Measures the difference between expected production costs and actual production costs.

What it Measures ?

How much actual production cost differs from expected.

Relevant StakeHolders 

Finance Team, Operations Manager

Why it Matters ?

Tracks deviations in production costs.

In-depth Use Case / Real-world Example

Production Cost Variance helps evaluate how well production cost estimates match actual expenses. If a production process was expected to cost ₹500,000 but actually costs ₹450,000, the variance is ₹50,000. This KPI highlights inefficiencies or unforeseen circumstances that may increase costs. Companies can use this information to adjust processes, control expenses, and improve cost estimation practices.