Variance Analysis Help

Question

Dear All
I have created a Scenario to tackle variance analysis and called ActualvsBudget
Example is
Revenue
Actual - Budget = Variance.
The problem I have is that the Favourable or Adverse variance works at accounte level however is distorted when consolidated.
Example
For Revenue
Actual Revenue £20
Budget Revenue £30
Variance = minus £10 (Adverse Variance) Because Revenue was less than expected.
For Costs
Actual Cost £30
Budget Cost £50
Variance = plus £20 (Favourable Variance) - Because Costs are lower than expected.
Gross Margin should Therefor be
Actual (Revenue - Cost) = Minus £10
Budget (Revenue - Cost) = Minus £20
Variance = plus £10 (Favourable Variance) As Gross Margin better than predicted.
So the Gross Margin Variance should be plus £10 as a favourable variance.
However when HFM consolidates it will calculate as follows.
minus 10 (revenue variance) minus +10 the cost variance analysis giving -20 variance on Gross Margin which is correct.
The only way I can see around this is to be able to calculate the parent just for that scenario but it will not let me do that.
Probably because not an input level account.
Can anyone help.

Answer 1

Hi,
Now for the finished good  create material cost estimate with quantity structure
Create standard cost estimate (marking and release to be carried out)
now for the same old process order in the cost analysis u can see different value for  total target cost
carry out confirmation  and u will get the total actual costs based on the activity types u have assigned
-Variance=(difference between  total target cost and total actual cost)
Variance related settings are done in consultation with Controlling people.
Regards,
Raj