate the replacement prices for finished goods using inventory cost estimates, proceed as follows:

    1. For the relevant activity types manually enter prices that only contain direct costs using Change Activity Type/Price Planning (transaction KP26). Use a version from Controlling that can be used to write planning data (in Customizing under Start of the navigation path Controlling Next navigation step General Controlling Next navigation step Multiple Valuation Approaches/Transfer Prices Next navigation step Basic Settings Next navigation step Create Versions for Valuation Methods End of the navigation path).

    2. Create a costing variant in Customizing under Start of the navigation path Controlling Next navigation step Product Cost Planning Next navigation step Material Cost Estimate with Quantity Structure Next navigation step Define Costing Variants End of the navigation path). Use a costing type that allows the update of a price field other than the standard price. Use a valuation variant that reads prices from one of the material price fields in the Accounting 2 view into which you updated the replacement cost.

    3. Create a costing run using Edit Costing Run (transaction CK40N).

    4. For the finished goods, update the same price fields that you used for purchased goods using Price Update: Mark Standard Price (transaction CK24). Choose Other Prices in the menu bar.

    For more information see, Inventory Cost Estimates (CO-PC-PCP).

  • Single-/Multilevel Actual Costing (CO-PC-ACT)

    You use actual costing if you want to calculate the replacement cost of a finished good based on the actual quantity structure.

    For more information, see Actual Costing/Material Ledger (CO-PC-ACT).