Valuation: Example of Splitting a Structured Article
In a bill of material
s (BOM), components are assigned to a display which is managed in the unit of measure "carton". The following table shows the components with their cost and retail price.Article |
Quantity |
Unit of measure |
Cost price |
Retail price |
Component 1 |
1 |
Piece |
10.00 |
15.0 |
Component 2 |
2 |
Piece |
20.00 |
30.00 |
The following table shows the current stock quantities, stock values and the moving average price (MAP = cost value / stock quantity ) for the components.
Article |
Stock quantity |
Cost value |
MAP |
Retail value |
Component 1 |
10 |
100.00 |
10.00 |
150.00 |
Component 2 |
10 |
200.00 |
20.00 |
300.00 |
The goods receipt for a purchase order for one carton is posted for a display. The cost price for the display is 40.00. The system is configured so that the display is broken down into its constituent components at goods receipt (for further information, see
Inventory Management: Structured Articles).The cost value of the goods receipt is then distributed over the components proportionally based on the moving average price ratio, taking account of the BOM quantities.
Quantity |
Unit of measure |
Article |
Movement type |
Cost value |
1 |
Carton |
Display |
101 + |
40.00 + |
1 |
Carton |
Display |
319 - |
40.00 - |
1 |
Piece |
Component 1 |
319 + |
8.00 + |
2 |
Piece |
Component 2 |
319 + |
32.00 + |
Because the cost price of the display (40.00) is lower than the total of the cost prices of the components (total cost price of components = 1 ´ 10.00 + 2 ´ 20.00 = 50.00), the moving average price of the components is reduced.
The goods receipt, on the other hand, is valuated at retail using the current retail price of the components, giving the following stock quantities and values:
Article |
Stock quantity |
Cost value |
MAP |
Retail value |
Component 1 |
11 |
108.00 |
9.82 |
165.00 |
Component 2 |
12 |
232.00 |
19.33 |
360.00 |