Scribd
Upload
56 views

Variance Analysys MBA 1

The document discusses various types of variances in cost accounting, including: 1) Material cost variance, which is the standard cost of actual production minus the actual cost, and includes material price, usage, mix, and yield variances. 2) Labour cost variance, which is the standard labour cost for actual production minus the actual labour cost, and includes rate, efficiency, idle time, and mix/gang variances. 3) Overhead variances include fixed and variable overhead variances.

Uploaded by

Goutam Ghosh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
56 views

Variance Analysys MBA 1

The document discusses various types of variances in cost accounting, including: 1) Material cost variance, which is the standard cost of actual production minus the actual cost, and includes material price, usage, mix, and yield variances. 2) Labour cost variance, which is the standard labour cost for actual production minus the actual labour cost, and includes rate, efficiency, idle time, and mix/gang variances. 3) Overhead variances include fixed and variable overhead variances.

Uploaded by

Goutam Ghosh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 3

Variance

Material Cost Labour Cost Overhead


Variance (MCV) Variance (LCV) Variance (OHV)

Material Price Material Usage Fixed OH Variable O H


Variance (MPV) Variance (MUV) Variance Variance

Yield Variance Mix Variance

Rate Efficiency Idle Time


Variance Variance Variance
Material Cost Variance (MCV)
•Material Cost Variance (MCV)
= Standard Cost of Actual production – Actual cost

•Material Price Variance (MPV)


=(Standard Price per unit – Actual Price per unit) X Actual Quantity of Material Used

•Material Usage Variance (MUV)


= (Standard Quantity for Actual Production – Actual Quantity Used) X Standard
Price per Unit

•Mix Variance
= (Revised Standard Quantity – Actual Quantity) X Standard Price
Or
= (Standard Proportion in Actual Total Input - Actual Quantity) X Standard Price

•Yield Variance
= (Standard Yield for Actual Input – Actual Yield) X Standard Cost Per Unit
Or
= Standard Price X (Standard Input Quantity for Actual Output – Revised Standard
Quantity
Labour Cost Variance (LCV)
• Labour Cost Variance =
Standard labour Cost for Actual production (A) – Actual Labour cost (B)
(A) = Standard Time for Actual Output (P) X Standard Rate
(B) = Actual Time X Actual rate
(P) = (Std. Time / Std. Output) X Actual Output

Rate Variance =
(Standard Wage rate – Actual Wage Rate) X Actual Time

Efficiency Variance =
(Standard Hour for Actual Output – Actual Hour) X Standard Rate

Idle Time Variance =


Abnormal Idle Hours X Standard Rate

Mix or Gang Variance =


Std. Wage Rate X (Revised Std. Labour Hour (M) – Actual Labour Hour)

(M) = (Actual Hour of Entire Mix / Std. Hour of Entire Mix) X Std. Hour

You might also like