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Standard Costing Variance Analysis

The document discusses the graphical presentation of variance analysis for standard costing. It presents formulas for calculating variances in direct material, direct labor, variable overhead, fixed overhead, and sales. It also discusses efficiency, capacity, and activity ratios as well as a reconciliation statement of profit that reconciles budgeted, standard, and actual profits using volume, cost, and sales price variances.

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Anupam Bali
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3K views3 pages

Standard Costing Variance Analysis

The document discusses the graphical presentation of variance analysis for standard costing. It presents formulas for calculating variances in direct material, direct labor, variable overhead, fixed overhead, and sales. It also discusses efficiency, capacity, and activity ratios as well as a reconciliation statement of profit that reconciles budgeted, standard, and actual profits using volume, cost, and sales price variances.

Uploaded by

Anupam Bali
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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STANDARD COSTING : GRAPHICAL PRESENTATION GRAPHICAL PRESENTATION OF VARIANCE ANALYSIS :A) DIRECT MATERIAL VARIANCES Material Cost Variance

= (Std.Qty*Std Price) (Actual Qty*Actual Price)

Material Price Variance = Actual Qty *(Std Price Actual Price)

Material Usage Variance = Std Price * (Std Qty Actual Qty)

B) DIRECT LABOUR VARIANCES

Labour Cost Variance = (Std Hrs * Std Rate) ( Actual Hrs * Actual rate)

Labour Rate Variance = Actual Hrs*(Std rate Actual rate)

Labour Efficiency Variance = Std Rate * (Std Hrs Actual Hrs)

Idle time variance = Std Rate * (Actual Hrs worked Actual Hrs paid)

C) VARIABLE OVERHEAD VARIANCES Variable Overhead Cost Variance = (SRR/Unit * Actual Output) Actual Overhead

Expenditure Variance = (SRR/Hr * Actual Hrs) Actual OH

Efficiency Variance = SRR/Hr * (Std Hrs Actual Hrs)

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D) FIXED OVERHEAD VARIANCES Fixed Overhead Cost Variance = (SRR/Unit * Actual Output) Actual Overheads

Expenditure Variance = Budgeted OH Actual OH

Volume Variance = SRR/Unit * (Bud. Output- Actual output)

Capacity Variance = SRR/Hr * ( Bud. Hrs Actual Hrs)

Efficiency Variance = SRR/Hr * (Std Hrs Actual Hrs)

E) SALES VARIANCES

Sales Variances = (Bud Qty * Std Selling price) (Actual Qty * Actual Selling price)

Sales Price Variance = Actual Qty (Std Sales price-Actual Sales price)

Sales Volume Variance = Std Sales price (Bud Qty Actual Qty)

MISCELLANEOUS RATIOS : 1) Efficiency Ratio = Standard hours for actual output * 100 Actual hours worked Or = Standard Output * 100 Actual Output 2) Capacity Ratio = Actual Hours Worked * 100 Budgeted Hours Or = Standard output * 100 Budgeted output

3) Activity Ratio = Actual output * 100 Budgeted ouput Downloaded from http://blog.ecactus.org SMS ON castudent to 9870807070 to subscribe to our SMS Channel CAstudent

Or = Standard Hrs for actual output *100 Budgeted Hours RECONCILIATION STATEMENT OF PROFIT :
Particulars BUDGETED PROFIT (+/-) : Profit Volume Variance STANDARD PROFIT (+/-) Cost Variances (Material, labour, Variable OH, Fixed OH) (+/-) Sales price variance ACTUAL PROFIT Amount Amount **** **** **** ****

****

**** ****

Profit Volume Variance = Std profit per unit * (Bud.Qty Actual Qty)

Compiled By GOPAL RATHI (9762227144), Sangamner (MH)

PLEASE FORWARD UR SUGGESTIONS TO [email protected]

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