Standard Costing

When you attach the parts list and routing either interactively or in batch, the system compares the frozen standard costs and the current costs, and updates the Production Cost table. The frozen standard costs come from the Item Cost Component Add-Ons table; they are based on the original bill of material and routing. The current costs are calculated from the values in the Item Cost Component Add-Ons; they are based on the current bill of material and routing instructions.

If a discrepancy exists between the frozen standard costs and the current costs, the amount of the discrepancy becomes the engineering variance. You can view engineering variances after you attach a parts list and routing instructions to a work order.