Material Quantity Variance
FormDifference between Standard and Actual Quantity x Standard Rate
1Standard quantity allowed for production
(per unit consumption x actual units)
2Actual quantity used in productionDifference
-
Standard Rate
Material quantity variance -Material Price Variance
Form
Difference between Standard and Actual rate x Actual quantity purchased or issued
Standard rate for purchasesActual rate on purchasesDifference
-
Actual Quantity purchase / issue
Material price variance -Labour hour/ efficency Variance
Form
Difference between Standard and Actual hours x Standard Rate
Standard hours allowed for production
(per unit hour consumption x actual units)
Actual hours used in productionDifferenceStandard Rate
Labour hour/ efficency Variance -Labour Wage Variance
Form
Difference between Standard and Actual rate x Actual hours used
Standard rate for payment of labour Actual rate paid to labour DifferenceActual hours used
Labour Price Variance
Fatory over head VarianceImportant:
Controllable variance = Spending variance + Variable portion of efficiency varianceVolume variance = Idle capacity + Fixed portion of efficiency variance.
2 - Variance method1Controllable Variance
a) Actual factory overhead
I) Fixed FOH
20,000
II)Variable FOH
19,250 39,250
b) Budgeted Factory overhead
I) Fixed budgeted overhead
20,000
II)Variable budgeted OH
(Standard hours allowed x
11,000
Variable per unit rate)
1.50 16,500 36,500CONTROLLABLE VARIANCE UF 2,7502Volume Variance
a) Budget FOH
36,500
b) Standand Factory Overhead
Standard hours allowed x
11,000
Total Standard Factory overhead rate
3.50 38,500VOLUME VARIANCE Fav 2,000
OR
a) Budget FOH
I) Fixed budgeted overhead
20,
000
II)Variable budgeted OH
(Standard hours allowed x
4,500
Variable per unit rate)
1.50 6,750 26,750
b) Standand Factory Overhead
I) Fixed budgeted overhead
4,5000.90 4,050
II)Variable budgeted OH
4,5001.50 6,750 10,800
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Standard Costing
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| Category: | Uncategorized. |
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| Upload Date: | 11/25/2009 |
| Copyright: | Attribution Non-commercial |
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