$BACK$ Standard Price with Valuated Sales Order Stocks

Use

If you are using a valuated sales order stock, it is often not possible to derive the standard price from a standard cost estimate for the material. The standard price is determined according to the settings in the requirements class.

Prerequisites

You make the settings for the valuation of the sales order stock in Customizing Product Cost by Sales Order under Control of Sales-Order-Related Production Check Requirements Classes .

The Valuation field controls whether the sales order stock is:

Valuated (no entry)
Valuated separately with reference to the sales document/project (entry “M”)

In this case the standard price is updated in a stock segment for individual requirements materials. The determination of the standard price depends on the setting in the field Without valuation strategy in the requirements class. Prices and inventory values are shown in the sales order stock (see also: Displaying Valuated Special Stocks )
Valuated without reference to the sales document (entry “A”)

In this case the valuated sales order stock is valuated together with the make-to-stock-inventory. The valuation uses the price for the make-to-stock material. Prices and inventory values are shown in the material master record.

Features

This section describes the separate valuation of individual requirements materials with reference to the sales document/project (entry "M" in the Valuation field of the requirements class).

The sales order stock or project stock is valuated at the time of the first goods receipt of the individual requirements material.

The standard price is determined at the value at which the first goods receipt to stock was made. This means that standard price determination depends directly on the valuation of the goods receipts. For internally manufactured individual requirements materials, you control how the price for valuation of the first goods receipt is determined in the requirements class with the indicator Without valuation strategy.

For externally procured individual requirements materials, the net order price is updated as the standard price.

You can view the stock segments of the individual requirements materials in the Inventory Management menu. A requirement is that valuation is made with reference to the sales document item.

You specify in the requirements class with the indicator Without valuation strategy how internally manufactured individual requirements materials are valuated:

According to the standard price of the make-to-stock material

This is recommended when a material is manufactured both for the make-to-stock-inventory and for the valuated sales order stock.
According to a predefined strategy sequence

Only the costs that are flagged as relevant to balance sheet valuation in the cost estimate are relevant for inventory valuation. This valuation strategy also applies to collective orders and cost object hierarchies, and in joint production.
1. The system reads the standard price from the stock segment of the individual requirements material ( see also : Displaying Valuated Special Stocks ). The stock segment only has a standard price if goods have been received. The first goods receipt results in valuation on the basis of one of the subsequent strategies in the specified sequence. A standard price selected through one of the subsequent strategies is copied into strategy and serves as the valuation basis from this point onwards. This value can only be changed manually.
  
  Note
  You cannot display or manually change the costing view or the accounting view of the special stock segment (for material, sales order, or sales order item).
  
  End of the note.
2. The system calculates the standard price on the basis of your customer exit COPCP002 Material valuation for valuated sales order stock .
  
  A customer exit is recommended in the following cases:
  - When you don’t want to create a sales order cost estimate, such as for performance reasons or because creating sales order cost estimates involves too much effort
  - When you don’t want to use a preliminary cost estimate for the production order or process order as the basis for standard price valuation, for example because you are using planned orders in repetitive manufacturing
  - When there is no standard cost estimate for the material
    
    You can use the customer exit for example when you want to valuate individual requirements materials on the basis of the components of a planned order in repetitive manufacturing (see also: Selected Logistical Processes and Cost Objects ; Product Cost Collectors in Sales-Order-Related Production ).
    
    For more information, read the documentation on the customer exit.
3. The system determines the standard price on the basis of a sales order cost estimate or order BOM cost estimate . A sales order cost estimate can use the costing method unit costing or product costing . Order BOM cost estimates use the method product costing .
  
  You can also use unit costing to modify a cost estimate with quantity structure for the sales order cost estimate.
  
  If you have a valuated sales order stock and want to calculate the standard price in a sales order cost estimate, the sales order cost estimate must be marked.
  
  If you have a valuated sales order stock and want to calculate the standard price in an order BOM cost estimate, the order BOM cost estimate must be marked.
  
