B4 - Operations Management

Question 1

Direct material price variance

Answer 1

did we spend more or less than we budgeted

Question 2

Direct material usage variance

Answer 2

did we use more or less materials than we should have

Question 3

DM price variance formula

Answer 3

Actual quantity purchased X (actual price - standard price)

Question 4

DM usage variance formula

Answer 4

Standard price X (actual quantity - standard quantity)

Question 5

Direct labor rate variance

Answer 5

did we spend more or less on DL this period than we budgeted?

Question 6

Direct labor efficiency variance

Answer 6

did labor work more hours or less hours than we budgeted

Question 7

DL rate variance

Answer 7

actual hours worked x (actual rate - standard rate)

Question 8

DL efficiency variance

Answer 8

standard rate x (actual hours worked - standard hours)