Transfer Cost Variance

Use this account to balance transactions when an item is transferred between warehouses in the same site, and the warehouses use a different standard cost for the item. This field is enabled only when Cost Items at Warehouse is selected on the Inventory Parameters form.

These accounting transactions occur for standard costing during a transfer between warehouses with different costs for the item:

• Credit the inventory accounts of the From warehouse at the standard cost of the From warehouse.
• Debit the inventory accounts of the To warehouse at the standard cost of the To warehouse.
• Place the difference between the two standard costs in the Transfer Cost Variance account, using the account associated with the To Warehouse.

  The system finds the appropriate distribution account record during a transfer in this way:

  • Use the To Warehouse on the transfer order and the product code of the transferred item.
  • If a specific record is not found, look for a distribution account record for the specific product code where the warehouse is null.
  • If that does not exist, look for a distribution account record for the specific warehouse where the product code is null.
  • If that does exist, get the distribution account record where both the warehouse and the product code are null.

This is an example of cost variance:

Whse:MAIN

Location: Stock

Standard Cost $5

Quantity: 5

Whse: DIST

Location: Stock

Standard Cost $3

Quantity 0