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Dec 04, 2011 at 04:00 AM

Variance due to Two Production Versions

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Dear Experts,

I am working for a cement Industry. We are having one FG Material. The material can be produced from two sources (Kinl1 & Kiln2).

Every month we produce the material from both the sources. 2 production orders will be created every month one for Kiln1 & another for Kiln2.

Standard cost estimate has been run for production version 1 (ie. Kiln1).

When activites are booked in production order 2 (i.e Kiln2) a huge variance is comming after settlement. Reason is

at the time of booking the activites its taking the activity price of Kiln1 and at the time of settlement its settling against kiln2 activity price due to which a huge variance is happening.

Kindly guide on how to resolve the situation since creating differenet material for kiln1&kiln2 is not feasible.

Thanks