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Variance Category calculation

former_member216878
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Dear All,

I`m facing problem in understanding the calculation of different variance category. Below is the scenario:

Split valuation is activated and below are the valuation type:

1. In house production:

Valuation type 1 and valuation type 2

2. Procured:

Valuation type 3 and valuation type 4

Now at the time of std cost release system picks price from BOM for material components but in BOM we never specify valuation type for components.

BOM is as below:

Mat.1 (RM)  10 QTY

Mat.2 (RM)   5 QTY

Mat.3 (By product) -1 qty

Mat.4 (SFG) 2 Qty 

So when I create Production order after releasing it system automatically picks the GI value(some PP config is maintain).

After this I enter order confirmation and I enter material components with valuation type but movement type is picked up automatically. Below is the data:

Material              Qty          Valuation type          Movement type

FG                    10             Valuation type 1       101

RM 1                100            Valuation type 3       261

RM 2                 50             Valuation type 3       261

By product         10            Valuation type 1       261

SFg                   20             Valuation type 2       531

Now when I calculate Variance below data are updated in categories:

Resource usage variance:

It consist data for By product and SFG under Actual cost and 0 under Target cost.

1. Why system is considering data for only SFG and By product combination?

2. Why standard cost is 0 under Target cost for this combination.??

Remaining input variance:

It consist data for RM1 & RM2 under Actual cost and (Std cost*10) under Target cost.

Why system is comparing whole standard cost under Target cost with Cost of(RM1 & RM2) under Actual cost.???



Please suggest

Regards

Nitu

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former_member216878
Participant
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Any suggestions!!!!

Regards

Nitu