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Calculation of Var. at target cost

Former Member
0 Kudos

hi gurus,

i want to know hw are variances occurred using PCC. the various types of variances that can possibly occour during a prodcut costing.

regards

sayeed

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi

Variance is the difference in the plan cost in the Production Order and the actual cost ( via goods issued to production, activities confirmed in CO11N ). Hence the difference can be due to more or less consumption of raw material , activities viz labour, machine hour etc.

After FG are moved to inventory, the variance is calculated - KKS1 and then settlement ( CO88 ) is done to move the variance to FI.

Thanks

kamala

Former Member
0 Kudos

thnx for the reply,

but it doesnt answer my question, what i want to know is

1.Under what conditions is the variance calculated while using PCC (Product cost collector)?

2 .How is target cost determined ?

3. what are the possible variances that might occur during a Variance Calculation ?

regards

sayeed

Former Member
0 Kudos

Dear Sayeed,

1.Under what conditions is the variance calculated while using PCC (Product cost collector)?

Say for example for order qty of 2 nos, planned price is 10 & Hours to be produce is 2 hrs

Niow while confirming , user will Give activity time as 3 hrs for order qty 2 nos

so now variance is 1 hr cost of machine, labour etc

2 .How is target cost determined ?

Check this link

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Regards

Madhu

Answers (0)