PO and mfg variance calculations (PPV)

Question

I'm trying to understand exactly what is in the the PPV amounts (and how calculated) on our Sage income statement so we understand the information reported, if the manual JE's are correct,a and if we need to change our processes. 
 We have two GL accounts, one for PO Variance and the other is mfg Variance in sage 100. How are these balances calculated in Sage? For a given item on a Sales Order and invoice posted in a given time period (ie month), is it the Standard Cost minus the PO amount for that specific item? Does it exclude items on vendor PO's received (and/or invoiced) during that time period? does it include the difference between the actual vendor invoice amount paid and the vendor PO amount for an item? 
 Any help is appreciated! Thanks!

Kevin M · Accepted Answer

Someone can correct me if I'm wrong, but I believe: 
 
 Purchase variance is the difference between Receipt Of Goods value and Receipt Of Invoice value. 
 Mfg variance only happens when the produced goods value does not go into a cost tier (lot / serial / FIFO...). The difference in inputs and outputs for the production are the variance amounts.

RoadRacer · Answer

Same here, correct me if I'm wrong: 
 
 Purchase price variance is caused by a difference between the price on the PO and the price on the vendor invoice when the Receipt of Invoice transaction is entered. 
 Manufacturing variance (for us anyway) is caused by a difference between the costs accumulated in the WIP accounts during production and the standard cost assigned to the finished good at the time it is transferred into inventory by a completion transaction entry.

Sage 100

PO and mfg variance calculations (PPV)

Top Replies

COMMUNITY

COMPANY

PARTNERS

SUPPORT & TRAINING