Price Variance and Quantity Variance ...
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Accounting
| Price Variance and Quantity Variance | ||||||||||
| 1. Materials Variances | ||||||||||
| Actual | Standard | Standard Material Cost | ||||||||
| P | Q | P | Q | P | Q | Price: | 6 | |||
| Quantity: | 40 | |||||||||
| Actual Material Cost | ||||||||||
| QV | PV | Price: | 7 | |||||||
| Quantity: | 35 | |||||||||
| Total Variance |
| |||||||||
| Material price variance = (standard price - actual price ) actual quantity = ($6 -$7) 35 = $35 unfavourable Material qty. Variance = (standard quantity- actual quantity ) standard rate = (40 - 35 ) 6 = $30 favourable
Total variance or net variance = $30 - $35 = $5 unfavorable |
| |||||||||
| 2. Labor Variances | ||||||||||
| Actual | Standard | |||||||||
| P | Q | P | Q | P | Q | Standard Labor Cost | ||||
| Price: | 20 | |||||||||
| Quantity: | 5 | |||||||||
| QV | PV | Actual Material Cost | ||||||||
| Price: | 22 | |||||||||
| Total Variance | Quantity: | 4 | ||||||||
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