Production planning and product costing are to be implemented in your company. Which organizational level must you choose for stock valuation?

Question

Options

• APlant
• BCompany code
• CControlling area
• DBusiness area

• A
  6% (2)
• B
  74% (25)
• C
  6% (2)
• D
  15% (5)

Explanation

In SAP, stock valuation is fundamentally anchored to the Company Code because it is the core organizational unit for Financial Accounting (FI). Inventory values are recorded in G/L accounts belonging to the company code's chart of accounts, and stock appears on the company code's balance sheet - which is exactly where Product Costing posts price differences, variances, and cost of goods manufactured.

Why the distractors are wrong:

• A (Plant): Plants are subordinate to company codes and do not maintain their own chart of accounts or legal balance sheet, so they cannot independently govern stock valuation.
• C (Controlling area): This is an internal CO reporting unit used for cost center accounting and profitability analysis - it has no direct role in MM stock valuation configuration.
• D (Business area): Business areas support cross-company-code internal reporting but are not where valuation rules or G/L account assignments for stock are defined.

Memory tip: Follow the money - stock valuation must live wherever the balance sheet lives. The balance sheet belongs to the Company Code (the legal entity), so that's your valuation level. Think: "C-ompany code = C-ash/inventory on the balance sheet."

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