Scribd
Upload
50 views2 pages

Material Variances

This document defines and explains various types of material, labor, and factory overhead variances that are used to analyze differences between actual and standard costs. Material variances include quantity, price, and price/usage variances calculated based on differences in actual vs standard quantities and prices. Labor variances include efficiency, rate, and idle time variances calculated on differences in actual vs standard hours and rates. Factory overhead variances include volume, controllable, variable efficiency, and spending variances calculated on differences between actual overhead costs and standard or budgeted amounts.

Uploaded by

tygur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
50 views2 pages

Material Variances

This document defines and explains various types of material, labor, and factory overhead variances that are used to analyze differences between actual and standard costs. Material variances include quantity, price, and price/usage variances calculated based on differences in actual vs standard quantities and prices. Labor variances include efficiency, rate, and idle time variances calculated on differences in actual vs standard hours and rates. Factory overhead variances include volume, controllable, variable efficiency, and spending variances calculated on differences between actual overhead costs and standard or budgeted amounts.

Uploaded by

tygur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

MATERIAL VARIANCES

Material Cost Variance Actual Materials Cost – Standard Materials Cost


 Actual Materials Cost Actual Quantity Used x Actual Price
 Standard Materials Cost Standard Quantity x Standard Price
Quantity Variance ∆ Quantity Used x Standard Price
Purchase Price Variance ∆ Price x Actual Quantity Purchased
(Usage) Price Variance ∆ Price x Actual Quantity Used
LABOR VARIANCES
Labor Cost Variance Actual Labor Cost – Standard Labor Cost
 Actual Labor Cost Actual Hours x Actual Labor Rate
 Standard Labor Cost Standard Hours x Standard Labor Rate
Efficiency Variance ∆ Hours x Standard Rate
 Idle Time Variance Idle Time x Standard Labor Rate
Rate Variance ∆ Rates x Actual Hours
FACTORY OVERHEAD VARIANCES
FOH Cost Variance Actual FOH Cost – Standard FOH Cost
Controllable Variance + Volume Variance
 Actual FOH Cost Actual Hours x Actual FOH Rate
 Standard FOH Cost Standard Hours x Standard FOH Rate
Controllable Variance Actual FOH – BASH
 Spending Variance Actual FOH – BAAH
o Fixed Spending Variance Actual Fixed FOH – BAAH-F
o Variable Spending Variance Actual Variable FOH – BAAH-V
 Variable Efficiency Variance ∆ Hours x Standard Variable OH Rate
Volume Variance BASH – Standard FOH
Budget Allowed based on Standard Hours (BASH) Budgeted Fixed FOH + (Standard Variable OH
Rate x Standard Hours)
Budget Allowed based on Actual Hours (BAAH) Budgeted Fixed FOH + (Standard Variable OH
Rate x Actual Hours)
 Budget Variance Actual FOH – Budgeted FOH
o Actual FOH Actual Cost – Budgeted Cost

MATERIAL VARIANCES
Material Price Variance Materials Spending Variance
Materials Money Variance
Materials Rate Variance
Materials Quantity Variance Materials Usage Variance
Materials Efficiency Variance
Materials Price Usage Variance Price Variance
LABOR VARIANCES
Labor Rate Variance Labor Price Variance
Labor Spending Variance
Labor Money Variance
Labor Efficiency Variance Labor Hours Variance
Labor Usage Variance
Labor Time Variance
SFOH Standard Hours x Standard FOH Rate
Capacity Variance Volume Variance

You might also like