Def - GL Account - Cost Distribution Variance
- Tom Williams
The GL Account that is used to record the total of all the variances, from all Lots assigned a 'Distributed Amt.' when a Cost Distribution is posted. Unlike the 'Purchase Clearing' and 'Inventory Adjustment' accounts that are configured on the Item, this is a system level account that all the variances are rolled into. A variance will occur whenever a 'Distributed Amt.' equates to a rate/cost UOM that goes out more than 5 decimal places. When this happens, the rounding difference is coded to the Cost Distribution Variance account. 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.