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May 30, 2018 at 06:33 AM

Production Variance

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Dear All,

Consider Following hypothetical scenario to depict a question.

1. BOM of 1 Unit FG which have only one RM (1 Unit)

2. Released 1 unit of RM @ 100 (MAP) i.e Actual cost

3. Upon confirmation of Production Order FG @ 110 (Std Cost)

4. Follwoing is the financial position after above transaction (Red Colored entry is of variance settlements)

Now my question is how come without doing any business, just on converting RM to FG profit of 10 generated??

Shouldn't be Inventory FG account instead of Price Diff

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