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Hello Experts,
I have an issue related to Weighted average during Production posting Example: I have purchased item with different price, ex: 100 X USD 50 = USD5000 100 X USD 10 =USD 1000So weighted average should be 6000/200 = USD 30but when I consumed 1 pcs during RAF, material consumption shows 50/-, I think based on weighted average it should be 30/-And for RM item and Finish good, Do I need to activate the item price every time. And it need to be plan price or standard price?
Kindly advice.
Thanks in advance.
Rajat W
Hi Rajat W,
The inventory valuation principle is applied when you run an inventory close or recalculation not when you process a production order.
Even though the figures might look wrong (temporarily) the close/recalculation process picks them up and corrects them.
Best regards,
Ludwig
Hi Mr. Ludwig,
Thank you for the reply . do I need to activate an item price , and if yes is it Plan price or standard price, what is the correct fallback principle and Item model group setup . and all RMs are batch controlled . also If I not activate a price the Report as finish value show zero value, and when I try to transfer, there is a error saying no cost . since the production END will take place monthly.
Hi Rajat.walia,
If you weighted average costing then the activation of a standard price is not mandatory.
It might help because if your actual costs deviate from the standard price (planned price) the difference will be recorded as adjustment when you run the inventory close/recalculation.
The closer the actual and planned prices are, the smaller the adjustments that will be recorded and the more realistic is your costing before the inventory close / recalculation is run.
Thank you . kinldy confirm this .My final understanding is for RM and finish good I don't need to activate Price and during RAF it will post the price based on component consumption, my issue is RAF post with Zero cost, during end only it reflected the price based on consumption. So how to I post a temporary price during RAF
Hi Rajat,
Basically all prices are temporary until the production is completed and even then the inventory close/recalculation process makes adjustments to those values.
I think what might really help is this post: fedotenko.info/.../
Thanks Mr. Ludwig,
It really helps.
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