PO for Inventory Item with Rate and Usage Variance
In this example, you purchase a quantity of 3 of item A, which has a standard cost of $20. Tax is accrued at receipt and is charged at 20%, with 75% of the tax recoverable. You are invoiced for 1 delivered item at $30. The matching is saved with a status of Finished, which generates usage variances.
Receipt Postings
Invoice Postings
Matching Postings
The usage variance posting is calculated as:
(Quantity Ordered – Quantity Received) * Receipt Price
The recoverable tax on the usage variance is calculated as:
(Quantity Ordered – Quantity Received) * Receipt Price *% Tax * (% Recoverable / 100)
The non-recoverable tax is calculated as:
(Quantity Ordered – Quantity Received) * Receipt Price *% Tax * (% Non-Recoverable / 100)
