Hi Guys,

I want to know how system calculate :
* Add Calculation Office variances
* Efficiencies Variance
* Price Variance

When we create one cyclus from create Production Order until Close order.
Thanks for your help.

Regards,
Rini

Dear Bu Rini,

Upon closure of production order, BaanERP will present the analysis of budgeted vs actual production costs in terms of following variances.
Material qty variance (in BaanERP, this is termed material efficiency variance)= estimated material price * (actual material qty - estimated material qty)
Material price variance = actual material qty * (actual material price - estimated material price)
Labor efficiency variance = estimated labor rate * (actual labor hours - estimated labor hours)
Labor rate variance = actual labor hours * (actual labor rate - estimated labor rate)
For FOH, this is how BaanERP calculates the variances. Please be reminded that BaanERP provides the flexibility to define FOH rate based on labor hour or machine hour (in Operation Rates) as well as on number of unit produced, % of direct material cost, or % of direct labor cost (in Surcharges)
FOH fixed efficiency variance = estimated fixed FOH rate * (actual base unit - estimated base unit)
FOH variable efficiency variance = estimated variable FOH rate * (actual base unit - estimated base unit)
FOH spending variance + FOH idle capacity variance (reported as one number in BaanERP) = actual base unit * (actual FOH rate - estimated FOH rate)
Rgds,
Paul