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Project Manufacturing Cost Variances

Under project manufacturing costing variances are generated and handled as follows:

Average Cost Variances

Under project manufacturing costing, average cost varainces are generated in a similar fashion as they are under average costing for non-project related transactions. See: Average Cost Variances.

There are however a couple of important differences. Under average costing average cost variances are generated when the total item quantity in the specified inventory organization is driven negative. Under project manufacturing costing average cost variances are generated when the total item quantity across all subinventories in a cost group is driven negative.

Another difference is that average cost variances generated in non-project manufacturing use the organization level Average Cost Variance account. Under project manufacturing costing, variances occurring in any project within a cost group are charged to Average Cost Variance account defined for that cost group.

Invoice Price Variance (IPV)

Invoice price variance is the difference between the purchase price and the invoice price paid for a purchase order receipt. Invoice price variances are generated when the invoice is processed and matched to the PO line items. Upon invoice approval, Oracle Payables automatically records this variance to both the invoice price variance and exchange rate variance accounts. IPV is determined and recorded the same under project and non-project costing.

See Also

Overview of Period Close

Inventory Average Cost Transactions

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