Variance Rates
When managing government contracts, you may need to define costing, billing, and revenue rates to calculate transaction costs, overhead, and revenue for your contract's rate-based contract lines. PeopleSoft Contracts uses rate sets and rate plans to perform this function. Rate sets enable you to define how specific contract-related transactions are priced for costing, billing, and revenue recognition. Rate plans enable you to combine multiple rate sets together to perform more complex pricing scenarios.
Revenue rates are defined if you have selected the Separate As Incurred Billing and Revenue check box on the contract. If not selected, then revenue rates cannot be applied to the contract and the rates used for billing are also used for revenue recognition.
For government contracts, in addition to setting up rate sets for billing and revenue recognition, you also set up rate sets for costing transactions and calculating overhead amounts. These rate sets are identified by a rate definition type of Cost, or Cost/Billing, and can contain provisional rates.
Note:
For rate sets that have a rate definition type of Cost/Billing, Variance Pricing is only applicable to target analysis types that are in the cost analysis group.