> For the complete documentation index, see [llms.txt](https://docs.tradeqloud.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tradeqloud.com/qloud-margin-control/using-qmc/setup-guides/landed-costs-setup/primary-landed-cost-variance-method.md).

# Primary Landed Cost Variance Method

The Primary method for handling variances (i.e. discrepancies) between budgeted and actual landed costs. When a Landed Cost Purchase Order is billed and a variance is identified, the application applies this method first (falling back to the Secondary method where required). The following methods are supported:

| Name                                         | Description                                                                                                                                                                                                                                                                                                                                                |
| -------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Do Nothing                                   | No action is taken to address the landed cost variance. The variance remains unadjusted in the system, allowing users to manually review and handle discrepancies as they see fit.                                                                                                                                                                         |
| Journal to COGS                              | Creates a journal entry to adjust the Cost of Goods Sold (COGS) account for the landed cost variance. This method directly impacts the income statement by recognizing the variance as an expense, ensuring accurate profit and loss reporting.                                                                                                            |
| Journal to Variance                          | Creates a journal entry to a specific variance account to record the landed cost variance. This method segregates the variance from regular COGS and inventory adjustments, allowing for detailed tracking and analysis of landed cost discrepancies.                                                                                                      |
| Update Inventory Cost (Open & Closed Period) | If the related Item Receipt is in an Open Period, it adjusts the landed cost on the Item Receipt to reflect the actual landed cost, ensuring the recorded cost matches the actual cost incurred. If the related Item Receipt is in a Closed Period, an inventory adjustment will be created to account for the variance.                                   |
| Update Inventory Cost (Open Period Only)     | If the related Item Receipt is in an Open Period, it adjusts the landed cost on the Item Receipt to reflect the actual landed cost, ensuring the recorded cost matches the actual cost incurred. If the related Item Receipt is in a Closed Period, no further action is processed. When selecting this option, selecting a Secondary Method is mandatory. |