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You can view these variances in the Discrete Job Value report, the Repetitive Value report, and by using the WIP Value Summary window.
Work in Process reports usage and efficiency variances as you incur them, but does not update the appropriate variance accounts until you close a job or period. Work in Process updates the standard cost adjustment variance account at cost update.
Usage and efficiency variances are primarily quantity variances. They identify the difference between the amount of material, resources, outside processing, and overheads required at standard, and the actual amounts you use to manufacture an assembly. Efficiency variance can also include rate variance as well as quantity variance if you charged resources or outside processing at actual.
You can calculate and report usage and efficiency variances based on planned start quantity or the actual quantity completed. You can use the planned start quantity to check potential variances during the job or repetitive schedule. You can use the actual quantity completed to check the variances before the job or period close. Your choice of planned start quantity or actual quantity completed determines the standard requirements. These standard requirements are compared to the actual material issues, resource, outside processing, and overhead charges to determine the reported variance.
Work in Process calculates, reports, and recognizes the following quantity variances:
This variance occurs when you over or under issue components or use an alternate bill.
This variance occurs when you use an alternate routing, add new operations to a standard routing during production, assign costed resources to No - direct charge operations skipped by shop floor moves, overcharge or undercharge a resource, or charge a resource at actual.
This variance occurs when you use an alternate routing, add operations to a standard routing during production, or do not complete all the move transactions associated with the assembly quantity being built.
This variance occurs when you use an alternate routing, add new operations to a standard routing during production, assign costed resources to No - direct charge operations skipped by shop floor moves, overcharge or undercharge a resource, or charge a resource at actual.
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