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Material Ledger - Actual Costing Congratulation

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Material Ledger – Actual Costing

Important Facts about Material Ledger – Actual Costing

1) All goods movements within a period are valuated preliminarily at the standard price.
2) At the same time, all price and exchange rate differences for the material are collected in the material
ledger.
3) At the end of the period, an actual price is calculated for each material based on the actual costs of the
particular period. The actual price that is calculated is called the periodic unit price.
4) Periodic unit price can be used to revaluate the inventory for the period to be closed. In addition, you can
use this actual price as the standard price for the next period.
5) Actual costing determines what portion of the variance is to be debited to the next-highest level using
material consumption. With the actual BOM, variances can be rolled up over multiple production levels all
the way to the finished product. Additionally, you can choose to have variances from cost centers and
business processes also taken into account.
6) Work in Process (WIP) is not included in Actual Costing, in other words all materials consumed for a
production process within the current month are processed in the withdrawal period, even if part, or all of
the delivery of the material to the warehouse takes place in a later period
7) The WIP account is still valuated using the standard prices for the materials and activities consumed. A
revaluation using actual prices does not take place.
8) Revaluating inventories at the end of the period with the periodic unit price is optional. Therefore, the
functions of actual costing can not only be used to run actual costing itself, they can also be used for
informational purposes in conjunction with other cost accounting systems
9) If you just want to use the Actual Costing/Material Ledger component to carry material inventory values in
multiple currencies/valuations, you must activate the material ledger. In addition, you can choose
transaction-based price determination(indicator 'price determination' in material master record = 2). If
you do this, you still have the option of deciding between price control standard price and moving average
price for your materials
10) If you want the system to calculate a periodic unit price for your materials based on the actual costs
incurred in a period, you will need to activate actual costing in addition to activating the material ledger. In
addition, you must choose single-level/multilevel price determination for your materials (price
determination indicator in material master record = 3). In this case, you must use price control standard
price for all materials that you want to use in actual costing.
11) If you want to include variances from cost centers and business processes in addition to the material cost
variances in actual costing, you must activate activity consumption update in the quantity structure in
addition to activating actual costing
12) If you use the Actual Costing/Material Ledger component, you must also use Logistics invoice
verification because ordinary invoice verification does not support the Actual Costing/Material Ledger
component.
13) Valuation using a standard price has the following features:

• All inventory postings are carried out at the standard price


• Variances are posted to price difference accounts
• Variances are updated in ML
• Price changes can be monitored

14) Valuation using a moving average price results in the following:

• Goods receipts are posted at the goods receipt value.


• The price in the material master is adjusted to the delivered price.
• Price differences occur only in exceptional circumstances.

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing
• Manual price changes are usually unnecessary. However, they are possible.

15) If the material ledger is active, the material prices of materials whose price determination
indicator is set to 3 can only be changed at the beginning of the period before all price-
relevant transactions. If the material ledger is not active, you can change the material
prices at any time
16) In Customizing for Actual Costing/Material Ledger, activity update can be activated so
that the consumption of activities can be updated in the quantity structure. If the activity
update option relevant to price determination has been selected, price differences can
arise on the material after actual price determination.
17) With price determination control 3, the material ledger data is divided into the following
categories:
• Beginning inventory
• Receipts
• Cumulated inventory
• Consumption
• Ending inventory
18) With price determination control 2, valuation-relevant transactions are listed in the price
history. If these transactions are displayed in the price determination structure, then the
category Price changes also appears in the display.
19) Multilevel price determination is used for materials that are part of a production cycle and
are in level 1 of the costing sequence. In addition, prices are determined for the materials
produced in this period that are in level 2 or higher.
20)
21) Closing Entry :

If you have specified that the system should revaluate the material stock in the previous
period, it does the following:
The system changes the price control for the material in the previous period from
Standard price S to moving average price V and updates the periodic unit price (that it
calculated for the material price determination) as the valuation price for the previous
period.
In the Accounting 1 view of the material master record, the periodic unit price for the
previous period is displayed as the moving price (price control V).
The preliminary valuation price (standard price) remains unchanged and can continue to
be displayed.
The system posts the price differences and exchange rate differences that are assigned to
ending inventory to the material stock account. You can see these amounts as well as the
closing document in material price analysis.
If you specified that the system should not revaluate the material stock in the previous
period, then it does the following:
_ The system does not change the price control.
_ The system does not post the price differences and exchange rate differences that were
assigned to ending inventory to the material stock account, but rather to the Accrual
Account (Material Ledger) account (transaction key LKW in Customizing).

