Example: Material Consumption for a Production Order
The semi-finished product H100, which is assigned to profit center PSEMI, is used in a production order for the finished product F100, which is assigned to profit center PFINP. The value of the material is 1,300.00.
Different values are posted depending on whether you use transfer prices according to the legal, group, or profit center viewpoint. The first example shows the postings when both FI and EC-PCA use the legal viewpoint. The second example shows the postings where the legal viewpoint is used in FI, but the profit center viewpoint is used in EC-PCA.
Posting Using the Legal View in EC-PCA and FI
FI document:
Change in stock of semi-finished product |
1,300.00 |
(PrCtr PFINP) |
to |
Stock of semi-finished product |
1,300.00 |
This posting only debits the receiver profit center of the production order with the change in stock.
From the point of view of Profit Center Accounting, the following problems arise:
Profit-relevant posting from the profit center viewpoint:
Profit center PSEMI |
|
1. Internal revenues |
-1,300.00 |
2. Internal change in stock |
1,300.00 |
Profit center PFINP |
|
1. Change in stock of semi-finished product |
1,300.00 |
2. Internal change in stock |
-1,300.00 |
3. Delivery from profit center |
1,300.00 |
Consequently, the sender profit center PSEMI reflects the revenues earned with other profit centers.
In order to correct the change in stock on the receiver side, lines 1 and 2 need to be one below the other in the information system.
The consumption posting is represented by line 3 of the posting.
Posting Using the Profit Center View (Transfer Prices) in EC-PCA and the Legal View in FI
In legal valuation, the stock is valuated at 1,300.00.
In profit center valuation, the stock is valuated at 1,400.00.
The transfer price of the semi-finished product is 1,500.00.
FI posting:
In FI, only legal valuation is used.
Change in stock, semi-finished products |
1,300.00 |
(PrCtr PFINP) |
to |
Stock, semi-finished products |
1,300.00 |
Profit-relevant posting the profit center viewpoint:
EC-PCA uses profit center valuation.
Profit center PSEMI
1. |
Internal revenues |
-1,500.00 |
2. |
Internal change in stock |
1,400.00 |
Profit center PFINP
1. |
Change in stock, semi-finished products |
1,500.00 |
2. |
Internal change in stock |
-1,500.00 |
3. |
Delivery from profit center |
1,500.00 |
Profit center PSEMI thus has earned internal profit of 100.00. For a more detailed example of the use of transfer prices, see
Example for a Withdrawal of a Semifinished Product.
