Order Post-Costing & Variance Statement

How to read this sheet

The rate and quantity effects are each valued at the other factor's quoted level, which leaves the product of the two movements over as a joint term rather than silently attaching it to one of them. Standard practice charges that joint term to rate by valuing the rate variance at actual quantity, and standard practice does not usually say so; it is reported separately here so a reader can see how much of the attribution is arithmetic and how much is a convention. Adding the joint term to the rate figure reproduces the conventional split exactly, and the three always sum to the total variance. Quantity and rate must be entered apart on both sides: a line entered only as a lump cost carries no split and its whole variance will appear as rate, which is the default the statement cannot avoid and the reader should not trust. Order costs are quoted over the booked quantity and borne by the shipped one, so a short shipment raises the cost of every piece that did ship even when nothing else moved. Shipped quantity is clamped to booked, because more cannot ship than was made to ship and a figure above it would report a negative shortfall as a gain. Order profit earned is the realised margin on the shipped pieces and takes no account of a claim, a discount already given, or the cost of the pieces that were made and not shipped - those are recovered, if at all, outside this statement. Nothing here is a substitute for the accounts: this is the merchandiser's reconciliation of one order against its own quotation, in the units the quotation was built in.