Variances Flashcards
Total Labour cost variance
Based on actual production
Should cost -
Did cost
Labour rate variance
Based on actual hrs paid
Should cost -
Did cost
Labour idle time variance
Hours paid -
Hours worked =
Variance in hrs
x standard cost per hour =
Variance £
Labour efficiency variance
Based on actual production
Should take -
Did take =
Variance in hrs
x standard cost per hour =
Variance £
Standard (expected) cost card
-How much material/hours needed per unit
-Cost per kg/hour
-Total standard cost per unit
Total material cost variance
Based on actual production (units)
Should cost -
Did cost
Material price variance
Based on actual purchases (kg/litres)
Should cost -
Did cost
Material usage variance
Based on actual production (units)
Should use -
Did use =
Variance in kg
x standard cost per unit =
Variance £
Labour usage variance
Based on actual production (units)
Should take -
Did take =
Variance in hours x
standard cost per hour =
Variance £
Total Variable overhead Variance
Based on actual production (units)
Should cost -
Did cost
Variable overhead expenditure variance
Based on actual hours worked
Should cost -
Did cost
Variable overhead efficiency variance
Based on actual production (units)
Should take -
Did take =
Variance hrs x
Standard cost per hour =
Variance £
Another way to check the total labour variance (using efficiency)
Total variance =
Labour rate v + Labour efficiency v
- Labour idle time v
Another way to check the total material variance
Total Variance =
Material price v + Material Usage v
What is a variance
The difference between the expected and actual results.
