VarianceAnalvsis

1.

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Material variances

a.

Total variance
Actual cost

flexed budget cost

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b.

Material price variance

(Actual price- standard price) x actual material
(AP-SP) x AM

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c.

Material usage variance

(Actual material- flexed budget material) x standard price

(AM- FM)x

SP

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2.

Labourvariances

a.
.

Labour total variance

Actual cost

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b.

tats

flexed budget cost

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Labour rate variance

(Actual rate- standard rate) x actual hours
(AR-SR) x AH

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= f'l'vg>
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t'' Ltsqso

= z.ls"(a

c.

Labour efficiency variance

(Actual hours

flexed budget hours) x standard rate

(AH- FH) x SR

- F?oa r s)
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3.

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Variable overhead variances (based on direct labour hours)

a. Variable overhead total variance
Actual cost

flexed budget cost

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b.

Variable overhead expenditure variance

(Actual OAR

standard OAR) x actual hours

(AOAR- SOAR) x AH

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(s1._?ts

c.

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Variable overhead efficiency variance

(Actual hours

standard hours) x standard OAR

(AH-SH)xSOAR

(*tt*-e?lsu x*)xz
= rge c4)
4.

Sales variances

a.

Sales price variance

(Actual price

standard price ) x actual sales

{AP-SP)xAS

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b.

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Sales volume variance

(Actual sales

Standard sales ) x standard price

(AS-SS)xSP

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