Ending production order calculating Standard cost Variance

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Posted on by Manufacturing D365

Hello Folks,

I am facing an issue and need your guidance/opinion:

I am using standard costing and created a standard cost version for finished good with 65 $ along with some RM cost and direct manufacturing cost as well.

While posting RAF, system calculated WIP Statement, where you can see " Net cost of goods manufactured" as 65

After ending the order, it replaced the cost with -6 $ (My question is why system replaced this cost with -6 $ and created variance of 59 $, is it default behavior or Am I missing anything)

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Oleksiy Khoroshylov 1,747 User Group Leader on at

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I don't think there are any setups missed.

$59 is your actual production variance = $65 standard cost - $6 actual cost of conversion. This functions similar to purchase price variance that is calculated on PO invoice.

That original $65 COGM is probably coming from base inventory price on released product. System uses it as a placeholder until it knows the actual cost of conversion on production order end.

Receipt inventory transaction should still have standard cost of $65.

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Manufacturing D365 5 on at

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Hi Oleksiy,

Thanks for your feedback and clarification. I agree with you 65 $ is just a place holder as standard cost set up on released product. when I posted RAF journal, system created the cost with 65 $ and after ending the production order, it took only 6 $ to create a final cost voucher but it booked the variance of 59 $ in Substitution variance account. Do you have any idea if that is the default behavior of D365?

Costing Voucher:

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Oleksiy Khoroshylov 1,747 User Group Leader on at

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Yes, as far as I know, this is default behavior for standard cost items in D365.

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