Standard Costing Flashcards
How do you calculate the Total Variable Overhead Variance?
(SH x SR) - (AH x AR)
How do you calculate the Overhead Efficiency Variance?
SR (SH - AH)
How do you calculate the Overhead spending/expenditure Variance?
AH (SR - AR)
What happens if the variable overhead is applied on the basis of direct labour hours?
The labour efficiency and variable overhead efficiency variances will move in tandem
What is sales price variance?
Shows the effect on profit/contribution if it is sold at a different price than expected.
How do you calculate sales price variance?
AQ (AP - SP)
What is the sales volume variance?
The difference between the actual quantity and the budgeted quantity
How do you calculate the sales volume variance?
SMC (AQ - BQ)
How do you calculate the standard marginal contribution?
Standard selling price - variable costs
What are the first four rows in an operating statement?
- Budgeted contribution
- Sales volume variance
- Standard contribution on actual sales (1+2)
- Selling price variance
What are standard costs?
Predetermined amounts - the expected cost for one unit
What are practical standards?
Standards set at levels that are currently attainable with reasonable and efficient effort
What are ideal standards?
Standards based on perfection, which are unattainable and discourage most employees
How do you calculate the total material variance?
(SQ x SP) - (AQ x AP)
How do you calculate the materials quantity/usage variance?
SP (SQ - AQ)
