Each production variance can stem from several sources. The common sources for a lot size variance include:

  • The good quantity for a production order differs from the calculation quantity that is used in the standard cost calculation. The quantity provides the basis for amortizing constant costs.

  • The value of constant costs within the production order differs from the constant costs that are used in the standard cost calculation. The constant costs within the production order can be different for several reasons. For example, the constant costs could reflect manual changes to the production bill of material (production BOM) or route, the selection of a different BOM version or route version when creating the production order, or planned engineering changes to the BOM version or route version that is assigned to the item.

The common sources for a production price variance include:

  • The cost category (and its cost category price) for the reported consumption of a routing operation differs from the cost category that is used in standard cost calculation.

  • The active cost for the cost category price differs from the cost category price that is used in standard cost calculation.

The common sources for a production quantity variance include:

  • Over-issue a material component or under-issue a material component.

  • Over-report time for a routing operation or under-report time for a routing operation.

  • Over-receive the good quantity of the parent item relative to the order quantity or under-receive the good quantity of the parent item relative to the order quantity (but completely issue components and report operations based on the order quantity for the production order).

The common sources for a production substitution variance include:

  • Issue a material component that is not in the production BOM.

  • Manually add a component to the production BOM and report it as consumed.

  • Report an item as consumed without manually adding it to the production BOM.

  • Manually add an operation to the production route and report it as consumed.

  • Select a different BOM version when creating the production order, where the BOM version differs from the one that is used in the standard cost calculation.

  • Select a different route version when creating the production order, where the route version differs from the one that is used in the standard cost calculation.