Types of Price Determination in Material Ledger
Single level material price determination – The periodic unit price for a material is calculated by single level material price determination.
Multiple level material price determination – The periodic unit price for material is also calculated by the multiple level material price determination. But in the multiple level material price determination, multiple things are taken into account.
Transaction based price Determination – The transaction-based material price discrimination allows the company to calculate the average moving price of all goods after their movement.
Explanation of types of price determination
Single level: While calculating the single level material price determination the single level differences (increase or decrease) in prices and the standard prices are considered. Single-level price determination is the calculation that is required before the multilevel price determination.
Multiple level: The multiple levels include, the standard prices, single level differences (increase or decrease) in the period, the input material differences and the differences in the panned and the actual prices. The inventory valuation is done with the help of material prices calculated in the multiple level material price determination.
Transaction based: Sometimes when the material ledger is inactive, the company only calculates the average moving price of all goods of the company in the actual currency. And at times when the material ledger is active, the company will calculate the average moving price of all the goods in three different currencies.
