Variance Analysis
2
Ex ample for Variance Calculation In this example, the target costs are compared with the control costs (net actual costs) for a production order. This example shows only variances on the input side. The actual costs arise from goods movements in the Materials Management component, and confirmations in the Production Planning component or activity allocations in the Controlling component. If... then the system calculates... the price of the material issued changes an input price variance the input quantity of a material changes an input quantity variance a material is replaced by a different material a resource- usage variance the confirmed values are different from the standard values an input quantity variance the operation is performed at a different cost center a resource- usage variance you have confirmed scrap (in Product Cost by Period at operation level, in Product Cost by Order at operation level or at order header level) and you have selected the indicator Scrap in the variance key and the indicator Scrap variances in the variance variant scrap variances and reports them The following tables provide an overview of the results of variance calculation. The first table shows the planned costs and actual costs for the order by cost element. The second table shows the same information by costing item. The third table shows the values that are calculated when variances are calculated for the order. Order: Analysis by Cost Element Resource Cost Elements Planned Costs Actual Costs Raw materials 400000 USD 20 USD 33 410000 USD 20 USD 20 Internal activities 610000 USD 75 USD 85
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Variance Analysis
Transcript of Variance Analysis
Example for Variance Calculation In this example, the target costs are compared with the control costs (net actual costs) for a production order. This example shows only variances on the input side.The actual costs arise from goods movements in the Materials Management component, and confirmations in theProduction Planning component or activity allocations in the Controlling component.If... then the
system calculates...
the price of the material issued changes an input price variance
the input quantity of a material changes an input quantity variance
a material is replaced by a differentmaterial
a resource-usage variance
the confirmed values are different from the standard values an input quantity variance
the operation is performed at a differentcost center
a resource-usage variance
you have confirmed scrap (in Product Cost by Period at operation level, in Product Cost by Order at operation level or at order header level) and you have selected the indicator Scrap in the variance key and the indicatorScrap variances in the variance variant
scrap variances and reports them
The following tables provide an overview of the results of variance calculation. The first table shows the planned costs and actual costs for the order by cost element. The second table shows the same information by costing item. The third table shows the values that are calculated when variances are calculated for the order.Order: Analysis by Cost ElementResource Cost Elements Planned Costs Actual Costs
Raw materials 400000 USD 20 USD 33 410000 USD 20 USD 20Internal activities 610000 USD 75 USD 85 620000 USD 50 USD 50Total costs USD 165 USD 188Order: ItemizationPlan Values for Resource Quantity Price
M WK01 ROH-1 2 units USD 10M WK01 ROH-2 2 units USD 10E KST1 LST1 15 min USD 5E KST2 LST2 10 min USD 5Actual Values for Resource Quantity Price
M WK01 ROH-1 3 units USD 11M WK01 ROH-3 2 units USD 10E KST1 LST1 17 min USD 5E KST2 LST3 10 min USD 5Results of Variance CalculationCost Element Variance Category Value
400000 Input price variance USD 3400000 Input quantity variance USD 10410000 Resource-usage variance USD 20 (+)410000 Resource-usage variance USD 20 (-)610000 Input quantity variance USD 10620000 Resource-usage variance USD 50 (+)620000 Resource-usage variance USD 50 (-) Total variance USD 23
