A customer asks you to explain the category price variances received on production orders. What could be the reason for price variances? Note: There are 2 correct answers to this question.

Consuming activity types from different cost centers typically leads to quantity variances or rate variances, but not specifically 'price variances' in the context of material input.

If consumed materials are managed with a V price (moving average price), any difference between the planned price used in the standard cost estimate and the actual moving average price at the time of goods issue to the production order will result in a price variance.

Price variances can occur if the valuation variant used for the standard cost estimate (which determines planned costs) is different from the valuation variant used for valuing actual costs on the production order. Different valuation variants can lead to different activity rates or material prices being used, causing a variance.

A change in the routing would primarily lead to quantity variances (due to different activity consumption or setup times) or possibly resource-related variances, rather than a direct 'price variance' on material input or activity rates themselves.