Riyadh Cables Group of Companies

Material Ledger Postings - Cost Accounting Reconciliation Proposed Solution

40220001 - ML 30000000 -
Single Level Inventory Raw
40210001 - ML Single Finished Variances 40200040- Finished Material at MAP 19100000 - GR/IR
Step Description Level Variances (PRV) (PRY) Prod variance (PRD) (BSX) (WRX)

1 Purchase of Raw Materials - GR/IR 1200 1200

2 Consumption of Raw materials to production 1200
3 Cost Center Act Type Confirmation
4 Confirmed GR from Production
5 Sales of Finished Goods
6 Delivery of Finished Goods
7 Month-end closing actual posting
8 Revaluation of Order at Actual Activity Rate
9 Process Order Settlement 600
10 ML Allocation Single/Multi-Level Variances Raw Material
11 ML Allocation Multi-Level from pack to finished 300
12 ML allocation Multi-Level from processs ord thru revaluation of Consumption 300
13 Material Ledger Posting Execution
600 600
0
 Process Order Cost Center
89400001 - Change
74000000 - Inventory 40000000 - Raw 89400000 - Factory from Order
19100000 - GR/IR Finished at Standard Materials Output Finished Settlement FG 60200000 - Cost 60200000 - Cost 42210000 - Labor 89300000 - COGS
(WRX) (BSX) Consumption (VBR) Goods (AUF) (AUA) center FMC activity center FMC activity Payroll for FG (VAX)

1200
1200
700 700
100L 1500 1500

750 50L 750

900
200 200
600

300
300

50L 1050 0
9300000 - COGS 80100000 - Sales
for FG (VAX) Revenue Customer X Vendor

1200

5000 5000

900
 Customizing Requirements
COC 5000010 COGS varisuggested
GBB-AUI 6700008 Cost centesuggested
PRV 6300098 Material Lesuggested
PRD 6700410 Raw Materialready set
PRD 6700044 Finished Palready set
LKW 1020010 Inventory rsuggested
LKW 1021010 Inventory psuggested
LKW 1023010 Inventory ssuggested
LKW 1024010 Inventory f suggested
BSX 1020000 Inventory already set
BSX 1024000 Inventory Falready set
WRX 2010002 GR/IR already set
COC 5000002 COGS already set
2030001 Sales Rev already set
GBB-VBO 6700020 Raw Materialready set
GBB-AUF 6700010 Factory Oualready set
PRY 6300096 Material Lealready set
Secondary 9000000 Cost centeralready set
Primary Co 6000115 Labor primalready set
May 2013 - Start of the Month June 2013 - Start of the Month
Qty Units Value Var Price Curr. Qty Units Value
Beg. Inv. 100 M 1000 500 10 SAR Beg. Inv. 200 M 2000
Production M SAR Production M
Cum. Inv. 100 M 1000 500 10 SAR Cum. Inv. 200 M 2000
Consumption M SAR Consumption M
End. Inv. 100 M 1000 10 SAR End. Inv. 200 M 2000

May 2013 - Before Material Ledger Closing (Actual Co June 2013 - Before Material Ledger Closing (Actual Co
Qty Units Value Var Price Curr. Qty Units Value
Beg. Inv. 100 M 1000 500 10 SAR Beg. Inv. 200 M 2000
Production 500 M 5000 2500 10 SAR Production 600 M 6000
Cum. Inv. 600 M 6000 3000 10 SAR Cum. Inv. 800 M 8000
Consumption 400 M 4000 10 SAR Consumption 500 M 5000
End. Inv. 200 M 2000 10 SAR End. Inv. 300 M 3000

May 2013 - After Material Ledger Closing (Actual Cos June 2013 - After Material Ledger Closing (Actual Cos
Qty Units Value Var Price Curr. Qty Units Value
Beg. Inv. 100 M 1000 500 10 SAR Beg. Inv. 200 M 2000
Production 500 M 5000 2500 10 SAR Production 600 M 6000
Cum. Inv. 600 M 6000 3000 15 SAR Cum. Inv. 800 M 8000
Consumption 400 M 4000 2000 15 SAR Consumption 500 M 5000
End. Inv. 200 M 2000 1000 15 SAR End. Inv. 300 M 3000
Zain: Through Dynamic Price Release
function, Actual Price (PUP) of May
2013 can be released for first goods
movement in July 2013
of the Month July 2013 - Start of the Month
Var Price Curr. Qty Units Value Var Price Curr.
1000 10 SAR Beg. Inv. 300 M 4500 1,687.50 15 SAR
SAR Production M SAR Zain: Through
1000 10 SAR Cum. Inv. 300 M 4500 1,687.50 15 SAR Dynamic Price
SAR Consumption M SAR Release function,
Actual Price (PUP)
1000 10 SAR End. Inv. 300 M 4500 1,687.50 15 SAR
of May 2013 can
be released for
first goods
aterial Ledger Closing (Actual Costing July 2013 - Before Material Ledger Closing (Actual Costing) movement in July
Var Price Curr. Qty Units Value Var Price Curr. 2013
1000 10 SAR Beg. Inv. 300 M 4500 1,687.50 15 SAR
3500 10 SAR Production 400 M 6000 2,000.00 15 SAR
4500 10 SAR Cum. Inv. 700 M 10500 3,687.50 15 SAR
10 SAR Consumption 600 M 9000 15 SAR
10 SAR End. Inv. 100 M 1500 15 SAR

