Variances

Question 1

Price Variance Formula

Answer 1

(Standard Price - Actual Price) x Actual Quantity

Question 2

Usage Variance Formula

Answer 2

(Standard Quantity - Actual Quantity) x Standard Price

Question 3

Material Price Variance Formula

Answer 3

Actual Quantity x (Standard Price - Actual Price)

Question 4

Material Quantity Variance Formula

Answer 4

Standard Price x (Standard Quantity - Actual Quantity)

Question 5

Variable Overhead Efficiency Variance Formula

Answer 5

Standard Rate x ( Standrad Hours - Actual Hours)

Question 6

Fixed Overhead Expenditure Variance Formula

Answer 6

Budgeted Fixed Overhead Rate - Actual Fixed Overhead Rate

Question 7

Sales Volume Profit Variance Formula

Answer 7

Standard Profit Margin x (Actual Sales Unit - Budgeted Sales Unit)

Question 8

Rate Variance Formula

Answer 8

(Standard Rate - Actual Rate) x Actual Hours

Question 9

Efficiency Variance Formula

Answer 9

(Standard Hours - Actual Hours) x Standard Rate

Question 10

Labour Rate Variance Formula

Answer 10

Actual Hours x (Standard Rate - Actual Rate)

Question 11

Labour Overhead Spending Variance Formula

Answer 11

Actual Hours x (Standard Rate - Actual Rate)

Question 12

Fixed Overhead Volume Variance Formula

Answer 12

Overhead Absorption Rate x (Actual production units - Budgeted production units)

Question 13

Selling Price Variance Formula

Answer 13

Actual Sales Units x (actual selling price - budgeted selling price)

Question 14

Target Profit Units Formula

Answer 14

(Fixed Costs + Target Profit) / Contribution per unit

Question 15

Cost per Unit (OAR)

Answer 15

Overhead costs / Direct labour hours

Question 16

Cost Gap Formula

Answer 16

Estimated cost - Target cost

Question 17

Contribution per unit

Answer 17

Selling pice per unit - variable cost per unit

Question 18

Margin of safety units formula

Answer 18

Current output - breakeven output

Question 19

Margin of safety % Formula

Answer 19

( (Budgeted sales - breakeven sales) / Budgeted Sales ) x100

Question 20

Contribution Formula

Answer 20

Selling Price - Variance Cost

Question 21

Breakeven units formula

Answer 21

Fixed costs / Contribution per unit

Question 22

Expenditure variance

Answer 22

If actual expenditure is different from budgeted expenditure there is an expenditure variance

Question 23

Volume Variance

Answer 23

If actual production is different from the budgeted production there is a volume variance

Question 24

Adverse

Answer 24

Bad

Question 25

Favourable

Answer 25

Good