Variance analysis

[Former Member]

Hello All,

Can anyone please let me know, how one can analyse the variance generated. Ex: some variance got posted by the system, now I want to analyse what type of variance is that, and how that variance has got posted. are there any transactions, methods available.

Please donot provide SAP help link and ask me read.

Please be specific on what you want - if you do not want to read SAP Help link .. not sure what it is that you seek... someone else to do the job for you ?? - pun intended

Thank you,

Srinivas

Edited by: Arun Varadarajan on Mar 10, 2009 9:16 AM

[Former Member · Accepted solution]

Hi Srinivas,

Take the following exmple incase of Production Order...

Before settlement, when you run the Variance Caluclation, the system will clearly show all the categories of variances and respective values on that Production Order.

Once you settle the Order in KO88, if you go to Cost Anlaysis of the Order (using CO03), double click on the line of the Settlement and it will take you to Settlement Document which the system has posted. Now, if you press on "Accounting Documents" button, the system will show the follow-on documents posted, like Accounting Document, Controlling Document, Profitability Document etc.

If you click on the Profitability Document, you will be able to see the Characteristics and Value Fields in different tabs pertaining to that Production Order.

So as to understand the Variance Categories in detail, you must go through SAP library, there is no other wayout.

Srikanth Munnaluri

[Former Member]

There are a number of Variances that are calculated by SAP. I have listed below the standard Variances with the SAP definition for each:

Input Price: Difference between Planned and Actual Price of materials, activities (moving average price)

Input Resource Usage: Difference between Planned material/activity and Actual material/activity used

(substitution)

Input Quantity: Difference between Planned quantity and Actual quantity consumed (usage)

Input Remaining: Remaining variance on Input side

Input Scrap: Difference between Planned Operation Scrap and Actual Operation Scrap

Output Mixed Price:

Output Price: Difference between target credit and actual credit which can arise from moving average costs (moving average price)

Output Lot Price: Difference between planned fixed costs and actual fixed costs (set-up costs)

Output Remaining: Remaining variance on Output side (no cost estimate was found, no variance configuration exists)

Hope this helps!

[Former Member]

Hi,

Variance in simple language is nothing but the differrence between plan and Actual values. Some of the examples for same are :

During Standard Cost estimate running, system will capture planned (standard price) price on cost center. While in actual when production / process order is creating and confirming at that time actual cost for the production (including of RM/ PM price, activity prices and overheads) is booked on production order. After that while running the settlement for production order, variance will be settled to production order.

Following entry in case of production order settlement :

Price difference (Variance) A/C Dr

To COGM (Cost of goods Manufactured) A/C Cr

T.code from where you can analyse the Plan Vs Actual with variance (Cost Centers) is S_

ALR_87013611.

Also , the same is happen for all expenses (primary cost elements) for which you are doing planning through KP06 for those expense heads cost cetner wise. When for the period actual cost is getting booked on that cost center, after that you can see variance for that expense head from above mentioned transaction code.

Pls get back for further query.

Thanks & Regards,

Taral Patel

[Former Member]

Hello Taral,

Thank you very much for your detailed explanation. I have a problem with variance analysis. There is material for which no production order is created since the material is defined, but now( period 12) a resource usage variance is got posted for this material, which I could see in T.C: S_ALR_87013166. This case is not only for this material but for all the materials which have got set up costs. So I was really wondering how this variance got posted. I would be very thankful for your valuable inputs on this.

Thank you very much..

Srinivas.

[Former Member]

Hi,

Variances are nothing but the difference between the Planned and Actual Values. It represents in amount as well as % wise. Let us take an example if you are planning some amount in activity

through KP26 for a Production Order entering a price. This Planned amount is for a specific period

for that Cost Center. Through this planned Price you are going to monitor, what will be the actual

price when the Production Order is settled. You can analyse Production Order wise or Cost Centre wise for that activity which carries a cost element (eg Machine Hours), what you have planned and what is the actual and the difference being the Variance. It summarizes whether the prices are overabsorbed or underabsorbed with you planned values.

Regards,

Sadashivan