Formulas of Standards Costing Management Accounting [AF-401]

TOTAL COST VARIANCES:

Material Variances:
1. Total Material Variance (Standard Material Used on Actual Production x Standard Rate) (Actual Material Used x Standard Rate) 2. Material Price Variance (Standard Rate x Actual Material Used) (Actual Rate x Actual Material Used) 3. Material Usage / Quantity Variance (Standard Material Used x Standard Rate) (Actual Material Used x Standard Rate) 4. Material Usage Mix Variance (Actual Material on Standard Mix x Standard Rate) (Actual Material on Actual Mix x Standard Ra te) 5. Material Usage Yield Variance (Standard Material on Standard Mix x Standard Rate) (Actual Material on Standard Mix x Standard Rate)

Labor Variances
1. Total Labor Variance (Standard Labor Hours on Actual units x Standard Rate per Hour) (Actual Labor Hour paid x Actual Rate per Hour) 2. Labor Rate Variance (Standard Rate per Hour x Actual Hours Paid) (Actual Rate per Hour x Actual Hours Paid) 3. Labor Efficiency Variance (Standard Hours Paid x Standard Rate per Hour) (Actual Hours Paid x Standard Rate per Hour) 4. Labor Idle Time Variance (Standard Idle Time Allowed on Actual Production x Standard Work Rate) (Actual Idle Time x Standard Work Rate) 5. Labor Productive Efficiency Variance (Standard Hours Worked on Actual Production x Standard Work Rate per Hour) (Actual Hours Worked on Actual Production x Standard Work Rate per Hour)

Prepared By: Qaisar Abbas (ACMA Stage-4)

Management Accounting (AF-401)

Formulas of Standards Costing Management Accounting [AF-401]

6. Labor Productive Efficiency Mix Variance (Actual Hours on Actual Mix x Standard Rate per Hour) (Actual Hours on Standard Mix x Standard Rate per Hour) 7. Labor Productive Efficiency Yield Variance (Standard Hours on Standard Mix x Standard Rater per Hour) (Actual Hours on Standard Mix x Standard Rate per Hour)

Factory Overhead Variances:

Fixed Overhead Variance 1. Total Fixed Overhead Variance Budgeted Fixed Overhead on actual production Actual Fixed Overhead 2. Volume Variance Budgeted Fixed Overhead (Actual Production x FOAR) FOAR = Budgeted Fixed Overhead / Budgeted Production 3. Fixed Overhead Efficiency Variance (Standard Hours on Actual Production x FOAR) (Actual Hours x FOAR) 4. Fixed Overhead Capacity Variance Budgeted Fixed Overhead (Actual Hours worked x FOAR) 5. Expenditure Variance Budgeted Fixed Overhead Actual Fixed Overhead Variable Overhead Variance 1. Total Variable Overhead Variance (Standard Hours on Actual Production x Standard Rate per Hour) (Actual Hours x Actual Rate per Hour) 2. Efficiency Variance (Standard Hours Allowed on Actual Production x Standard Rate per Hour) (Actual Hours Taken x Standard Rate per Hour) 3. Expenditure/Rate Variance (Actual Hours x Standard Rate per Hour) (Actual Hours x Actual Rate)

Prepared By: Qaisar Abbas (ACMA Stage-4)

Management Accounting (AF-401)

Formulas of Standards Costing Management Accounting [AF-401]

SALES VARIANCE
1. Total Sales Variance (Standard Quantity Sold x Standard Sale Price) (Actual Quantity Sold x Actual Sale Price) 2. Sale Price Variance (Standard Sale Price x Actual Quantity Sold) (Actual Sale Price x Actual Quantity Sold) 3. Sale Quantity Variance (Standard Quantity Sold x Standard Sale Price) (Actual Quantity Sold x Standard Sale Price) 4. Sale Mix Variance (Actual Quantity on Standard Mix x Standard Sale Price) (Actual Quantity on Actual Mix x Standard Sale Price) 5. Sale Yield Variance (Standard Quantity on Standard Mix x Standard Sale Price) (Actual Quantity on Standard Mix x Standard Sale Price)

PLANNING AND OPERATION VARIANCES

1. Planning Variance* (Standard Material x Standard Rate) (Revised Standard Material x Revised Standard Rate) 2. Operational Variance** (Actual Material x Actual Rate) (Revised Standard Material x Revised Standard Rate)

*(Formula given above will be follow for Planning Variances of Labor, Overhead and Sales Variances) **(Formula given above will be follow for Operational Variances of Labor, Overhead and Sales Variances)

Prepared By: Qaisar Abbas (ACMA Stage-4)

Management Accounting (AF-401)