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Manufacturing- questions

Posted on by 8

Hello all,

 

I'm facing an issue with the material cost of the raw material and the semi-finished item for the finished item.

When I create a Firm Planned Production Order for the Finished-Item and check the statistics order, it will show me that there is a variance of 4$ between the expected cost and the standard cost and for the capacity no variance. However, when i create the Firm Planned Production Order for the Semifinished-Item there is no variance for both the material and the capacity.

 I just created a new testing company. I have not made any transaction yet. For the raw material, semi-finished, and finished item I have created for them a SKU.
For the raw material the unit cost is the same as the last direct cost using costing method is AVERAGE.

For the semi-finished I'm using a STANDARD COST, so I calculated the cost on ALL LEVELS.

Same for the finished item I'm using a STANDARD COST, so I calculated the cost on ALL LEVELS. MAKING SURE TO GO OVER THE OVERALL COST. 

 

So why there is a variance on the material cost?

 

Thanks

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