MFG/PRO 9.0 User Guide Volume 3: Manufacturing - QAD.com

Setting Up Mix Variance Accounts
If the quantity of a co-product received to stock differs from the quantity
expected, a variance occurs. To properly account for such variances,
called mix variances, a mix variance account must be established. Even if
you do not plan to use the co-product/by-product features, a mix variance
account must be established before any work orders can be generated.
Mix/yield variance is the costed difference between the quantity received
and scrapped for a product and its expected (order) quantity. The formula
is as follows:
Mix Variance = [Order Qty – (Received Qty + Scrapped Qty)] x Unit Cost
Mix/yield variances are always calculated as the result of unplanned
receipts because the expected (order) quantity is zero.
1 Set up mix variance accounts in Account Code Maintenance
(25.3.13).
2 Verify that mix variance account numbers appear in the variances
frame of the System/Account Control File (36.1).
Mix variance amounts (if any) are updated on the affected co/by-product
work order, and subtracted from the work-in-process (WIP) amount of the
base process work order. A general ledger (GL) transaction is created
debiting the mix variance account specified on the co/by-product work
order and crediting the WIP account specified on the base process work
order. The work order close procedure can be performed more than once
on a work order, and the work order amounts are cumulative. The GL
transaction is additive.
Setting Up Sites and Locations for the Base Process
Establish sites for the base process in Site Maintenance (1.1.13). A
location is an area within a site. A site can have an unlimited number of
locations. You can use the same location code for different sites. Use
Location Maintenance (1.1.18) to set up locations for the base process.
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