Variances

Question 1

What is the materials price variance ?

Answer 1

AQ * (AP - SP)

Comparing AQAP to AQSP

Question 2

What is materials usage variance?

Answer 2

SP * (AQ - SQ)

Comparing SPAQ to SPSQ

• remember is standard quantity of actual production.

Question 3

What is total variance?

Answer 3

Price variance + usage variance

Question 4

What is mix variance?

Answer 4

(AQ in std. mix - AQ) * SP

AQ in std. mix = (total actual inputs * std. use for each item)/ total std. inputs

Question 5

How to work out the mix variance?

Answer 5

1. total the std. KG
2. total the actual KG
3. for each compare AQ to the AQ in std. mix
4. multiply by std. price for each

Question 6

What is the yield variance?

Answer 6

(Actual yield - Std. yield from actual input) * SC per unit of output

SC per unit of output = total cost of Std. mix/ output of std. mix

Question 7

How do you work out yield variance?

Answer 7

1. Actual output - std. output (std. output = actual input * std. waste)
2. work out std. price
   sum: (std. use of item * std. cost for item) / output of std.
   output of std. = sum of KG* waste %
3. (Actual output - std. output) * std. price

Question 8

What is the sales volume variance ?

Answer 8

Product, AQ, Std. Q, Variance (units), std. margin (contribution), Variance £

*Volume variance = Mix variance + quantity variance

Question 9

What is the sales mix variance?

Answer 9

Product, AQ, AQ in std. mix, Variance (units), std. margin, variance £

• AQ in std. mix = (total actual inputs * std. use for each item) / total std. inputs

Question 10

What is the sales quantity variance?

Answer 10

Product, AQ in std. mix, Std. Q, Variance (units), std. margin, Variance £