SOMTRLV - Positive/Negative variance of Direct Material Cost

Hi ​@Harsha Siriwardhana,

The SOMTRLV transactions are recorded in Shop Orders when there is a variance in the Material Cost.

Basically, when the Standard Cost of the Material in the Shop Order differs to the Actual Cost of the Materials used in the Shop Order. This is to balance the over/under cost of the materials used in the Shop Order.

In the below Shop Order, you can see that the Standard Cost of the Material is “10”. The Qtys of manterial needed is “1”.

However, I have over issued material to this Shop Order (Issued “5” qtys). So, the Actual Cost of Material is “50”.

Now, when I Receive and Close the Shop Order there is an excess of 40 (i.e., “50” - “10”). So, to balance the books a “SOMTRLV- - Negative variance of Direct Material Cost” transaction has been created.

This does not affect the Inventory Value of the manufacturing part, since you are using Inventory Valuation Method as “Standard Cost”.  

However, the GL will get updated once the Inventory Transaction SOMTRLV- bookings are passed to a Voucher and the same is posted to the GL.

I’m not sure why you want to prevent this, since this is required from the accounting point of view. Also, it is not incorrect such transaction getting created.

(Note that, when using Valuation Method as “Weighted Average” such transactions will not get created. But…. that is not a remebdy though a differnt mechanism for cost calculation)