1.Material
Variance
1.1 Material costs variance = (Standard
quantity x Standard Price) - (Actual quantity x Actual price)
MCV = (SQ x SP)
- (AQ x AP)
1.2 Material price variance = Actual
quantity x (Standard price - Actual price)
MPV = AQ x (SP -
AP)
1.3 Material usage variance = Standard
price (Standard quantity - Actual quantity)
MUV = SP x (SQ
-AQ)
1.4 Material cost variance = Material
usage variance + Material price variance
MCV = MUV + MPV
Material
usage variance is further sub-divided into:
i) Material mix
variance
ii) Material
yield variance. (Or Material sub-usage variance)
1.5 Material mix variance = (Revised
standard quantity - Actual quantity) x Standard price
MMV = (RSQ - AQ)
x SP
Revised standard quantity
= (Standard quantity of one material x Total of actual quantities
of all materials) / Total of standard quantities s of all materials
1.6 Material revised usage variance= (Standard
quantity-Revised standard quantity) x Standard Price
MRUV = (SQ - RSQ)
x SP
1.7 Material yield variance = (Actual
yield - Standard yield) x Standard output price
MYV = (AY - SY) x SOP
Material usage variance = Material
mix variance + Material yield variance (MUV= MMV +
MYV)
Material usage variance = Material
mix variance + Material revised usage variance (MUV = MMV +
MRUV)
Note: Material
revised usage variance is also known as material sub - usage variance. In each
case there will be only one variance either material yield or material revised
Usage variance.
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2.1 Labour Cost variance = (Std. hours
for actual output x Std. rate per hour) - (Actual hours x Actual rate per hour)
LCV = (SH x
SR) - (AH x AR)
2.2 Labour rate variance = Actual time
(Std. rate - Actual rate)
LRV = AH x
(SR - AR)
2.3 Labour efficiency (or time)
variance = Std. rate (Std. hours for actual output-Actual hours)
LEV= SR x (SH
- AH)
Check: Labour cost variance =
Labour efficiency variance + Labour rate variance LCV = LEV + LRV
Labour
efficiency variance is further divided into the following variances:
(i) Idle time
variance
(ii) Labour mix
variance
(iii) Labour yield
variance (or Labour revised-efficiency variance)
2.4 Idle time variance = Idle hours x
Standard rate
ITV = IH x SR
2.5 Labour mix variance = (Revised
std. hours - Actual hours) x Standard rate
LMV = (RSH -
AH) x SR
2.6 Labour revised efficiency variance
= (Std. hours for actual output-Revised std. hours) x Standard rate
LREV = (SH -
RSH) x SR
2.7 Labour yield variance = (Actual
yield-Std. yield from actual input) x Std. Labour cost per unit of output
LYV = (AY -
SY) x SLC
Check:
Labour efficiency variance= Idle time variance + Labour mix
variance + Labour yield variance
LEV = ITV + LMV + LYV (or LREV)