Ca Final Costing Formulas

STANDARD COSTING (VARIANCES)
1.1 Material costs variance = (Standard quantity x Standard Price) – (Actual quantity x Actual price) MCV = (SQ × SP) – (AQ × AP) 1.2 Material price variance = Actual quantity × (Standard price – Actual price) MPV = AQ × (SP – AP) 1.3 Material usage variance = Standard price (Standard quantity – Actual quantity) MUV = SP × (SQ –AQ) 1.4 Material cost variance = Material usage variance + Material price variance MCV = MUV + MPV

1. Material Variance

Material usage variance is further sub-divided into:
i) Material mix variance ii) Material yield variance. (Or Material sub-usage variance) 1.5 Material mix variance = (Revised standard quantity – Actual quantity) × Standard price MMV = (RSQ – AQ) × SP Revised standard quantity = (Standard quantity of one material × Total of actual quantities materials) / Total of standard quantities s of all materials 1.6 Material revised usage variance= (Standard quantity–Revised standard quantity) ×Standard Price MRUV = (SQ – RSQ) × SP 1.7 Material yield variance = (Actual yield – Standard yield) × Standard output price MYV = (AY – SY) × SOP Material usage variance = Material mix variance + Material yield variance (MUV= MMV + MYV)

of

all

Or Material usage variance = Material mix variance + Material revised usage variance (MUV = MMV + MRUV)
Note: Material revised usage variance is also known as material sub – usage variance. In each case there will be only one variance either material yield or material revised Usage variance.

2.1 Labour Cost variance = (Std. hours for actual output × Std. rate per hour) – (Actual hours × Actual rate per hour) LCV = (SH × SR) – (AH × AR) 2.2 Labour rate variance = Actual time (Std. rate – Actual rate) LRV = AH × (SR – AR) 2.3 Labour efficiency (or time) variance = Std. rate (Std. hours for actual output–Actual hours) LEV= SR × (SH – AH) Check: Labour cost variance = Labour efficiency variance + Labour rate variance LCV = LEV + LRV

2. Labour Variance