Setting Up Mix Variance Accounts
If the quantity of a co-product or by-product received to stock differs from the quantity expected, a variance occurs. To record such variances properly, 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.
1 Set up Mix Variance accounts and, optionally, sub-accounts and cost centers in the General Ledger (GL) setup functions (25.3).
2 Verify that Mix Variance account numbers appear in the variances frame of Domain/Account Control (36.9.24).
3 Set up Mix Variance accounts for specific product lines in Product Line Maintenance (1.2.1).
4 Set up Mix Variance accounts for product lines at specific sites in Work Order Accounts Maintenance (1.2.9).
5 Associate product lines with co-products and by-products in Item Master Maintenance (1.4.1) or Item Data Maintenance (1.4.3).
Mix variances are generated when co-product and by-product work orders are processed by Work Order Accounting Close (16.21). Variance amounts are posted to the Mix Variance account on the applicable co‑product or by‑product work order and subtracted from the work‑in‑process (WIP) amount of the base process work order.
The work order close procedure can be performed more than once for a work order, and the variance amounts are cumulative.
For more information on mix variances, see
Calculating Mix Variances for Joint Orders.