Material variances are included where the capacity is calculated. materials with hIgher variance like concrete (implementation variance) and wood (material variance) get their capacity lowered more than more consistent materials like steel.

The factor of safety is above and beyond material variance. You calculate the worst case load combinations for that component, then you check your factor of safety. Civil engineering is relatively conservative in its estimations for everyone's safety.

In my experience serviceability requirements (like reducing uncomfortable deflections that dont threaten the safety of the structure) often govern, rather than the ultimate capacity.