MI-variance formulas

Question 1

Sales volume variance and sales price variance

Answer 1

Sales volume:

(AQ-BQ)*SCPU

Sales price variance:

(AP-SP)*AQ

Where:

AQ is actual quantity
BQ is budgeted quantity
SCPU standard contribution per unit
AP is actual selling price per unit
SP standard selling price per unit

Question 2

Variable overhead expenditure and efficiency variance

Answer 2

Expenditure:

(SR-AR)*AH

Efficiency:

(SH-AH)*SR

Where:
SH is standard hours for actual number of cost units produced
AH is actual hours
SR is standard rate per labour hour
AR is actual rate per labour hour

Question 3

Material price and material usage variances

Answer 3

Material price:

(SP-AP)*AQ

Material usage:

(SQ used-AQ used)*SP

Where;
AQ is actual quantity
SP is standard price of material
AP is actual price of material
SQ is standard quantity of material to make actual number of units produced

Question 4

Labour rate and labour efficiency variances

Answer 4

Labour rate:

(SR-AR)*AH

Labour efficiency:

(SH-AH)*SR

Where
AH is actual hours
AR is actual rate per labour hour
SR is standard rate per labour hour
SH is standard hours for actual number of cost units produced