Material-Ledger,物料分类帐,matériel livre,구체 l 차다 d 부산 r,Материа л ай D вниз г,Materia l tut d Abajo r,品目元帳,Material ledger ,ACTUAL PRICE

1. Complete Configuration with Test Scripts
SAP
Material Ledger
By Guntupalli Hari Krishna

2. Index:
Material Ledger Overview :
What is Actual Costing and Material Ledger?
Material Ledger is a tool that collects data for materials whose master data has been saved
in a material master record. This data is used to calculate prices to valuate these materials
forming the basis for actual costing and enabling inventory valuation to be carried out in up
to three currencies or valuation methods.
If Actual Costing is used, system can use the periodically collected values to automatically
calculate new inventory values and valuation prices, independently of one another and in
different currencies or valuation methods.
Introduction:
Material ledger (ML) is functionality in SAP, which helps to calculate Actual Cost for
materials and also provide the facility of multiple parallel valuations in multiple currencies.
ML has two major functionalities, first to calculate actual cost of materials, semi/finished
goods, and second provide an opportunity to calculate actual cost on multiple valuation
such as Legal, Group, & Profit center valuation. In this document we will see fundamental
concept of material ledger, how the actual cost is calculated for different business
scenarios.
Actual Costing in SAP
Actual Costing has a purpose of calculating actual cost for goods manufactured in-house
and materials procured from outside. Calculation of actual cost for finished goods, raw
materials is very difficult as we don’t know many of actual costs when business
transactions are performed. Business transactions are performed throughout the months
and at that time we don’t know the actual cost of our production activities, expenses for full
months, total activities performed in month, overhead cost etc., so it’s become difficult to
calculate actual cost for finished goods, raw material purchased from outside. The situation
becomes more difficult when we talk about a Multinational organization having
manufacturing plants in different countries and transfer of goods is happening between
groups.

3. Material ledger works on a concept on first recording the material movement in Standard
Cost and then accumulating the Variance to calculate the Actual cost.
In Material ledger the benefit of standard cost is retained as all the materials movements
are initially recorded at Standard Cost and variances are collected to come to actual cost.
Actual cost is calculated at the end as part of Period End Closing, and the actual cost is
termed as Periodic Unit Price (PUP).
Periodic Unit Price (PUP)
Periodic Unit Price refers to the average actual cost of materials in material ledger.
For material procured from outside, PUP represent Standard Cost plus Capitalized
Purchasing variances (like, purchase price variance, exchange rate variance etc.)
For in-house produced material, PUP represents Standard Cost plus manufacturing
variances (like quantity variances from raw material & activity, purchase price variance,
multi-level variances coming from raw materials etc.)
For calculating the PUP, only opening stock and receipt is consider, but not the
consumption.
Consumption is revalued at closing cost. First the consumption is booked at standard cost
and then it’s revalued during ML period end closing, with the difference of New PUP and
Standard Cost.
PUP is updated in Accounting View 1 of material master data.
Pre requisite for Material ledger
a. Material price determination should be 3 (i.e. Single/Multilevel price determination)
b. All procurement cost should be linked to purchase order
c. All manufacturing cost, overhead expenses should be part of activity cost (i.e. product
cost value flow)

4. Different Scenarios:
Scenario 1: External Procurement of Raw Materials
Step 1: Purchase requisition: No journal entries, as it’s a pre-commitment.
Step 2: Purchase order: No journal entries, it’s a commitment for Budget
Step 3: Goods receipt: when we receipt the raw material, at that time we are not aware of
our actual cost of material then the initial recognition happened at Standard cost.
Stock of Raw material A/c ………….. Debit (Std. Cost * Actual Qty.)
To, GR/IR A/c… (Credit) (Std. Cost * Actual Qty.)
The value posted at GR is equals to (Std. Cost of raw material multiplied by Actual Quantity
receipt)
Material ledger: at the time of good receipt, in material ledger there is an entry happened
for receipt under purchase, where entry happened for stock quantity & value is recognized
as standard price.
Step 4: Invoice Receipt:
GR/IR A/c ……………………………………. Dr. (Std. Cost * Actual Qty.)
Exchange rate difference A/c …………Dr. (Exchange rate variance)
Purchase Price Variance A/c ………… Dr. (Balancing figure)

5. To Vendor A/c (Invoice Value)
Material ledger: at the time of invoice receipt the purchase price variance is recognized in
material ledger under zero quantity receipt, which increases the actual price of cumulative
inventory. In some of cases we can also see exchange rate variances at time of invoice
receipt. Exchange rate variance generally arises when the transaction currency is different
than legal currency and average actual exchange rate is different than budgeted exchange
rate.
Scenario 2: In-house production of Finished goods
Step 1: Goods Issue to Production/ Process Order
Raw Material Consumption A/c ……………… Dr. (Std. Cost * Actual Qty)
To, Stock of Raw material A/c ….. Cr (Std. Cost * Actual Qty)
In Controlling, Order should be debited with raw material consumption with a value equals
to (Std. Cost * Actual Qty).
In Material Ledger, consumption entries will happen for raw material with Consumption of
Raw material quantity as Actual quantity issue to order and value of consumption as (Std.
Cost * Actual Qty).
Step 2: Activity Confirmation for completion of production activity
When production/ process order activities are confirm, then order is debited/charged with
the cost of activity (Plan Activity rate * Actual Activity), and the production cost is credited.
This entry is passed in Controlling, but no entries happened in FI.
Step 3: Goods receipt, finished goods receipt as part of order completion.

