Where does NAV get the material / capacity variances

Nokio

Hello,
the reason for the variances itself is clear. But I have an example where it is not clear why NAV is posting these.

1. I have an item with a production bom and a routing.
2. The standard worksheet was calculated and the new standard cost based on the bom and routing was implemented.
3. When I run the standard worksheet suggestion the system shows equal standard cost in the fields Standard cost and new standard cost.
4. The routing of the production item has 5 steps, every step has costs of 10$ each. In total 50$ labour costs
5. After the posting the released production order the system creates a capacity variance of 50$ and a material variance of 17.87$.

I've attached two screenshots of this example.

Does anyone know the reason for this behavior?

Kappa

The standard cost sets the norm for the valuation of the item. Within a production order, it compares this norm to what has been actually posted in that particular production order. Capacity variance of -50 (credit position on the P&L, so a gain) shows that you needed less capacity to produce the good compared to the norm (so you have produced more efficiently). If the variance is 100% of the norm, then no capacity has been posted at all in the production order. Make sure to manually post the capacity, or change the work centre setup so the capacity is backflushed accordingly with the output.

Kappa

The standard cost sets the norm for the valuation of the item. Within a production order, it compares this norm to what has been actually posted in that particular production order. Capacity variance of -50 (credit position on the P&L, so a gain) shows that you needed less capacity to produce the good compared to the norm (so you have produced more efficiently). If the variance is 100% of the norm, then no capacity has been posted at all in the production order. Make sure to manually post the capacity, or change the work centre setup so the capacity is backflushed accordingly with the output.