win2win
Feb 16, 2008, 03:53 AM
I need all variance formulae in one place as summary. Please help!!
morgaine300
Feb 17, 2008, 01:11 AM
I can only give you direct material and direct labor:
Direct material:
(actual price x actual quantity) - (standrad price x actual quantity) = price variance
(standard price x actual quantity) - (standard price x standard quantity) = quantity variance
Direct labor:
(actual rate x actual time) - (standard rate x actual time) = rate variance
(standard rate x actual time) - (standrad rate x standard time) = efficienty variance
(time=hours=efficiency depending on what your book calls it)
To make it easier to memorize, these two are actually the same. If you can think of rate being the same as price, and time being the same as quantity. Since they basically are the same thing.
I had to cheat to give you this much, because variances can get involved and complicated, and since I'm not a cost accountant, is something I just don't do. I have a cheat sheet just for this part. And, it can also be done more than one way.