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Variance Analysis: Basic Variances Formula

This document outlines various types of variances that can be analyzed for planning and operating purposes. It lists the basic variances for sales, margins, volumes, mixes, material prices, usages, yields, labor rates, efficiencies, idle time, overhead volumes and expenditures. Formulas are provided for calculating each variance by comparing actual results to standards. Planning variances analyze differences between original and revised standards, while operating variances compare actuals to revised standards.

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Mifzal Izzani
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135 views

Variance Analysis: Basic Variances Formula

This document outlines various types of variances that can be analyzed for planning and operating purposes. It lists the basic variances for sales, margins, volumes, mixes, material prices, usages, yields, labor rates, efficiencies, idle time, overhead volumes and expenditures. Formulas are provided for calculating each variance by comparing actual results to standards. Planning variances analyze differences between original and revised standards, while operating variances compare actuals to revised standards.

Uploaded by

Mifzal Izzani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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VARIANCE ANALYSIS

Basic Variances Formula


Sales price (actual sales price ~ standard sales price) actual volume
Sales margin (actual margin ~ standard margin) actual volume
Sales volume (actual volume ~ budgeted volume) standard margin
Sales mix margin (actual sales volume ~ standard mix of actual total sales
volume) standard margin
Direct material price (actual price ~ standard price) actual quantity
Direct material usage (actual quantity ~ standard quantity of actual production)
standard price
Direct material mix (actual mix of actual total material input ~ standard mix of
actual total material input) standard price
Direct material yield (actual yield ~ standard yield of actual total material input)
standard material cost
Direct labour rate (actual rate ~ standard rate) actual hours
Direct labour efficiency (actual hours ~ standard hours of actual production)
standard rate
Direct labour mix (actual mix of actual total hours ~ standard mix of actual
total hours) standard rate
Direct labour yield (actual yield ~ standard yield of actual total labour hours)
standard labour cost
Direct labour idle time (idle hours x standard rate)
Fixed overhead volume ( actual volume ~ budgeted volume) fixed overhead
absorption rate
Fixed overhead (budgeted fixed overhead cost ~ actual fixed overhead cost)
expenditure
Variable overhead (actual hours ~ standard hours) variable overhead
efficiency absorption rate
Variable overhead actual variable overhead cost ~ (actual hours x variable
expenditure overhead absorption rate)

Planning Variances Formula


Material price (original standard price ~ revised standard price) revised
standard quantity
Material usage (original standard quantity ~ revised standard quantity)
original standard price
Labour rate (original standard rate ~ revised standard rate) revised
standard hour
Labour efficiency (original standard hour ~ revised standard hour) original
standard rate

Operating Variances Formula


Material price (actual price ~ revised standard price) actual quantity
Material usage (actual quantity ~ revised standard quantity) revised
standard price
Labour rate (actual rate ~ revised standard rate) actual hour
Labour efficiency (actual hour ~ revised standard hour) revised standard rate

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