Standard Costing

Question 1

P.410 - Sales volume variance

Answer 1

= (Actual quantity sold - Standard quantity sold) × Standard margin

Standard margin =
- Contribution per unit under marginal
- Profit per unit under absorption

Question 2

P.410 - Sales price variance

Answer 2

= (Actual price - Standard price) × Actual quantity sold

Question 3

P.412 - Material price variance

Answer 3

= (Actual price - Standard price) × Actual quantity bought

Question 4

P.412 - Material usage variance

Answer 4

= (Actual quantity used - Standard used for actual production) × Standard price

Question 5

P.416 - Labour rate variance

Answer 5

= (Actual rate - Standard rate) × Actual hours

Question 6

P.416 - Labour efficiency variance

Answer 6

= (Actual hours - Standard hours for actual production) × Standard rate

Question 7

P.418 - Variable overhead expenditure variance

Answer 7

= (Actual rate - Standard rate) × Actual hours

Question 8

P.418 - Variable overhead efficiency variance

Answer 8

= (Actual hours - Standard hours for actual output) × Standard rate

Question 9

P.422 Fixed overhead expenditure variance

Answer 9

= Actual expenditure - Standard expenditure

This is also total variance in marginal costing

Question 10

P.423 - Fixed overhead volume variance

Answer 10

Absorption basis is units produced
= (Actual units × FOAR p/unit) - Standard expenditure

Absorption basis is hours worked
= (Standard hours for actual production × FOAR p/standard hour) - Standard expenditure

Question 11

P.425 - Fixed overhead capacity variance

Answer 11

= (Actual hours × FOAR p/h) - Standard expenditure

Only if FOAR basis is hours

Question 12

P.425 - Fixed overhead efficiency variance

Answer 12

= (Standard hours for actual production - Actual hours) × FOAR p/h

Only if FOAR basis is hours