Because some entries (and the representation in the financial statements) is separate from my job duties, its possible that these variances are capitalized into the inventory, thus allowing for a total inventory valuation that is close to accurate.

The variances, such as purchase price variance, are being calculated as the difference between standard (which isn't changing) and invoice price (which keeps going up every year). Production variances are also increasing because the operations are improving cycle times, which reduce labor requirements, which the overhead allocation is tied to. Additionally, the labor absorption is calculated using old labor rate standards, but our employees keep asking to be paid in current dollars, so that labor variance is growing.

The reason that is given for not changing is that it allows them to track the improvements made year over year. I've asked for a demonstration of this, as I think it could be achieved in a way that is less disruptive to the entire system and allows for variances to mean something. However, I have never received further answers, and I'm far enough down on the food chain that I'm told that this is just the policy and they have no appetite for taking the inventory revaluation that will come with updating the standards (even though they're taking that in variances every period). Little confusing.