Actual Cost in Valuated Stock

[Former Member]

Dear PS experts,

I am facing an issue in case of actual costs in 'valuated project stock' scenario.

The scenario is as following:

1. A material(assembly) is attached to network having planned costs as 100 Euros.

2. The planned costs for project is also now 100 Euros.

3. This material is assembly made from using 2 materials.

4. The assembly is made by subcontractor.

5. The breakup of the costs is 80 euro for 2 material components and 20 euro as subcontracting charges.

6. When I run MRP and covert a req. to PO, the commitment is 20 euro for subcontracting order and 80 euro for material components PO.

7. After I receive the 2 material components in stock, the actual cost(statistical cost element is hit) for project becomes 80 euro.

8. When I send these components to the supplier and he converts it into assembly material, at GR the entries are like this:

a. Commitment is reduced of 20 euro, actual cost is incurred for 20 euro for subcontracting charges.

b. The consumption is booked for 2 components(movement type 543), actual cost incurred is 80 euro.

So total actual costs at this stage is 100 euros.

9. Now the assembled material is issued against network activity ( movement type 281 Q), this again updates the the consumption at project with value 100 euro.

In this way, I am seeing the actual cost at project is 200 euro. I think it is not correct, does anybody have any opinion on this. I am not able to understand if it is related to valuation categories.

If you are having any clue about it, please let me know. Thanks in advance !

Regards,

Mahendra Dighe

[nitin_patoliya · Accepted solution]

this scenario is called third party subcontracting.

here you need to raise two POs. one for raw material vendor to supply the material to subcontractor as you have mentioned in delivery address you have to check the sc vendor.

when you do GRN for this PO the stock is provided to vendor.

now you have to do GRN for your subcontracting PO then the all std entries will take place. For better result Please check in Logistic (MM ) Forum. To arrive at decision, you need to take input from MM.

With Regards

Nitin P.

[Former Member · Accepted solution]

Hi Nitin,

Thanks for the answer.But my worry here is not about logistical process but the reflection of the same in financials and controlling. here I am seeing the actual cost is getting updated twice as first I receive assembly and then when I am consuming the same.

Regards,

Mahendra Dighe

[nitin_patoliya · Accepted solution]

I asked your to redefine your logistic process. You are procuring against project stock ( So that will be stastical cost for your Project stock - valuation type 11 ) After that when you does the GI to network activity with M Type 281 at that time system will does Actual cost on network activity. In between you need to incorporate your subcontracting process. Ask you logistic consultant to map the same.

With Regards

Nitin P.

[venkatesh_kulkarni1]

Hi,

I hope this scenario clarifies your problem.

assly- X- 100

material A- 40

Material B-40

Sub contracting charges20

MAterail A & B came to stock (project stock) so inventroy 80 INR(statistical)

now subcontracting PO for 20 INR

you can not issue project stock to subcontractor so you have to transfer A & B to plant stock. then do 541 for subcontracting

now in project you are having actual -0 and commitment 20

when you confirm subcontract PO then material X with 100rs will come to the stock. this will reflect as 100 INR in project as an inventory. just check cost element report.

when you issue it to network then inventory become zero and actual consumption shows you 100 INR again check yourcost element report.

i think this is how subcontracting works... lets wait for other experts comment.

I dont understand why you are doing 543 movement ( goods isue for sale order)?

venkatesh

Edited by: venkatesh kulkarni on Dec 3, 2009 8:38 AM

[Former Member]

Thanks Venkatesh for your answer.

But I still have one question, I know that you can not send project stock to subcontractor. But let's say I want to identify this particular stock as project stock even during when I an transferring it to subcontractor, I will identify a storage location as subcontractor's location and transfer stock over there. When I am recieving the assembly I am consuming the two childerns A & B( as project stock is consumed it shows as actual cost against WBS element) and I am recieving stock of Assembly. Then when I am again consuming assembly against network it is again updating the actual costs.

In my scanrio, I do not want to loose the track that materials I am sending to subcontractor is out of which project stock.

Regards,

mahendra

[venkatesh_kulkarni1]

if your keeping stockof A & B with you only( I mean in the system) with special storage location, then how you are goin to consume at the time of goods receipt. ( i hope subcontracting purchase order is clear to you- to get this X material assembled, you are sending A & B to Subcontractor, which should appear in the PO against which you are sending materials- that means at the time of goods receipt it will consume these two material and you will get X in to the system)

if you are issuing A & B manually against WBSE or Network then 80 INR will be actual cost for these two materials consumption.

and at the time of goods receipt again you are consuming that too plant stock so you are duplicating thats why getting cost also double.

just decide how you want and discuss with MM consultant and resolve.

Venkatesh