3380260 - The Calculation of Material Substitution Variance in the Production Variance Details Report

The customer hopes to know the calculation formula of material substitution variance in the Production Variance Details Report

SAP Business ByDesign

1. Go to Inventory Valuation work center.
2. Go to Reports view.
3. Select Report: Production Variance Details Report.
4. Input parameters such as Company, Set of books, Production end date, and Production lot.
5. Click 'Apply'.
6. In the view section, add input material and input resource.
7. You can see the material substitution variance result displays as AAA for material XXX.

Production Variance Details Report compares the actual costs with material cost estimate costs.

Hence, the material substitution variance equals to actual cost of material minus material cost estimate costs.

In the Production Variance Details Report, you can find actual cost of material as BBB.

The cost per unit of this material can be found in the Material Cost Estimate Rollup Run which is CCC.

The quantity of the material used can be found in the report as DDD.

Material cost estimate costs is equal to the quantity multiplied by cost per unit which is CCC*DDD.

Hence, material substitution variance = BBB - CCC*DDD. 

System behavior.

Material Substitution Variance, Production Variance Details Report , KBA , SRD-FIN-INV , Inventory , Problem