2 Replies Latest reply: Feb 24, 2009 6:46 AM by Srikanth Munnaluri RSS

Price/Quantity Variance in Production Order

Currently Being Moderated

Hi

 

How does Price and Quantity Variances are calculated for a Production Order?

 

Regards

 

Kailash

  • Re: Price/Quantity Variance in Production Order
    Sanil Kailash Bhandari
    Currently Being Moderated

    Hi

     

    The cost difference due to quantity diffrence between planned activities and materials and actual activites and materials is treated as Quantity Variance

     

    The Cost difference due to difference between planned price and actual price of activities and materials is treated as "Price Variance".

     

    It is advisable you refer www.help.sap.com before posting a query here,

     

    Thanks & Best Regards

     

    Sanil K Bhandari

  • Re: Price/Quantity Variance in Production Order
    Srikanth Munnaluri
    Currently Being Moderated

    Hi Kailash,

     

    The variances relating to Input Price and Input Quantity are calculated on following basis...

     

    Input price variances

     

    Input price variances are caused by differences between the planned and actual prices of the materials and activities used.

     

    The system can only calculate input price variances if quantities were specified in addition to the planned and actual costs. The following conditions must be met for this:

     

    You need t turn on the Material origin indicator in the costing view of the master record of all materials that have a large influence on your costs. Uniform units of measure must be assigned to all input materials. That is, material costs can only be totaled under a cost element when such costs are carried under the same unit of measure.

     

    If you have defined primary input price variances in Customizing, the system will calculate input price variance percentages and update them with reference to the operation. When you start the variance calculation process at the end of the period, this data will be canceled and the input price variances calculated by multiplying the difference between the planned price and the actual price by the confirmed quantity. If the confirmed quantities are incomplete or do not exist, input price variance percentages will be shown.

     

    Input quantity variances

     

    Input quantity variances are caused by differences between the planned and actual consumption quantities of materials and activities. You need to turn on the Material origin indicator in the costing view of the master record of all materials that have a large influence on your costs.

     

    As a whole, if you want to see input quantity variances and input price variances, you must make the following settings:

     

    Turn on the Material origin indicator in the costing view of the material master record.

    Turn on the Record quantity indicator in the cost element.

     

    When it calculates the variances, the system does not check whether the Record quantity indicator is turned on. If quantities are not recorded, however, it is not possible to calculate quantity variances. If the Record quantity indicator is turned on, a warning message is issued if you do not enter a quantity in consumption postings.

     

    Pls revert back for further explanation....

     

    Srikanth Munnaluri

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