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Standard Costing - Variance Breakdown 

This option allows for the standard costing variance to be broken down into variances on price changes between received and invoiced, freight, duty and FX transaction rate differences.  The logic is based on the fact that standard costing is calculated as Suppliers Home Cost plus freight and duty percentage component.

System settings

Use Cost of Goods Ledger = Yes

Use Rounding = No

Post Purchase Tax = No

Use Foreign Exchange = No

Use Standard Costing = Yes

Break Down Variance =Yes

Use Warehouse Masking = No

Scenario Changes

The freight and duty charges have been deleted from this example.  They form part of the standard costs.  These figures are used in the journal examples that follow.

Receival Slip

All items are received as ordered.  An insurance fee for the purchase order is to entered in the Totals grid of the form

Insurance          $10.00

Purchase Invoice

The invoice from the supplier notes a price change to Part A.  There are only 50 of these items remaining in stock on hand.

New Price - Part A           Inc Tax Price $1.38

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