# Raw Material Usage Report

### **Report Module Guide: Raw Material Usage Report (BOM Variance Report)**

#### **Module Location**

#### Inventory > Reports > Raw Material Usage Report

#### **Module Objective**

#### The **Raw Material Usage Report** is a crucial production and cost analysis tool. Its purpose is to compare the **standard quantity** of raw materials (according to the recipe or Bill of Materials - BOM) that should have been used to produce a finished good, with the **actual quantity** of raw materials that were really consumed during the production process. This report is used to measure efficiency and identify potential waste.

### **1. Report Parameters (Conceptual)**

#### To generate an analysis report like this, you typically need to define filters such as:

- #### **Finished Good**: Select the final product whose raw material usage you want to analyze.
- #### **Production Order**: Select a specific batch number or work order for a more focused analysis.
- #### **Production Period**: Specify the production date range.

### **2. Reading the Report (Based on a Template)**

#### The generated report will detail the usage comparison for each raw material for the finished good you are analyzing.

#### **Key Column Explanation**

- #### **Item/Service Code**: The code for the Raw Material or Packaging Material.
- #### **Standard Qty**: The quantity of raw material that should have been used according to the standard recipe/BOM to produce a certain amount of finished goods.
- #### **Actual Qty**: The quantity of raw material that was actually withdrawn from the warehouse and used during the production process.

#### **How to Analyze the Report**

#### The main focus of this report is the comparison between the **Standard Qty** and **Actual Qty** columns.

- #### If **Actual Qty > Standard Qty**, this indicates an inefficiency or waste (**negative variance**).
- #### If **Actual Qty < Standard Qty**, this indicates an efficiency (**positive variance**).

### **Tips & Important Notes**

- #### This report is a key analysis tool for **Production Managers and Cost Accountants**.
- #### Use the variance found in this report to investigate problems on the production floor, such as material spills, raw material quality issues, or operator errors.
- #### The **Actual Qty** data is pulled from the goods issue transactions to production, while the **Standard Qty** data is pulled from the **Bill of Materials (BOM)** master data.