Moving Average Price vs Standard Price in SAP Material Master


Moving Average Price vs Standard Price in SAP Material Master

It is maintained in the accounting view of the material master and configured in Material Type. see below
See the bottom of the below image for price control

Consider the Below Scenario to understand the difference:

First Purchase Order  Made for 100 Qty at $20/pcs
                            Price = 100*20
                                     = 2000$

Second Purchase Order  Made for 500 Qty at $10/pcs for the same material
                            Price = 500*10
                                     = 5000$

Standard Price : It doesn't change with the change in price in new PO, so suppose the standard price maintained in material master was 20$ when 1st goods are received

                           total value = total stock * Standard price
                                             = 600qty * 20$
                                             = 12000$


Moving Average Price : It does change with the change in price in new PO, so suppose the moving price maintained in material master was 20$ when 1st goods are received

                           total value = total stock * Moving avg price
                                   MAP = total value / total stock
                                             = 7000$ / 600qty
                                             = 11.6666666667 $

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