Changing Prices in the Material Master

In the preceding figure, there are two scenarios:

• Without change to standard cost estimate (Change Price app). In this case, COPA data will not equal FI data.
• With a change to standard cost estimate (Re-org cost estimate app). In this case, COPA and FI data is in sync. During the time that the cost estimate is deleted, refrain from any inventory postings.

You can change the standard price without affecting the released standard cost estimate by executing price change transaction MR21.

The standard system does not normally allow this type of price change if a released standard cost estimate exists.

Changing the material standard price creates a material document and generates accounting documents.

The standard price is changed with transaction MR21. However, the released standard price and its link to the standard cost estimate remain.

You can change the standard price change and alter the released standard cost estimate by deleting the cost estimate and executing a new one.

Delete the cost estimate by using the Delete Test Data menu option. When you delete the current standard cost estimate, the system removes the cost component split and itemization from the database. The system also deletes the link to the material master, and the current planned price is set to 'blank'. At this phase there is still no change to the standard price.

After deletion, execute a new, corrected standard cost estimate and proceed with the price update process described in the previous lesson.

In both the methods, inventory will be revaluated resulting in an impact on the account balance in financial accounting.

Distinguishing Between Material Cost Estimates

If you create more than one cost estimate for the same material, the following parameters need to be checked:

• Proportion of costs attributable to technical and organizational improvements:

  For example, use of current quantity structure and valuation at historical prices. Subsequent comparison with standard cost estimate.

• Influence of changed raw material prices and potential wage increases:

  For example, use of historical quantity structure and valuation with current or future prices. Subsequent comparison with standard cost estimate.

• Breakdown of current costs:

  For example, current quantity structure with current prices.

• "What If" scenarios:

  For example, maintaining and valuating make-or-buy decisions, prices, quantities, and structures under a separate version.

You have been asked to perform an analysis of the costs of manufacturing material S-FL## and to present your findings to management.

The engineering department has updated the existing Bills Of Material (BOMs) and routings for the materials. The purchasing department has reviewed the BOMs and the procurement costs for materials S-FL##.

You create individual cost estimates or a costing run to create cost estimates for producing S-FL## internally. You also determine that you are required to create a costing variant to enable you to create a cost estimate for this analysis.

The following are a few recommendations:

• Maintain the Customizing parameters for costing variant, costing type, valuation variant, costing sheet, and template assignment as defined in the business scenario.

• Review the logistics master data to include the material master, BOM, routing, and work centers. Correct any errors.

• Create cost estimates. Review the error logs to determine what master data objects need to be corrected.

• Repeat the cost estimate process and error correction until your cost estimates are error-free.

The following errors must be manually corrected by the participants:

• For S-FL##, the costing relevancy indicator is removed from BOM components T-FL3## and T-FL4##. Participants must manually set the costing relevancy indicator for these components.

• For S-FL##, the costing relevancy indicator is removed from operations 10 and 40. Participants must manually set the costing relevancy indicators for these operations.

• For S-FL##, the routing status has been changed to 1. Participants must change this to 4.

To determine if you have successfully completed the exercise, carry out the following checks:

• Display the cost estimate for S-FL##. Explode the costed BOM with all items. Verify that all the components and the operations are listed. Verify that all the six components are listed for S-FL##.

• Verify that six operations are listed for S-FL##. The operations can be verified from the costing BOM, or from the itemization report for S-FL##, using the display layout that sorts the items by operation.

• Verify that the valuation strategy is the purchasing info record for component T-FL1C00, and that there are two cost components for this material (raw material and freight).

• Change standard prices in the material master using transaction MR21 without affecting the released standard cost estimate.
• Alter released standard cost estimates by deleting the current estimate and executing a new, corrected one.
• Distinguish between material cost estimates by evaluating technical improvements, raw material price changes, and "What If" scenarios.
• Perform cost analysis for manufacturing materials, ensuring error-free cost estimates by correcting master data objects.
• Verify cost estimates by checking BOM components, operations, and valuation strategies for accuracy.