Formulas of Standard Costing

Formulas of Standards Costing Management Accountin Accounti ng [AF-401 [ AF-401]]

TOTAL COST VARIANCES: Material Variances: 1. Total Material M aterial Variance Variance (Standard Material Used on Actual Production x Standard Rate) – (Actual Material Used x Standard Rate) 2. M aterial Price Variance (Standard Rate x Actual Material Used) – (Actual Rate x Actual Material Used) 3. M aterial Usage / Quantity Variance (Standard Material Used x Standard Rate) – (Actual Material Used x Standard Rate) 4. M aterial Usage Mix Variance Variance (Actual Material on Standard Mix x Standard Rate) – (Actual Material on Actual Mix x Standard Rate) 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 (Standard 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 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)

Prepar Prep ared ed By: Qaisar Abbas (ACMA Stage-4) Stage- 4)

Management Accounting (AF-401 (AF- 401))


6. Labor Productive Pro ductive Efficiency Efficiency Mix M ix 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 Efficiency Yield Variance (Standard Hours on Standard Mix x Standard Rater per Hour) – (Actual Hours on Standard Mix x Standard (Standard Rate per Hour)

Factory Overhead Variances Variances : Fixed Overhead Variance Variance 1. Total Fi F ixed Overhead Variance Variance Budgeted Fixed Overhead on actual production – Actual Actual Fixed Overhead 2. Volume Variance Budgeted Budgeted Fixed F ixed Overhead – (Actual Production x FOAR) FOAR = Budgeted Fixed Overhead / Budgeted Production 3. Fixed Overhead Efficiency Variance Variance (Standard Hours on Actual Production x FOAR) – (Actual Hours x FOAR) 4. Fixed Overhead Capacity Capacity Variance Budgeted Budgeted Fixed F ixed Overhead – (Actual (Actual Hours worked x FOAR) F OAR) 5. Expenditure Variance Variance Budgeted Budgeted Fixed F ixed Overhead – Actual Fixed Overhead Variable Overhead Variance 1. Total Variable Variable Overhead Variance Variance (Standard Hours on Actual Production x Standard Rate per Hour) – (Actual Hours x Actual Rate per Hour) 2. Efficiency Variance Variance (Standard Hours Allowed on Actual Production x Standard Rate per Hour) – (Actual Hours Taken x Standard Rate per Hour) 3. Expenditure/Rate Variance Variance (Actual Hours x Standard Rate per Hour) – (Actual (Actual Hours Hour s x Actual Rate)




SALES VARIANCE 1. Total Sales Variance 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 Variance (Standard Quantity Sold x Standard Sale Price) – (Actual Quantity Sold x Standard Sale Price) 4. Sale Mix Variance Variance (Actual (Actual Quantity Quantity on Standard Mix x Standard Sale Price) – (Act (Ac tual Quant Quan tity on Actual Actual Mix M ix 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 PLA NNING AND OPERATION VARIANCES VARIANCES 1. Planning Variance* (Standard Material x Standard Rate) – (Revised Standard Material x Revised Standard Rate) 2. Operational Variance** Variance** (Actual (Actual M aterial 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)



Formulas of Standard Costing

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