erial Ledger Closing (Actual Costing) July 2013 - After Material Ledger Closing (Actual Costing)
Var Price Curr. Qty Units Value Var Price Curr.
1000 10 SAR Beg. Inv. 300 M 4500 1,687.50 15 SAR
3500 10 SAR Production 400 M 6000 2,000.00 15 SAR
4500 15.63 SAR Cum. Inv. 700 M 10500 3,687.50 20.27 SAR
2,812.50 15.63 SAR Consumption 600 M 9000 3,160.71 20.27 SAR
1,687.50 15.63 SAR End. Inv. 100 M 1500 526.79 20.27 SAR
Price Release
UP) of May
r first goods
Zain: Through
Dynamic Price
Release function,
Actual Price (PUP)
of May 2013 can
be released for
first goods
movement in July
2013
Month of May 2013

Standard Cost Estimate for May 2013

Standard Price updated in Material Master
Beginning Inventory Revaluated with New Standard Price

Material Consumption at Standard Price during the month

Material Receipt in stock at Standard Price during the month

Month-end Closing
Postings of all expenses to Cost centers
Allocation of Expenses from Service Cost Centers to Production Cost
Centers
Actual Activity Price/Rate Calculation
Revaluation Of Orders With Actual Activity Price/Rate
WIP Calculation for Orders
Variance Calculation for Orders
Production Order Settlement

Period Closing - Openning of Next Period for FI and MM

Standard Cost Estimate for June 2013

Standard Price updated in Material Master
Beginning Inventory Revaluated with New Standard Price

Material Ledger Closing

Selections
Determine Sequence
Single-level Price Determination
Multi-level Price Determination
- Actual Cost is calculated

Posting Closing
- Material Master is updated with Periodic Unit Price (Actual Cost)
- COGS is revaluated with Actual Cost
- Ending Inventory is revaluated with Actual Cost
- Inventory Revaluation Entry is posted on 31st May 2013
- Inventory Revaluation Entry is reversed 1st June 2013

Mark Future Price

- Actual cost of May 2013 is marked for future period
- This Marked Furture Price can be released in July 2013
Month of June 2013

Standard Price updated in Material Master

Beginning Inventory Revaluated with New Standard Price

Material Consumption at Standard Price during the month

Material Receipt in stock at Standard Price during the month

Month-end Closing
Postings of all expenses to Cost centers
Allocation of Expenses from Service Cost Centers to Production Cost
Centers
Actual Activity Price/Rate Calculation
Revaluation Of Orders With Actual Activity Price/Rate
WIP Calculation for Orders
Variance Calculation for Orders
Production Order Settlement

Period Closing - Openning of Next Period for FI and MM

Standard Cost Estimate for June 2013

Standard Price updated in Material Master
Beginning Inventory Revaluated with New Standard Price

Material Ledger Closing

Selections
Determine Sequence
Single-level Price Determination
Multi-level Price Determination
- Actual Cost is calculated

Posting Closing
- Material Master is updated with Periodic Unit Price (Actual Cost)
- COGS is revaluated with Actual Cost
- Ending Inventory is revaluated with Actual Cost
- Inventory Revaluation Entry is posted on 30th June 2013
- Inventory Revaluation Entry is reversed 1st July 2013

Mark Future Price

- Actual cost of May 2013 is marked for future period
- This Marked Furture Price can be released in August 2013
Month of July 2013
Standard Price updated in Material Master
Beginning Inventory Revaluated with New Standard Price

- Material Master is updated with Marked Furture Price from May 2013
- Beginning Inventory is revaluated based this new Standard Price

Material Consumption at Standard Price during the month

Material Receipt in stock at Standard Price during the month

Month-end Closing
Postings of all expenses to Cost centers

Allocation of Expenses from Service Cost Centers to Production Cost Centers

Actual Activity Price/Rate Calculation
Revaluation Of Orders With Actual Activity Price/Rate
WIP Calculation for Orders
Variance Calculation for Orders
Production Order Settlement

