What is the Moving Average Price (MAP) if a material master record price is $3 and the invoice price is $2?

The Moving Average Price (MAP) is a pricing mechanism that reflects the average purchase price of a material based on the quantity and value of goods received over time. When new invoices are processed, they can influence the MAP by adjusting it according to the most recent purchase prices.

In this scenario, the material master record's initial price is set at $3, signifying the established cost of the material. When a new invoice arrives at a lower price of $2, this new price needs to be factored into the MAP calculation. Since the MAP is an average of the previous moving price and the latest invoice amount, the formula typically involves taking the existing MAP, the recent price, and possibly the quantities involved.

To determine the MAP accurately, you would consider both prices and how they affect the average. If you are working with only these two data points (ignoring quantities or prior purchases for simplicity), the MAP can be calculated as the average of the two prices:

MAP = (Current Price + Invoice Price) / 2

MAP = ($3 + $2) / 2

MAP = $5 / 2

MAP = $2.50

Therefore, the MAP adjusting for the new invoice price is indeed $2.50