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Purchase Price Variance is being triggered at Item Receipt (IR) instead of at Vendor Bill
Hi, Gurus,
1) If Standard Cost items, the PPV will be posted at IR.
2) If Average Cost Items, the PPV will be posted to Vendor Bill.
Question : Are the two statements above correct? is this system behavior right ?
Below is the answer from ChatGpt :
PO300049461 = 36,000, 4 unit with uom is 500ml/ctn x12
Item: RM1021043-01, base uom is liter with default cost :1020, thus standard inventory cost = 24,480 (1020 x ((500ml/ctn)x12) = RM6120 x 4)
Difference: 36,000 − 24,480 = 11,520
The posting entry as below:
| Account | Amount |
|---|---|---|
Dr | Inventory | 24,480 |
Dr | PPV | 11,520 |
Cr | GRIR | 36,000 |
If the item is set to average cost in the costing method then usually it will be as below : -
0