Variance Analysis Flashcards
Total Revenue Variance
Budgeted revenue vs actual (flexed)
Selling price Variance
For the quantity sold $
What revenue should have been? x
Actual revenue? (x)
Sales volume variance
Units
Budgeted sales x
Actual sales (x)
Difference valued at standard profit
Contribution per unit $x
Total material cost variance
Budgeted cost vs actual (budget may be flexed for differing production levels)
Material price variance
Based on actual purchases $
What should it have cost? x
What did it cost? (x)
Material usage variance
Based on actual production kgs
What should have been used? x
What was used? (x)
Difference valued at std cost per kg $x
Total labour cost variance
Difference between budgeted and actual (flexed budget)
Labour rate variance
Based on actual hours paid $
What should it have cost? x
What did it cost? (x)
Idle time
Hours worked x
Hours paid (x)
Diff valued @ std rate
per hour $x
Labour efficiency variance
Based on actual production
How long should it have taken? x
How long did it take? (X)
Difference valued at std rate per
hour $x
Variable Overhead Expenditure variance
Based on actual hours worked (depends on allocation basis) $
What should it have cost? x
What did it cost? (x)
Variable Overhead efficiency variance
How many hours should it have taken? x
How many hours did it take? (x)
Difference valued @OAR per
hour $x
Fixed Overhead Volume efficiency variance (Absorption costing only)
Actual Production Hrs
Should have taken? x
Did take? (x)
Valued @ std Abs rate per hour OAR
Fixed Overhead volume capacity variance (Absorption costing only)
Budgeted hours worked x
Actual Hours worked (x)
Valued at std Abs rate per
Hour OAR $x
Operating statement
A regular report for management which compares actual costs and revenues with budgeted figures and shows variances
