> 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/secondary-landed-cost-variance-method.md).

# Secondary Landed Cost Variance Method

The Secondary method for handling variances (i.e. discrepancies) between budgeted and actual landed costs. It is applied when the Primary method cannot resolve the variance. In case the Primary method is Update Inventory Cost (Open Period Only), this setting is mandatory, as it determines how variances are handled when the related Item Receipt falls in a Closed Period. 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. |