What is input price variance in SAP CO - Controlling?

SAP Term: input price variance

• Component: CO

• Component Name: Controlling

• Description: The difference between target cost and actual cost caused by differences between planned prices and actual prices of the goods consumed, or by differences between planned activity prices and actual activity prices. Typically, input price variances are calculated by multiplying the difference between the planned value and the actual value by the quantity consumed.

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• Key Concepts: 
  Input price variance is a term used in SAP Controlling (CO) to describe the difference between the actual price of an input and the planned price. This variance is calculated by subtracting the planned price from the actual price. The result of this calculation is then used to adjust the cost of goods sold (COGS) and inventory values. 
  
  How to use it: 
  Input price variance can be used to track changes in the cost of inputs over time. This information can be used to identify potential cost savings opportunities or to adjust pricing strategies. Additionally, input price variance can be used to adjust inventory values and COGS, which can help ensure accurate financial reporting. 
  
  Tips & Tricks: 
  When calculating input price variance, it is important to ensure that the planned and actual prices are in the same currency. Additionally, it is important to consider any taxes or other fees that may be associated with the purchase of inputs when calculating input price variance. 
  
  Related Information: 
  Input price variance is closely related to other terms such as material price variance and output price variance. Material price variance is the difference between the actual and planned prices of materials used in production, while output price variance is the difference between the actual and planned prices of products sold.