Excerpt from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:
With the material ledger, you can carry inventory in up to two additional valuations and at actual costs, described as follows:
Carry material prices in multiple currencies and valuations
Material inventory values are normally carried in only company code currency. The material ledger enables the system to carry inventory values in two additional currencies/valuations. This is achieved by updating all goods movements in the material ledger in up to three currencies or valuations. Currency amounts are translated into foreign currencies at historical exchange rates directly at the time of posting.
Value inventory at actual costs
Actual costing valuates all goods movements within a period at the standard price (preliminary valuation). All price and exchange rate differences for the material are collected in the material ledger.
At the end of the period, an actual price is calculated for each material based on the actual costs of the period. This actual price is called the periodic unit price and can be used to revaluate the inventory for the period to be closed. You can use this actual price as the standard price for the next period.
Actual costing determines what portion of the variance is to be debited to the next-highest level using material consumption. The actual bill of materials enables variances to be rolled up over multiple production levels all the way to the finished product. You can choose to have cost center variances also taken into account.
This category of tips describes how multiple valuations and actual costing work, and the material ledger period-end closing process. It also describes the implementation steps needed during production startup. The actual cost component split and deactivating the material ledger are also explained.
Keep reading in Things You Should Know About Controlling with SAP (2nd Edition). Use coupon code CTLSP10 for 10% off on www.sap-press.com.