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  • Material Price Variance + Material Usage Variance (MPV) (MUV) (AP - SP) AQ Purchased (AQ - SQ ) SP SQ SQ Per Unit Actual Output

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    Iena Iena
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    The document outlines the formulas used to calculate variances for direct materials and direct labor. It shows that direct material variance is made up of material price variance and material usage variance. Direct labor variance is made up of labor rate variance and labor efficiency variance. Both variances compare actual costs to standard costs.

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    FORMULA.docx

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    The document outlines the formulas used to calculate variances for direct materials and direct labor. It shows that direct material variance is made up of material price variance and material usage variance. Direct labor variance is made up of labor rate variance and labor efficiency variance. Both variances compare actual costs to standard costs.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    4 views1 page

    Material Price Variance + Material Usage Variance (MPV) (MUV) (AP - SP) AQ Purchased (AQ - SQ ) SP SQ SQ Per Unit Actual Output

    Uploaded by

    Iena Iena
    The document outlines the formulas used to calculate variances for direct materials and direct labor. It shows that direct material variance is made up of material price variance and material usage variance. Direct labor variance is made up of labor rate variance and labor efficiency variance. Both variances compare actual costs to standard costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Direct material variance (DMV)

    Material price variance + material usage variance


    (MPV) (MUV)
    (AP – SP) AQ purchased (AQ – SQ*)SP
    *SQ = SQ per unit * actual output

    Direct labour variance (DLV)


    Labour rate variance (LRV) + Labour efficiency variance (LEV)

    (AR – SR)AH (AH – SH)SR


    *SH = SH per unit * actual output

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