  Note
  A sales order cost estimate can include the sales and administration costs to calculate the cost of goods sold. The costs are transferred from the cost component view Cost of goods sold into the condition type.
  
  The sales and administration costs are not relevant to inventory valuation. They are not used in the system to valuate a sales order stock because the system only includes the items in the itemization that are relevant to inventory valuation.
  
  End of the note.
  
  In contrast to when a standard cost estimate for a material is marked, the status MARKED in a sales order cost estimate does not write the calculated value to the stock segment of the sales order stock. Once a standard price has been written to the stock segment of an individual requirements material, that price can only be changed manually. If the standard price was already calculated by the above customer exit, no sales order cost estimate created subsequently can overwrite this standard price.
  
  Since the planned value is not written to the stock segment of the individual requirements material until after the first goods receipt, you can recost as often as you wish up to the first goods receipt. The current cost estimate with the status VO (marked) will be the one that is used to valuate the material at the time of the goods receipt.
  
  Caution
  If you create a new cost estimate with the status VO (marked) after the first goods receipt, you might no longer know how the price used to valuate the goods receipt was calculated. When you calculate the variances in the period-end closing process, the system will report an output price variance in this case.
  
  End of the caution.
  
  If the status of the sales order cost estimate is not VO (marked), or if no sales order cost estimate exists, the standard price is determined using the strategy described below.
  
  You specify that the status VO (marked) is set automatically in Customizing for Product Cost Controlling under Cost Object Controlling Product Cost by Sales Order Control of Sales-Order-Related Production Check Requirements Classes by entering B in the Costing ID indicator. This is particularly recommended in mass production environments on the basis of sales orders, because it would involve too much effort to set the status manually.
4. The system determines the standard price using the production order cost estimate or the planned costs for the WBS element. If there are multiple production orders for the same sales order item due to milestone deliveries, the system uses the standard price that results from the production order that delivers first (see strategy 1).
  
  If no such preliminary costing was carried out, the standard price is determined on the basis of the following strategy.
5. If you manufacture a material both for the make-to-stock-inventory and for the valuated sales order stock, the system reads the material master record of the collective requirements material. The standard price in the master record of the collective requirements material may have been calculated in different ways, such as in a standard cost estimate.
  
  Note
  If you calculate the standard price in a product cost estimate for the material or for the sales order item, the system generates a cost component split for the planned costs according to cost components that you can transfer to Profitability Analysis (CO-PA).
  
  In Release 4.0A you can transfer a cost component split for the planned costs calculated in a sales order cost estimate into Profitability Analysis . You define the transfer in Customizing for Profitability Analysis under Master Data Valuation Product Costing Define access to product costing with the indicator Transfer sales order cost estimate.
  
  A requirement here is that you calculate the planned costs for the sales order cost estimate in a product cost estimate.
  
  If you calculate the standard price in a preliminary cost estimate for the manufacturing order or use the price in the material master record, you cannot transfer cost component splits into Profitability Analysis .
  
  If you calculate the planned costs in a unit cost estimate or postprocess a product cost estimate with unit costing, you cannot transfer cost component splits into Profitability Analysis .
  
  End of the note.
  
  Note
  If you cancel a goods receipt, the standard price updated by the first goods receipt continues to be valid. The cancellation of the goods receipt therefore only cancels the goods movement, not the update of the standard price. A new goods receipt does not overwrite the existing standard price.
  
  If you cancel a goods receipt and then create and mark a new sales order cost estimate, for example, this cost estimate is not used for valuation purposes. However, this cost estimate is then used to determine the total variance for target cost calculation. The system reports the difference between the total value of the new sales order cost estimate and the standard price as an output price variance (as described above) (see also: Variances with Valuated Sales Order Stock ).
  
  End of the note.
  
  Note
  If the standard price for the material is calculated in a standard cost estimate, the costs will be updated not only as a total but also split into fixed and variable costs. This allows the fixed and variable costs for internal activities and overhead to be taken into account when the material is manufactured.
  
  End of the note.