Cost Distribution Variance Amt - Rollup

A calculated field that displays the sum of all the variances between the [Distributed Amt] and the [Lot Cost Amt.] from each Lot that a cost amount has been distributed to. These variances occur when a 2-digit [Distributed Amt.] is converted to the Lot's 5-digit cost rate. The variance is calculated in the header rollup as [Amount] - [Lot Cost Amt.]. When Distributions that contain a [Variance Amt.] are Posted, a separate Journal Entry is generated to record the variance as follows:

• If the variance is positive (e.g. the [Lot Cost Amt.] < [Amount]) then

  • Debit the 'Distribution Variance Account' (specified in the Inventory Preference) for the amount of the variance 

  • Credit the Item(s) Inventory Adjustment Account for the amount of the variance.

• If the variance is negative (e.g. the [Lot Cost Amt.] > [Amount]) then

  • Debit the Item(s) Inventory Adjustment Account for the amount of the variance 

  • Credit the 'Distribution Variance Account' (specified in the Inventory Preference) for the amount of the variance 

For example, if you needed to distribute $517.35 to a Lot with 2,103 lbs, the rate/lb would calculate as 0.2460057061. However, because the 'Cost Rate' is limited to 5 digits, it would be rounded and applied at rate of 0.24601. When the 5-digit rate is applied back to the 2,103 lbs the result would be a 'Lot Cost Amt.' of $517.36 leaving a 'Variance Amt.' of ($0.01) that must be accounted for.