Variances in the Controlling component (CO) at period-end closing can be due to planning was overshot/undershot, the actual costs on the cost center or business process differ from the target costs and over-/under-absorption occurs on the cost center or the business process.
Variance calculation lets you analyse the causes of these variations. Variance calculation is based on the reconciled planning of internal activity between cost centers and business processes. Variances are the differences between actual costs and plan/target costs.
Below are the steps for variance calculation –
Step-1:- Navigate to Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period → Period-end closing → Single Functions: Product Cost Collector → Variances → Individual Processing or Collective Processing.
(OR)
Navigate to Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Order → Period-end closing → Single Functions → Variances → Individual Processing or Collective Processing.
If required to calculate the variances for a single cost object, select the option Individual Processing.
If required to calculate the variances for all cost object in a controlling area, select Collective Processing.
Step-2:- If Product Cost by Period, Enter the Material, plant information, parameters information and processing options.
If Product Cost by Order, Enter the Order information, parameters information and processing options.
Step-3:- Once the information entered, click on Execute button to calculate the variances.
Once successfully processed, It displays the below screen.
