What is the differance between Weighted Average Rate & Moving Average Rate?

[Former Member]

Hi Expertz,

My client wish to get Weighted Average Rate For Raw Material insted of Moving Average Rate generated by SAP.

Is there any option to generate Weighted Average Rate?

Thanks,

Srujal Patel

[Former Member · Accepted solution]

Dear Brother

Moving average will calculate the commodity price divided by change period example 5 days closing prices / 5

But weighted average method will calculate the commodity price divided by quantity. 1 qty Rs. 10 and next time 1qty Rs.20

calculation is 30 / 2 = Rs 15.

regards

[Former Member · Accepted solution]

Hi Gordon & Asupathy Raja

Sorry for the let reply

Weighted Average Rate

Weighted Average Rate = Total Periodic Receipt Value / Total Periodic Receipt Qty

This Rate is to be Issue Rate for all Transaction & this Rate generate periodically not on daily base

Moving Average Rate

Moving Average Rate = Daily Receipt Value / Daily Receipt Qty

This Rate generate on daily bases.

As per Indian Accounting Standard Moving Average Rate is called Weighted Average Rate

But there are major impact on Profitability of Company.

Thanks,

Srujal Patel

[Former Member · Accepted solution]

Hello Expert

There is the major impact on Valuation.

Do you have any idea about this.

Thanks,

Srujal Patel

[Former Member · Accepted solution]

in my idea both are same only difference in UOM.

Moving Avg means

Total Amount/How many Qty(Unit) = price for 1 unit.

Now unit will be KG and Nos.

Srujal have you made any test case for same ?

Thanks

Manvendra Singh Niranjan

[Former Member · Accepted solution]

Hi Manvendra,

Thats not a issue of UOM

This is the Valuation Issue

Thanks,

Srujal Patel

[Former Member]

Solved

[Former Member]

Hi Srujal Patel,

I am afraid there is no simple solution. System only provide 3 basic valuation type. You may create a query to calculate the Weighted Average Rate.Then you can find the difference.

Thanks,

Gordon