May I know is it possible to have FIFO for Purchase Item and Standard Costing for Manufacturing Item.

What is the impact on variance? Pros and Cons?

Appreciate your help.

Thank you

May I know is it possible to have FIFO for Purchase Item and Standard Costing for Manufacturing Item.

What is the impact on variance? Pros and Cons?

Appreciate your help.

Thank you
the items valuation methods could be defined and hence you would want to define different item groups for your purchase items and manufactured items.

also it is possible to do in the Item Data by Warehouse (but then it would be high maintenace for you to maintain this for each Item/Warehouse combination

as regarding variances only for purchased items when getting issue if at all to make a manufactured items - you will get a price variance based on (FIFO or pur item - standard of pur item)

baazigar,

thanks for your feedback. Based on my testing I've the same results as well.
As long as the material cost issued to production order different than the FTP price, it will generate a variance (production Price Variance).

BUT, my manufacturing consultant disagree with the above explaination. According to her the variance was generated due to different costing methods for Purchase and Manufacturing item. Any comment?

thanks

Hi MIALIM,

It's probably best not to argue too much with your manufacturing consultant on this matter because she doesn't even seem to know what variance analysis is in cost accounting. Variance analysis is long held concept in cost accounting with standard cost and you can learn more about it and its uses from cost accounting textbooks (if you haven't done so) than from her

Rgds,
Paul

Thanks all