Period Closing - Openning of Next Period for FI and MM

Standard Cost Estimate for June 2013

Standard Price updated in Material Master
Beginning Inventory Revaluated with New Standard Price

Material Ledger Closing

Selections
Determine Sequence
Single-level Price Determination
Multi-level Price Determination
- Actual Cost is calculated

Posting Closing
- Material Master is updated with Periodic Unit Price (Actual Cost)
- COGS is revaluated with Actual Cost
- Ending Inventory is revaluated with Actual Cost
- Inventory Revaluation Entry is posted on 30th June 2013
- Inventory Revaluation Entry is reversed 1st July 2013

Mark Future Price

- Actual cost of May 2013 is marked for future period
- This Marked Furture Price can be released in August 2013
 Finished Stock Finished Variances
Tr # Units Price Value Units Price Value Tr # Units Price Value

Semi Finished Stock Semi Finished Variances

Tr # Units Price Value Units Price Value Tr # Units Price Value

Raw Material Stock Raw Material Variances

Tr # Units Price Value Units Price Value Tr # Units Price Value
Openning Stock
Goods Receipt 1
Goods Issuance 1
 Finished Variances
Units Price Value

Semi Finished Variances

Units Price Value

Raw Material Variances

Units Price Value
PRODUCT COST PLANNING

Planning of Expenses at Service and Production Cost Centers (KP06)

Planning of Planned Activity Hours/Output for Production Cost Centers (KP26)

Allocation of Planned Expenses from Service CCtrs to Production Cost Centers (KSUB)

Plan Activity Price/Rate Calculation (KSPI)

Product Cost Estimate for Setting Standard Price for Finished/Semi-Finished Products (CK11N/CK40N)

REVALUATION OF FINISHED/SEMI-FINISHED STOCK WITH NEW STANDARD PRICE

100500 Finished Goods Stock xxx
441800 Revaluation of FG xxx

RAW MATERIAL CONSUMPTION (MIGO)

GL/Cost
Element Desc Dr Cr Qty
890000 Semi-finished Consumption 746.76
790000 SFG Stock 746.76 25.4 T

ACTIVITY ALLOCATION VIA CONFIRMATIONS IN PRODUCTION PROCESS (CO11N)

610170 Labor Hours 800 20 HR
610180 Machines Hours 500 10 HR
610170 Labor Hours 800 20 HR
610180 Machines Hours 500 10 HR

SEMI-FINISHED GOODS RECEIPT

790000 Finished Goods Stock 15,299.70

895000 Factory Output prod.ord 15,299.70 509990 M

MONTH-END CLOSING

Postings of all expenses to Service and Production Cost centers

Allocation of Expenses from Service Cost Centers to Production Cost Centers

Actual Activity Price/Rate Calculation

REVALUATION OF ORDERS WITH ACTUAL ACTIVITY PRICE/RATE

610170 Labor Hours 200.00
610180 Machines Hours 700.00
610170 Labor Hours 200.00
610180 Machines Hours 700.00
WIP Calculation for Orders

Variance Calculation for Orders

ORDER SETTLEMENT
For Complete orders (if Order is DLV/TECO)
895000 Factory output prod.ord 12,352.94
231500 Prod. Difference 12,352.94

For Incomplete orders (if Order is REL/PDLV status)

WIP (P&L) 12,352.94
WIP (BS) 12,352.94

COST OF SALES
Cost of Sales 15,299.70
Finished Goods Stock 15,299.70 509990 M

SALES
Customer 20000
Sales 20000 509990 M
ers (KSUB)

Products (CK11N/CK40N)

EW STANDARD PRICE

Material CO Object
Prod Order-1000402
ZT_COPPER_COIL

SS (CO11N)
Prod Order-1000402 Standard Rate X Actual Hours = 40 X 20
Prod Order-1000402 Standard Rate X Actual Hours = 50 X 10
Cost Center-M11050
Cost Center-M11050

ZT_DRAWN_WIRE Standard Cost .03 per Mtr

509990 M Prod Order-1000402

Prod Order-1000402 Actual rate X Actual Hours = 50 X 20 = 1000

Prod Order-1000402 Actual rate X Actual Hours = 60 X 10 = 1200
Cost Center-M11050
Cost Center-M11050
 Prod Order-1000402

Standard Cost .03 per Mtr

509990 M

509990 M COPA
15,299.70
2,946.76

12,352.94
PROFIT & LOSS

Sales -1000
Less : COS 400
Variance 160

BALANCE SHEET

Finished Goods
Production 400
Sold -400

Customer 1000

Raw Material Stock -560

 Standard Cost
Calculation

Stanard Cost
Determination
Material Ledger
Closing
Mark Future Price