Cost variance.

The Financial Integration (FI) aspect of Compiere means Accounting Consequence, and stuff that makes Accountants rule. Well, IANA.

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Cost variance.

Postby Reeja » Thu Jan 27, 2005 7:07 pm

Hi,

I have a doubt in the product cost module in compiere. Let me give you a situation. I am selling a new product which does not have a stock using drop shipment. Since i have not purchased the product I put an approximate cost as 10 USD in the product master -> Costing. So that the product doesnot show a 100% margin. Now once the product is shipped from the supplier to the customer directly. The supplier raises an invoice saying that the cost is actually 11USD. Based on that i created an invoice with the price as 11. Now there is a difference in the cost of the product when it was sold and the cost the product when it is invoiced (Supplier). So what happens to the USD1 in this case.

Can anybody tell the accounting scenario in this.

Thanks a lot & Regards,

Reeja
Reeja
 
Posts: 6
Joined: Sat Aug 07, 2004 7:10 pm
Location: Dubai

Postby moyses » Thu Jan 27, 2005 10:31 pm

Hi! Maybe this can help you.

On the last days I have been studying the Compiere's default chart of accounts. One of those accounts is called "Purchase Price Variance Offset" and the explanation for it is that
"Offset Account for Purchase price variance (PPV)". As far as I know this is the difference between the standard price for this product and the actual invoiced price (from vendor). Please someone correct me if I am wrong.

You can try checking your accounting posting for your scenario. Go to View<Acount Info and there select the day of the accounting movement and a sort order usefoul for your tracking purposes. There you can trace what compiere is doing with your scenario.

Hope this help!

Best Regards
moyses
 
Posts: 41
Joined: Wed Sep 01, 2004 10:22 pm
Location: Mexico

Postby Reeja » Sat Jan 29, 2005 3:58 pm

Hi Moyses,

Thanks for the answer. Even i have been trying and found out that when u match a PO - Receipt-Invoice the matched entries will be generated in the Matched Invoice / Matched PO screen. On posting those entries, you will find the difference of amount posted to Invoice price variance / Purchase price variance.

Hope you got it.

Regards,

Reeja
Reeja
 
Posts: 6
Joined: Sat Aug 07, 2004 7:10 pm
Location: Dubai


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