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing
22) Value Flow Monitor : Value flow monitor can be used to analyze the materials specially
focused on Non distributed and Non Allocated variances. Some of variance can not be
allocated to Material Ledger for the various reasons such as
a) there will not be any quantity to allocate the variance in both the cases of
price determination type 2&3
b) there will be some price limits set for some of the cases
c) some kind of internal consumption where materials issued to cost center
d) mr22 or some other price differences
in such cases you need to rectify the parameters and rerun the ML for allocations or other
cases the unallocated will remain in ML.

Important Configuration steps in Material Ledger – Actual Costing

Transaction: OMX1
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Activate
Valuation Areas for Material Ledger

Note: If you want few Materials 2 &few materials 3,Then difficult give 3 at activation time
Then while creation of MM overwrite the default value in accounting 1 tab. Once MM created
MM can't change the price determination using the separate t code can change the once MM
created

CKMM - Change Material Price Determination

Functionality

Material price determination calculates the periodic unit price for a material. The standard price
and the cumulative single-level differences of the period are taken into account. The material
price calculated in multilevel price determination can be used for stock valuation.
The actual cost component split is used to analyze actual costs over multiple production levels.
• Differences from preliminary valuation
• Price differences

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing
• Exchange rate differences
The entered actual costs of a material are listed according to cost components. The original
identity of the costs (for example, whether they are material costs or production costs) is retained
throughout all production levels.

Click On Execute

Transaction: OMX2
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Assign
Currency Types to Material Ledger Type

Transaction: OMX3
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Assign
Material Ledger Types to Valuation Area

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Note: Assign same ML type to all plants to atleast which belongs to same company Code
But always recommtable that use same ML across company codes which is which is belongs to
same controlling area.

Transaction: OMX4
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Maintain
Number Ranges for Material Ledger Documents

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Transaction: OMX5
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Configure
dynamic price change

Transaction: OMX8
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Material
update> Assign Material Update Structure to a Valuation Area

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Actual


Costing> Activate Actual Costing

Note: 0 No Activity update- Don't update activity flow in ML,Revaluation possiable at Product costing
1 Activity update not revlavent to price detremination.
Acty flow updates in ML but revaluation can do at PC level
2 Acty update revelvent to price detrimination
Activity flow & Revel at ML level
Credit Cost Center:
If you keep blank then revaluation of acty price it updates to the respective work center cost center
If you update diferent cost center in credit it update to defult cost center insated of orginal cost center .

Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Actual


Costing> Activate Actual Cost Component Split

Note: Execute Programe -MLCCS_STARTUP.This program it buliuds the actual cost cost componect
split for existing materials .

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click on execute

Transaction: CKMSTART
Path: Sap Easy Menu>Accounting>Controlling>Product Cost Controlling>Actual Costing / Material
Ledger> Environment> Production Startup>Set Valuation Areas as Productive

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click On execute

Note: This step need to perform before creation of MM,Open PO, Open sales orders, Open sales
orders,Open producation orders before posting any transactions etc....
We can't create the MM unless performing CKMSTART, This program makes the plants status it makes
productive.
Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Actual
Costing> Activate Distribucation of consumcation differences

Note: To redistribute physical inventroy differences either to order or to products on propornate of


respative materials consumption Qty of respativite Orders

Path: SPRO>Controlling>Product Cost Controlling>Actual Costing / Material Ledger> Actual


Costing> Activate WIP at actual cost

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Important End User Transactions in Material Ledger


