Difference between Standard Pricing and Moving Average Price

[Former Member]

Hi,

Would like to seek some advises on the difference between standard price and Moving average price.

also, how does it affect the account postings differently?

Thanks

[Former Member · Accepted solution]

hi,

Standard Price(S) ---is one whose value is fixed and does not change .It is defined by setting "S" in Accounting view of Material Master Record.

It is recommended for Semi finished and Finished goods.

Because their prices are usally fixed.

Moving Average Price(M)--- is one whose value changes in the Material Master Record depending on stock and value.

It is calculated using formula MAP= Total stockvalue(Rs)/Total stock(Nos).

Total stock ---Stock available in plant (MMBE ) also you get that value in material master.

Total stock value----Cost of one *No . of stock.

This is how MAP is calculated and new value calculated from above is updated as new price in Material Master Record.

Hope this is clear.

Thanks & Regards,

Smitha

[Former Member]

Standard Price

Materials whose price control indicator is set to S are valuated in Financial Accounting (FI) at standard price.

This is recommended for semifinished products and finished products.

The moving average price is shown as a statistical value in the material master record.

The standard price is normally calculated using a standard cost estimate for the material. The standard price can also be calculated in a mixed cost estimate.

Moving Average Price

When materials whose price control indicator is set to V are received from in-house manufacturing processes, they are initially valuated with a value you defined (such as the standard price). When you settle, the material stock account is debited with the variances. This results in a new moving average price.

Valuating semifinished products and finished products with the moving average price is not recommended.

Regards,

Indranil

[former_member202528]

Hi ,

there are lot of discussions regarding pricing(Std and MAP). request to you pls search forum.

FYI, here is one thread :

BR,

Krishna