variances

Question 1

Materials price sub-variance

Answer 1

​Actual quantity x (Standard price per unit – Actual price per unit)

Question 2

Materials usage sub-variance

Answer 2

Standard price x (Standard quantity – Actual quantity)

Question 3

Overall materials variance

Answer 3

Materials price sub-variance + Materials usage sub-variance

Question 4

Labour rate sub-variance

Answer 4

Actual labour hours x (Standard hourly rate – Actual hourly rate)

Question 5

Labour efficiency sub-variance

Answer 5

​Standard rate x (Standard hours – Actual hours)

Question 6

Overall labour variance

Answer 6

Labour rate sub-variance + Labour efficiency sub-variance

Question 7

Sales price sub-variance

Answer 7

​Actual quantity x (Standard selling price– Actual selling price)

Question 8

Sales volume sub-variance

Answer 8

Standard price x (Standard quantity – Actual quantity)

Question 9

Overall sales variance

Answer 9

Sales price sub-variance + Sales volume sub-variance