Material Ledger Actual Costing in SAP S4 Hana Controlling

Material Ledger Actual Costing

Material ledger actual costing is used to evaluate the stock at their actual price. We use material ledger to evaluate the stock in their group and profit center valuation. Before using material ledger materials are only valued in their company code currency. If we don’t use material ledger, finished goods will remain in their standard price.

In the previous sessions of product costing, we have posted price variance which we roll up to material price using material ledger and update the PUP price.

Material Price Determination Control

There are two types of material price determination control

1. Transaction based

In the transaction based only same level price difference can be analyzed. In the transaction based are unable the valuate the inventory at their actual price because the lower-level price difference is not rolled up to the higher level. It is only used to evaluate the inventory in multiple valuation views.

2. Single / Multi level

In the single and multi-level lower level price difference amount will also be rolled up to the actual price of material and the inventory will be valued at their actual price. Price control will be changed to ‘s’ for all the materials. In case of price control ‘v’ lower level price difference will not rolled up to next level.

Single Level Price Determination

In the single level system identify differences for product and some proportion of amount will be rolled up and the remaining will be added to consumption. Activity price difference will not be rolled up to the closing inventory actual price. In the single level price determination only the material price difference will be rolled up to the inventory actual price.

Multi Level Price Determination

In multi level price determination inventory will be valued at their actual price. Material price difference and activity price difference will be rolled up from raw material to finished good. PUP price for the inventory will be calculated which will be considered as future standard price for the next month. PUP will then further used for

1. Internal consumption

2. WIP valuation

3. Inventory actual price calculation.

Price Binding Indicator

Price binding indicator is used to fix the price determination of the material master during material master creation. After assignment system will not allow to change the price determination of the material master.

Price Unit Price (PUP)

In the single & multi level price determination PUP price will be calculated to evaluate the material at its actual price. PUP price is used to evaluate the materials in multiple valuation views.

Material Ledger Update Structure

Material ledger update structure is used to collects the values from different categories of valuation relevant transactions. All the material update values will be displayed in the material update structure.