Variance Accounts

Variance Accounts

(a)    Variance accounts associated with Standard Discrete and Non-standard Asset accounting classes are charged when jobs are closed.

(b)   Variance accounts associated with Expense Non-standard Discrete, and optionally Repetitive accounting classes, are charged when accounting periods are closed.

List of Variance Accounts

(a)    Material

(b)   Resource

(c)    Outside Processing

(d)   Overhead

(e)    Standard Cost

(f)    Bridging

(g)   Expense

(h)   Estimated Scrap

Material:  

(a)    This account tracks variances that occur when the previous level material costs charged to the job or schedule do not equal the previous level material costs that are relieved.

(b)   This calculation gives you a net material usage and configuration variance.

Resource:

(a)    This account tracks variances that occur when this level resource costs charged to the job or schedule do not equal the this level resource costs that are relieved.

(b)   If you charge actual labor without creating resource rate variances (resource standard rate is set to No), the resource variance includes any rate, efficiency, and method variances.

(c)    If you recognize rate variances or charge resources at standard, the resource variance includes resource efficiency, and any method variances.

Outside Processing:

(a)    Tracks the variances that are occur when the this level outside processing costs charged to the job or schedule do not equal the this level outside processing costs that are relieved.

(b)   If you do not calculate purchase price variance (resource standard rate is set to No), the outside processing variance includes any rate, efficiency, and method variances.

(c)    If you recognize purchase price variance, this account includes efficiency and any method variances.

  

Overhead:

(a)    Tracks the variances that are occur when the this level overhead costs charged to the job or schedule do not equal the this level overhead costs relieved from the job or schedule.

(b)   These variances include both efficiency and method variances.

Standard Cost:

(a)    Applies only to standard discrete and non-standard asset.

(b)   This account is charged for the sum of all the elemental standard cost adjustments when you perform a standard cost update that impacts an active job.

(c)    Cost updates are not performed for repetitive schedules or expense non-standard jobs.

Bridging:  This is Optional

Expense: Optional, used to accommodate European accounting practices.

Estimated Scrap:

(a)    Applies only to lot based jobs in Oracle Shop Floor Management enabled inventory organizations when Estimated Scrap Accounting is enabled.

(b)   If this feature is enabled, both Estimated Scrap accounts are required.

(c)    The scrap account field is required when defining a department on the Departments window.

(d)   Additionally when you define this account, you can also track operation yield and estimated scrap absorption when creating transactions for lot based jobs. See Defining Parameters in the Oracle Shop Floor Management User's Guide.