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Variances
Variances
In general, a variance equals the standard cost minus the actual cost for the transaction. MAC-PAC provides several options for calculating variances. Information about material variances is provided in the Reporting Scrap key concept. Information about labor, manning, and overhead variances is provided in the Reporting Labor Variances key concept. The calculations for the other variances are very straight-forward. For example:
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Purchase Price Variance
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=
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Quantity * Standard Acquisition Cost per Piece -
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Actual Cost from the Purchase Order
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For more information about any of the variances calculated by Inventory Accounting, refer to the Inventory Accounting Program Documentation Manual.