Variance Categories in SAP:

Variances on the input side:

Input price variances: o Input price variances are the differences between the planned prices and actual prices of the resources used. Input quantity variances: o Input quantity variances are differences between the planned and actual input quantities of the resources. Resource-usage variances: o A resource-usage variance arises when a different resource is used than was planned. Remaining input variances: o Remaining input variances are differences on the input side that cannot be assigned to any other variance category on the input side (such as overhead)

Variances on the output side:

Lot size variances: o Lot size variances are differences between the planned fixed costs and the charged fixed actual costs. Lot size variances can only be calculated for target cost version 0. Output prices variances: o Output price variances are differences between the target credit (at the standard price) and the actual credit (for example at the moving average price) Remaining variances: o Remaining variances are variances that cannot be assigned to any other variance category (for example, rounding differences). If the system cannot calculate any target costs, only remaining variances will be calculated.

 Variance categories: Examples :

Price variance: Raw material 1 went into the standard cost estimate at $10 (the standard price was selected in accordance with the valuation strategy). When the material was withdrawn from stock, however, the goods movement was valuated at $11 (because according to price control the moving average price is used for valuation). This results in a price variance of $1.

Quantity variance: Machine time of 15 minutes was planned. However, 17 minutes were confirmed. The activity price for the machine time is $5 per minute. This results in a quantity variance of $10. Resource-usage variance: Raw material 2 was used instead of raw material 1. The costs for both raw material 1 and raw material 2 are reported as resource-usage variances. Input variance: Because the material price for raw material 1 changed, the material overhead is higher than planned. The difference between the planned and the actual material overhead surcharges is reported as an input variance. Output price variance: If the delivery to stock is made at a price that is not the standard price (such as the planned price), the difference is reported as an output price variance. This variance category can only occur for materials that have moving average price control. Remaining variance: If the system cannot calculate any target costs, it will report only remaining variances.