Intermediate Management

Accounting
Variance Analysis:
Material:
Total variance = Standard material cost for actual production − Actual material cost
Price variance = Actual quantity consumed (Standard price/kg − Actual price/kg
Usage variance = Standard price/kg (Standard quantity for actual production − Actual
quantity consumed)

Labor:
Total variance = Standard labor cost for actual production − Actual labor cost
Rate variance = Actual paid hours(Standard rate/hour − Actual rate/hour)
Efficiency variance = Standard rate/hour (Standard hours for actual production −
Active hours)

2
Variance Analysis:
Sales:
Total variance = Budgeted sales− Actual sales
Sales Price variance = Actual sales volume (Actual sales price − Standard sales price)
Volume variance = Standard sales price(Actual sales volume − Budgeted sales volume)

Advanced Variances:
 Mix and Yield Variance
 Planning and Operational Variance

3
Variance Analysis:

4
Variance Analysis:

5
Variance Analysis: