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Transfer price variance and material absorption in interorg transfer

Received Response
in Costing 13 comments

Summary: Material is transferred from Org A to Org B. Both the orgs are in same BU and Cost orgs.

The standard cost is valuation structure is at cost org level.

Item cost:

Content (required):

Material is transferred from Org A to Org B using transfer order. Below are the cost distribution for the transaction Transfer Order Interorganization Receipt in the destination org, item qty - 10.

1) Both the orgs A and B are in the same cost orgs and same BU, why and how transfer price variance can be generated? There should not be any TPV in this case.

2) Why there is material OH absorption in this transaction? No OH absorption rule defined.

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