CKM3 - Material Price Analysis

Note: Material price analysis shows the valuated transactions and the results of material price
determination with price and exchange-rate differences for a given material in a plant in a period
within a price determination structure

S_ALR_87013180 - Listing of Materials by Period Status

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click On execute

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Note: List of Materials by Period Status gives you an overview of the respective period status of
the listed materials. You can display the period statuses of the selected materials in each plant for
a particular period
S_ALR_87013182 - Transaction History for a Material

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click on execute

Note: This report is useful in the analysis of materials with regard to prices (for
example, comparison of the standard price and the periodic unit price) or inventory
values (analysis of the price and exchange rate differences of the ending inventory).

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing
Transfer Price :
If any material transfer from one plant to another plant or one material to another material,if
want to add extra charge from one plant to another plant that receiving plant or material add
extra charge that we called as transfer price

Transfer prices from the legal view represent valuation approaches (also sales price here)
of goods or services transferred between legally independent member companies in the
group. These valuation approaches are reflected in the individual financial statements of
those companies.

Transfer prices according to the group view represent the costs of goods manufactured,
which can be used for the allocation of goods and services within a group of companies. For
these prices, group-internal profits are eliminated from the prices of the legal view.

Transfer prices according to the profit center represent valuation approaches


(management approaches) which are agreed between different areas of responsibility (profit
centers) and used to determine their internal profitability and assist enterprise management.

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing
Customizing -> SAP Reference IMG -> Controlling -> General Controlling -> Multiple Valuation
Approaches/Transfer Prices -> Basic Settings -> Maintain Currency and Valuation Profile (8KEM)

select 9661 and double click


on details

Customizing -> SAP Reference IMG -> Controlling -> General Controlling -> Multiple Valuation
Approaches/Transfer Prices -> Basic Settings -> Assign currency and valuation profile to controlling
area

Customizing -> SAP Reference IMG -> Controlling -> General Controlling -> Multiple Valuation
Approaches/Transfer Prices -> Activation -> Setup transfer prices in a production system-->Assign
valuation to the version

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Distribution of usage variance (DUV)


CKMDUV: Material wise and activity type wise

During the period, we are doing goods issue to production order with planned components and activity types at
the time of order confirmation
(OR)

To redistribute the physical inventory diff either to order or products on proportionate of respective material
consummation qty of the respective orders

Material Qty
RM 1000
Production Order
1 300
Production Order
2 100
Bal 700
Physical Inventory 600

Production order 1: 300/400*1000


Production order 2: 100/400*1000

configuration Steps
SM 30

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click on maintain

T Code: OMJJ

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click on copy
selected MM
types

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

SM30

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Create BOM-CS01

Std cost CK11N

Mark & Release


Create the production Order-CO01

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Production Qty Required of


Order Qty-FG RM RM
MIGO Calculation CKMDUVMAT
800841 20 15 200000100 0.428571429 21.42857143 36.42857
20 200000101 0.444444444 20 40
35

800842 25 20 200000100 0.571428571 28.57142857 48.57143


25 200000101 0.555555556 25 50

Consumed Physically Available After


Material Qty Qty Diff Qty Consumed Available
200000100 35 65 50 85 15
200000101 45 55 45 90 10

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Physical Count difference-MI10

Click On enter

Check Material Document-MB03/MIGO

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Click On
accounting
Document

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

CKMDUVMAT

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Fill all required fields

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Refer More Info follow the attached pdf (SAP Note: 645739)

movemet-types-for-
duv.pdf

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Select and click on


Details

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

As per above
calculation system
distribute the qty

Click on post

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Check Material Price -CKM3N

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Check Order Report -CO03

Venkatesh Sunku SAP CO Associate Consultant


Material Ledger – Actual Costing

Note: In above screen shot which was highlighted with"Red" color ,that is consumed goods issue
to order
which was highlighted with"Bule" color ,that is consumed CKMDUVMAT

Created By
Venkatesh Sunku
SAP CO Associate Consultant

Venkatesh Sunku SAP CO Associate Consultant

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