A change in the quality of materials purchased A new supplier contract Error in the accounting records Change in proportion of spoiled materials Unreasonable standard Unanticipated overtime hours A change in the government-mandated minimum wage Equipment malfunction A change in average worker experience or training A Direct materials price variance B Direct materials quantity variance C Direct labor rate variance D Direct labor efficiency
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
All
- A change in the quality of materials purchased
- A new supplier contract
- Error in the accounting records
- Change in proportion of spoiled materials
- Unreasonable standard
- Unanticipated overtime hours
- A change in the government-mandated minimum wage
- Equipment malfunction
- A change in average worker experience or training
|
A |
Direct materials price variance |
|
B |
Direct materials quantity variance |
|
C |
Direct labor rate variance |
|
D |
Direct labor efficiency |
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