6. Stock of Finished Goods A/c ………………… Dr. (Std Cost * Actual Qty) BSX
To, Finished Goods manufacture A/c (Std Cost * Actual Qty) GBB
In Controlling, order is credited with cost of finished goods manufactured i.e. (Std Cost of
FG * Actual Qty produced).
In Material Ledger, there will be entry in the receipt for finished goods. Inventory/volume
in KG will increased by quantity receipt during goods receipt and value will increased by
(Standard cost of FG * Actual Quantity receipt)
Step 4: Variance Calculation & Settlement
Once we do the variance calculation then variance represents the difference between Total
cost charged to process/production order and Cost of Finished good receipt. These
variances basically represent quantity variance of raw material and activity. i.e. (Actual
Quantity less Plan Quantity)* Standard rate.
Variance calculated at this step gets posted in Material ledger to adjust the actual cost of
finished goods produced.
Scenario 3: Sales of Finished goods (FG)
Step 1: Sales order; no accounting entries are created in FI. No impact in material ledger.
Step 2: Goods Issue to Customer; when goods issued to customer, in financial accounting
the entries are recorded for actual quantity sold @ Standard cost of finished goods.
Cost of Goods Sold A/c ………………………….. Dr. (Std. cost of FG * Actual Quantity)
To, Finished goods Inventory A/c (Std. cost of FG * Actual
Quantity)

7. In Material ledger: goods issue to customer is recorded in material ledger as consumption
of raw material. The Actual quantity is recognized at standard cost.
Step 3: Billing document released
Customer A/c ……………………………………..DR
To, Sales Revenue A/c
Step 4: Payment receipt,
Bank A/c …………………………………………DR
To, Customer A/c
Step 5: Period end closing: when we do period end closing activity in ML, the consumption
is revaluated with the different between actual cost (periodic unit price) and standard cost
of finished goods. The price difference & exchange rate difference are proportionately
adjusted between consumption & closing inventory.
Illustration:
To illustrate the scenario in more details, assume that we are manufacturing finished goods
FGA, which is made of raw material RM1 & RM2, and two activity X & Y are performed to
convert raw material in finished goods. In below table represent Plan standard cost of
finished goods.
Table 1

8. Assume that we have created a production order to manufacture 10 kg of finished goods
FGA. The details of value which will be posted at different task like Goods issue, Activity
confirmation & goods receipt are given below. I have assumed actual quantity as different
then plan quantity so that we can check variances.
Table 2
Here we can see the total variance of 140 USD, basically represent quantity variance.

9. Table 3
Assumed, actual rate different than plan rate. Here we can see the calculation of lower level
variance.
PUP Calculation for finished goods FGA
PUP is calculated on the ratio of total cumulative cost with total cumulative quantity. The
formula is given below.
In the below table the calculation of average actual cost is shown

10. Assuming the opening stock is zero in table 4.
Goods receipt from order is actual quantity @ standard cost. Details can be verified from
Table 2.
Variance from order of 140 USD is basically the difference between total debit cost & total
credit cost to production order, which is quantity variance. (Table 2)
Lower level variance of 95 USD is price variance (Table 3)
PUP is {(630+235)/10} = 86.50 USD/Kg
Goods issue to sales order is initial recorded at Std. cost
Revaluation of consumption {(PUP – Std Cost)*Actual Qty} i.e. {(86.5 – 63.0)*5} = 117.5
USD
Closing inventory is also revaluated with PUP.
Table4 4

11. Conclusion:
With the help of this document I have tried to focus on basic functioning of material ledger
with concept. It will help to understand how the variances are moved from raw material,
activity to finished goods & to closing inventory and consumption.
CO-PC-ACT transaction code list:
Transaction Description
CKMDISPACT Technical Activity Type View.
CKMD Transactions for a Material.
CKMDISPDOC Technical View ML Document
CKMDISPPOH Technical View of Order Development
CKMDISPTAB Technical View of ML Master Data
CKMDUVACT Distribution of Activity Differences
CKMDUVMAT Distribution of Inventory Diffs
CKMDUVREC Enter Activity Differences
CKMDUVSHOW Display Inventory and Activity Diff.
CKME Activation of Planned Prices
CKMF Allow Price Determination
CKMF_RUN Allow Price Determination for Run
CKMG Allow Closing Entries
CKMG_RUN Allow Closing Entries for Run
CKMH Single-Level Price Determination
CKMH_RUN Single-Level Price Det.for Costg Run
CKMHELPWIP Helpdesk for WIP
CKMI Post Closing
CKMI_RUN Post Closing for Costing Run
CKMJ Display Organizational Measures
CKMJ_RUN Organizational Measures for Run
CKML_FPR1N Edit Production Process
CKML_PRICES_SEND Send Material Prices
CKML_SURF Edit Prcrmnt / Cnsmptn Alternatives
CKMLAVREXP AVR Erklärungstool
CKMLAVRPERD Display period values

