Scrap Variance Calculation

Hello All,

We are having a problem in calculation of Scrap Variance,

Example:

We have a BOM with the following quantities,

FG - 1000 EA

-- Item 1 - 784 kgs

We are maintaining an assembly scrap of 28.95% so when we create a production order for 38 it will automatically increase the quantity to 49 (38*1.2895) and give us a scrap quantity of 11. Which is correct.

Now when I'm doing variance calculation it is displaying incorrect scrap quantity, it should show (784/1000*11) = 8.624 Kgs for Raw Materials, where as it is showing - 5.323 Kgs. Can anyone please let me know how the actual scrap quantity are calculated.

I have gone through lot of threads before posting this question.

Thanks,

Srini