About analyzing variances for a completed production order
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
Production variances are calculated after you end a production order for a standard cost item. The variances reflect a comparison between the reported production activities and the calculation of standard costs for the production item. The variances do not reflect a comparison to the production order's estimated costs. The production activities that are reported include the consumption of material and routing operations, together with the associated indirect costs, and the quantity that is reported as finished. The following four types of variances are calculated:
Lot size variance
Production quantity variance
Production price variance
Production substitution variance
The following diagram identifies the four variances that account for the difference between a production order's actual costs and the calculated costs within the item's cost record when the production order is ended.
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Analyze the production variances by using the Variance form or the Production variance report. Use the display options to view detailed variances by item and operations resource, or by cost group. You can also use the display options to view summarized variances. These display options are called single, multi, and total. The policy for cost breakdown in the inventory parameters determines whether the variances are tracked by cost group.
The information about detailed variances can help you understand the source of each variance. To predict variances before you end a production order, analyze the detailed information that is provided in the Cost estimates and costings report.