'O oeJ0"0wing

variances ate repotted for both variable and tort n

Materials and labour

1 -Materialp;ice variance (standard pric.e por unit or motoriaj actual quantity of materials
purchased
2 Materialusage variance (stondo/d quantity of materials for actual production actual quantityu.
x standard price per unit
3 'äotal matenajs (actuat production x standard material cost per unit of productjocj)
cost varionee actuat materials cost
4 Wage rate variance .(standard wage rate per hour actual wage rate) x actuat labour
worked
5 Labour efficiency (standard quantity of labour hours for actual production actual jabour•
variance hours) x standard wage rate
6 • Total labour cost (actual productionx standard labour cost per unit ot production)
variance actual labour cost
Fixed production overhead
7 fixed ovemead budgeted fixed overheads —actual fixed overheads
expenditure
Variableproduction overhead
8 ' Variable
overhead z, (budgeted variable overheads br actual input volume
expenditure variance —actual variable overhead cost)
9 Variable overhead = (standard quantity of input hours for actual production
efficiencyvariance actual input hours) x variable overhead rate
10 Total variable (actual production x standard variable overhead rate per unit)
overhead variance — actual variable overhead cost

Sales margins
11 Sales-margin ' = (actual selling price —budgeted selling price)
price variance x actual sales volume
12 Sales margin = (actual sales volume —budgeted sales volume)
volume variance x standard contribution margin
413Total sales margin (actual sales revenue standard variable cost of saleS)
; variance total budgeted contribution
Witha standard absorption costing system profit
margins are used instead of contribution margins
tocak;vlate the sales margin variances and the
followingadditional variances can be reported;
14 Fixed Overhead
(agtual production budgeted production)
volume variance * standard fixed overhead rate
15 Volume efficiency
I(standard quantityof input hours for actual
variance production
' —actual input hours) x standard
6 Volume ,capacity fixed overhead rate
F. (actual hours of input
vatiance budgeted hours of input)
standard fixed overhead rate
Total fixed overhead (actyaj production standard fixed overhead rate per unit)
actua! fixed overheadu)$t