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Question from ksiew on Jan 31 at 12:39 AM Hi, We are a small business with four separate product divisions. We have both trading products as well as manufactured products. However, the markets in which we trade in are commodity markets which means that our input prices fluctuate quite extensively over a relatively short period of time. We currently operate using MAP for BIL and for SEMI and FERT, these are valued using standard cost. The issue we have is given our input pricing varying greatly, our COGS are not reflective of the latest prices. Furthermore, we have factory variances resulting which are not allocated back to the individual material COGS making GP analysis by product inaccurate.
Is there anyway we can operate actual costing so that all production variances are allocated back to each material and flows through to the material COGS instead of a price variance account?
Our organization does not like the fact that we have a factory variance to standard amount and would rather that we recognized the production made in the month based on actual costing and operated on a FIFO method.
Items the relevant COGS for the items sold based on FIFO, and then realize the actual cost of production this month by material less make and transfer into stock as total COGS.
Is there anyway, this is feasible in SAP? Please feel free to clarify any of the above if I have not worded it clearly enough. Thank you for your assistance.
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