Standard costing and Variance analysis Flashcards
Material price variance
The difference between the standard cost and the actual cost for the actual quantity of material used or purchased
Material usage variance
The difference between the standard quantity of materials that should have been used for the number of units actually produced, and the actual quantity of materials used, valued at the standard cost per unit of material
Labour total variance
Measures the difference between the standard labour cost of the output
produced and the actual labour cost incurred
Labour rate variance
The difference between the standard cost and the actual cost for the actual number of labour hours paid
Labour efficiency variance
The difference between the hours that should have been worked for the number of units actually produced, and the actual number of hours worked, valued at the standard labour rate per hour.
Variable production overhead total variance
Measures the difference between the variable production overhead that should be used for actual output and the variable production overhead actually used
Variable production overhead expenditure variance
Measures the actual cost of any change from the standard variable overhead rate per hour
Variable production overhead efficiency variance
The standard variable production overhead cost of any change from the standard level of efficiency
Fixed overhead expenditure variance
(Budgeted fixed overhead cost – Actual fixed overhead cost)
Sales price variance
A measure of the effect on expected profit of a different selling price to standard selling price. It is calculated as the difference between what the sales revenue should have been for the actual quantity sold, and the actual sales revenue
Sales volume variance
The difference between the actual units sold and the budgeted (planned) quantity, valued at the standard contribution per unit
Operating statement
A regular report for management of actual costs and revenues, usually showing variances from budget
