variance formulas

Question 1

sales volume variance

Answer 1

(actual sales volume - budgeted sales volume) x standard profit

Question 2

sales price variance

Answer 2

(standard price - actual price) x actual volume

Question 3

direct material price variance

Answer 3

(standard price - actual price) x actual quantity

Question 4

Direct Material Usage Variance

Answer 4

(Standard Quantity – Actual Quantity) X Standard Price

Question 5

Direct Labour Rate Variance

Answer 5

(Standard Rate – Actual Rate) X Actual labour hours

Question 6

Direct Labour Efficiency Variance

Answer 6

(Standard Hours – Actual Hours) X Standard Rate

Question 7

Fixed Production Volume Variance

Answer 7

(Actual Production – Budgeted Production) X Fixed Overhead Absorption Rate

Question 8

Fixed Overhead Expenditure Variance

Answer 8

(Budgeted Overhead – Actual Overhead)