Mixed-price variance & Lot size variance

[Former Member]

Dears Gurus,

Can anyone give a detail explanation & examples of Mixed-price variance & Lot size variance?

(After reading sap library, I still didn't get clear idea)

Thanks

Ellie

[Former Member · Accepted solution]

Mixed Price Variance :- This is the variance between a standard price that was calculated in a mixed calculation for more than one procurement alternative and the costing of a procurement alternative.

For Example : Standard Cost was made for a Raw Material A purchased from 2 sources ( X and Y ) with 50/50 ratio..

Actuals it was made of a Raw Material A purchased from X and Y ( in 25:75 ratio ).

The same can happen for production versions also . Standard May have version 1 and 2 (in 50:50 ratio).. actual have version 1 and 2 ( 40: 60) ratio .

Lot Size Variance : Variance due to effect of lot-size-independent costs when the lot size is changed .

For Example : we may have consumables cost per 10000 lot size . Original Lot size during creation of standard is 10000 .

Actually lot size was 150000 .. hence due to change the lot size.. the cost has increased and its lot size variance..

Hope it clarifies..

Regards

Sarada

[Former Member · Accepted solution]

Thanks.

Could you plz make examples with result details?

[ajaycwa1981 · Accepted solution]

Hi

Mixed Price Variance - Suppose your Std cost is based on Prod Version 1 and Prod Version 2

PV1 Std cost is 100 and PV 2 std cost is 150.... Your released cost in 50-50 ratio is 125...

During Actual production you would use any one of these at any given point of time....

If you use PV1, then Mixed price variance will be 100-125 = -25

If you use PV2, then Mixed Price var will be 150-125 = +25

Lot Size Variance: Suppose you have set up cost of 1000 rs for 10 hrs of set up time which is fixed... The std lot size is say, 100... If actual lot size during production is say, 50 - then lot size variance will be -500

Regards

Ajay M