Standard Costing Manufacturing (formulas)

Question 1

material price variance

Answer 1

AQP x (SP - AP)
or
(AQP x SP) - (AQP x AP)

Question 2

material usage variance

Answer 2

SP x (SQI - AQI)

Question 3

material yield variance

Answer 3

SP x (SQI- RSQ)

Question 4

labour rate variance

Answer 4

AH x (SR - AR)

Question 5

labour efficiency variance

Answer 5

SR x (SH - AH)

Question 6

idle time variance + explain

Answer 6

IH x SR

Actual hours used to calculate efficiency variance would need to be reduced by the actual idle time hours

Question 7

variable overhead spending variance (1) and breaks down into rate (2) and efficiency variance (3)

Answer 7

1. SC - AC or (AH xSR) - AC
2. AH x (SR - AR)
3. SR x ( SH - AH)
   Activity is output based so will only have spending variance

Question 8

fixed overhead expenditure (spending) variance

Answer 8

BC - AC

Question 9

fixed overhead volume variance

Answer 9

SR x (FB -BQI)
FB = AQ x SQI

Question 10

material mix variance

Answer 10

SP x (RSQ - AQI)

Question 11

fixed overhead efficiency variance

Answer 11

SR x (FB - AQI)
can only be done if Fixed OH is applied on a labour/machine hour basis

Question 12

fixed overhead capacity variance

Answer 12

SR x (AQI - BQI)