# Lecture 9- Variance Analysis Flashcards

What are the different types of standard costs?

- BASIC standards remain static from year to year.
- IDEAL standards assume nothing will go wrong and be 100% perfect all the time. Sometimes used, but despondency can set in.
- ATTAINABLE standards demand EFFICIENT, not perfect working and should be used according to theory.

How do you calculate the material price variance?

standard cost less actual cost times actual quantity

How do you calculate the materials quantity variance?

standard quantity less actual quantity times standard price.

How does labour variance compare to materials variance?

We use different terms; labour rate (not price) and labour efficiency (not usage).

How do we calculate the fixed overhead volume variance?

The FIXED OVERHEAD VOLUME VARIANCE is (Actual production – Budgeted production) x Standard rate (product).

How do we calculate the FIXED OVERHEAD VOLUME CAPACITY VARIANCE?

Actual hours – Budgeted hours) x Standard rate (hour

How do we calculate the FIXED OVERHEAD VOLUME EFFICIENCY VARIANCE?

Standard hours – actual hours) x standard rate (hour)

How do we calculate the TOTAL SALES MARGIN VARIANCE?

actual contribution – budgeted contribution

How do we calculate the SALES MARGIN PRICE VARIANCE?

actual margin – standard margin) x actual volume.

How do we calculate the SALES MARGIN QUANTITY VARIANCE?

actual volume – budgeted volume) x standard margin