1、Material inventory values are normally carried by the SAP system in one currency. The material ledger component enables the R/3 System to carry inventory values in two additional currencies/valuations. Therefore, all goods movements in the material ledger are carried in up to 3 currencies or valuati

2、ons. Currency amounts are translated into foreign currencies at historical exchange rates directly at the time of posting. Businesses such as those in high-inflation countries can therefore carry their inventories in a more stable currency (such as US dollars). This reveals inflationary effects on i

3、nventory values.If you use transfer prices to represent value flows in your company in different valuation views, you must use the material ledger. This allows you to carry your inventories in three different valuations (legal valuation, valuation for reporting purposes, and profit center valuation)

4、.Before activating the material ledger, make sure you know which currencies and valuations you want to use, because you cannot go back and change the setting.Activating the material ledger is a prerequisite for using multiple valuations.Actual CostingActual costing expands upon the functionality of

5、the application components with the purpose of determining actual costs for externally procured materials and materials produced in-house. In addition, actual costing uses actual costs to valuate material inventories, such as raw materials as well as semifinished and finished products.Actual costing

6、 calculates an actual price (periodic unit price) for each material, into which all actual costs for the particular period flow.Concept Behind Actual CostingWhen you use actual costing, all goods movements within a period are valuated preliminarily at the standard price. At the same time, all price

7、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 particular period. The actual price that is calculated is called the periodic unit price and can be used to r

8、evaluate the inventory for the period to be closed. In addition, you can use this actual price as the standard price for the next period. (See also: Price Changes)Actual costing determines what portion of the variance is to be debited to the next-highest level using material consumption. With the ac

9、tual 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. (See: Activate Actual Costing).Note that the portion of the variance that is to b

10、e allocated to consumption can only be allocated to the next-highest production level. If material consumption was assigned directly to a cost center or an internal order, that corresponding portion of the variance cannot be debited to the account assignment object (such as the cost center) and ther

11、efore remains in the particular price difference account. Subsequent allocation of the cost variances to the particular cost objects is not possible within the context of Actual Costing. This is to ensure consistent cost management within a production area.Work in Process (WIP) is not included in Ac

12、tual 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 materialto the warehouse takesplace in a later period. The actual quantity structure is not adjusted when the WIP

13、determination reposts the withdrawal costs to a WIP account. Any price differences for the consumed materials or activities are, therefore, completelly accounted for in the production for this month.If no delivery has taken place, the price difference remain as not included in the accounts for the m

14、aterial or cost center.If a partial delivery has been made to the warehose, the price differences for all components and activities withdrawn are allocated to this partial delivery. This could lead to an unrealistic actual production price for the finished good.Since the quantity structure always co

15、ntains all of the confirmed activities, differences between the plan and actual prices are only calculated for the delivery for the period concerned. If incorrect deliveries are made, the costs remain assigned to the cost center. The WIP account is still valuated using the standard prices for the ma

16、terials and activities consumed. A revaluation using actual prices does not take place.Valuating the material stock with the periodic unit price provides a method of valuation using actual costs while avoiding problems associated with using the moving average price (see: Price Control With and Witho

17、ut the Material Ledger). Preliminary valuation of goods movements using the standard price makes consistent and reliable cost management of your production process possible while revealing the variances within production. Actual Costing therefore combines the advantages of price control using the st

18、andard price with the advantages of using the moving average price. The period dependency of the actual price supports periodic cost management.Revaluating inventories at the end of the period with the periodic unit price is optional. Therefore, the functions of actual costing cannot only be used to

19、 run actual costing itself, they can also be used for informational purposes in conjunction with other cost accounting systems. The Actual Costing/Material Ledger component therefore does not just collect and calculate actual costs - it also tracks variances from the standard costs.Due to the abilit

20、y of actual costing to roll up costs and complete final costing at actual costs, it is particularly interesting for businesses that use a large number of raw materials with production processes that have multiple levels. Businesses that have high inventory levels and are interested in analyzing thei

21、r inventory and consumption cost variances more closely can also use the functionality of actual costing.By calculating actual prices for materials, actual costing can aid you in making decisions such as whether to manufacture in-house or outsource. Because data is updated at the level of the procur

22、ement alternatives in actual costing, it is possible to compare different sources of supply.Activation OptionsIf 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,

23、 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. Note the suggestions from SAP regarding this i

24、n Price Control with and without the Material Ledger.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 ma