Variance Option

This field identifies how labor, overhead, and manning variances are calculated and accounted for in the system.  Valid values are: 

1. Variances are calculated and posted by comparing standard costs to actual costs for closed manufacturing orders or received JIT parts.  

2. Two types of variances are calculated: as-incurred (efficiency) variances and closure variances. As-incurred variances compare actual versus planned costs and are calculated for each operation that has been completed (even if the manufacturing order is still open).  Closure variances compare planned vs. standard costs.  

Option 1 should be used for JIT parts.