on 04-19-2009 11:38 PM
What is the meaning of Production varaince Account, it gets Dr or Cr when we calculate WIP,
and the Production Variance Account Shows a Negative Balance when Analyzed , why is it so ?
When It gets Dr and when it gets Cr ?
Thx,
Sandhya..
Variance account will not debit or credit when you calculated WIP, it will be debited/credited when you calculate variance on production order:
if production order status is DLV/TECO variance will be calculated, otherwise WIP will be calculated.
Variance will be debited or credited based on positive or negative variance.
If your total input cost is less than the out put cost it is positive variance or vice versa.
in other terms for example:
your total cost to produce on finished product = RM cost + Activity cost = 100
but as per actual the finished product price is: 90
then you will get a variance.
regs,
ramesh b
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Ramesh that was really nice explanation. I have one last Qqestion to close this thread , I have a huge
-ve balance on Production Variance Account that mean the total out put costs are more when compared to the input costs for that period.so what we do with the Costs/Balance in this GL(Production variance Acct) account?
is this account is just for information purpose? or we use this acount (Production variance Acct) for some thing else?
Thx,
Sandhya...
it is based on the your cleint's requirements.
But any way you have to show it in financial statements in some form to balance your trial balance.
If client is required that their stock should be at actual prices, then you have to post manually these variances to stock accounts ( for example I have a client in Vietnam, as per their requirement they have to adjust the variances to finished products, if that finished product is sold, of course it is a very huge process , we have to work around out of sap then post to material accounts) .Generally stock accounts are managed with automatic postings, for this posting we have to remove that check box, then you have to post.
regs,
ramesh b
for any JV write transaction is F-02.
you can directly debit or credit stock account, if you want to adjust variance to stock account.
for example production variance a/c dr to stock account Cr.
but please note that stock GL account will be ticket with automatic posting, so you have to remove this, after posting agin you have to tick this check box in GL master.
But again it is purely on your cleint's decision, how to adjust the variances?
regs,
ramesh b
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