Variance calculation is based on planned Cost Center Accounting with a reconciled activity network. In variance calculation, the target costs of a cost center are compared to the actual costs of the input side, and the actual costs of the output side.

The following process describes all possible variance categories. The cost center we use has two activity types. The activity prices are determined iteratively as a period price, based on capacity, not the planned activity quantity. The planning is made both dependent and independent of the activity types.

The process displays the call up of the variance calculation and the step-by-step calculation of the variance results. We also explain how costs are split and how any variances are calculated.