Release of a standard cost estimate is not possible if in a given period goods have already been moved or invoices have been updated with values and posted. If the material ledger is active in a standard SAP Financials system, it does not allow release of a standard cost estimate if any transactions have been posted on the material in the concerned period.

A standard cost estimate can go wrong owing to many reasons such as incorrect raw material price, incorrect activity rates, or incorrect logistics data in a routing or a bill of material (BOM). For large companies that create hundreds of orders every day, an incorrect standard cost estimate may have a huge impact on production cost. Therefore, it is necessary to correct the standard cost estimate as soon as the problem is identified. 

Consider this scenario. You want to update a market price analysis for an order of material. To complete this process, you execute transaction code CKM3. In the screen that appears, you populate the fields as shown in Figure 1.

Figure 1

Settings for a material price analysis

Now you create and mark a cost estimate. For this process you first execute transaction code CK11N and then transaction code CK24. You can also use CK40N instead of CK11N and CK24 as an option. In the screen that appears, open the History tab (Figure 2). Here you can see the data that was entered in the screen in Figure 1. In my example, an order of 1,000 pounds of flour (material order 10003349) from plant 5519 has a total value of $300.00.

Figure 2

Display a cost estimate

Now you want to release this cost estimate. To complete this process you can either execute transaction codes CK11N and CK24 or CK40N. However, after you try to release the cost estimate in your SAP system, the following error message appears on the screen: Price changes for material 10003349 is not possible (Figure 3).

Figure 3

Error message after failing to release a cost estimate

If you double-click this error message, the screen displays the following detailed description of this error:

“You want to change the price or release planned prices for material 10003349 with valuation type in valuation area 5519. You have, however, already entered actual data or performed a single-level price determination in the period concerned. The status of the material in the period is Quantities and Values Entered. Price determination indicator 3 assumes that the standard price remains constant throughout the period, so that all movements can be valuated preliminarily with the same standard price. Therefore, you can only change the standard price at the beginning of a period (i.e., as long as no actual data was entered).”

The Solution

A standard cost estimate can only be released by executing transaction code MR21 (price change) after implementing SAP Note 555176. (This note is already implemented in SAP ERP Central Component [ECC] 6.0. This note needs to be implemented in systems prior to ECC 6.0.)

Using transaction code MR21 allows you to make a price change despite the transactions that you have already run. I recommend that you use this option only in urgent cases. In general, you should only make a price change at the beginning of the period. The subsequent price change that I introduce in this section does allow a price change and does not lead to inconsistencies, but errors occur in periodic consumption valuation, especially if you have already posted consumption in the period. If possible, you should cancel consumption before making a subsequent price change.

To release a standard cost estimate, follow these steps:

Execute transaction code MR21 or follow menu path SAP Easy Access > Accounting > Controlling > Product Cost Controlling > Actual Costing/Material Ledger > Material Ledger > Set Prices > MR21- Change Material Prices. In the screen that appears (Figure 4), enter data in the following fields:

• Posting Date
• Company Code
• Plant
• Doc.Header Text (This field is optional.)

Figure 4

Enter values for a price change

Enter LTPC (late price change) in the command bar and press Enter. In the next screen enter a number for your material in the row in the Material column and press Enter. Acknowledge any information displayed by again pressing Enter. All the related data is copied to the screen as shown in Figure 5.

Figure 5

Enter a material number for a price change

Select the line with the entered material, click the Edit button, and choose Default Planned Prices from the drop-down list of options (Figure 6).

Figure 6

Choose an option in the Price Change screen

The next screen (Figure 7) displays the new price. Click the save icon (not shown).

Figure 7

The new price displayed in the Price Change screen

In the next screen (not shown) check and accept the new information by pressing the Enter key. After you click the save icon to save your data, an inventory revaluation document is posted as shown in Figure 8.

Figure 8

The posted inventory revaluation document

As you can see, this price change document increases or reduces the inventory. You can view this inventory by executing transaction code CKM3 to open the Material Price Analysis screen (Figure 9). In my example, the Material Price Analysis screen shows that the beginning inventory is valuated at $300.00. Therefore, during the material ledger closing, this difference is taken care of by the material ledger.

Figure 9

The beginning inventory displayed in the Material Price Analysis screen

To see the release price in the cost estimate that you created, execute transaction code CK13N. The screen that opens indicates that the cost estimate is now released (Figure 10).

Figure 10

Display a cost estimate

You can see the same value in the material master (transaction code MM03) as shown in Figure 11.

Figure 11

The cost estimate in the material master

This way, a standard cost estimate can be released during a period when material movement has been posted.