Variance Rates

To enable the system to calculate and produce transaction rows for rate changes, you must complete the following tasks:

• Define a rate set with a rate definition type of Cost, Billing, or Cost/Billing.

  Your costing and cost/billing rate sets contain your provisional and forward pricing rates, and enable you to calculate indirect costs. Variance pricing is only applicable to active rates where associated transactions have been billed, recognized as revenue or used for fee calculations for cost-plus contracts lines. Any rate changes that occur are tracked and managed using the rate sets that you define for the contract.

  When rate changes are processed by the Variance Pricing process, the system generates transaction rows for the difference between the old indirect cost row and the new indirect cost row, prices the new row, and assigns a system source of PRV (variance pricing), and the analysis type that was defined for the original target costing row.

• Select an optional Rate Set Category that indicates that the rate set category can be selected on the Variance Pricing run control page.

• Associate the rate set or a rate plan that contains a cost, billing, or cost/billing rate set, to the contract lines.

• When a rate change has occurred, select the Enable Variance check box on the rate set and enter the new target rate amount using the history link.