standard costing

• Material cost variance


  Difference between actual cost of materials and expected (standard) costs of materials used
• Material price variance

  taq(sp-ap)
• Material usage variance

  sp(tsq-taq)

  flex tsq = actual output x standard quantity
• Standard cost 


  Pre-determined cost that should be achieved through an efficient working environment
• Sales revenue Variance

  Difference between standard cost/revenue and actual cost/revenue
• Sales price variance

  tav(s-sp- a-sp)
• Sales volume variance

  s-sp(ssv-asv)
• Labour cost variance

  difference between the actual cost of labour and the expected cost of labour for actual production
• Labour rate variance

  tah(sr-ar)
• Labour efficiency variance

  sr(tsh - tah)

  flex tsh sh x actual output
• Simple Cost reconciliation statement

  budgeted cost

  MPV

  MUV

  LRV

  LEV

  = actual cost

  if favourable deduct

  if adverse add
• Simple profit reconciliation statement

  budgeted profit

  MPV

  MUV

  LRV

  LEV

  SPP

  SVV

  =actual profit

  if favourable deduct

  if adverse add

  based on actual output