12. CKMLCP Cockpit Actual Costing
CKMLCPAVR Alternative Valuation Run Cockpit
CKMLCPMLBF Material Ledger Budget Cockpit
CKMLDC Debit/Credit Material
CKMLDM Debit or Credit Material
CKMLLA Prices in the Material Ledger
CKMLLACHANGE Display ActvPrices, Change NO_SETTLE
CKMLLACREATE Create ML-AT Master Data Manually
CKMLLANOSETTLE Ind.'Do Not Consider Price'
CKMLLASHOW Display Activity Prices
CKMLMAT Display Material List
CKMLMV_CA Edit Controlling Level
CKMLMV_MCA_N Mass Maintenance: Controlling Levels
CKMLMVCHECK Quantity Structure Consistency
CKMLOH PO History/Multiple Currencies
CKMLPC Price Change
CKMLPOH Order History Display
CKMLPROT Delete Logs
CKMLQS Valuated Quantity Structure(M-level)
CKMLRUNCUMDEL Delete costing run cumulation
CKMLRUNDEL Delete Costing Run (Actual Costing)
CKMLRUNREORG Reorganization of Costing Runs
CKMLSTATUS Materials by Period Status
CKMLWIPDEACT Check Report: WIP Deactivation
CKMLXPRA46A Postprocessing Report for 46A-XPRA
CKMM Change Price Determination
CKMM_RUN Multilevel Pr. Deter. for Cstg Run
CKMPCD Display Price Change Document
CKMPCSEARCH Price Change Documents for Material
CKMPROTDIS Display Log
CKMPRP Maintain Planned Prices
CKMPRP2 Maintain Future Prices by Profile
CKMPRPN Price Maintenance
CKMREDWIP Value Flow Display for Reduced WIP
CKMREP Repair Program for ML Tables
CKMS Material Ledger Docs for Material
CKMSTART Production Startup of Mat. Ledger

13. CKMTOPPRICEDIF Mat. with Highest MAP Difference
CKMTOPSTOCKVAL Materials w/ Highest Inventory Value
CKMVAPP Data Transfer: Val. Production Plan
CKMVFM Value Flow Monitor
CKMVFM_DEL Delete Extract
CKRU00 Create ML Costing Run
CKRU01 ML Costing Run, Create Profile
CKRU02 ML Costing Run, Change Profile
CKRU03 ML Costing Run, Display Profile
CKRU04 Display Selection
CKRU05 Display ML Costing Run
CKRU06 Delete ML Costing Run
CKRU07 Plants in Costing Runs
CKRU08 Display Levels
COMLI Post WIP Closing for Activities
COMLWIPARCH Archive WIP Quantities Document
COMLWIPDISP Trans. For Prog. Display_WIP_OBJ_M
COMLWIPDOC Display WIP Quantities Document
KALNRCHECK Consist. Check for Costing Run Nos.
KALNRREORG Reorg. of Old Costing Number Entries
LACCS CO_ML_DISPLAY
MGV_CORRECT Checks + Corrects Quantity Structure
MLCCSPD Cost Components for Price
MR11 GR/IR account maintenance
MR11_OLD Old GR/IR account maintenance
MR11SHOW Account Maint.Docu.Display-Reversal
OMRW Treatment of Exch. Rate Differences
OMX_NLINK_DISP Assign Contr. Level to Process Cat.
OMX_NRULE_DISP Display Controlling Levels
OMX_UMB_ACCOUNTS Display Accounts for Account Key UMB
OMX0 Assign ML Movement Type Groups
OMX1 ML Activation in n Valuation Areas
OMX2 Define Material Ledger Type
OMX3 ML Assignment of Valuation Area
OMX4 Number Range Maintenence: ML-DOCU.
OMX5 Dyn. Price Release Plan. Pr. Change
OMX6 Texts for Currency Types/Valuations

14. OMX7 Definition ML Movement Type Groups
OMX8 Assign Material Update Structure
OMX9 Define Material Update Structure
OMXA Display Quantity Structure Type
OMXB Define Naming Rule
OMXC Rules for Name Formation
OMXD Maintain Naming Structure
OMXE Assign Naming Structure to Plant
OMXF Activate Actual Cst Component Split
OMXW Activate WIP at Actual Costs